Bookland Corporation\'s trial balance at December 31, 2014 is presented on the n

Question

Bookland Corporation's trial balance at December 31, 2014 is presented on the next tab. All 2014 transactions have been recorded except for the items listed below the trial balance.

REQUIRED (Ignore income taxes)                          
(a)   Prepare journal entries for the transactions listed on the next tab.                      
(b)   Prepare an updated December 31, 2014 trial balance, reflecting the unrecorded transactions.                      
(c)   Prepare a 2014 multiple step income statement.                      
(d)   Prepare a statement of retained earnings for the year ending December 31, 2014.                      
(e)   Prepare a December 31, 2014 classified balance sheet.     

Bookland Corporation                          
Trial Balance                          
December 31, 2014                          
                          
       Debit       Credit          
Cash       $23,000                   
Accounts Receivable       $51,000                   
Allowance for Doubtful Accounts               $450           
Inventory        $22,700                   
Land       $65,000                   
Buildings       $95,000                   
Accumulated Depreciation - Buildings               $30,000           
Equipment       $40,000                   
Accumulated Depreciation - Equipment               $14,400           
Accounts Payable               $19,300           
Interest Payable               $- 0           
Dividends Payable               $- 0           
Unearned Rent Revenue               $8,000           
Bonds Payable (10%)               $50,000           
Common Stock ($10 par)               $30,000           
Paid-In Capital in Excess of Par - Common Stock               $6,000           
Preferred Stock ($20 par)               $- 0           
Paid-In Capital in Excess of Par - Preferred Stock               $- 0           
Retained Earnings               $75,050           
Treasury Stock       $- 0                   
Sales Revenue               $570,000           
Rent Revenue               $- 0           
Bad Debts Expense       $- 0                   
Interest Expense       $2,500                   
Cost of Goods Sold       $400,000                   
Depreciation Expense       $- 0                   
Other Operating Expenses       $39,000                   
Salaries and Wages Expense       $65,000                   
   Total   $803,200        $803,200           
                          
                          
Unrecorded transactions:                          
1. On January 1, 2014, Bookland issued 2,000 shares of $20 par, 6% preferred stock for $44,000.                          
2. On January 1, 2014, Bookland also issued 3,000 shares of common stock for $75,000.                          
3. Bookland reacquired 500 shares of its common stock on July 1, 2014 for $49 per share.                          
4. On December 31, 2014, Bookland declared the annual preferred stock dividend and a $1.50                          
per share dividend on the outstanding common stock, all payable on January 15, 2015.                          
5. Bookland estimates that uncollectible accounts receivable at year end is $5,100.                          
6. The building is being depreciated using the straight line method over 30 years. The salvage                          
value is $5,000.                          
7. The equipment is being depreciated using the straight line method over 10 years. The salvage                          
value is $4,000.                          
8. The unearned rent was collected on October 1, 2014. It was receipt of 4 months' rent in                           
advance (October 1, 2014 through January 31, 2015).                          
9. Bookland employs 5 people, each of whom earn $3,000 per month and have been employed since                          
January 1. FICA Social Security taxes are 6.2% of the first $110,100 paid to each employee, & Medicare                          
taxes are 1.45%. FUTA taxes are .8% and SUTA taxes are 5.4% of the first $7,000 paid to each employee.                          
Record the employer tax expense for December, 2014.                  

Explanation / Answer

Bookland Corporation's trial balance at December 31, 2014 is presented on the n

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