Step # 1 (Work Sheet # 1) Prepare the adjustment to Old Trial Balance Assigned Problem # 2 The trail balance of balance sheet account of Lancer's, a popular casual dining spot, as of December 31, + 2019 is as follows: Debits Credits Cash S 10,000 Marketable Securities 16,000 2a Accounts Receivable (Less 10%) 130,000 2a Allowance for Doubtful Accounts 6.000 Food Inventory 20,000 2e Prepaid Rent ( 14,000 2b Prepaid Insurance ( 12,000 Investments 50,000 Land 80,000 Building 520,500 Equipment 152,000 2c Accumulated Depreciation + $ 100,000 Accounts Payable 15,000 #2d Income Taxes Payable 20% (see (iii) calculation ) 0- Accrued Expenses 25,000 Current Liabilities Dividends Payable + (S -0- Long-Term Debt ($ S 300,000 Capital Stock 130,000 Paid-In Capital in Excess of Par 120,000 Retained Earnings(1/1/2019) Old R/E 61,500 Used NEW Retained earnings calculated in (V) on the on the B/S Additional Information: 1. Dividends declared during 2019 totaled $45,000. Only $20,000 of the dividends declared in 2019 have been paid as of December 31, 2019. The unpaid dividends have not been recorded. 2. Operations generated (ii) $860,000 of revenue for 2019. Expenses recorded totaled (ii) $600,000. Additional adjustments required are as follows: a. The allowance for doubtful accounts should be adjusted to 10 percent of accounts receivable. b. Prepaid insurance of $12,000 (1% of $12,000 on BS & 1/2 to (1)_) is the premium paid for insurance coverage for July 1, 2019, through June 30, 2020. C. Unrecorded depreciation expense for 2019 totals $47,000 (use on B/S & (D)) d. Income taxes have not been recorded. Lance's average rate is 20 percent. e. Prepaid rent of $14,000 (1/2 of $14,000 on BS & 1/2 to (1) ) is the amount paid for two months rent; Dec.31, 2019, through January 31, 2020. December portion of rent was not expensed (addition to problem). 3. The Long-Term Debt account includes $60,000, which must be paid on June 30, 2020. Required: Prepare a balance sheet according to the USALI.The trial balance of balance sheet account of Lancer's, a popular casual dining spot, as of December 31, 2019, is as follows: Debits Credits Cash S 10,000 Marketable Securities 16.000 Accounts Receivable 130.000 Allowance for Doubtful Accounts S 6.000 Food Inventory 20,000 Prepaid Rent 14.000 Prepaid Insurance 12.000 Investments 50.000 Land 80.000 Building 520,500 Equipment 100,000 Accumulated Depreciation 100,000 Accounts Payable 15,000 Income Taxes Payable Accrued Expenses 25,000 Dividends Payable -0- Long-Term Debt 300,000 Capital Stock 130,000 Paid-In Capital in Excess of Par 120,000 Retained Earning (1 / 1 / 2019) 61,500 Additional Information: 1. Dividends declared during 2019 totaled $45,000. Only $20,000 of the dividends declared in 2019 have been paid as of December 31, 2019. The unpaid dividends have not been recorded. 2. Operations generated $860,000 of revenue for 2019. Expenses recorded totaled $600,000. Additional adjustments required are as follows: a. The allowance for doubtful accounts should be adjusted to 10 percent of accounts receivable. b. Prepaid insurance of $12,000 is the premium paid for insurance coverage for July 1, 2019, through June 30, 2020. C. Unrecorded depreciation expense for 2019 totals $47,000. d. Income taxes have not been recorded. Lance's average rate is 20 percent. e. Prepaid rent of $14,000 is the amount paid for two months' rent; Dec.31, 2019, through January 31, 2020. December portion of rent was not expensed. 3. The Long-Term Debt account includes $60,000, which must be paid on June 30, 2020. 4. Required: Prepare a balance sheet according to the USALI
