Part 1 Adjusting entries'a Statements 12I31I2019 Year-end Adjustment Data for Bruce and Emmett Corp is as follows: 1. $300,000 in sales on account had not been recorded but were shipped FOB Shipping Point on December 31. The cost of this inventory was $140,000. Bmce and Emmett use a perpetual inventory system. 2. Employees are allowed to carry over up to 10 days of earned vacation days per year up to 40 days. Employees earn an average of $150 per day. A total of 500 eamed vacation days will be carried over to 2020. It is probable that the employees will take the vacation days. 3. Accrued wages at December 31, 2019 amount to $50,000. 4. You discover that a product sale was made and recorded in December for $50,000; the product had not yet been shipped. The cost of the product was $24,000. 5. The Prepaid Expense account balance includes the $24,000 cost of a two year insurance policy purchased on April 1, 2019. (Prepaid Expense was debited for $24,000 on April 1, 2019) 6. Depreciation & Amortization expense for the year is $150,000 7. Interest expense accrued on its long-term liabilities is $35,000. 8. A dividend of $40,000 was declared on December 16, to be paid on January 15, 2020 9. It is estimated that 5% of accounts receivable will be uncollectable. 10. Income tax expense is 30% of income before income tax. INSTRUCTIONS: A. Record the adjusting journal entries B. Compute the adjusted trial balance amounts C. Prepare in good form: a. Multiple Step Income Statement with a= other gains and losses section b. Balance Sheet 1:. Retained Earnings Statement D. Compute the following ratios: Current Ratio, Prot Margin on Sales, Debt to Assets, Earnings per Share, and Book Value per share E. Record Closing Entries Bruce and Emmett Corporation Unadjusted Balances 2019-12-31 Debit Credit 101 Cash 425,000 102 Cash Equivalents 38,000 103 Accounts Receivable 825,000 104 Allowance for Doubtful Accounts S 25,000 105 Inventory 1,375,000 106 Prepaid expenses 122,593 107 Other Current Assets 25,531 121 Equipment 487,000 122 Building 875,000 123 Land 310,000 124 Accumulated Depreciation S 457,500 125 Investments 675,868 131 Goodwill 175,000 132 Other Intangible Assets 250,000 201 Accounts Payable 1,144,925 202 Wages Payable 80,000 204 Payroll taxes payable 18,000 205 Interest Payable 12,550 206 Dividends Payable 50,000 207 Unearned Revenue 187,500 210 Income Tax payable 212 Compensated Absence Payable 221 Long Term Liabilities 688,500 301 Common Stock ($10 par) 735,000 302 Paid-in Capital Common Stock 157,500 310 Dividends 50,000 315 Treasury Stock 250,000 320 Retained Earnings 369,700 401 Product Sales Revenue 9,280,673 402 Service Revenue 1,542,678 403 Sales Returns 162,500 404 Sales Discounts 269,500 420 Investment Income 28,290 421 Gain/Loss on Disposal 501 Cost of Goods Sold 5,100,000 601 Office Expenses 215,000 602 Bad debts expenses 603 Equipment Repair Expense 150,000 604 Advertising Expense 168,500 605 Depreciation Expense 607 Legal Fees 205,000 608 Office Wages Expense 400,000 609 Accounting Consultants 100,000 610 Property Taxes 107,831 611 Maintenance Expense 42,500 612 Dues and subscriptions Expense 22,960 613 Telephone Expense 20,199 614 Utilities Expenses 78,000 615 Wages Expense 962,000 616 Travel & Entertainment Expense 220,000 617 Research & Development 290,000 618 Insurance Expense 85,000 619 Income Tax Expense 620 Payroll taxes Expense S 168,488 625 Compensated Absence Expense 695 Interest Expense 47,500 699 Miscellaneous Expense 78,846 Totals S 14,777,816 $ 14,777,816
