Sapphire Gems and Minerals Co Ltd $-$ Garnet Division Trial Balance as of December $31,2022$

ACCT$1002$ Introduction to Financial Accounting Assignment # $2$ Page $|12$

DR CR

Cash

$3,005,000$

Accounts receivable

$4,445,000$

Allowance for bad debt

$300,000$

Other debtors

Merchandise Inventory

$8,800,000$

Store Supplies

$1,200,000$

Prepaid Insurance

$5,985,000$

Prepaid rent

$1,484,000$

Furniture & Equipment

$12,000,500$

Accumulated deprecation$-$Furniture and equipment

$4,760,200$

Motor Truck

$2,660,000$

Accumulated depreciation$-$ Motor Truck

$1,962,697$

Accounts payable

$430,900$

Salary payable

Interest payable

Unearned Sales revenue

$1,255,550$

Note Payable, long term

$5,190,000$

Capital

$15,801,403$

Withdrawals

$55,750$

Sales revenue

$30,000,000$

Sales discount

$705,500$

Sales returns and allowances

$750,500$

Cost of goods sold

$7,450,000$

Salaries expense

$8,900,000$

Insurance Expense

Utilities Expense

$705,500$

Rent Expense

$1,554,000$

Depreciation Expense $$ Furniture and Equipment

Depreciation Expense $$ Motor truck

Store Supplies Expense

Gain$/$loss on Disposal of Fixed Asset

Bad$-$Debt Expense

Interest Expense

$59,700,750$

$59,700,750$

The following additional information is available December $31,2022$:

ACCT$1002$ Introduction to Financial Accounting Assignment # $2$

Page $|13$

$1)$ Store Supplies on hand on December $31,2022,$ amounted to $$490,600.$

$2)$ Insurance of $$5,985,000$ was paid on January $1,2022,$ for the $19-$months to July $31,2023$

$3)$ Prepaid rent expired December $31,2022,$ amounted to $$1,060,000.$

$4)$ The furniture and equipment have an estimated useful life of $10$ years and is being depreciated on the straight$-$line method down to a residual value of $$100,000.$

$5)$ The motor truck cost relates to two Livi Trucks purchased for $$1,330,000$ each by the company on January $1,2016.$ The double$-$declining balance method of depreciation is used to compute the truck$$s depreciation charges and their expected useful life is $10$ years or $100,000$ miles. In $2016,15,000$ miles were driven, $18,500$ in $2017,15,600$ in $2018,17,000$ in $2019,14,500$ in $2020,10,800$ in $2021$ and $12,800$ in $2022.$ The residual value on both truck is $$278,921$ each. On July $1,2022,$ the company sold one of the trucks to Daley Company for $$400,000$ on credit. Round off answers to the nearest dollar.

$6)$ Salaries earned by employees and not yet paid amounted to $$1,250,000$ on Dec $31,2022.$

$7)$ Accrued interest expense as of December $31,2022,$ $$405,000.$

$8)$ On Dec $31,2022,$ $$205,550$ of the previously unearned sales revenue had been earned.

$9)$ The aging of the Accounts Receivable schedule on Dec $31,2022,$ indicated that the Allowance for Bad Debts should be $$444,500.$

$10)$ A physical count of inventory was done on December $31,2022,$ after making all the other adjustments and this revealed that there was $$8,800,500$ worth of inventory on hand at this point.

Other data:

$11)$ The business is expected to make principal payments totalling $$1,550,500$ towards the loan during the fiscal year to December $31,2023$

Required:

a$)$

b$)$ c$)$

Prepare the necessary adjusting journal entries on Dec $31,2022.[$Narrations are not required$]$ Prepare the Adjusted Trial balance for the period ending December $31,2022.$

Prepare the following financial statements for the division:

$$ A Multiple$-$step income statement & a Statement of owner$$s equity for the year ended

December $31,2022$

$$ A Classified balance sheet, in report format, at December $31,2022.$