The following unadjusted trial balance is for Groenke Construction Company as of year-end for the December 31, 20x7 fiscal year. The December 31, 20x6 credit balance of the stockholders’ equity account is $61,900, and the stockholders invested $45,000 cash in the company during 20x7.

1. Account Title Debit                     Credit

101         Cash                                                      $15,000

126         Supplies                                               $8,500

128         Pre-paid insurance                          $11,200

167         Equipment                                          $175,000

168         Accumulated depreciation – equipment                 $19,000

201         Accounts payable                                                               $9,250

251         Long-term notes payable                                               $45,000

301         Shareholders’ equity                                                      $106,900

302         Dividends                                            $15,750

401         Construction Revenue                                                   $153,000

623         Wage expense                                  $61,800

633         Interest expense                               $6,250

640         Rent expense                                    $15,750

683         Property tax expense                    $12,500

684         Repairs expense                                $6,100

690         Utilities expense                                $5,300

TOTALS                                                            $333,150                  $333,150

Instructions:

Use the template provided to:

1. Journalize the following adjusting entries as of fiscal year-end December 31, 20x7.
2. Post the adjusting entries to an unadjusted trial balance and prepare the adjusted trial balance.
3. Create financial statements, namely: i) the income statement, ii) statement of stockholders’ equity, and iii) the balance sheet for 20x7.

Adjustments needed:

1. The supplies available at the end of the fiscal year 20x7 are at a cost of $5,700.
2. The company's employees have earned $3.500 in accrued wages for the fiscal year.
3. The cost of expired insurance for the fiscal year is $8,600.
4. The rent expense not yet paid or recorded in the fiscal year is $2,250.
5. Annual depreciation on equipment is $8,000; no other depreciation adjustment was made in 20x7.
6. The $450 accrued interest for December has not yet been paid and reported.
7. Additional property taxes of $625 have been assessed for the fiscal year but have not yet been paid or recorded in the accounts.
8. The December utilities expense of $425 is not included in the adjusted trial balance, because the bill arrived after the trial balance was prepared. The $425 amount owed needs to be recorded.
9. The company paid dividends of $15,575 to its shareholders on record.

An engineer is planning a 15 year retirement. She has decided that she will need to withdraw $4,000 each month from her bank account to live. How much money should she have in the bank at the start of her retirement, if the bank pays 0.25% interest per month (compounded monthly)?

- During the year ended 31 December, the business made sales of merchandises of £45,000 and purchases of merchandises of £25,000. The inventory of merchandises at the beginning of the year was valued at £8,000 and, at 31 December, £4,500. The gross profit for the year was:
a) £16,500.
b) £23,500.
c). £20,000.
d) None of these amounts

- If a firm purchases an Equipment (Fixed assets), net income decreases by the amount of the equipment purchase
a)True
b)False

- Which one of the following events will reduce the cash balances of a business?   
a)Dividend proposed pending shareholder approval
b)Purchase of stock on credit
c)Purchase of fixed assets on interest free credit
d)Suppliers paid amounts owed

- Which of the following is a cash outflow?   
a)Creation of a provision
b)Sale of a fixed assets
c)Payment of dividends
d)Depreciation

- A company has a negative cash flow from operating activities. What could explain this negative cash-flow?   
a)A substantial investment in new fixed assets
b)The repayment of a loan
c)A sudden increase in credit sales
d)High levels of dividend

- The basic business equation is
a)Fixed assets + current assets – Current Liabilities = Equity + Total liabilities
b)Fixed assets + current assets – Dividends = Equity + Total liabilities – Net income
c)Fixed assets + current assets = Equity + Total liabilities
d)Total Assets – Capital = Equity + Total liabilities

van for $28,000 with a salvage value of $3,000 on September 1, Year 1. It has an estimated useful life of 5 years. Using the straight-line method, how much depreciation expense should the company recognize on December 31, Year 1?
Select one:
a. $1,400.
b. $5,000.
c. $1,250.
d. $1,667.
Jump to...

At the end of the current year, Bamboo Co. included $1,420,000 of recent purchases still in transit shipped F.O.B. Destination in their ending inventory. How will including this value affect Bamboo Co.'s financial statements?

The real risk-free rate is 3.5%. Inflation is expected to be 2% this year and 3.75% during the next 2 years. Assume that the maturity risk premium is zero.

What is the yield on 2-year Treasury securities? Do not round intermediate calculations. Round your answer to two decimal places. %

What is the yield on 3-year Treasury securities? Do not round intermediate calculations. Round your answer to two decimal places. %

Suppose the present vaule of a 5 year ordinary annuity is $528, if the discount rate is 14%, what must the annual cash flow be?  

The Wet Corp. has an investment project that will reduce expenses by $20,000 per year for 3 years. The project's cost is $20,000. If the asset is part of the 3-year MACRS category (33.33% first year depreciation) and the company's tax rate is 36%, what is the cash flow from the project in year 1?

Compute the duration of a bond which pays two coupons of $100 next year and the following year and then (in year two) repays the principal of $1000, given an annual yield of 7%. Repeat the calculation for a 9% yield.