Please do not omit G section. Please do all sections. a~h.
Jamukha Corporati on prepares quarterly financial statements, ending March 31, 2018. The bal ance sheet at December 31, 2017, is presented below Jamukha Corporation Balance Sheet December 31, 2017 Assets Cash Accounts receivable Allowance for doubtful accounts iabilities and Stockholders Accounts payable Common stock 51,075 40,000 172,825 15,150 44,750 4,000 Retained earnings 45,000 60,000 (15,000) 200,000 2,000 263,900 an quipment AD - equipment Building AD building 263,900 During the first quarter the following transactions occurred 1. Performed services for $80,000 on account . On February 1, collected fees of $38,100 in advance. $3,175 worth of services are to be performed each month from February 1, 2018, to January 31, 2019. (Wait to make adjusting entries.) On February 1, purchased equipment for $20,000 plus 5% sales tax $4,700 cash was paid with the remaining balance on account Check #755 was used (hint: use accounts payable for the liability) 4. On March 5, collected $106,250 from customers on account Paid $61,125 on accounts payable. Check #756 was used Paid administrative expenses of $48,600 Check #757 was used Acquired a patent with a 10-year life for $17,900 cash on March 1 Check #758 was used. 7. 8. Wrote off a receivable of $2,300 from a customer who went bankrupt 9.On March 31, Jamukha Corp. sold for $15,400 cash equipm ent, which originally cost $22,000. It had an estimated life of 10 years and a salvage of $2,000. Accumulated depreciation as of December 31, 2017 was $5,600 using the straight line method (1) Record depreciation on the equipment sold, (2) record the sale Adjusting Journal Entries 10. Record revenue earned from item 2 above 11. Jamukha Corp estimated that 6,2% of its revenues will end up uncollected Record bad debt expense Hint: You wll need to calculate the revenue balance before calculating bad debt expense. You should do this by looking at the ledger after posting entries 1-10 12. Record depreciation on the equipment as of March 31. The new equipment purchased in February is being depreciated using the double declining balance method over 5 years. The equipment has an estimated salvage value of $1,000. The equipment that was on the books on December 31, 2017, and that is still owned by Jamukha is being depreciated over a 10-year life using straight line with no salvage value 13. Depreciation is recorded on the building on a straight-line basis using a 20-year life and a salvage value of $4,000 14. Amortization is recorded on the patent 15. The company reconciles its bank statement every quarter. Informati on from the December 31, 2017, bank reconciliation is provided below. Make the necessary journal entry. You wll need the facts in this item to complete the bank reconciliation for Requirement (e). There were no errors Deposit in trans /30/17 $4,100 Outstanding Checks #740 $2,333 #752 #753 #754 400 7,500 The bank statement received for the quarter ended March 31, 2018, w as: Beginning balance per bank Deposits 1/2/18 $4,100, 2/2/18 $38,100, 3/6/18 $106,250 Checks: #752 $400, #7535800, #756 $61,125, #757 $48,600 Debit memo: Bank service charge (Record as Administrative expense" 75 Ending balance per bank Jamukha's income tax rate is 32%. The tax will be paid when the tax return is due in April 22,083 148,450 110,925) 59,533 16. Hint: Prepare the income statement up to income before taxes and multiply by 32% to compute the amount of income tax expense. Round the tax expense to the nearest whole dollar Instructions Print out the solution pages for the general journal, ledger, and worksheet that follow and enter the following ransactions. I suggest that you use a penci. You must complete all requirements (a) through (h) to receive any credit Turn in completed work to your TA in discussion, or in their mailbox by midnight, Saturday April 20th a. Enter the December 31, 2017, balances in ledger accounts. Use the ledger account running balance format accounts provided on the following pages. Look at the cash account for an example of how to use the running bal ance ledger. Ihave completed the first two lines of it for you. It is a goodidea to keep track of whether your balance column is a debit or a credit, particularly for contra accounts b. Enter the transactions numbered 1-9 in the general journal provided on the following pages c. Post the journal entries to the ledger accounts for items 1-9 d Prepare an unadjusted trial bal ance at March 31 and enter on the worksheet. Then complete the other worksheet columns. (See below) Worksheet requir ement: Using your unadjusted trial balance (d) above and the data for adjusting entries (e) and (f) below, prepare a 12 column worksheet. Use the example for Sierra Corporati on from Chapter 4 in the text (Ilustration 4A-1 in Chapter 4 Appendix) for guidance You will not receive any credit if the worksheet is incomplete e. Prepare a bank reconciliation in good form (Item 15 above.) Use your own paper. Record the necessary AJE in the journal, the ledger, and the worksheet. f Journalize and post all other adjusting entries. (Items 10-16 above) Add them to the worksheet g. Prepare an income statem ent and a retained earnings statement for the quarter ended March 31, 2018 and a classified balance sheet at March 31, 2018. Appropriate name the gain/loss account on your income statem ent (you must call it either a gain or a loss, not both.) Use your own paper. No form atted sheets are supplied as for the other items.) h. Journalize closing entries. You are not required to post the closing entries or prepare a post-closing trial alance for this assignment EXTRA CREDIT II SOLUTION Requirements (b), (e), and (f) Name Extra Credit II-General Journal Debit Credit a.5 a.6 a.9 a.10 a 11 a. a. 14 a. 15 a 16 cl. 1 cl.2 cl.3 4 General Ledger Requirements (a), (c), and (d) CASH DR CR BALANCE Beginnin 15,150 15,150 ACCOUNTS RECEIVABLE Beginnn DR CR BALANCE DR ALLOWANCE FOR DOUBTFUL ACCOUNTS Beginnin CR BALANCE LAND DR CR BALANCE Beginnin DR EQUIPMENT Beginnin CR BALANCE ACCUMDEPRECIATION- EOUIPMENT DR CR BALANCE Beginning General Ledger - continued BUILDING DR CR BALANCE ACCUMDEPRECIATION- BUILDING DR CR BALANCE PATENTS DR CR BALANCE ACCOUNTS PAYABLE DR CR BALANCE Beginnin UNEARNED SERVICE REVENUE DR CR BALANCE INCOE TAXES PAYABLE DR CR BALANCE COMMON STOCK Beginnin DR CR BALANCE RETAINED EARNINGS DR CR BALANCE Beginnin SERVICE REVENUE DR CR BALANCE ADMINISTRATIVE EXPENSES DR CR BALANCE Gener al Ledger - continued DEPRECIATION EXPENSE DR CR BALANCE AMORTIZATION EXPENSE DR CR BALANCE GAIN/LOSS ON DISPOSAL DR CR BALANCE BAD DEBT EXPENSE DR CR BALANCE INCOME TAX EXPENSE DR CR BALANCE Worksheet (d), (e), (f) Jamukha Corporati on prepares quarterly financial statements, ending March 31, 2018. The bal ance sheet at December 31, 2017, is presented below Jamukha Corporation Balance Sheet December 31, 2017 Assets Cash Accounts receivable Allowance for doubtful accounts iabilities and Stockholders Accounts payable Common stock 51,075 40,000 172,825 15,150 44,750 4,000 Retained earnings 45,000 60,000 (15,000) 200,000 2,000 263,900 an quipment AD - equipment Building AD building 263,900 During the first quarter the following transactions occurred 1. Performed services for $80,000 on account . On February 1, collected fees of $38,100 in advance. $3,175 worth of services are to be performed each month from February 1, 2018, to January 31, 2019. (Wait to make adjusting entries.) On February 1, purchased equipment for $20,000 plus 5% sales tax $4,700 cash was paid with the remaining balance on account Check #755 was used (hint: use accounts payable for the liability) 4. On March 5, collected $106,250 from customers on account Paid $61,125 on accounts payable. Check #756 was used Paid administrative expenses of $48,600 Check #757 was used Acquired a patent with a 10-year life for $17,900 cash on March 1 Check #758 was used. 7. 8. Wrote off a receivable of $2,300 from a customer who went bankrupt 9.On March 31, Jamukha Corp. sold for $15,400 cash equipm ent, which originally cost $22,000. It had an estimated life of 10 years and a salvage of $2,000. Accumulated depreciation as of December 31, 2017 was $5,600 using the straight line method (1) Record depreciation on the equipment sold, (2) record the sale Adjusting Journal Entries 10. Record revenue earned from item 2 above 11. Jamukha Corp estimated that 6,2% of its revenues will end up uncollected Record bad debt expense Hint: You wll need to calculate the revenue balance before calculating bad debt expense. You should do this by looking at the ledger after posting entries 1-10 12. Record depreciation on the equipment as of March 31. The new equipment purchased in February is being depreciated using the double declining balance method over 5 years. The equipment has an estimated salvage value of $1,000. The equipment that was on the books on December 31, 2017, and that is still owned by Jamukha is being depreciated over a 10-year life using straight line with no salvage value 13. Depreciation is recorded on the building on a straight-line basis using a 20-year life and a salvage value of $4,000 14. Amortization is recorded on the patent 15. The company reconciles its bank statement every quarter. Informati on from the December 31, 2017, bank reconciliation is provided below. Make the necessary journal entry. You wll need the facts in this item to complete the bank reconciliation for Requirement (e). There were no errors Deposit in trans /30/17 $4,100 Outstanding Checks #740 $2,333 #752 #753 #754 400 7,500 The bank statement received for the quarter ended March 31, 2018, w as: Beginning balance per bank Deposits 1/2/18 $4,100, 2/2/18 $38,100, 3/6/18 $106,250 Checks: #752 $400, #7535800, #756 $61,125, #757 $48,600 Debit memo: Bank service charge (Record as Administrative expense" 75 Ending balance per bank Jamukha's income tax rate is 32%. The tax will be paid when the tax return is due in April 22,083 148,450 110,925) 59,533 16. Hint: Prepare the income statement up to income before taxes and multiply by 32% to compute the amount of income tax expense. Round the tax expense to the nearest whole dollar Instructions Print out the solution pages for the general journal, ledger, and worksheet that follow and enter the following ransactions. I suggest that you use a penci. You must complete all requirements (a) through (h) to receive any credit Turn in completed work to your TA in discussion, or in their mailbox by midnight, Saturday April 20th a. Enter the December 31, 2017, balances in ledger accounts. Use the ledger account running balance format accounts provided on the following pages. Look at the cash account for an example of how to use the running bal ance ledger. Ihave completed the first two lines of it for you. It is a goodidea to keep track of whether your balance column is a debit or a credit, particularly for contra accounts b. Enter the transactions numbered 1-9 in the general journal provided on the following pages c. Post the journal entries to the ledger accounts for items 1-9 d Prepare an unadjusted trial bal ance at March 31 and enter on the worksheet. Then complete the other worksheet columns. (See below) Worksheet requir ement: Using your unadjusted trial balance (d) above and the data for adjusting entries (e) and (f) below, prepare a 12 column worksheet. Use the example for Sierra Corporati on from Chapter 4 in the text (Ilustration 4A-1 in Chapter 4 Appendix) for guidance You will not receive any credit if the worksheet is incomplete e. Prepare a bank reconciliation in good form (Item 15 above.) Use your own paper. Record the necessary AJE in the journal, the ledger, and the worksheet. f Journalize and post all other adjusting entries. (Items 10-16 above) Add them to the worksheet g. Prepare an income statem ent and a retained earnings statement for the quarter ended March 31, 2018 and a classified balance sheet at March 31, 2018. Appropriate name the gain/loss account on your income statem ent (you must call it either a gain or a loss, not both.) Use your own paper. No form atted sheets are supplied as for the other items.) h. Journalize closing entries. You are not required to post the closing entries or prepare a post-closing trial alance for this assignment EXTRA CREDIT II SOLUTION Requirements (b), (e), and (f) Name Extra Credit II-General Journal Debit Credit a.5 a.6 a.9 a.10 a 11 a. a. 14 a. 15 a 16 cl. 1 cl.2 cl.3 4 General Ledger Requirements (a), (c), and (d) CASH DR CR BALANCE Beginnin 15,150 15,150 ACCOUNTS RECEIVABLE Beginnn DR CR BALANCE DR ALLOWANCE FOR DOUBTFUL ACCOUNTS Beginnin CR BALANCE LAND DR CR BALANCE Beginnin DR EQUIPMENT Beginnin CR BALANCE ACCUMDEPRECIATION- EOUIPMENT DR CR BALANCE Beginning General Ledger - continued BUILDING DR CR BALANCE ACCUMDEPRECIATION- BUILDING DR CR BALANCE PATENTS DR CR BALANCE ACCOUNTS PAYABLE DR CR BALANCE Beginnin UNEARNED SERVICE REVENUE DR CR BALANCE INCOE TAXES PAYABLE DR CR BALANCE COMMON STOCK Beginnin DR CR BALANCE RETAINED EARNINGS DR CR BALANCE Beginnin SERVICE REVENUE DR CR BALANCE ADMINISTRATIVE EXPENSES DR CR BALANCE Gener al Ledger - continued DEPRECIATION EXPENSE DR CR BALANCE AMORTIZATION EXPENSE DR CR BALANCE GAIN/LOSS ON DISPOSAL DR CR BALANCE BAD DEBT EXPENSE DR CR BALANCE INCOME TAX EXPENSE DR CR BALANCE Worksheet (d), (e), (f)
