Question 5 Flint Corporation's balance sheet at December 31, 2016, is presented below FLINT CORPORATION Balance Sheet December 31, 2016 Cash Inventory Prepaid insurance Equipment $30,800 Accounts payable 30,300 Interest payable 5,900 Bonds payable 40,000 Common stock $12,000 2,435 48,700 27,600 Retained earnings $16,265 $107,000 $107,000 During 2017, the following transactions occurred. Flint uses a perpetual inventory system 1. Flint paid $2,435 interest on the bonds on January 1, 2017 2. Flint purchased $241,700 of inventory on account. 3. Flint sold for $486,000 cash inventory which cost $266,000. Flint also collected $29,160 sales taxes 4. Flint paid $236,000 on accounts payable 5. Flint paid $2,435 interest on the bonds on July 1, 2017. 6. The prepaid insurance ($5,900) expired on July 31 7. On August 1, Flint paid $9,840 for insurance coverage from August 1, 2017, through July 31, 2018 8. Flint paid $17,000 sales taxes to the state 9. Paid other operating expenses, $86,000 10. Redeemed the bonds on December 31, 2017, by paying $46,800 plus $2,435 interest b. Ihe prepaid insurance ($5,900) expired on July 31 7. On August 1, Flint paid $9,840 for insurance coverage from August 1, 2017, through July 31, 2018. 8. Flint paid $17,000 sales taxes to the state. 9. Paid other operating expenses, $86,000 10. Redeemed the bonds on December 31, 2017, by paying $46,800 plus $2,435 interest. 11, Issued $87,000 of 8% bonds on December 31, 2017, at 103, The bonds pay interest every June 30 and December 31. Adjustment data: 12. Recorded the insurance expired from item 7. 13. The equipment was acquired on December 31, 2016, and will be depreciated on a straight-line basis over 5 years with a $2,700 salvage value. 14. The income tax rate is 30%. (Hint: Prepare the income statement up to income before taxes and multiply by 30% to compute the amount.) Prepare journal entries for the transactions listed above and adjusting entries. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit 1. Interest Payable Cash 2. Inventory Windows [] Windows Accounts Payable Accounts Payable 3. Cash Sales Revenue Sales Taxes Payable (To record sales revenue.) Cost of Goods Sold Inventory (To record cost of goods sold.) 4. Accounts Payable Cash 5. Interest Expense Cash 6. Insurance Expense Prepaid Insurance 7. Prepaid Insurance Cash 8. Sales Taxes Payable Cash 9. Other Operating Expenses Cash 10. Interest Expense Bonds Payable To record interest expense.) Cash Gain on Bond Redemption Cash (To record retirement of bonds.) 11. Cash (To record retirement of bonds.) 11. Cash Bonds Payable Premium on Bonds Payable 12. Insurance Expense Prepaid Insurance 13. Depreciation Expense Accumulated Depreciation-Equipment 14. Income Tax Expense Income Taxes Payable Prepare an adjusted trial balance at December 31, 2017. FLINT CORPORATION Trial Balance December 31, 2017 Prepare an adjusted trial balance at December 31, 2017. FLINT CORPORATION Trial Balance December 31, 2017 Debit Credit Totals Prepare an income statement for the year ending December 31, 20127 FLINT CORPORATION Income Statement Prepare an income statement for the year ending December 31, 2017. FLINT CORPORATION Income Statement For the Year Ending December 31, 2017 Prepare a retained earnings statement for the year ending December 31, 2017 FLINT CORPORATION Retained Earnings Statement Prepare a retained earnings statement for the year ending December 31, 2017. FLINT CORPORATION Retained Earnings Statement Prepare a classified balance sheet as of December 31, 2017. (List current assets in order of liquidity.) FLINT CORPORATION Balance Sheet December 31, 2017 Assets FLINT CORPORA TION Balance Sheet December 31, 2017 Assets Liabilities and Stockholders' Equity Liabilities and Stockholders' Equity
