ACCOUNTING QUESTION - Emily Corp.
You are given the unadjusted trial balance for Emily Corp. You have to make all necessary journal entries and then prepare the monthly financial statements for the company.
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Dec-07 |
Jan-08 |
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Adjusted Trial Balance |
Unadjusted Trial Balance |
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DR |
CR |
DR |
CR |
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Cash |
93,856.00 |
79,725.00 |
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Notes Receivable |
6,000.00 |
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Accounts Receivable |
12,000.00 |
4,000.00 |
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Allowance for Doubtful Accounts |
500 |
500 |
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Inventory |
190,374.00 |
190,374.00 |
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Prepaid Insurance |
480 |
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Prepaid License |
400 |
400 |
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Store Supplies |
150 |
660 |
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Furniture |
30,000.00 |
29,900.00 |
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Accumulated Depreciation |
10,350.00 |
10,320.00 |
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Equipment |
55,000.00 |
55,000.00 |
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Accumulated Depreciation |
23,800.00 |
23,800.00 |
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Accounts Payable |
29,910.00 |
13,824.00 |
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Salary Payable |
9,000.00 |
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Interest Payable |
0 |
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Income Tax Payable |
3,000.00 |
0 |
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Note Payable Long Term |
30,000.00 |
30,000.00 |
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Stock |
100,000.00 |
100,000.00 |
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Capital in Excess of Par |
150,000.00 |
150,000.00 |
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Retained Earnings |
25,220.00 |
25,220.00 |
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Sales |
81,672.00 |
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Sales Returns |
318 |
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Purchases |
35,164.00 |
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Purchase Returns |
150 |
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Purchase Discounts |
50 |
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Freight in |
250 |
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Advertising Expense |
2,550.00 |
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Miscellaneous Expense |
75 |
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Postage Expense |
33 |
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Rent Expense |
1,500.00 |
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Salary Expense |
28,706.00 |
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Telephone Expense |
307 |
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Utility Expense |
84 |
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Loss on sale of furniture |
10 |
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381,780.00 |
381,780.00 |
435,536.00 |
435,536.00 |
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Depreciation Schedule |
Year Acquired |
Cost |
Change |
Accumulated Depreciation |
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Furniture |
2006 |
25,000.00 |
-100.00 |
24,900.00 |
10,125.00 |
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2007 |
5,000.00 |
5,000.00 |
225.00 |
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30,000.00 |
29,900.00 |
10,350.00 |
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Equipment |
2006 |
40,000.00 |
40,000.00 |
20,800.00 |
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2007 |
15,000.00 |
15,000.00 |
3,000.00 |
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55,000.00 |
55,000.00 |
23,800.00 |
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The furniture was sold for $60 |
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Adjustments |
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The Zeck accounts receivable account is written off as a bad debt ($400) |
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Estimated bad debts expense at .5% (.005) of credit sales ($7,572) |
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Depreciation for the furniture is straight line, 10 years, 10% salvage |
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Depreciation for the equipment is 150 declining balance, 5 years, 5% salvage |
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Store supplies inventory on January 31 was $310 |
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Interest revenue on the note receivable should accrue for 20 days (365 day year). |
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The note was signed this month. The interest rate is 10% and the term is 6 months. |
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Interest expense should accrue on the long term note payable (interest paid December 31 each year). |
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The note bears a 9% interest rate. |
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Record expired prepaid insurance. The insurance was paid on the first of this month for a two year period |
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Record expired prepaid license |
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License was paid on September 1 (of last year) for one year |
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The company uses the retail inventory method |
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Retail value of the beginning inventory |
442,730.00 |
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Retail value of purchases |
87,910.00 |
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There were no markups or markdowns |
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Round your percentages to two decimal places (example 43.15%) |
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Accrue income taxes at a 30% rate |
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Rating:
/5
Solution: ACCOUNTING QUESTION - Emily Corp. (Solution)