26 Jun Financial Statement Homework Assignment
Question
Name: ___________________________________
Circle Class Time: 8:00 9:30 12:30
Accounting 200
Financial Statement Homework Assignment
(10 points)
Due in class on April 22nd
Part 1: At December 31, 2012, Cohen Fencing Company had the following trial balance.
Cohen Fencing Company
Unadjusted Trial Balance
12/31/12
Dr
Cr
Cash
203,203
Accounts Receivable
60,000
Allowance for Doubtful Accounts
600
Short Term Note Receivable
24,000
Interest Receivable
Prepaid Insurance
11,000
Supplies
6,000
Inventory
65,000
Equipment
175,000
Accumulated Depreciation
75,000
Copyright
48,000
Accounts Payable
35,000
Wages Payable
Interest Payable
Bonds Payable
200,000
Premium on Bonds Payable
11,103
Common Stock
90,000
Retained Earnings
5,000
Dividends
5,200
Sales
923900
Sales Returns & Allowances
4,000
Sales Discounts
9,000
Cost of Goods Sold
375,000
Bad Debts Expense
Depreciation Expense
Wages Expense
260,000
Rent Expense
65,000
Insurance Expense
16,000
Supplies Expense
7,000
Interest Revenue
800
Interest Expense
9,000
Gain on Sale of Equipment
5,000
Income Tax Expense
4,000
Total
1,346,403
1,346,403
Instructions: You must turn in the work performed on the sheets printed with this page. Your assignment will NOT BE ACCEPTED ON PLAIN PAPER.
1. Write the journal entries required for each of the 5 events described below on the General page provided. Use ONLY the accounts listed on the trial balance for your journal entries.
2. Post the journal entry transactions to individual T-accounts and prepare an adjusted trial balance for The Cohen Fencing Company as of December 31, 2012.
Information for the necessary adjustments or calculations as of December 31, 2012:
1. The company last received interest on the note receivable on October 30, 2012. Interest will next be paid on April 30, 2013, when the note matures. Record the accrued interest revenue for the last 2 months of 2012. The annual interest rate is 6%. Round to nearest whole dollar.
2. The Equipment was purchased prior to 2012. The company uses the straight-line method, assumed a $5,000 salvage value and an estimated useful life of 10 years. Record depreciation expense for the full year of 2012.
3. The company uses the allowance method to estimate its uncollectible accounts. The new Chief Financial Officer (CFO) decided to use the percent of receivables method and estimated that 3% of Accounts Receivables at December 31, 2012, will be uncollectible. Record the adjusting entry for bad debt expense for 2012.
4. The company issued 8%, 10-year bonds when the market rate for similar investments is 5%. The company pays interest each year on January 1st. Using the effective interest method of amortizing the premium on bonds payable, accrue the interest expense as of December 31, 2012. Round to nearest whole dollar for your interest expense calculation.
5. Employees were last paid on December 24, 2012. Several employees worked through December 31st and wages due but not yet paid are $5,500. These wages will be paid in early January. An adjusting entry needs to be recorded to reflect this liability.
GENERAL JOURNAL
DATE
ACCOUNT NAME
DEBIT
CREDIT
Use the space below for T-accounts (REQUIRED FOR GRADING). For each account in the journal entries, you will need to adjust the balance from the preliminary trial balance with the debit or credit from the journal entry. (You only need to provide T-accounts for those that change)
Cohen Fencing Company
ADJUSTED TRIAL BALANCE
12/31/12
DEBIT
CREDIT
Cash
Accounts Receivable
Allowance for Doubtful Accounts
Short-term Note Receivable
Interest Receivable
Prepaid Insurance
Supplies
Inventory
Equipment
Accumulated Depreciation
Copyright
Accounts Payable
Wages Payable
Interest Payable
Bonds Payable
Premium on Bonds Payable
Common Stock
Retained Earnings
Dividends
Sales
Sales Returns & Allowances
Sales Discounts
Cost of Goods Sold
Bad Debts Expense
Depreciation Expense
Wages Expense
Rent Expense
Insurance Expense
Supplies Expense
Interest Revenue
Interest Expense
Gain on sale of equipment
Income Tax Expense
Totals
1,380,898
1,380,898
Part 2: Using the trial balance below for Rochman Water Company (this is a different company and new problem), prepare a multi-step income statement and prepare the Statement of Retained Earnings and Classified Balance Sheet on the pages which follow. To get full credit you must include all critical subtotals (see class announcements).
Rochman Water Company
Adjusted Trial Balance
December 31, 2012
DEBIT
CREDIT
Cash
2,517
Accounts Receivable
1,560
Allowance for Uncollectible Accounts
17
Short term Note Receivable
76
Interest Receivable
2
Supplies
35
Inventory
1,019
Prepaid Expenses
15
Equipment
8,725
Accumulated Depreciation
975
Copyrights
98
Accounts Payable
370
Interest Payable
2
Unearned Revenue
40
Long Term Note Payable
3,400
Common Stock
6,600
Add’l Paid-in-Capital
800
Retained Earnings (1/1/12)
2,000
Dividends
100
Sales
34,900
Sales Returns & Allowances
34
Sales Discounts
65
Cost of Goods Sold
30,200
Bad debt expense
34
Depreciation Expense
276
Amortization Expense
11
Wages Expense
2,000
Rent Expense
500
Office Expense
79
Supplies Expense
100
Selling Expense
816
Interest Expense
100
Interest Revenue
8
Income Tax Expense
750
Totals
49,112
49,112
Rochman Water Company
Multi Step Income Statement
For the year ended December 31, 2012
Rochman Water Company
Statement of Retained Earnings
For the year ended December 31, 2012
Rochman Water Company
Classified Balance Sheet
December 31, 2012
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