real IJ. 23. Analysis of transactions and preparation of income statement and balance sheet. R. to the information for Patterson Corporation for January, Year 13, in Chapter 2. Proh 2.14, above. The following transactions occur during February. (1) February 1: The firm pays the two-year insurance premium of $2,400 for fire liability coverage beginning February 1. (2) February 5: Acquires merchandise costing $1,050,000. Of this amount, $1.455 is for suppliers to whom Patterson returned defective merchandise during January but which the firm had not yet received a refund for amounts paid. Patterson Corpor tion acquired the remaining purchases on account. (3) During February: Sells merchandise to customers totaling $1,500,000. of this amoun. $4,500 was to customers who had advanced Patterson Corporation cash during Janu. ary. Patterson Corporation makes the remaining sales on account. (4) During February: The cost of the goods sold in transaction (3) was $950,000. (5) During February: Pays in cash selling and administrative expenses of $235,000. (6) During February: Collects $1,206,000 from customer for sales previously made on account (7) During February: Pays $710,000 to suppliers of merchandise for purchases previously made on account. (8) February 28: Recognizes rent expense for February. besuary 28: Recognizes depreciation expense of $2,500 for February. Patterson Cor poration uses an Accumulated Depreciation account. 10) February 28: Recognizes amortization expense of $450 on the patent. Patterson Cor poration does not use an Accumulated Amortization account for patents; instead, it records the amortized amounts directly to the patent account. (11) February 28: Recognizes an appropriate amount of insurance expense for February (12) February 28: Recognizes interest expense on the mortgage payable (see transaction (12) in Chapter 2, Problem 2.14). (13) February 28: Recognizes income tax expense for February. The income tax rate is 40%. Income taxes for February are payable by April 15. a. Using T-accounts, enter the balances in balance sheet accounts on February 1 Year (see Chapter 2, Problem 2.14), and the effects of the 13 transactions above. b. Prepare an income statement for the month of February, Year 13. c. Prepare a comparative balance sheet as January 31 and February 28. Year 13. 24. Miscellaneous transnationa real IJ. 23. Analysis of transactions and preparation of income statement and balance sheet. R. to the information for Patterson Corporation for January, Year 13, in Chapter 2. Proh 2.14, above. The following transactions occur during February. (1) February 1: The firm pays the two-year insurance premium of $2,400 for fire liability coverage beginning February 1. (2) February 5: Acquires merchandise costing $1,050,000. Of this amount, $1.455 is for suppliers to whom Patterson returned defective merchandise during January but which the firm had not yet received a refund for amounts paid. Patterson Corpor tion acquired the remaining purchases on account. (3) During February: Sells merchandise to customers totaling $1,500,000. of this amoun. $4,500 was to customers who had advanced Patterson Corporation cash during Janu. ary. Patterson Corporation makes the remaining sales on account. (4) During February: The cost of the goods sold in transaction (3) was $950,000. (5) During February: Pays in cash selling and administrative expenses of $235,000. (6) During February: Collects $1,206,000 from customer for sales previously made on account (7) During February: Pays $710,000 to suppliers of merchandise for purchases previously made on account. (8) February 28: Recognizes rent expense for February. besuary 28: Recognizes depreciation expense of $2,500 for February. Patterson Cor poration uses an Accumulated Depreciation account. 10) February 28: Recognizes amortization expense of $450 on the patent. Patterson Cor poration does not use an Accumulated Amortization account for patents; instead, it records the amortized amounts directly to the patent account. (11) February 28: Recognizes an appropriate amount of insurance expense for February (12) February 28: Recognizes interest expense on the mortgage payable (see transaction (12) in Chapter 2, Problem 2.14). (13) February 28: Recognizes income tax expense for February. The income tax rate is 40%. Income taxes for February are payable by April 15. a. Using T-accounts, enter the balances in balance sheet accounts on February 1 Year (see Chapter 2, Problem 2.14), and the effects of the 13 transactions above. b. Prepare an income statement for the month of February, Year 13. c. Prepare a comparative balance sheet as January 31 and February 28. Year 13. 24. Miscellaneous transnationa
