Problem

The following trial balance was taken from the books of COYOTE Co. on Dec. 31, 2016.

Account Debit Credit

Cash Dedt: $10,000

Accounts receivable Debt: 50,000

Allowance for doubtful accounts Credit: $ 2,000

Prepaid insurance Debt: 30,000

Inventory, January 1, 2016 Debit: 50,000

Furniture and equipment Debit: 290,000

Accumulated depreciation Credit: 140,000

Patents Debt: 50,000

Copyrights Debit: 30,000

Accounts payable Credit: 38,000

Accrued expenses Credit: 30,000

Bonds payable Credit: 50,000

Common stock Credit: 60,000

Retained earnings Credit: 20,000

Dividends Credit: 30,000

Sales 400,000

Rental revenue Credit: 50,000

Loss on fire (extra ordinary) Debit: 10,000

Purchase Debit: 200,000

Salary expense Debit: 70,000

Rent expense Debit: 30,000

Totals Debit: 820,000 Credit: 820,000

At the yearend, the following items have not been recorded.

a. Prepaid insurance expired during the 2016, $22,000.

b. Estimated bad debts expense for 2016 is $1,000.

c. Five month rent of $30,000 was paid in advance on September 1, 2016 and charged to rent expense then.

d. Inventory as of December 31, 2016, $40,000 (using periodic inventory procedure).

Furniture and equipment have an average useful life of 4 years and salvage value of $10,000. Use the straight line method.

e. Utility bill of $3,000 for the month of December 2016 will be paid on its due date, January 10, 2015.

f. Office salaries accrued but not yet paid by December 31, 2016 are $4,000.

g. The tax rate is 30%.

Instruction:

1) Prepare any necessary adjusting entries.

2) Prepare income statement, statement of retained earnings, & balance sheet of COYOTE Company for the year 2016.

3) Prepare closing entries of COYOTE for the year 2016.

Presume the above trial balance is an adjusted trial balance, and prepare

4) Multiple step income statement and

5) Multiple step balance sheet.