The following selected account balances(pre-adjusted)are taken from the ledger b

Question

The following selected account balances(pre-adjusted)are taken from the ledger book of ABC company at Decmber 31,2012: Cash $2000 accounts receivable $13000 Allowance for uncollectible accounts $3200(credit balance) Inventory Dec 31 2012 $22000 Long-term investments $30000 Buildings(at cost) $45000 Accumulated depreciation for buildings $26000(credit balance) Other assets $12800 Accounts payable $8000 Taxes payable $4400 Loans payable $15000 Capital stock $40000 Retained Earnings,Dec 31 2012 $28000 Retained Earnings,Jan 1,2012 $??? Dividends,2012 $??? Sales revenues $98000 Cost of goods sold $42000 Selling expense $6000 Wages and salary expense $12500 Uncollectible accounts expense $400 Miscellaneous general and administrative expenses $11000 Office supplies expense $5400 Insurance expense $4800 Interest revenue $800 Interest expense $2200 Additional information(to be used for adjusting entries) a the allowance for uncollectible accounts should be increased to $3800 baccrued wages and salary(not paid)at the end of 2012 were $450 c buildings are depreciated at the rate of 4%(of cost)per year(depreciation is recognized at the end of each year) d accrued selling expense(not paid)at the end of 2012 was $600 e prepaid(unexpired)insurance premium at the end of the year was $420(when insurance premiums are paid,the company charges them to the insurance expense account) f accrued interest on loans, not paid at the end of 2012 was $188 g earned interest on long-term investment,not received as of the end of 2012,was $1000 h office supplies unused as of the end of 2012 were $350(when office supplies are purchased, the company charges the amount of the supplies to the office supplies expenses account) Required: 1 prepare the necessary adjusting entries for each of the additional information items above 2 compute the adjusted balance of each balance sheet account in the adjusting entries above.Notice that allowance for uncollectibles and accumulated depreciation are reported on the balance sheet. 3 compute the pre-tax income of the company for 2012(after considering the adjusting entries above Income and RE Statement: Debt Credit Net Sales Less:Cost of sales Gross profit Selling and Admi Expenses Income from operation Other revenues and gains Interest revenue Gains on sale of investment Other expenses and losses Write -off of GW Income from Cont.Oper.before tax Income taxes Income from Cont.Oper.after tax Discontinued Operations Loss on operations Loss on dosposal of net assests Income before extraord items Extraord.Loss Net income Earning per share: IFCO after tax ($0.16) Discontued operation Extraord.loss Net income ($0.16) Retained Earnings Statement: RE at beg. Add:Net income Less:Dividends RE at end IFCO before tax(in error) dep.error IFCO before tax(error correc.) loss on sale of secs. gain on life insurance coverage 104,000 IFCO before tax Income tax(30%) Income before DO and ExOdltems loss on DO extraord loss Net income $489050 Ni per share $4.075

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