Accounting Cycle Review 15 a-e
Ivanhoe Corporation’s trial balance at December 31, 2020, is presented below. All 2020 transactions have been recorded except for the items described below.
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Debit |
Credit |
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Cash |
$27,700 |
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Accounts Receivable |
54,000 |
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Inventory |
23,100 |
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Land |
65,800 |
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Buildings |
86,900 |
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Equipment |
31,000 |
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Allowance for Doubtful Accounts |
$440 |
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Accumulated Depreciation—Buildings |
27,000 |
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Accumulated Depreciation—Equipment |
15,000 |
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Accounts Payable |
19,000 |
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Interest Payable |
–0– |
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Dividends Payable |
–0– |
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Unearned Rent Revenue |
8,000 |
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Bonds Payable (10%) |
50,000 |
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Common Stock ($10 par) |
32,000 |
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Paid-in Capital in Excess of Par—Common Stock |
6,400 |
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Preferred Stock ($20 par) |
–0– |
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Paid-in Capital in Excess of Par—Preferred Stock |
–0– |
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Retained Earnings |
26,860 |
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Treasury Stock |
–0– |
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Cash Dividends |
–0– |
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Sales Revenue |
615,000 |
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Rent Revenue |
–0– |
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Bad Debt Expense |
–0– |
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Interest Expense |
–0– |
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Cost of Goods Sold |
408,000 |
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Depreciation Expense |
–0– |
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Other Operating Expenses |
39,300 |
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Salaries and Wages Expense |
63,900 |
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|
Total |
$799,700 |
$799,700 |
Unrecorded transactions and adjustments:
| 1. | On January 1, 2020, Ivanhoe issued 1,200 shares of $20 par, 6% preferred stock for $26,400. | |
| 2. | On January 1, 2020, Ivanhoe also issued 1,100 shares of common stock for $26,400. | |
| 3. | Ivanhoe reacquired 320 shares of its common stock on July 1, 2020, for $50 per share. | |
| 4. | On December 31, 2020, Ivanhoe declared the annual cash dividend on the preferred stock and a $1.30 per share dividend on the outstanding common stock, all payable on January 15, 2021. | |
| 5. | Ivanhoe estimates that uncollectible accounts receivable at year-end is $5,400. | |
| 6. | The building is being depreciated using the straight-line method over 30 years. The salvage value is $5,900. | |
| 7. | The equipment is being depreciated using the straight-line method over 10 years. The salvage value is $3,100. | |
| 8. | The unearned rent was collected on October 1, 2020. It was receipt of 4 months’ rent in advance (October 1, 2020 through January 31, 2021). | |
| 9. | The 10% bonds payable pay interest every January 1. The interest for the 12 months ended December 31, 2020, has not been paid or recorded. |
(Ignore income taxes.)
1. Prepare journal entries for the transactions and adjustment listed above. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
2. Prepare an updated December 31, 2020, trial balance, reflecting the journal entries in part(a).
3. Prepare a multiple-step income statement for the year ending December 31, 2020. (List other revenues before other expenses.)
4. Prepare a retained earnings statement for the year ending December 31, 2020. (List items that increase retained earning first.)
5. Prepare a classified balance sheet as of December 31, 2020.
(List Current Assets in order of liquidity. List
Property, Plant and Equipment in order of Land, Buildings and
Equipment. Enter account name only and do not provide descriptive
information.)
In: Accounting
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