Debit Credit (a) Date Account Titles and Explanation Debit Credit Dec. 2 Dec. 2

Question

Debit

Credit

(a)

Date

Account Titles and Explanation

Debit

Credit

Dec. 2

Dec. 2

Dec. 15

Dec. 23

Dec. 31

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

Debit

Credit

Cash $26,150 Accounts Receivable 36,530 Notes Receivable 9,200 Interest Receivable –0– Inventory 36,240 Prepaid Insurance 3,870 Land 21,300 Buildings 153,000 Equipment 62,000 Patent 10,170 Allowance for Doubtful Accounts $400 Accumulated Depreciation—Buildings 51,000 Accumulated Depreciation—Equipment 24,800 Accounts Payable 27,700 Salaries and Wages Payable –0– Notes Payable (due April 30, 2015) 12,400 Interest Payable –0– Notes Payable (due in 2020) 35,120 Common Stock 53,800 Retained Earnings 22,950 Dividends 13,600 Sales Revenue 941,800 Interest Revenue –0– Gain on Disposal of Plant Assets –0– Bad Debt Expense –0– Cost of Goods Sold 631,100 Depreciation Expense –0– Insurance Expense –0– Interest Expense –0– Other Operating Expenses 61,410 Amortization Expense –0– Salaries and Wages Expense 105,400 Total $1,169,970 $1,169,970
The following transactions occurred during December.
Dec. 2 Kenseth purchased equipment for $18,000, plus sales taxes of $600 (all paid in cash). 2 Kenseth sold for $3,590 equipment which originally cost $5,100. Accumulated depreciation on this equipment at January 1, 2014, was $1,840; 2014 depreciation prior to the sale of equipment was $420. 15 Kenseth sold for $5,200 on account inventory that cost $3,210. 23 Salaries and wages of $6,640 were paid.
Adjustment data:
1. Kenseth estimates that uncollectible accounts receivable at year-end are $3,840. 2. The note receivable is a one-year, 8% note dated April 1, 2014. No interest has been recorded. 3. The balance in prepaid insurance represents payment of a $3,870, 6-month premium on September 1, 2014. 4. The building is being depreciated using the straight-line method over 30 years. The salvage value is $33,000. 5. The equipment owned prior to this year is being depreciated using the straight-line method over 5 years. The salvage value is 10% of cost. 6. The equipment purchased on December 2, 2014, is being depreciated using the straight-line method over 5 years, with a salvage value of $2,100. 7. The patent was acquired on January 1, 2014, and has a useful life of 9 years from that date. 8. Unpaid salaries at December 31, 2014, total $2,130. 9. Both the short-term and long-term notes payable are dated January 1, 2014, and carry a 10% interest rate. All interest is payable in the next 12 months. 10 Income tax expense was $13,350. It was unpaid at December 31.

Explanation / Answer

Debit Credit (a) Date Account Titles and Explanation Debit Credit Dec. 2 Dec. 2

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