Crane Corporation’s trial balance at December 31, 2020, is presented below. All 2020 transactions have been recorded except for the items described below. Debit Credit Cash $25,500 Accounts Receivable 50,000 Inventory 23,000 Land 65,800 Buildings 109,200 Equipment 43,000 Allowance for Doubtful Accounts $460 Accumulated Depreciation—Buildings 35,000 Accumulated Depreciation—Equipment 12,000 Accounts Payable 19,200 Interest Payable –0– Dividends Payable –0– Unearned Rent Revenue 6,400 Bonds Payable (10%) 40,000 Common Stock ($10 par) 30,000 Paid-in Capital in Excess of Par—Common Stock 6,000 Preferred Stock ($20 par) –0– Paid-in Capital in Excess of Par—Preferred Stock –0– Retained Earnings 98,040 Treasury Stock –0– Cash Dividends –0– Sales Revenue 576,000 Rent Revenue –0– Bad Debt Expense –0– Interest Expense –0– Cost of Goods Sold 403,000 Depreciation Expense –0– Other Operating Expenses 38,600 Salaries and Wages Expense 65,000 Total $823,100 $823,100 Unrecorded transactions and adjustments: 1. On January 1, 2020, Crane issued 1,000 shares of $20 par, 6% preferred stock for $22,000. 2. On January 1, 2020, Crane also issued 1,200 shares of common stock for $26,400. 3. Crane reacquired 320 shares of its common stock on July 1, 2020, for $47 per share. 4. On December 31, 2020, Crane declared the annual cash dividend on the preferred stock and a $1.30 per share dividend on the outstanding common stock, all payable on January 15, 2021. 5. Crane estimates that uncollectible accounts receivable at year-end is $5,000. 6. The building is being depreciated using the straight-line method over 30 years. The salvage value is $4,200. 7. The equipment is being depreciated using the straight-line method over 10 years. The salvage value is $4,300. 8. The unearned rent was collected on October 1, 2020. It was receipt of 4 months’ rent in advance (October 1, 2020 through January 31, 2021). 9. The 10% bonds payable pay interest every January 1. The interest for the 12 months ended December 31, 2020, has not been paid or recorded. (Ignore income taxes.)

Crane Corporation’s trial balance at December 31, 2020, is presented below. All 2020 transactions have been recorded except for the items described below. Debit Credit Cash $25,500 Accounts Receivable 50,000 Inventory 23,000 Land 65,800 Buildings 109,200 Equipment 43,000 Allowance for Doubtful Accounts $460 Accumulated Depreciation—Buildings 35,000 Accumulated Depreciation—Equipment 12,000 Accounts Payable 19,200 Interest Payable –0– Dividends Payable –0– Unearned Rent Revenue 6,400 Bonds Payable (10%) 40,000 Common Stock ($10 par) 30,000 Paid-in Capital in Excess of Par—Common Stock 6,000 Preferred Stock ($20 par) –0– Paid-in Capital in Excess of Par—Preferred Stock –0– Retained Earnings 98,040 Treasury Stock –0– Cash Dividends –0– Sales Revenue 576,000 Rent Revenue –0– Bad Debt Expense –0– Interest Expense –0– Cost of Goods Sold 403,000 Depreciation Expense –0– Other Operating Expenses 38,600 Salaries and Wages Expense 65,000 Total $823,100 $823,100 Unrecorded transactions and adjustments: 1. On January 1, 2020, Crane issued 1,000 shares of $20 par, 6% preferred stock for $22,000. 2. On January 1, 2020, Crane also issued 1,200 shares of common stock for $26,400. 3. Crane reacquired 320 shares of its common stock on July 1, 2020, for $47 per share. 4. On December 31, 2020, Crane declared the annual cash dividend on the preferred stock and a $1.30 per share dividend on the outstanding common stock, all payable on January 15, 2021. 5. Crane estimates that uncollectible accounts receivable at year-end is $5,000. 6. The building is being depreciated using the straight-line method over 30 years. The salvage value is $4,200. 7. The equipment is being depreciated using the straight-line method over 10 years. The salvage value is $4,300. 8. The unearned rent was collected on October 1, 2020. It was receipt of 4 months’ rent in advance (October 1, 2020 through January 31, 2021). 9. The 10% bonds payable pay interest every January 1. The interest for the 12 months ended December 31, 2020, has not been paid or recorded. (Ignore income taxes.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Crane Corporation’s trial balance at December 31, 2020, is presented below. All 2020 transactions have been recorded except for the items described below.

	Debit	Credit
Cash	$25,500
Accounts Receivable	50,000
Inventory	23,000
Land	65,800
Buildings	109,200
Equipment	43,000
Allowance for Doubtful Accounts		$460
Accumulated Depreciation—Buildings		35,000
Accumulated Depreciation—Equipment		12,000
Accounts Payable		19,200
Interest Payable		–0–
Dividends Payable		–0–
Unearned Rent Revenue		6,400
Bonds Payable (10%)		40,000
Common Stock ($10 par)		30,000
Paid-in Capital in Excess of Par—Common Stock		6,000
Preferred Stock ($20 par)		–0–
Paid-in Capital in Excess of Par—Preferred Stock		–0–
Retained Earnings		98,040
Treasury Stock	–0–
Cash Dividends	–0–
Sales Revenue		576,000
Rent Revenue		–0–
Bad Debt Expense	–0–
Interest Expense	–0–
Cost of Goods Sold	403,000
Depreciation Expense	–0–
Other Operating Expenses	38,600
Salaries and Wages Expense	65,000
Total	$823,100	$823,100

Unrecorded transactions and adjustments:

1.		On January 1, 2020, Crane issued 1,000 shares of $20 par, 6% preferred stock for $22,000.
2.		On January 1, 2020, Crane also issued 1,200 shares of common stock for $26,400.
3.		Crane reacquired 320 shares of its common stock on July 1, 2020, for $47 per share.
4.		On December 31, 2020, Crane declared the annual cash dividend on the preferred stock and a $1.30 per share dividend on the outstanding common stock, all payable on January 15, 2021.
5.		Crane estimates that uncollectible accounts receivable at year-end is $5,000.
6.		The building is being depreciated using the straight-line method over 30 years. The salvage value is $4,200.
7.		The equipment is being depreciated using the straight-line method over 10 years. The salvage value is $4,300.
8.		The unearned rent was collected on October 1, 2020. It was receipt of 4 months’ rent in advance (October 1, 2020 through January 31, 2021).
9.		The 10% bonds payable pay interest every January 1. The interest for the 12 months ended December 31, 2020, has not been paid or recorded.

(Ignore income taxes.)

(a)

Prepare journal entries for the transactions and adjustment listed above. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

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2.
3.
4.
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9.
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