Show all calculations for journal entries.

Prepare first December journal entries

Prepare adjusting entries

Prepare adjusted trial balance

Part I: December Journal Entries

Record the following entries in general journal form for December 2021:

December 1: Purchased Equipment for $200,000, paying $100,000 down and signed a 4%, 90-day note for the balance. This equipment will be depreciated using the double declining method over 9 years, and no salvage value.

December 2: Recorded sales on account of $600,000, 2/15, net 30. Cost of inventory was $376,000. Caledonia Construction Company uses the net method for accounting for sales.

December 3: Collected $610,000 on accounts.

December 4: Bought back 4,000 shares of stock for $16 per share.

December 5: Issued 5000 shares of restricted stock to its CFO. The stock has a fair value of $95,000. The service period related to this restricted stock is 4 years. Vesting occurs if the CFO stays with the company for 4 years. The par value of the stock is $1.

December 6: Paid invoice of $687,000 to supplier. The invoice related to inventory purchase that had been previously recorded.

December 7: Purchased inventory of $589,000 on account with terms 3/10 net 60. Caledonia Construction uses the net method for its purchases.

December 8: Received payment related to sale on December 2.

December 9: Purchased equity securities, without the intention to sell in the near term, for $310,000, plus commissions of $3,200.

December 10: Paid off short-term note from 12/1 trial balance plus interest of $600.

December 11: Paid invoices of $711,000 to suppliers.

December 12: Issued 20,000 shares of common stock at $22.50 per share

December 14: Collected $750,000 on Account.

December 16: Paid invoice from 12/7.

December 17: Purchased $50,045 inventory on account with terms 2/15, net 30. Caledonia Construction uses the net method for its purchases.

December 19: Recorded cash sales of $350,000, cost of inventory was $185,000.

December 20: Recorded sales on account of $635,000, terms 2/10, net 30, cost of merchandise inventory was $325,000.

December 23: Sold 2,500 shares of Treasury Stock for $23 per share.

December 24: Made payment of $32,000 towards long-term note payable of $500,000, which includes interest of $3,500.

December 26: Wrote off $12,800 in bad debt.

December 31: Signed a 7-year lease for equipment, fair value of $300,000. Equipment transfers to Caledonia Construction at end of lease. Lease payments of 62,500 commence with signing of lease.

Part I: Adjusting Journal Entries

Record the following adjusting entries in general journal form as of December 31, 2021:

1. Supplies on hand at the end of the year: $8,009
2. Equipment shown on the 12/1 TB was purchased on 1/1/17, has a 7-year life, no salvage value and company uses double-declining balance method for its depreciation.
3. Dont forget to depreciate the new equipment, which is also depreciated using the DDB method!
4. Included in the truck balance is a fully depreciated truck for $6,500 and a new truck valued at $50,000 that was purchased on 1/1/17. The new truck has an 8-year life, no salvage value and the company uses the sum-of-the-years digits for its depreciation method on this asset.
5. The building is depreciated under the straight-line method over 39 years and was placed in service on July 1, 2018.
6. The machinery was purchased on December 1, 2020, has a 5-year useful life, $4,000 salvage value, and is being depreciated under the straight-line method.
7. The patent was purchased on 1/1/2013 for $100,000 and its useful life is 20 years.
8. Included in the Prepaid Insurance Account balance at 12/1 is a $75,000, 18-month insurance policy that was purchased on August 1, 2021.
9. Also included in the 12/1 trial balance (and the 12/31 TB) was an insurance policy that expired on 12/31/21.
10. Declared dividends of $150,000 on December 31.
11. The fair market value of the short-term investments is $17,500.
12. The total fair value of the Available for Sale securities is $395,000.
13. 5% of Accounts Receivable is estimated to be uncollectible. Company uses the allowance method for estimating its uncollectible accounts.
14. Accrued salaries of $120,000 and accrued payroll taxes of 6.2%.
15. Had issued $1,500,000 of 4%, 10-year bond, dated 1/1/18 for $1,383,079 when the market rate was 5%. Interest is paid on June 30 and January 1 using the effective interest rate method. The June payment is included in the Dec. 1 TB. Extra credit of 5 points if a complete amortization table (all 10 years) is included. Partial extra credit may be awarded.
16. One month has passed since the issuance of restricted stock.
17. Interest on 30 days of short-term note payable, dated 12/1/21 should be accrued. (Assume 360 days in a year for calculation)
18. Income tax rate is 21%.

Chart of Accounts

Check figures:

Adjusted Trial Balance Total Debit: $17,198,109.34

Journal Entries Total Debits: $8,621,604.10

Adjusting Entries Total Debits: $902,356.74

CR 30,000.00 269,231.00 1 Caledonia Construction Company 2 Trial Balance 3 December 1, 2021 4 Description DR 5 Cash 2,088,098.00 6 Accounts Receivable 2,340,370.00 7 Allowance for Doubtful Accounts 8 Short-term Investments 14,000.00 9 Fair Value Adjustment-ST 10 Inventory 645,000.00 11 Prepaid Insurance 125,000.00 12 Supplies 12,005.00 13 Available-for-sale Investments 100,000.00 14 Fair Value Adjustment-AFS 15,000.00 15 Land 635,000.00 16 Building 3,000,000.00 17 Accumulated Depreciation-Building 18 Machinery 850,000.00 19 Accumulated Depreciation Machinery 20 Equipment 150,000.00 21 Accumulated Depreciation Equipment 22 Truck 56,500.00 23 Accumulated Depreciation Truck 24 Right-of-use Asset 25 Patents 60,000.00 26 Accounts Payable 27 Salaries Payable 28 Utilities Payable 29 Payroll Taxes Payable 30 Interest Payable 31 Dividends Payable 32 Note Payable -short term 33 Income Tax Payable 34 Lease Liability 35 Note Payable-long term 36 Bond Payable 14,100.00 103,954.00 42,611.00 1,793,300.00 1,577,000.00 9,000.00 25,000.00 50,000.00 26,000.00 500,000.00 1,500,000.00 82,377.00 135,000.00 2,488,193.00 15,000.00 1,019,559.00 5,942,510.00 3,155,000.00 37 Discount on Bond Payable Common Stock, $1 par, $1M shares authorized; 135,000 shares issued and 38 outstanding 39 APIC Common Stock 40 Unrealized Gains (Losses) Equity 41 Unearned Compensation 42 Treasury Stock 43 APIC Treasury Stock 44 Retained Earnings 45 Sales 46 Cost of Goods Sold 47 Compensation Expense 48 Salaries Expense 49 Bad Dept Expense 50 Payroll Tax Expense 51 Advertisting Expense 52 Insurance Expense 53 Supplies Expense 54 Depreciation Expense 55 Amortization Expense 56 Utilities Expense 57 Miscellaneous Expenses 58 Interest Expense 59 Income Tax Expense 60 Realized Gains (Losses) 61 Unrealized Gains (Losses) Income Statement 62 1,900,000.00 80,000.00 125,000.00 40,000.00 16,000.00 9,000.00 9,300.00 35,308.00 2,500.00 15,542,958.00 15,542,958.00 December Adjustments Dr Cr. Trial Balance 12.1 Dr. Cr. Unadjusted Trial Balance 12.31 Dr. Cr. Adjusting Journal Entries Dr. Cr. Adjusted Trial Balance Dr. Cr. Income Statement Dr. Cr Bal. Sheet Stmt. Own. Equity Dr. Cr. Account Title CR 30,000.00 269,231.00 1 Caledonia Construction Company 2 Trial Balance 3 December 1, 2021 4 Description DR 5 Cash 2,088,098.00 6 Accounts Receivable 2,340,370.00 7 Allowance for Doubtful Accounts 8 Short-term Investments 14,000.00 9 Fair Value Adjustment-ST 10 Inventory 645,000.00 11 Prepaid Insurance 125,000.00 12 Supplies 12,005.00 13 Available-for-sale Investments 100,000.00 14 Fair Value Adjustment-AFS 15,000.00 15 Land 635,000.00 16 Building 3,000,000.00 17 Accumulated Depreciation-Building 18 Machinery 850,000.00 19 Accumulated Depreciation Machinery 20 Equipment 150,000.00 21 Accumulated Depreciation Equipment 22 Truck 56,500.00 23 Accumulated Depreciation Truck 24 Right-of-use Asset 25 Patents 60,000.00 26 Accounts Payable 27 Salaries Payable 28 Utilities Payable 29 Payroll Taxes Payable 30 Interest Payable 31 Dividends Payable 32 Note Payable -short term 33 Income Tax Payable 34 Lease Liability 35 Note Payable-long term 36 Bond Payable 14,100.00 103,954.00 42,611.00 1,793,300.00 1,577,000.00 9,000.00 25,000.00 50,000.00 26,000.00 500,000.00 1,500,000.00 82,377.00 135,000.00 2,488,193.00 15,000.00 1,019,559.00 5,942,510.00 3,155,000.00 37 Discount on Bond Payable Common Stock, $1 par, $1M shares authorized; 135,000 shares issued and 38 outstanding 39 APIC Common Stock 40 Unrealized Gains (Losses) Equity 41 Unearned Compensation 42 Treasury Stock 43 APIC Treasury Stock 44 Retained Earnings 45 Sales 46 Cost of Goods Sold 47 Compensation Expense 48 Salaries Expense 49 Bad Dept Expense 50 Payroll Tax Expense 51 Advertisting Expense 52 Insurance Expense 53 Supplies Expense 54 Depreciation Expense 55 Amortization Expense 56 Utilities Expense 57 Miscellaneous Expenses 58 Interest Expense 59 Income Tax Expense 60 Realized Gains (Losses) 61 Unrealized Gains (Losses) Income Statement 62 1,900,000.00 80,000.00 125,000.00 40,000.00 16,000.00 9,000.00 9,300.00 35,308.00 2,500.00 15,542,958.00 15,542,958.00 December Adjustments Dr Cr. Trial Balance 12.1 Dr. Cr. Unadjusted Trial Balance 12.31 Dr. Cr. Adjusting Journal Entries Dr. Cr. Adjusted Trial Balance Dr. Cr. Income Statement Dr. Cr Bal. Sheet Stmt. Own. Equity Dr. Cr. Account Title