The following information was taken from the accounting records of JBD Company as of December 31,...

The following information was taken from the accounting
records of JBD Company as of December 31, 2020:

Inventory .................   $17,000
Accounts Payable ..........   $36,000
Common Stock ..............   $78,000
Accounts Receivable .......   $11,000
Retained Earnings .........   $24,000 (at January 1, 2020)
Copyright .................   $20,000
Salaries Expense ..........   $28,000
Supplies ..................   $12,000
Mortgage payable ..........   $80,000 (due March 1, 2040)
Land ......................   $93,000
Notes Payable .............   $17,000 (due November 1, 2022) 
Trademark .................   $37,000
Sales Revenue .............   $97,000
Equipment .................   $85,000
Income Tax Expense ........   $10,000
Cost of Goods Sold ........   $45,000
Salaries Payable ..........      ?
Cash ......................      ?
Accumulated Depreciation ..      ?
Dividends .................      ?
Interest revenue ..........      ?

Additional information:
1)  Total current assets at December 31, 2020 are equal to
    30% of the total assets at December 31, 2020.

2)  20% of JBD’s 2020 net income was paid to stockholders
    as dividends.

3)  Total long-term liabilities at December 31, 2020 are
    equal to total current liabilities at December 31, 2020.

4)  Total equity at December 31, 2020 is equal to 35% of the
    total liabilities at December 31, 2020.

Calculate the balance in the accumulated depreciation account
at December 31, 2020.

Solutions

Expert Solution

Calculate the balance in the accumulated depreciation account
at December 31, 2020.

Answer : Accumulated Depreciation ..$51670

Working

Prepare Balance sheet to find the required value of Accumulated Depreciation.

Balance sheet

Assets
Current Assets:
Cash (78570 - 11000 - 17000 - 12000)	38570
Accounts Receivable	11000
Inventory	17000
Supplies	12000
*Total Current Assets (261900 30% )**	78570
Land	93000
Equipment ………………………………..…..85000
Less: Accumulated depreciation…….(51670) ( 85000 - 33330)
Net equip. (261900 - 37000 - 20000 - 93000-78570)	33330
Other Assets
Copy right	20000
Trade mark	37000
Total Assets	261900

Liabilities & Equity
Liabilities
Current Liabilities:
Accounts Payable	$36000
Salaries payable (97000 - 36000 )	61000
Total Current Liabilities (17000 + 80000)	97000
Non current:
Note payable	17000
Mortgage payable	80000
Total liabilities	194000
Total equity *(194000 35% )**	67900
Total liabilities & equity	261900

1) Total current assets at December 31, 2020 are equal to

30% of the total assets at December 31, 2020.

2) 20% of JBD’s 2020 net income was paid to stockholders

as dividends.

3) Total long-term liabilities at December 31, 2020 are

equal to total current liabilities at December 31, 2020.

4) Total equity at December 31, 2020 is equal to 35% of the

total liabilities at December 31, 2020.

ekkarill92 answered 2 years ago

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