p3-12

Credit Dec P3-12 Comprehensive On November 30, 2019, Davis Company had the following account balances: LO 3.3 Debit LO 3.4 Debit Credit LO 3.5 Cash $ 3,090 Common Stock, no par (2,000 LO 3.6 shares) $20,000 LO 3.7 Accounts Receivable 9,900 Relained Earnings (1/1/2019) 42,400 LO 3.8 Allowance for Doubtful Dividends $ 2,000 Accounts $ 100 Inventory 17.750 Sales Revenue 69 700 Supplies 1,400 Cost of Goods Sold 36,860 Land 9,000 Salaries Expense 12,500 Buildings and Equipment 42,000 Advertising Expense 8,100 Accumulated Depreciation 4,200 Other Expenses 4,500 Accounts Payable 10,700 During the month of December, Davis entered into the following transactions: Date Transaction Made cash sales of $3,000, the cost of the inventory sold was $1,800. 7 Purchased $2,400 of inventory on credit. 14 Colected $900 of accounts receivable. 18 Sold land for $7,800; the land originally cost $5,000 Made credit sales of $4,000; the cost of the inventory sold was $2,400 21 Returned $360 of defective inventory to supplier for credit to the Davis Company's account. 27 Purchased $1,250 of inventory for cash. 28 Paid $1,100 of accounts payable 31 Purchased land at a cost of $6,000; made a $1,000 down payment and signed a 12%, 2year note for the balance Required: 1. Prepare general journal entries to record the preceding transactions 2. Post to general ledger T accounts. 3. Prepare a year-end trial balance on a worksheet and complete the worksheet using the following information: (a) accrued salaries at year-end total $1,200; (b) for simplicity, the building and equipment are being depre- ciated using the straight-line method over an estimated life of 20 years with no residual value; (c) supplies on hand at the end of the year total S630; (d) bad debts expense for the year totals $830; and (e) the income tax rate is 30%, income taxes are payable in the first quarter of 2020. 4. Prepare the company's financial statements for 2019. 5. Prepare the 2019 (a) adjusting and (b) closing entries in the general journal. 20