2023 Financial Statement Homework 2 Name Gold Inc December 31 2013 | Assignments Online

Financial Statement Homework #2              Name___________________

                                                                                                           

Gold, Inc

December 31, 2013

Unadjusted Trial balance

Cash	50,000
Accounts Receivable	14,000
Allowance for Doubtful Accounts		500
Short term Note Receivable	50,000
Interest Receivable
Supplies on Hand	5,000
Prepaid Insurance	48,000
Inventory	10,000
Land
Vehicle	15,000
Equipment	75,000
Accumulated Depreciation		42,000
Accounts Payable		10,000
Unearned Revenue		14,000
Wages Payable		2,000
Long-Term Notes Payable		45,000
Common Stock		106,000
Retained Earnings (1/1/2013)
Dividends	3,000
Sales		506,000
Sales Discounts	10,000
COGS	50,000
Delivery Expense	50,000
Depreciation Expense	16,000
Bad Debt Expense
Rent Expense	54,000
Permit Expense
Insurance Expense	25,000
Wages Expense	195,000
Supplies Expense	16,000
Interest Revenue
Gain on Sale
Interest Expense	4,500
Income Tax Expense	35,000
Total	725,500	725,500

 

 

 

Part 1:     Prepare the adjusting journal entries:

 

1.    Gold Inc loaned Klara Kart Inc $50,000 (already on the TB) on Oct 1, a 6 month, 10% interest note.  All interest and principal will be paid back at the end of the 6 months.  Write the adjusting journal entry required by Gold Inc for financial statements as of Dec 31st.

 

2.    There was a write off of uncollectable A/R’s of $300, $100, and $420 not yet recorded for the year ended 2013.

 

3.    Bad Debts for the following year are expected to be 4% of Jan 1^st A/R balance of $14,000. Record the adjustment based on this information.  Use the AFDA balance AFTER the above write off during 2013.

 

4.    Land was purchased for $6,000 with related costs incurred for soil testing of 1,100 and annual permit fees of 1,600. Record the necessary journal entries.

 

5.    Equipment was sold for $11,000 on Dec 31^st with a cost of 30,000 and related A/D of 24,000 as of Jan 1.  Additional depreciation of 3,000 is required at Dec 31^st .Update the depreciation.

 

6.    And record the sale of the equipment including the gain or loss

 

 

 

 

 

Part 2: Post the adjusting journal entries to t-accounts :

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Part 3:  Prepare the Adjusted Trial Balance (i.e., use ending balances after the previous journal entries are posted)

Gold, Inc

December 31, 2013

Adjusted Trial balance

                                                            Debit     Credit

 

Part 4:  Prepare a Multi-step Income Statement

(Be sure to include all the necessary headings, totals and subtotals as outlined in Chapter 5.)

 

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Prepare a Statement of Retained Earnings.

 

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Prepare a Classified Balance Sheet (follow the example in Chapter 2)

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Part 5: Answer the following questions using the above completed financial statements:

 

 

What is the Gross Profit?

What is Income from Operations?

What is Income before for Income Tax?

What is Total Current Assets?

What is Total Current Liabilities?

What is Net PPE?

If the company FAILS to record depreciation expense in the adjusting entries:

 

What is the impact to the income statement?

 

What is the impact to the balance sheet?