Normal Balance Accounts Accounts Payable $ 2,684 Accounts Receivable $ 3,803 Accumulated Dep - Autos 5 Accumulated Dep - Buildings Advertising Expense $ Allowance for Doubtful Accounts Amortization Expense - Patent Autos $ 20,000 Bad Debts Expense (Uncollectible Accts Expense) $ Buildings $ 28,000 Cash $ 8,153 Common Stock $ 8,714 Cost of Goods Sold $ 12,639 Current Portion of Long-Term Debt Depreciation Expense - Autos $ Depreciation Expense - Buildings Dividends $ 1,600 Gain on Sale of Equipment 1,007 Insurance Expense Interest Expense Interest Payable Inventory $ 1,638 Land 8,500 Notes Payable - Long Term $ 50,000 Operating Expenses 641 Patents 9,000 Payroll Tax Expense $ 177 Prepaid Advertising 1,800 Prepaid Insurance 2,300 Prepaid Rent $ 3,700 Rent Expense etained Earnings (Ending) $ 6,874 alaries/Wages Expense 2.703 olaries/Wages Payable ales Revenue $ 37,293 pplies 177 pplies Expense $ 157 nsportation Out/ Shipping Expense $ 461 ities Expense 1,113 ranty Expense $ ranty Payable $ Uuuuuuuuuuuuu Information for adjusting entries - When calculating the amounts, round all items up to the nearest whole dollar. $10.01 = S11 Adjust the accounts for the following items: Round up to the nearest whole dollar 1 Paid for 12 months of advertising on April 1st. 2 Patented an invention on July 1st and was granted a 20-year patent (straight line with-O- Salvage value). 3 Bad Debts (Uncollectible Accounts) Expense is estimated to be 2% of Sales Revenue. We purchased the Auto on October ist when it was brand new (0 miles). It is estimated to 4 last 5 years, 100,000 miles and then we should be able to sell it for $1,000. We put 15,000 miles on it this year. Use the Units of Product Method for depreciation. We purchased the building on February 1st. It is estimated to last 10 years and then we 5 should be able to sell it for $5,000. Use the Double Declining Balance Method for depreciation. 6 Paid for 6 months of Insurance on November 1st. 7 Paid for 12 months of Rent on September 1st. 8 There are $500 of wages for Dec 16th - 31st that we still owe, but have not paid (and have not accrued yet). 9 We counted our supplies and there was $150 of supplies on hand. 10 We counted our inventory and there was $1500 of inventory on hand. 11 We estimate our warranty expense to be 1% of sales. On January 1st of this year, we signed the long-term note payable. The note payable calls for 6% interest and is a 5-year note. Assume that we make $5,000 payments each 12 December 31st. Make the entry to record the payment (both principle and interest). Note that you also need to break out current and long-term Notes Payable amounts for the financial statements. Financial Statement Pages - Income Statement Financial Statement Pages -- Statement of Changes in Stockholders' Equity Financial Statement Pages - Balance Sheet (Assets) Financial Statement Pages - Balance Sheet (Liabilities) Normal Balance Accounts Accounts Payable $ 2,684 Accounts Receivable $ 3,803 Accumulated Dep - Autos 5 Accumulated Dep - Buildings Advertising Expense $ Allowance for Doubtful Accounts Amortization Expense - Patent Autos $ 20,000 Bad Debts Expense (Uncollectible Accts Expense) $ Buildings $ 28,000 Cash $ 8,153 Common Stock $ 8,714 Cost of Goods Sold $ 12,639 Current Portion of Long-Term Debt Depreciation Expense - Autos $ Depreciation Expense - Buildings Dividends $ 1,600 Gain on Sale of Equipment 1,007 Insurance Expense Interest Expense Interest Payable Inventory $ 1,638 Land 8,500 Notes Payable - Long Term $ 50,000 Operating Expenses 641 Patents 9,000 Payroll Tax Expense $ 177 Prepaid Advertising 1,800 Prepaid Insurance 2,300 Prepaid Rent $ 3,700 Rent Expense etained Earnings (Ending) $ 6,874 alaries/Wages Expense 2.703 olaries/Wages Payable ales Revenue $ 37,293 pplies 177 pplies Expense $ 157 nsportation Out/ Shipping Expense $ 461 ities Expense 1,113 ranty Expense $ ranty Payable $ Uuuuuuuuuuuuu Information for adjusting entries - When calculating the amounts, round all items up to the nearest whole dollar. $10.01 = S11 Adjust the accounts for the following items: Round up to the nearest whole dollar 1 Paid for 12 months of advertising on April 1st. 2 Patented an invention on July 1st and was granted a 20-year patent (straight line with-O- Salvage value). 3 Bad Debts (Uncollectible Accounts) Expense is estimated to be 2% of Sales Revenue. We purchased the Auto on October ist when it was brand new (0 miles). It is estimated to 4 last 5 years, 100,000 miles and then we should be able to sell it for $1,000. We put 15,000 miles on it this year. Use the Units of Product Method for depreciation. We purchased the building on February 1st. It is estimated to last 10 years and then we 5 should be able to sell it for $5,000. Use the Double Declining Balance Method for depreciation. 6 Paid for 6 months of Insurance on November 1st. 7 Paid for 12 months of Rent on September 1st. 8 There are $500 of wages for Dec 16th - 31st that we still owe, but have not paid (and have not accrued yet). 9 We counted our supplies and there was $150 of supplies on hand. 10 We counted our inventory and there was $1500 of inventory on hand. 11 We estimate our warranty expense to be 1% of sales. On January 1st of this year, we signed the long-term note payable. The note payable calls for 6% interest and is a 5-year note. Assume that we make $5,000 payments each 12 December 31st. Make the entry to record the payment (both principle and interest). Note that you also need to break out current and long-term Notes Payable amounts for the financial statements. Financial Statement Pages - Income Statement Financial Statement Pages -- Statement of Changes in Stockholders' Equity Financial Statement Pages - Balance Sheet (Assets) Financial Statement Pages - Balance Sheet (Liabilities)