December utilities totaled $1,143 and remain unrecorded at December 31, 2017. 2-
ID: 2551472 • Letter: D
Question
December utilities totaled $1,143 and remain unrecorded at December 31, 2017.
2- PREPARE ADJUSTING ENTRIES
3- PREPARE INCOME STATEMENT
4- PREPARE STATEMENT OF RETAINED EARNING
5- CLOSING ENTRIES
6- PREPARE BALANCE SHEET
7 - RATIOS
- working capital
- current ratio
The following items should be considered in adjusting the accounts for financial statement preparation: 1. Franklin Products acquired a 8.4% bank loan for $65,550 on August 1, 2017, due in 1 year. 2. Prepaid insurance is the cost of a 18-month insurance policy, effective February 1. 3. Franklin Products rents warehouse storage for its seasonal heavy equipment. On November 1, 2017, Franklin Products paid $4,140 for a 6-month lease. 4. The physical inventory count of Merchandise Inventory indicated an amount $64,686. 5. Supplies on hand at December 31, 2017 total $3,918. 6. Equipment is depreciated on a straight-line basis; residual value is estimated to be $7,500 with an estimated service life of 7 years. The assets were held the entire year. 7. On October 1, Franklin Products issued Evergreen Industries a 6-month note receivable at a 6.4% annual interest rate. 8. The aging schedule of accounts receivable indicates total estimated bad debt will be $8,166. 9. Salaries & Wages of $1,498 are accrued and unpaid at December 31, 2017. 10.December utilities totaled $1,143 and remain unrecorded at December 31, 2017.
Unadjusted Adjusted Account Title Trial Balance Adjustments Trial Balance Income Statement Balance Sheet DR CR DR CR DR CR DR CR DR CR Cash 23,414 Accounts Receivable 92,552 Allowance for Doubtful Accounts 451 Interest Receivable Note Receivable 5,290 Merchandise Inventory 66,516 Prepaid Insurance 2,484 Prepaid Rent 4,140 Supplies 10,488 Equipment 94,392 Accumulated Depreciation - Equipment 10,212 Accounts Payable 9,669 Salaries & Wages Payable Interest Payable Utilities Payable Note Payable (final payment due 2020) 65,550 Common Stock 27,600 Retained Earnings 78,200 Dividends 22,540 Sales 989,690 Sales Returns and Allowances 5,520 Sales Discounts 11,868 Cost of Goods Sold 681,214 Salaries & Wages Expense 149,868 Depreciation Expense - Equipment Bad Debt Expense Insurance Expense Rent Expense Supplies Expense Utilities Expense 11,086 Interest Revenue Interest Expense 1,181,372 1,181,372 Net IncomeExplanation / Answer
2. In the books of Franklin Products:
Adjusting Entries:
3. Franklin Products
Income Statement
For the Year Ended December 31, 2017
4. Franklin Products
Statement of Retained Earnings
For the year ended December 31, 2017
6. Franklin Products
Balance Sheet
December 31, 2017
7. Working Capital = Current Assets - Current Liabilities = $ 185,505 - $ 14,604 = $ 170,901.
Current Ratio = Current Assets / Current Liabilities = $ 185,505 / $ 14,604 = 12.70
Adjustment # Account Titles Debit Credit December 31, 2017 $ $ 1. Interest Expense ( $ 65,550 x 8.4 % x 5/12) 2,294 Interest Payable 2,294 2. Insurance Expense ( $ 2,484 / 18 x 11) 1,518 Prepaid Insurance 1,518 3. Rent Expense ( $ 4,140/6 x 2) 1,380 Prepaid Rent 1,380 4. Inventory Loss 1,830 Merchandise Inventory 1,830 5. Supplies Expense 6,570 Supplies 6,570 6. Depreciation Expense 12,413 Accumulated Depreciation : Equipment 12,413 7. Interest Receivable ( $ 5,290 x 6.4% x 3/12) 85 Interest Revenue 85 8. Bad Debt Expense 7,715 Allowance for Doubtful Accounts 7,715 9. Salaries and Wages Expense 1,498 Salaries and Wages Payable 1,498 10. Utilities Expense 1,143 Utilities Payable 1,143Related Questions
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