Question 5 Bridgeport Corp.'s balance sheet at December 31, 2016, is presented below BRIDGEPORT CORP. Balance Sheet December 31, 2016 Cash Inventory Prepaid insurance Equipment $33,700 Accounts payable $13,100 2,415 48,300 25,100 Retained earnings $19,43!5 $108,350 30,850 Interest payable 5,700 Bonds payable 38,100 Common stock $108,350 During 2017, the following transactions occurred. Bridgeport uses a perpetual inventory system 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. Bridgeport paid $2,415 interest on the bonds on January 1, 2017 Bridgeport purchased $244,700 of inventory on account. Bridgeport sold for $484,000 cash inventory which cost $270,000. Bridgeport also collected $29,040 sales taxes Bridgeport paid $223,000 on accounts payable Bridgeport paid $2,415 interest on the bonds on July 1, 2017 The prepaid insurance ($5,700) expired on July 31 On August 1, Bridgeport paid $10,440 for insurance coverage from August 1, 2017, through July 31, 2018 Bridgeport paid $16,000 sales taxes to the state Paid other operating expenses, $89,000 Redeemed the bonds on December 31, 2017, by paying $46,500 plus $2,415 interest. issued $88,000 of 8% bonds on December 31, 2017, at 103. The bonds pay interest every June 30 and December 31 Adjustment data: 12. 13. 14. Recorded the insurance expired from item 7. The equipment was acquired on December 31, 2016, and will be depreciated on a straight-line basis over 5 years with a $3,100 sal The income tax rate is 30%. (Hint: Prepare the income statement up to income before taxes and multiply by 30% to compute the a Prepare journal entries for the transactions listed above and adjusting entries. (Credit account titles are automatically indented whe indent manually.) No. Account Titles and Explanation Debit Credit 1. Interest Payable 2415 Interest Expense 2415 2. Cash 244700 Inventory 244700 To record sales revenue.) To record cost of goods sold.) 4. 5 6. 7. . 10. (To record interest expense.) (To record retirement of bonds.) 12. 13. 14. Prepare an adjusted trial balance at December 31, 2017. BRIDGEPORT CORP Trial Balance Debit Credit Totals Prepare an income statement for the year ending December 31, 2017. BRIDGEPORT CORP. Income Statement Income Statement Prepare a retained earnings statement for the year ending December 31, 2017. BRIDGEPORT CORP Retained Earnings Statement Prepare a classified balance sheet as of December 31, 2017. (List current assets in order of liquidity.) BRIDGEPORT CORP Balance Sheet Assets Liabilities and Stockholders' Equity