ACC423-Accounting 308-The January 1, 2017, balance sheet for Bullous Documents

The January 1, 2017, balance sheet for Bullous Documents Company (BDC), a professional corporation, was as follows:

ASSETS
Current Assets:
Cash $133,000

LIABILITIES AND STOCKHOLDERS” EQUITY

Accounts Receivable
Less: Allowance for Doubtful

Accounts Supplies

Total Current Assets

Non-Current Assets:

$131,500 (12,100)

119,400 15,850 268,250

149,500 1,022,500 102,500 6,750

1,281,250 $1,549,500

Current Liabilities:

Accounts Payable Salaries Payable Interest Payable

Total Current Liabilities Notes Payable

Total Liabilities

Stockholders’ Equity:

Capital Stock
Retained Earnings
Total Stockholders’ Equity

Total Liabilities and Stockholders’ Equity

$118,450 1,900 1,750

122,100 145,000 267,100

1,100,000 182,400 1,282,400

$1,549,500

Land
Building 1,220,000 Less: Accumulated Depreciation (197,500) Furniture 114,600

Less: Accumulated Depreciation Equipment
Less: Accumulated Depreciation

Total Non-Current Assets Total Assets

(12,100) 18,350 (11,600)

The following transactions and other economic events took place during the month ending January 31, 2017.

1. a) Purchased supplies on account, $22,200.
2. b) Paid the $1,750 interest accrued on notes payable at the end of 2016.
3. c) Completed work and billed the client $183,000.
4. d) Paid salaries totaling $124,000. This amount includes salaries accrued at the end of 2016.
5. e) Cash collections from customers, $127,600.
6. f) Wrote off a customer’s account of $1,800 as uncollectible.
7. g) Made payment on accounts payable of $18,600.
8. h) Paid salaries totaling $124,000.
9. i) Completed work and billed the client $179,000.
10. j) Cash collections from customers, $110,600.
11. k) Declared a cash dividend of $13,000 to be paid in February 2017.

Required:

1. Open T-accounts and enter the beginning balance sheet information.
2. Record the January transactions in general journal form using letters in place of dates.
3. Post the journal entries to the T-accounts.
4. Prepare a trial balance.
5. Prepare adjusting entries in general journal form. Information for adjustments: a) Bad debt expense is estimated to be 3% of revenue.
   b) Supplies remaining, $4,850.
   c) Depreciation expense, $11,200 for building, $1,300 for furniture, and $1,900 for equipment.
   d) Salaries accrued, end of the month, $11,440.
   e) Interest accrued on notes payable, $1,750.
   f) Unpaid utility bills, $1,560.
6. Post the adjusting entries to the T-accounts.
7. Prepare an adjusted trial balance.
8. Prepare an Income Statement, a Retained Earnings Statement, and a Balance Sheet.
9. Prepare closing entries.
10. Post closing entries.
11. Prepare a post-closing trial balance.