P3-16 Comprehensive (Appendix 3.1) Presented below is information pertaining to Delsnyder Specialty Foods, a LO 3.11 calendar-year sole proprietorship, maintaining its books on the cash basis during the year. At year-end, however, AICPA A. J. Delsnyder's accountant adjusts the books to the accrual basis only for sales, purchases, and cost of sales, and Adapted records depreciation to more clearly reflect the business income. Trial Balance December 31, 2016 Debit Credit $ 18,500 4,500 20,000 35,000 $ 9,000 4,800 850 24,000 Cash Accounts Receivable, 12/31/15 Inventory, 12/31/15 Equipment Accumulated Depreciation, 12/31/15 Accounts Payable, 12/31/15 Payroll Taxes Withheld A. J. Delsnyder, Withdrawals A. J. Delsnyder, Capital, 12/31/15 Sales Purchases Salaries Payroll Taxes Rent Miscellaneous Expense Insurance Utilities 33,650 187,000 82,700 29,500 2,900 8,400 3,900 2,400 3,500 $235,300 $235,300 During 2016, Delsnyder signed a new 8-year lease for the store premises and is in the process of negotiating a loan for remodeling purposes. The bank requires Delsnyder to present financial statements for 2016 prepared on the accrual basis. To do so, Delsnyder's accountant obtained the following additional information for 2016: 1. Amounts due from customers totaled $7.900 at December 31. 2. A review of the receivables at December 31, disclosed that an allowance for doubtful accounts of Sl. 100 should be provided. Delsnyder had recorded no bad debt losses from the inception of the company through December 31. 3. The inventory amounted to $23,000 at December 31, based on a physical count of goods priced at cost No reduction to market was required. 4. On signing the new lease on October 1, 2016, Delsnyder paid $8,400, representing 1 year's rent in advance for the lease vear ending October 1, 2017. The $7,500 annual rental under the old lease was paid on October 1, 2015, for the lease year ended October 1, 2016. (continued) 350 5. On April 1, 2016, Delsnyder paid $2,400 to renew the comprehensive insurance coverage for 1 year. The premium was $2,160 on the old policy, which expired on April 1, 2016. 6. Depreciation on the equipment was computed at $5,800 for 2016. 7. Unpaid vendors' invoices for food purchases totaled $8,800 at December 31. 8. Accrued expenses at December 31, 2015 and December 31, 2016, were as follows: 12/31/15 12/31/16 Payroll taxes $250 $400 Salaries 375 510 Utilities 275 450 After obtaining the preceding information, Delsnyder's accountant prepared the following partially completed worksheet: - B C Cash Basis Debit Credit 18.500 T 4.500 D E Adjustments Debit Credit F G Accrual Basis Debit Credit 2 3 5 20.000 35,000 Accounts Cash Accounts Receivable Allowance for Doubtful Accounts Inventory Eviment Accumulated Depreciation Prepaid Rent Prepaid Insurance Accounts Payable Accrued Expenses Payroll Taxes Withheld AJ. Delsnyder Withdrawals A. J. Delsryder Capital 9,000 9 10 11 12 13 14 15 4.800 850 24.000 33,650 187,000 82,700 17 18 19 20 21 22 23 24 25 26 21 Sales Purchases Income Summary Inventory Salaries Payroll Taxes Rent Miscellaneous Expenses Insurance Ubilities Depreciation Bad Debts Totals 29.500 2.900 8.400 3.900 2.400 3.500 29 235,300 Required: 1Complete the preceding worksheet to convert Delsnyder Specialty Foods's trial balance to the accu the year ended December 31, 2016. 2. Prepare a statement showing the changes in A. J. Delsnyder, Capital, for the year ended December Comprehensive (Appendix 3.1) Dawson O'Connor is the owner of Miller Island Sales 1 dirtnihil supplies. The following is the balance sheet of the comin P3-17 LO 3.6 LO 3.8 LO3.11 Cash Island Sales dictributor of fishing
