Roxy & Harley Corporation
	Unadjusted Balances
	12/31/2016
		Debit	Credit

101	Cash	$ 850,000
102	Cash Equivalents	$ 76,000
301	Common Stock ($10 par)		$ 1,470,000
103	Accounts Receivable	$ 1,650,000
131	Goodwill	$ 350,000
125	Investments	$ 1,351,735
602	Bad debts expenses	$ 0
122	Building	$ 1,750,000
613	Telephone Expense	$ 40,398
617	Research & Development	$ 580,000
601	Office Expenses	$ 430,000
107	Other Current Assets	$ 51,063
121	Equipment	$ 974,000
618	Insurance Expense	$ 170,000
620	Payroll taxes Expense	$ 336,975
204	Payroll taxes payable		$ 36000
608	Office Wages Expense	$ 800,000
132	Other Intangible Assets	$ 500,000
310	Dividends	$ 100,000
123	Land	$ 620,000
106	Prepaid expenses	$ 245,186
614	Utilities Expenses	$ 156,000
615	Wages Expense	$ 1,924,000
616	Travel & Entertainment Expense	$ 440,000
105	Inventory	$ 2,750,000
315	Treasury Stock	$ 500,000
404	Sales Discounts	$ 539,000
420	Investment Income		$ 56,580
421	Gain/Loss on Disposal
205	Interest Payable		$ 25,100
619	Income Tax Expense
210	Income Tax payable
104	Allowance for Doubtful Accounts		$ 50,000
612	Dues and subscriptions Expense	$ 45,920
695	Interest Expense	$ 95,000
501	Cost of Goods Sold	$ 10,200,000
607	Legal Fees	$ 410,000
124	Accumulated Depreciation		$ 915,000
609	Accounting Consultants	$ 200,000
610	Property Taxes	$ 215,662
611	Maintenance Expense	$ 85,000
221	Long Term Liabilities		$ 1,377,000
207	Unearned Revenue		$ 375,000
401	Product Sales Revenue		$ 18,561,346
402	Service Revenue		$ 3,085,356
302	Paid-in Capital Common Stock		$ 315,000
201	Accounts Payable		$ 2,289,850
604	Advertising Expense	$ 337,000
605	Depreciation Expense
320	Retained Earnings		$ 739,400
603	Equipment Repair Expense	$ 300,000
206	Dividends Payable		$ 100,000
403	Sales Returns	$ 325,000
202	Wages Payable		$ 160,000
699	Miscellaneous Expense	$ 157,693
	Totals	$ 29,555,632	$ 29,555,632
625	Compensated Absence Expense
212	Compensated Absence Payable

1. $300,000 in sales on account had not been recorded but were shipped FOB Shipping Point on December 31. The cost of this inventory was $140,000. Roxy and Harley uses a perpetual inventory system.

2. Employees are allowed to carry over up to 10 days of earned vacation days per year up to 40 days. Employees earn an average of $190 per day. A total of 1,000 earned vacation days will be carried over to 2017. It is probable that the employees will take the vacation days.

3. Income tax expense is 30% of income before income tax.

4. The Research and Development account includes current year costs of $380,000 and R& D Equipment with a cost of $200,000 and an estimated useful life of 10 years.

5. You discover that a product sale was made and recorded in December for $100,000; the product had not yet been shipped. The cost of the product was $58,000.

6. The Prepaid Expense account balance includes the $300,000 cost of a two year insurance policy purchased on April 1, 2016.

7. Depreciation & Amortization expense for the year is $275,000

8. Interest expense accrued on its long-term liabilities is $82,620.

9. A dividend of $147,000 was declared on December 16, to be paid on January 15, 2017

10. It is estimated that 6% of accounts receivable will be uncollectable.

INSTRUCTIONS:

A. Correct the trial balance by putting the accounts in the typical account number order

B. Record the adjusting journal entries

C. Compute the adjusted trial balance amounts

D. Prepare in good form: a. Income Statement b. Balance Sheet c. Retained Earnings Statement

E. Compute the following ratios: Current Ratio, Profit Margin on Sales, Debt to Assets, Earnings per Share, and Book Value per share F. Record Closing Entries