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In: Accounting

Account Debit Credit Cash 31,680 Accounts Receivable 52,992 Notes Receivable 14,400 Interest Receivable 0 Inventory 52,128...

Account Debit Credit
Cash 31,680
Accounts Receivable 52,992
Notes Receivable 14,400
Interest Receivable 0
Inventory 52,128
Prepaid Insurance 5,184
Land 28,800
Buildings 216,000
Equipment 86,400
Patent 12,960
Allowance for Doubtful Accounts 720
Accumulated Depreciation—Buildings 72,000
Accumulated Depreciation—Equipment 34,560
Accounts Payable 39,312
Salaries and Wages Payable 0
Notes Payable (due April 30, 2023) 15,840
Income Taxes Payable 0
Interest Payable 0
Notes Payable (due in 2028) 50,400
Common Stock 72,000
Retained Earnings 91,584
Dividends 17,280
Sales Revenue 1,296,000
Interest Revenue 0
Gain on Disposal of Plant Assets 0
Bad Debt Expense 0
Cost of Goods Sold 907,200
Depreciation Expense 0
Income Tax Expense 0
Insurance Expense 0
Interest Expense 0
Other Operating Expenses 88,992
Amortization Expense 0
Salaries and Wages Expense 158,400
Totals 1,672,416 1,672,416

The following transactions occurred during December.

Dec. 2 Purchased equipment for $23,040, plus sales taxes of $1,152 (paid in cash).
Dec. 2 Novak sold for $5,040 equipment which originally cost $7,200. Accumulated depreciation on this equipment at January 1, 2022, was $2,592; 2022 depreciation prior to the sale of equipment was $1,188.
Dec. 15
Novak sold for $7,200 on account inventory that cost $5,040.
Dec. 23 Salaries and wages of $9,504 were paid.

Adjustment data:

1
Novak estimates that uncollectible accounts receivable at year-end are $5,760.
2
The note receivable is a one-year, 8% note dated April 1, 2022. No interest has been recorded.
3
The balance in prepaid insurance represents payment of a $5,184, 6-month premium on September 1, 2022.
4
The building is being depreciated using the straight-line method over 30 years. The salvage value is $43,200.
5
The equipment owned prior to this year is being depreciated using the straight-line method over 5 years. The salvage value is 10% of cost.
6
The equipment purchased on December 2, 2022, is being depreciated using the straight-line method over 5 years, with a salvage value of $2,592.
7
The patent was acquired on January 1, 2022, and has a useful life of 9 years from that date.
8
Unpaid salaries at December 31, 2022, total $3,168.
9
Both the short-term and long-term notes payable are dated January 1, 2022, and carry a 10% interest rate. All interest is payable in the next 12 months.
10
Income tax expense was $21,600. It was unpaid at December 31.

Prepare journal entries for the transactions listed above and adjusting entries. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.)

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ekkarill92 answered 2 years ago
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