Problem 5-7A |
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The unadjusted trial balance of Mesa Inc., at the company’s year end of December 31 follows:
MESA INC. |
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Debit |
Credit |
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Cash |
$22,814 |
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Accounts receivable |
31,060 |
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Merchandise inventory |
28,350 |
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Supplies |
2,840 |
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Prepaid insurance |
2,900 |
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Land |
29,570 |
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Buildings |
149,220 |
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Accumulated depreciation—buildings |
$24,250 |
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Equipment |
44,620 |
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Accumulated depreciation—equipment |
18,330 |
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Accounts payable |
33,926 |
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Unearned revenue |
4,080 |
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Mortgage payable |
147,180 |
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Common shares |
13,110 |
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Retained earnings |
31,435 |
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Dividends |
1,690 |
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Sales |
265,870 |
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Sales returns and allowances |
2,440 |
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Sales discounts |
3,239 |
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Cost of goods sold |
170,348 |
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Salaries expense |
30,940 |
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Utilities expense |
5,080 |
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Interest expense |
8,060 |
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Income tax expense |
5,010 |
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538,181 |
538,181 |
Additional information and adjustment data:
1. |
The 12-month insurance policy was purchased and was effective February 1, 2012. |
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2. |
There was $780 of supplies on hand on December 31. |
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3. |
Depreciation expense for the year is $6,063 for the buildings and $4,583 for the equipment. |
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4. |
Salaries of $780 are accrued and unpaid at December 31. |
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5. |
Accrued interest expense at December 31 is $767. |
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6. |
Unearned revenue of $994 is still unearned at December 31. On the sales revenue that was earned, the cost of goods sold was $2,260. |
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7. |
Of the mortgage payable, $9,880 is payable next year |
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8. |
Income tax of $510 is due and unpaid. |
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9. |
A physical count of inventory indicates $24,620 on hand at December 31. |
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10. |
Common shares of $3,040 were issued during the year. |
Prepare T accounts and enter the trial balance amounts.
Record and post the adjusting entries, assuming the company adjusts its accounts annually. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round all answers to nearest dollar. Record journal entries in the order presented in the problem.)
Post the adjusting entries. (Post entries in the order of journal entries presented in the previous part.)
Prepare an adjusted trial balance at December 31, 2012.
Prepare a multiple-step income statement for the year.
Prepare a statement of changes in equity for the year. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Prepare a statement of financial position for the year. (List current assets in order of liquidity. List Property, plant and equipment in order of land, building and equipment.)
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