NOTE: Transactions up to this point have been recorded. At this point you became con- troller and are responsible for recording all further transactions. 26 The board of directors voted to purchase 1,000 shares of its own stock from stockholder Dionne Schivone at $82 per share and issued check No. 1595 in payment. Stock repur- chases are recorded at cost. Rockford is purchasing these shares because Ms. Schivone had been a valuable employee. 26 The board of directors declared a $3.30 per-share cash dividend payable on January 14 to stockholders of record on December 26 (after purchase of stock). 26 The president informs you that Beverly's Building Products agrees to convert the $14,000 overdue accounts receivable (invoice No. 1119) balance to a 9% note due six months from today. 27 A half-acre parcel of land adjacent to the building is acquired in exchange for 450 shares of unissued common stock. The land has a fair value of $48,000 and will be used imme- diately as an outside storage lot and parking lot. 27 An invoice in the amount of $1,750 is received from Wayne McManus, lawyer, for legal services involved in the acquisition of the adjacent parcel of land; check No. 1596 is issued in payment. 27 Sold pipe and plumbing materials to Boecker Builders on account, invoice No. 1210 for $51,200. 28 Issued check No. 1597 in the amount of $935 to the Northern Star for advertisement run in the home building supplement of December 13. 28 Issued check No. 1598 in the amount of $1,430 to Standard Oil Co. in payment of gas, oil, and truck repairs from Standard Oil Co. (use Freight-out). 28 Purchased copper and cast iron pipe from Oxenford Copperworks on account, purchase order No. 320 for $57,520, terms 1/10, n/30. 28 Check No. 1599 for $16,800 is issued to the bond sinking fund trustee, Chicago Trust Co., for deposit in the sinking fund. (Use Other Assets). 28 Sold plumbing supplies to Swanson Brothers Construction on account, invoice No. 1211 for $29,760. 31 Received a check for $24,730 from Boecker Builders in payment of invoice No. 1207. 31 Issued check No. 1600 for $60,192 to Smith Pipe Company in payment of purchase order No. 317. 31 The custodian of the petty cash fund submits the following receipts for reimbursement and reports a cash-on-hand count of $22. Postage stamps used (supplies expense).. United Parcel (freight-out) C.O.D. postage (inventory cost).. Check No. 1601 is issued and cashed to reimburse the fund. $35 42 51 31 Sold an electric truck-lift to Leila Stierman Co. for $5,350 cash. The original cost was $10,500 with salvage value of $1,000, a life of 10 years, and accumulated depreciation recorded through 12/31/17 of $3,625. The straight-line method is used. (Note: the company follows the practice of recording a half year's depreciation in the year of acquisition and a half year in the year of disposal.) First, bring the depreciation expense up to date in the general journal. Then journalize the entry for the sale in the cash receipts journal. 31 Sold bathroom fixtures and plumbing supplies to Trudy's Plumbing on account, invoice No. 1212 for $51,700. 31 Because for some time the petty cash fund has been smaller than required for monthly expenditures, the fund is increased by $125 by cashing check No. 1602 and placing the money in the petty cash fund. 31 The payroll summary for the monthly paid employees is submitted so that December checks can be distributed before the year-end; the details are as follows: Office and administrative salaries.. Federal income taxes withheld State income taxes withheld FICA taxes withheld Net pay. $46,350 7,025 1,360 3,545 $34,420 1. 2. 3. 4. 5. Issued check No. 1603 for the amount of the net pay and deposited it in the payroll bank account. Individual payroll checks were prepared for distribution to all monthly employees by the end of the day. Employer's payroll taxes: FICA tax (all office and administrative)........... Federal unemployment tax State unemployment tax. 31 Cash sales since December 14 total $53,065. INSTRUCTIONS $3,545 Make the entries in the appropriate journals for December 26 through December 31. Post any amounts to be posted as individual amounts from the journals to the general ledger and any amounts to be posted to the subsidiary ledger accounts. (If the normal practice of daily posting were followed, the postings would be in chronological order; proper date sequence for this practice set is not necessary.) Foot and cross-foot the columnar journals and complete the month-end postings of all books of original entry. Prepare a trial balance by entering the account balances from the general ledger in the first two columns of the ten-column work sheet (list all accounts, including those with zero balances). From the following information prepare adjusting entries in the general journal and enter them in the "adjustments" columns of the work sheet and cross-reference the amounts using the related alphabetic characters (round all calculations to the nearest dollar). a. The annual provision for doubtful accounts receivable is recorded in an amount equal to 4.1% of gross accounts receivable less the ending Allowance account balance.(This entry should be entered below the middle of General Journal page 10.) b. An inventory count of the office supplies revealed $835 of supplies on hand at year- end. c. The insurance premium outstanding on January 1, 2018, covers the period January 1 through August 31, 2018. The insurance premium of $7,800 recorded in August covers the period of September 1, 2018 through August 31, 2019. d. The payroll summary for the employees who are paid biweekly shows the following information at December 31, 2018: Delivery and Warehouse Wages FICA Taxes Payable Federal Withholding Taxes State Withholding Taxes. $7,950 608 985 335 $6.022 Net pay.... e. The employer's share of the FICA tax ($608) must be accrued; no state or federal unemployment tax is incurred during the fourth quarter because all wages and salaries earned during the last quarter exceed the maximum subject to unemployment tax. f. Interest has accrued at 7.2% on the long-term notes payable since July 1, 2018. The next six-month interest payment at 5.4% on the bonds is due on March 1, 2019. The original discount on bonds payable was $12,400. No portion of the discount has been amortized for any part of 2018; the bonds are 10-yr maturity. (Use straight-line.) g. The interest accrued to 12/31/18 on notes receivable is composed of the following: Platteville Plumbers, 10 %, 6 months, due March 31, 2019 Bilder Construction, 8%, 6 months, due June 17, 2019 Beverly's Building, 9%, 6 months, due June 26, 2019 $ 900 211 17 $1,128 The interest accrued at 12/31/18 on the note payable of $15,000 is 12 months at 7%. Interest is payable on January 2, 2019. (The note is due in 2019.) h. A warehouse lease payment of $20,700 was made on September 1, 2018, for rental through February 28, 2019. (The Prepaid Rent account is for advance lease payments on the warehouse. This should be the ONLY outstanding lease agreement at year end.) i. $720 is owed to Northern Electric Co. and $195 is owed to City of Rockford for utility services provided during December 2018. j. Plant and equipment depreciation expense is composed of the following: Accumulated Depreciation-Buildings Accumulated Depreciation-Equipment Accumulated Deprecation-Trucks $16,500 $5,540 $ 8,280