Question
The balance sheet of the Captain Fishing Inc. is attached. During 2017, the following events occurred. 1. On January 10, sold merchandise on account to
The balance sheet of the Captain Fishing Inc. is attached. During 2017, the following events occurred. | ||||||||||||||||
1. On January 10, sold merchandise on account to Rayms $8800 and Fischer $7500. Terms 2/10, n/30. | ||||||||||||||||
2. On January 12, purchased merchandise on account from Zapfel $3600 and Liotta $2600. Terms 1/10, n/30. | ||||||||||||||||
3. On January 14, received checks, $4700 from Longhini and $2500 from Hall, for sales on account after discount period has lapsed. | ||||||||||||||||
4. On January 15, sent checks to Joosten for $8600 less 3% cash discount, and to Maida for $10000 less 2% cash discount. | ||||||||||||||||
5. On January 16, issued credit of $550 to Fischer for merchandise returned. | ||||||||||||||||
6. On January 21, paid off the balances to Zapfel and Liotta for the purchases made on January 12. | ||||||||||||||||
7. On Feburary 9, received payment in full from Rayms and Fischer. | ||||||||||||||||
8. On March 1, paid rent of $8400 for a two-year term starting from July 1, 2017. | ||||||||||||||||
9. On April 1, the company CEO paid $49000 from her savings bank account to purchase a car for personal use. | ||||||||||||||||
10. On April 12, paid $785 cash for office supplies and expensed immediately. | ||||||||||||||||
11. Cash dividends totaling $1433 were declared on June 13 and paid to stockholders on June 23. | ||||||||||||||||
12. Issued a note of $110000 to bank (one year, annual interest rate 5%) for cash on July 1. | ||||||||||||||||
13. On July 5, purchased merchandise from Maida $33000 terms 3/10, n/30. | ||||||||||||||||
14. On July 7, issued common stock 1150 shares, $10 par, in exchange of a land with a fair market value of $16000. | ||||||||||||||||
15. On July 8, returned $327 of merchandise to Maida and received credit. | ||||||||||||||||
16. On August 1, sold merchandise to Lachey on account $83800, term 1/10, n/30. | ||||||||||||||||
17. Paid off the balance to Maida on August 4. | ||||||||||||||||
18. On Auguest 8, paid utilities expense, $10324. | ||||||||||||||||
19. On August 18, Lachey paid off its balance. | ||||||||||||||||
20. On September 1, paid cash $7550 to Farmington for merchandise purchased last year. | ||||||||||||||||
21. On October 1, paid off notes payable $130000 (issued in 2015) and associated interest $6000 (this amount includes $1800 interest payable on the balance sheet). | ||||||||||||||||
22. Over the year, cash sales to other retail customers were $16332. | ||||||||||||||||
23. Over the year, sales and office employees earned $24800 in salaries and wages, of which $2480 remained as payable at the end of year. | ||||||||||||||||
24. On Dec 31, received an utilities bill of $1350 (for December 2016) and paid off the bill on January 10, 2018. | ||||||||||||||||
25. On Dec 31, paid 5% interest on bonds payable. | ||||||||||||||||
Additional Information at the end of the year: | ||||||||||||||||
1 .Depreciation expense for the year was $12560. | ||||||||||||||||
2. The company estimated that it will pay federal income tax, $4225. | ||||||||||||||||
3. After physically counting, the company decided that the ending inventories was $41179. | ||||||||||||||||
4. Based on its historical data, the bad debts expense are about $1070. | ||||||||||||||||
5. Unearned revenue was decreased by $11520. | ||||||||||||||||
6. The company expenses all of the supplies purchased during the year. | ||||||||||||||||
7. No insurance policy was effective during the year (will be effective from Jan 1, 2018). | ||||||||||||||||
8. The company uses the gross method to record its purchases and sales on credit. | ||||||||||||||||
9. The company adopts the periodic inventory system. | ||||||||||||||||
10. Rayms, Fischer, and Lachey had zero balance on account as of Jan 1, 2017. | ||||||||||||||||
Instructions: | ||||||||||||||||
1. Prepare journal entries for each event. | ||||||||||||||||
2. Prepare adjusting entries. | ||||||||||||||||
3. Prepare adjusted trial balance. | ||||||||||||||||
4. Prepare Income Statement, Retained Earnings Statement and Balance Sheet for the year of 2017. | ||||||||||||||||
5. Prepare closing entries. | ||||||||||||||||
6. Upload the complete Excel file by Nov 1. |
CAPTAIN FISHING INC. | |
BALANCE SHEET | |
DECEMBER 31, 2016 | |
Current Assets | |
Cash | 41,800 |
Notes Receivable | 16,000 |
Accounts Receivable | 41,800 |
Less: Allowance for Doubtful Accounts | (3,000) |
Inventories | 42,000 |
Prepaid Insurance | 840 |
Total Current Assets | 139,440 |
Non-Current Assets | |
Long-term Investments | |
Investments in held-for-maturity securities | 51,000 |
Land held for future development | 45,500 |
Property, Plant, and Equipment | |
Land | 85,000 |
Buildings | 675,000 |
Less: Accumulated Depreciation | (187,500) |
Intangible Assets | |
Capitalized Development Costs | 8,000 |
Goodwill | 76,000 |
Other Identifiable Intangible Assets | 48,000 |
Total Non-Current Assets | 801,000 |
Total Assets | 940,440 |
Current Liabilities | |
Notes Payable | 130,000 |
Accounts Payable | 33,500 |
Unearned Revenues | 16,000 |
Income Taxes Payable | 9,440 |
Property Taxes Payable | 6,600 |
Interest Payable | 1,800 |
Total Current Liabilities | 197,340 |
Non-Current Liabilities | |
Provisions Related to Pensions | 93,100 |
Bonds Payable | 300,000 |
Total Non-Current Liabilities | 393,100 |
Total Liabilities | 590,440 |
Stockholders' Equity | |
Common Stock | 100,000 |
Preferred Stock | 100,000 |
Paid-in-capital - Common Stock | 27,500 |
Paid-in-capital - Preferred Stock | 10,000 |
Retained Earnings | 120,250 |
Accumulated Other Comprehensive Income | 5,000 |
Less: Treasury Stock | (12,750) |
Total Stockholders' Equity | 350,000 |
Total Liabilities and Stockholders' Equity | 940,440 |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started