Question

Sarasota Corp.’s balance sheet at December 31, 2021, is presented below. SARASOTA CORP. Balance Sheet December 31, 2021 Cash $49,200 Accounts payable $51,200 Accounts receivable 91,000 Common stock ($10 par) 160,000 Allowance for doubtful accounts (3,000 ) Retained earnings 254,800 Supplies 8,800 Land 80,000 Buildings 284,000 Accumulated depreciation—buildings (44,000 ) $466,000 $466,000 During 2022, the following transactions occurred. 1. On January 1, Sarasota issued 2,400 shares of $40 par, 7% preferred stock for $98,400. 2. On January 1, Sarasota also issued 1,800 shares of the $10 par value common stock for $42,000. 3. Sarasota performed services for $640,000 on account. 4. On April 1, 2022, Sarasota collected fees of $72,000 in advance for services to be performed from April 1, 2022, to March 31, 2023. 5. Sarasota collected $552,000 from customers on account. 6. Sarasota bought $70,200 of supplies on account. 7. Sarasota paid $64,400 on accounts payable. 8. Sarasota reacquired 800 shares of its common stock on June 1 for $28 per share. 9. Paid other operating expenses of $376,400. 10. On December 31, 2022, Sarasota declared the annual preferred stock dividend and a $1.20 per share dividend on the outstanding common stock, all payable on January 15, 2023. 11. An account receivable of $3,400 which originated in 2022 is written off as uncollectible. Adjustment data: 1. A count of supplies indicates that $11,800 of supplies remain unused at year-end. 2. Recorded revenue from item 4 above. 3. The allowance for doubtful accounts should have a balance of $7,000 at year end. 4. Depreciation is recorded on the building on a straight-line basis based on a 30-year life and a salvage value of $20,000. 5. The income tax rate is 30%. (Hint: Prepare the income statement up to income before taxes and multiply by 30% to compute the amount.) prepare a balance sheet and adjusted trial balance please.

Answer 1