Panther Builders, Inc.

Trial BalanceDecember 1, 2021

Debit Credit

Cash2,188,098.00

Accounts Receivable2,240,370.00

Allowance for Doubtful Accounts30,000.00

Short-term Investments14,000.00

Fair Value Adjustment-ST

inventory1,645,000.00

Prepaid Insurance125,000.00

Supplies12,005.00

Available-for-sale Investments 100,000.00

Fair Value Adjustment-AFS15,000.00

Land1,135,000.00

Building3,000,000.00

Accumulated Depreciation-Building269,231.00

Machinery850,000.00

Accumulated Depreciation Machinery14,100.00

Equipment250,000.00

Accumulated Depreciation Equipment177,923.00

Truck56,500.00

Accumulated Depreciation Truck42,611.00

Right-of-use Asset

Patents60,000.00

Accounts Payable1,251,754.00

Salaries Payable1,577,000.00

Utilities Payable9,000.00

Payroll Taxes Payable25,000.00

Interest Payable

Dividends Payable

Note Payable -short term50,000.00

Income Tax Payable26,000.00

Lease Liability

Note Payable -long term500,000.00

Bond Payable2,500,000.00

Discount on Bond Payable137,292.00

Common Stock, $1 par, $1M shares authorized; 235,000 shares issued and outstanding

235,000.00

APIC Common Stock3,488,193.00

Retained Earnings1,045,590.00

Unrealized Gains (Losses) Equity15,000.00

Unearned Compensation

Treasury Stock

APIC Treasury Stock

Sales5,961,510.00

Cost of Goods Sold3,155,000.00

Compensation Expense

Salaries Expense1,900,000.00

Bad Debt Expense

Payroll Tax Expense80,000.00

Advertisting Expense125,000.00

Insurance Expense40,000.00

Supplies Expense16,000.00

Depreciation Expense

Amortization Expense

Utilities Expense9,000.00

Miscellaneous Expenses9,300.00

Interest Expense58,847.00

Income Tax Expense

Realized Gains (Losses)3,500.00

Unrealized Gains (Losses) Income

Totals17,221,412.0017,221,412.00

A. Record the journal entries for the December transactions.

B. Record the adjusting journal entries

C. Set up a worksheet using Excel to:

Prepare the Unadjusted Trial Balance as of December 31, by making the December adjustments (separate columns). **Must link cells to journal entries.

Enter the adjusting journal entries into worksheet (separate columns).

Prepare the Adjusted Trial Balance as of December 31

Part I: December Journal Entries

Record the following entries in general journal form for December 2021:

December 1: Recorded sales on account of $800,000, 3/15, net 30. Cost of inventory was $375,000. Panther Builders, Inc. uses the net method for accounting for sales.

December 2:Purchased Equipment for $400,000, paying $250,000 down and signed a 6%, 90-day note for the balance. This equipment will be depreciated using the double declining method over 9 years, and no salvage value.

December 3: Collected $611,000 on accounts.

December 4: Bought back 18,000 shares of stock for $13 per share.

December 5: Issued 10,000 shares of restricted stock to its CFO. The stock has a fair value of $160,000.The service period related to this restricted stock is 6 years. Vesting occurs if the CFO stays with the company for 6 years. The par value of the stock is $1.

December 6: Paid invoices total of $289,000 to its suppliers. The invoices related to inventory purchases that had been previously recorded.

December 7:Purchased inventory of $587,000 on account with terms 2/10 net 60. Panther Builders, Inc. uses the net method for its purchases.

December 8:Received payment related to sale on December 1.

December 9: Purchased equity securities, without the intention to sell in the near term, for $380,000, plus commissions of $3,800.

December 10: Paid off short-term note from 12/1 trial balance plus interest of $1,000.

December 11: Paid invoices of $712,000 to suppliers.

December 12:Issued 50,000 shares of common stock at $17.50 per share

December 14: Collected $850,000 on Account.

December 16: Paid invoice from 12/7.

December 17: Purchased $110,045 inventory on account with terms 2/15, net 30. Panther Builders, Inc. uses the net method for its purchases.

December 18: Collected $453,000 on Account.

December 19: Recorded sales on account of $850,000, 2/15, net 60, cost of inventory was $595,000.

December 20:Recorded sales on account of $635,000, terms 3/10, net 30, cost of merchandise inventory was $425,000.

December 21: Sold 12,500 shares of Treasury Stock for $15 per share.

December 24: Made payment of $52,000 towards long-term note payable of $500,000, which includes interest of $6,500.

December 26: Wrote off $18,600 in bad debt.

December 31: Signed a 6-year lease for equipment, fair value of $500,000. Equipment transfers to Panther Builders, Inc. at end of lease. Lease payments of 82,750 commence with signing of lease.

Part I: Adjusting Journal Entries

Record the following adjusting entries in general journal form as of December 31, 2021:

1. Supplies on hand at the end of the year:$5,016.
2. Equipment shown on the 12/1 TB was purchased on 1/1/17, has a 7-year life, no salvage value and company uses double-declining balance method for its depreciation.
3. Don't forget to depreciate the new equipment, which is also depreciated using the DDB method!
4. Included in the truck balance is a fully depreciated truck for $6,500 and a new truck valued at $50,000 that was purchased on 1/1/17. The new truck has an 8-year life, no salvage value and the company uses the sum-of-the-years digits for its depreciation method on this asset.
5. The building is depreciated under the straight-line method over 39 years and was placed in service on July 1, 2018.
6. The machinery was purchased on December 1, 2020, has a 5-year useful life, salvage value of $4,000, and is being depreciated under the straight-line method.
7. The patent was purchased on 1/1/2013 for $100,000 and its useful life is 20 years.
8. Included in the Prepaid Insurance Account balance at 12/1 is a $75,000, 12-month insurance policy that was purchased on August 1, 2021.
9. Also included in the 12/1 trial balance (and the 12/31 TB) was an insurance policy that expired on 12/31/21.
10. Declared dividends of $350,000 on December 31.
11. The fair market value of the short-term investments is $12,500.
12. The total fair value of the Available for Sale Securities is $489,000.
13. 2% of Accounts Receivable is estimated to be uncollectible. Company uses the allowance method for estimating its uncollectible accounts.
14. Accrued salaries of $145,000 and accrued payroll taxes of 6.2%.
15. Had issued $2,500,000 of 4%, 10-year bond, dated 1/1/18 for $2,305,133 when the market rate was 5%. Interest is paid on June 30 and January 1 using the effective interest rate method. The June payment is included in the Dec. 1 TB.
16. One month has passed since the issuance of restricted stock.
17. Interest on 30 days of short-term note payable, dated 12/2/21 should be accrued. (Assume 360 days in a year for calculation)
18. Income tax rate is 21%

Additional Information:

Panther Builders, Inc. was founded in Grand Rapids, Michigan in 2013 by Davenport University entrepreneurs. It is a private company with more than 40 employees. Its operations include providing household renovation services to homeowners and small businesses.

During 2021, the following additional transactions occurred: (Hint: these are already included in 12/1/21 TB, but may be needed for the Statement of Cash Flows and calculation of Weighted Average shares of Common Stock )

1.Issued 35,000 shares of common stock, $1 par, for $700,000 on June 30, 2021.

2.Some equipment was sold (original cost $10,000, book value $3,000) for $6,500 (do not consider in your #2 AJE). Confirm with the 12/1 Trial Balance!

3.All amortization and depreciation is recorded once a year on December 31.

4.Market price per share of stock at 12/31/2021 was $18.75.