The following is a list of account balances as of Dec. 31, 2009. Please prepare
ID: 2374315 • Letter: T
Question
The following is a list of account balances as of Dec. 31, 2009. Please prepare a multi- step income statement and a classified balance sheet for Passion Inc for 2009. The income tax rate for the year is 35%.
Accumulated Depreciation,Building-$620,000
Accoints Payable-189,000
Accounts Recievable-163,000
Accumulated Depreciation,Machinery-210,000
Allowance for uncollectible accounts-8,000
Building-1,550,000
Cash-67,000
Cost of Goods Sold-832,000
Common Stock-500,000
Dividends Payable-10,000
Franchise-40,000
General And Administration Expense-120,000
Interest Expense-25,000
Interest Income-12,000
Interest Payable-16,000
Interest Receivable-12,000
Inventories-215,000
Land-280,000
Long term investments-35,000
Machinery-637,000
Note Recievable-250,000
Notes Payable-300,000
Paid in capital excess,common- 1,500,000
Patent-152,000
Prepaid Rent-16,000
Research and Developement-77,000
Retained Earrnings-146,000
Sales Discount-30,000
Sales Revenue-1,450,000
Selling Expense-123,000
Short term investments-182,000
Taxes Payable-40,000
Unearned Revenue-60,000
50,000 ofdamaged was caused by a fire to the building. In other instance a earthquake caused 100,000 worth of property damage to the machine and it was deemed material and the event was consider usual and infrequent.
Notes payable consists of two notes one for 100,000 June 15, 2011 and another for 200,000 due in four annual installments of 50,000 each with the first payment due on June 30, 2010
Short term investment consist of marketable equity securities that the company plans to sell in 2010 and 50,000 in treasury bills purchased on December 15 of the current year that mature on February 15,2010. Long term investments consist of marketable securities that thecompany does not plan to sell in the next year
The cash account includes 30,000 set aside in a fund to pay bons payable that mature in 2010 and 30,000 set aside in a thirty three month t bond
Accounts receivablle includes a 20,000 note receivable from a customer due in 2012
One of the companies factories was closed during the year . Restructing costs incurred $125,000
The common stock represents 1 million shares of $1 par stock authorized 500,000 shares issued and outstanding
Inventory costing 30,000 was written off as obsolete Material losses of this type are not considered to be unusual
The notes receivable is due in installments of 50,000 payable on each september 30. Interest ispayable annually.
Unearned revenue represents customer payments for extended service contracts. 80% of these contract expire in 2010. the remainder in 2011
Depreciation Expense for 2008 was understated by 5,000 due to material mathematical mishap
Prepaid rent represent 18 months in advance
Unrealized Gains on securities avaible for sale of $20,000
Explanation / Answer
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