Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

R&B Electrical began operations on 1/1/2017. Their annual reporting period ends 12/31. The trial balance on 1/1/2019 follows: Transaction during 2019: $15,000 cash was borrowed

R&B Electrical began operations on 1/1/2017. Their annual reporting period ends 12/31. The trial balance on 1/1/2019 follows:

image text in transcribed

image text in transcribed

Transaction during 2019:

$15,000 cash was borrowed on a five-year 8% note payable, dated 3/1/2019.

$13,000 cash was paid for land. Earned $215,000 in sales revenues for 2019.

$52,000 on account and the remainder in cash. Issued 4,000 additional shares of common stock for cash at $1 per share on 1/1/2019.

Incurred $114,000 in miscellaneous expenses for 2019, $20,000 on credit and the rest paid in cash.

Collected $34,000 owned on account.

Purchased materials with $15,000 cash.

Purchased $27,000 supplies on account.

Paid $26,000 accounts payable.

Signed a $12,000 one-year service contract for work to begin on 2/1/2020.

Declared and paid $25,000 in cash dividends.

Adjusting entries:

$18,000 in supplies remained on 12/31/2019.

$10,000 depreciation on equipment.

Interest accrued on notes payable in step a.

$16,000 in wages earned but will not be paid until 1/3/2020.

$11,000 in income taxes for 2019 will be paid in 2020.

$2,000 was written off during the year.

$2,000 of A/R is estimated to be uncollectable. Hint: The AfUA has a $1,000 debit balance after the write-offs.

Required:

Prepare journal entries for the 2019 transactions and post them to the ledger.

Prepare and post the adjusting entries.

Prepare an adjusted trial balance

Check numbers: Adjusted trial balance total debits = $404,000, Total liabilities and equity should equal $182,000.

Account title Debit Credit Cash 6,000 Accounts receivable 6,000 Allowance for uncollectable accounts 1,000 Supplies 13,000 Materials 7,000 Equipment 78,000 Accumulated Depreciation 8,000 Land Accounts payable Wages payable Interest payable Income taxes payable Long-term notes payable Common stock (8,000 shares, $0.50 4,000 par value Additional paid-in capital 80,000 Retained earnings 17,000 Service revenue Wages expense Supplies expense Bad debt expense Interest expense Depreciation expense Income tax expense Misc. expenses Totals 110,000 110,000

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

Sound Investing, Chapter 19 - Related-Party Transaction Ruse

Authors: Kate Mooney

1st Edition

0071719415, 9780071719414

More Books

Students also viewed these Accounting questions