Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please work this out for me. it is due on sunday please. thanks Before you begin, print out all the pages in this workbook. The

please work this out for me. it is due on sunday please. thanks
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
Before you begin, print out all the pages in this workbook. The unadjusted trial balance of Morgan Manufacturing Corp. at December 31, 2019 is shown on the "Trial Bal" page (see tab below). Refer also to the additional year-end information for the company shown on the "Adjusting Entries" page (see tab below). Required: 1 Prepare year-end adjusting entries. General ledger account numbers are not necessary. Show your calculations below each adjusting entry. 2 Post the adjusting entries to the trial balance and prepare an adjusted trial balance. 3 Using the amounts from the adjusted trial balance, complete the financial statements for the year ended December 31, 2019. Morgan Manufacturing Corp. Adjusting Entries For the Year Ended December 31, 2019 The following additional information is available at the corporation's year-end. GST of 5% only applies when indicated. a. A sale on account has not been recorded in the amount of: $5,000 Applicable sales tax is: 8% b. Warranty expense for the year as a percentage of sales should be: 2% Unpaid gross salaries at year-end amount to: $10,000 C. Deductions from unpaid salaries are as follows: Employee Company Portion Portion Employee income taxes FICA Social Security taxes 12% 0% 4% 4% FICA Medicare taxes 29% 2% Company health insurance 4% 4% these are not the actual required percentages d. The estimated year-end audit fees are: $90,000 e. Rent revenue consists of 13 equal monthly payments, including one paid in advance for January 2020. f. A trade account payable was converted to a note payable during the year. No entry has been made to record this. The note payable is due at the end of 2020. The amount of the note payable is: $40,000 3% The annual interest rate on the note payable is: The note payable created at the end of this month: was (January 1; December 12) g. A lawsuit was commenced against the company in 2019. Damages claimed are: $30,000 Lawyers for the company consider the likelihood of success to be: Possible h. The interest rate on the mortgage is: 8% Annual payments (blended principal and interest) are made on Dec. $163,200 31 and total: The 2019 payment has been recorded as Interest on Long-term Debt expense. The corporate income tax rate as a percentage of income before i. 10% income taxes is: Corporate income tax installments during the year have been recorded as Income Tax expense in the records. Assume any 2019 loss before income taxes will result in the refund of income taxes at the current year's income tax rate. Morgan Manufacturing Corp. GENERAL JOURNAL Dec Credit 2019 Adjusting entries Debit Trial Balance At December 31, 2019 Adjustments Credit Unadjusted TB Account Adjusted TB Debit Adj. Debit Credit Adj. # Debit Credit Cash in bank Accounts receivable Parts inventory Corp, income tax receivable Land Building Accumulated dep'n - bldg. Trade accounts payable Interest payable Estimated current liabilities 74,000 760.000 210,000 10,000,000 7,900,000 1,580,000 140,000 Estimated warranty liability Salaries payable Employee inc. taxes pay. FICA Soc. Sec. pay. 136,000 FICA Medicare payable Co. health insurance payable Corp. income tax payable Sales tax payable Note payable Unearned rent revenue 1,000 1,632,000 Mortgage payable Common stock, $1 per sh. Retained earnings 9,000,000 2,963,800 Rent revenue 520,000 Sales, net Cost of goods sold Bad debts expense Co. health ins. expense 13,600,000 870,400 3,000 18,400 300,000 1,000 18,400 9,200 Delivery expense Dep'n. expense- building FICA Soc. Sec. exp. FICA Medicare exp. Interest and bank charges Interest on long-term debt Lawsuit damages expense Office supplies expense Professional fees Salaries expense Warranty expense Corp. income tax exp. 50,000 163,200 99,000 40,000 460,000 1,000 489,600 29,436,800 29,436,800 Morgan Manufacturing Corp. Income Statement For the Year Ended December 31, 2019 sales, net ess: Cost of goods sold Gross profit Operating expenses 2019 2018 $12.756.800 9,017,344 3,739,456 Selling Salaries and benefits Delivery Office supplies Warranty 532.510 282,510 99,000 Total selling General and administrative 247,520 1,161,030 Bad debts 2,790 Depreciation Lawsuit damages Professional fees 940 143.000 Total general and adminstrative 146,730 Total operating expenses Income from operations 1,307,760 2,431,696 Other income 499,200 Rent revenue Income before interest and income taxes 2,930,896 177,243 Interest expense Income before income taxes 2,753,653 275,365 Income taxes $2,478,288 Net income Morgan Manufacturing Corp. Statement of Changes in Equity For the Year Ended December 31, 2019 2018 2019 Retained Common Total equity Total equity earnings $2,963,800 stock $9,000,000 $11,963,800 $9,485,512 Balance at Jan. 1 2,478,288 $11,963,800 Net income $9,000,000 Balance at Dec. 31 Morgan Manufacturing Corp. Balance Sheet. At December 31, 2019 Assets Current Cash Accounts receivable, net 2019 2018 $41,970 Corporate income taxes receivable Inventories 640,000 168.012 849,982 Non-current Land 23,166,245 6,321,000 29,487,245 $30,337,227 Building, net Liabilities Current Trade accounts payable $108,150 84,600 Estimated current liabilities 126,900 Estimated warranty liabilities Note payable Interest payable 297 10,340 Salaries and benefits payable 1,540 Sales tax payable 41,600 Unearned rent Current portion of mortgage payable Corporate income taxes payable 180,000 553,427 Non-current 18,000,000 (180,000) Mortgage payable Less: Current portion 17,820,000 18,373,427 Total liabilities Stockholders' Equity 9,000,000 Common stock 2,963,800 Retained earnings 11,963,800 $30,337,227 Total liabilities and S/H equity

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Performance Auditing Contributing To Accountability In Democratic Government

Authors: Jeremy Lonsdale, Peter Wilkins, Tom Ling

1st Edition

1848449720, 978-1848449725

More Books

Students also viewed these Accounting questions

Question

7. Understand the challenges of multilingualism.

Answered: 1 week ago

Question

5. Give examples of variations in contextual rules.

Answered: 1 week ago