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Presentation/PPT
27/08/2022
TREVOR CORPORATION
Balance Sheet
December 31, 2013
Cash
$ 30,000
Accounts payable
$ 13,750
Inventory
30,750
Interest payable
2,500
Prepaid insurance
5,600
Bonds payable
50,000
Equipment
38,000
Common stock
25,000
$104,350
Retained earnings
13,100
$104,350
During 2014, the following transactions occurred.
1.
Trevor paid $2,500 interest on the bonds on January 1, 2014.
2.
Trevor purchased $241,100 of inventory on account.
3.
Trevor sold for $480,000 cash inventory which cost $265,000. Trevor also collected $28,800 sales taxes.
4.
Trevor paid $230,000 on accounts payable.
5.
Trevor paid $2,500 interest on the bonds on July 1, 2014.
6.
The prepaid insurance ($5,600) expired on July 31.
7.
On August 1, Trevor paid $10,200 for insurance coverage from August 1, 2014, through July 31, 2015.
8.
Trevor paid $17,000 sales taxes to the state.
9.
Paid other operating expenses, $91,000.
10.
Redeemed the bonds on December 31, 2014, by paying $48,000 plus $2,500 interest.
11.
Issued $90,000 of 8% bonds on December 31, 2014, at 103. The bonds pay interest every June 30 and December 31.
Adjustment data:
1.
Recorded the insurance expired from item 7.
2.
The equipment was acquired on December 31, 2013, and will be depreciated on a straight-line basis over 5 years with a $3,000 salvage value.
3.
The income tax rate is 30%. (Hint: Prepare the income statement up to income before taxes and multiply by 30% to compute the amount.)
Instructions
(You may want to set up T-accounts to determine ending balances.)
1.
Prepare journal entries for the transactions listed above and adjusting entries.
2.
Prepare an adjusted trial balance at December 31, 2014.
Totals
$687,695
The writer is very fast, professional and responded to the review request fast also. Thank you.
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