Describe the system of accounting standards and principles and utilize these in the preparation and communication of relevant financial information. 2. Apply the accrual method of accounting and the accounting cycle in preparation of the adjusting entries, and adjusted trial balance. 3. Prepare a balance sheet and income statement for merchandising and service organizations. The Belvidere Pharmaceuticals Group is a group of companies with six divisions/branches within your country. The company’s Financial Controller resigned suddenly, and you have been asked to prepare the company’s draft financial statements for submission to the Auditors for review and preparation of the consolidated financial reports. Below is the trial balance which was extracted from the books of the business on December 31, 2021, the end of the company’s financial year. Having been exposed to the principles relating to Financial Accounting you are confident in your abilities to complete the task at hand Belvidere Pharmaceuticals F -Town Division Trial Balance as of December 31, 2021 A/C Name D R C R Cash 2,850,000 Accounts receivable 8,000,000 Allowance for bad debt 710,100 Other debtors Merchandise Inventory 8,000,000 Store Supplies 1,800,000 Prepaid Insurance 4,200,000 Prepaid rent 3,850,000 Furniture & Equipment 16,000,000 Accumulated deprecation-Furniture and equipment 6,320,000 Motor Car 3,600,000 Accumulated depreciation- Motor Car 2,656,282 Accounts payable 1,650,050 Salary payable Interest payable Unearned Sales revenue 2,800,000 Note Payable, long term 8,000,000 Patty Patterson, Capital 24,500,000 Withdrawals 150,000 Sales revenue 32,688,568 Sales discount 1,250,000 Sales returns and allowances 1,525,000 Cost of goods sold 10,500,000 Salaries expense 12,500,000 Insurance Expense Utilities Expense 1,250,000 Rent Expense 3,850,000 Depreciation Expense – Furniture and Equipment Depreciation Expense – Motor Car Store Supplies Expense Gain/loss on Disposal of Fixed Asset Bad-Debt Expense Interest Expense 79,325,000 79,325,000 1) Store Supplies on hand on December 31, 2021, amounted to $1,500,000. 2) Insurance of $4,200,000 was paid on January 1, 2021, for the 14-months to February 28, 2022 3) Prepaid rent expired December 31, 2021, amounted to $2,750,000 4) The furniture and equipment have an estimated useful life of 10 years and is being depreciated on the straight-line method down to a residual value of $200,000. 5) The Motor Car cost relates to two Sosa cars purchased for $1,800,000 each by the company on January 1, 2015. The double-declining balance method of depreciation is used to compute the car’s depreciation charges and their expected useful life is 10 years or 100,000 miles. In 2015, 10,000 miles were driven, 16,500 in 2016, 12,600 in 2017, 16,000 in 2018, 16,500 in 2019, 14,800 in 2020 and 16,800 in 2021. The residual value on both car is $241,592 each. On September 1, 2021, the company sold one of the cars to ZM Company for $720,000 on credit. Round off answers to the nearest dollar. 6) Salaries earned by employees and not yet paid amounted to $65,000 on Dec 31, 2021. 7) Accrued interest expense as of December 31, 2021, $65,000. 8) On Dec 31, 2021, $2,500,000 of the previously unearned sales revenue had been earned. 9) The aging of the Accounts Receivable schedule on Dec 31, 2021, indicated that the Allowance for Bad Debts should be $800,000 10) A physical count of inventory was done on December 31, 2021, after making all the other adjustments and this revealed that there was $7,850,000 worth of inventory on hand at this
Describe the system of accounting standards and principles and utilize these in the
preparation and communication of relevant financial information.
2. Apply the accrual method of accounting and the accounting cycle in preparation of the
3. Prepare a
organizations.
The Belvidere Pharmaceuticals Group is a group of companies with six divisions/branches
within your country. The company’s Financial Controller resigned suddenly, and you have been
asked to prepare the company’s draft financial statements for submission to the Auditors for
review and preparation of the consolidated financial reports. Below is the trial balance which
was extracted from the books of the business on December 31, 2021, the end of the company’s
financial year. Having been exposed to the principles relating to Financial Accounting you are
confident in your abilities to complete the task at hand
Belvidere Pharmaceuticals F -Town Division
Trial Balance as of December 31, 2021
A/C Name
D R C R
Cash 2,850,000
Allowance for bad debt 710,100
Other debtors
Merchandise Inventory 8,000,000
Store Supplies 1,800,000
Prepaid Insurance 4,200,000
Prepaid rent 3,850,000
Furniture & Equipment 16,000,000
Accumulated deprecation-Furniture and equipment 6,320,000
Motor Car 3,600,000
Accumulated
Accounts payable 1,650,050
Salary payable
Interest payable
Unearned Sales revenue 2,800,000
Note Payable, long term 8,000,000
Patty Patterson, Capital 24,500,000
Withdrawals 150,000
Sales revenue 32,688,568
Sales discount 1,250,000
Sales returns and allowances 1,525,000
Cost of goods sold 10,500,000
Salaries expense 12,500,000
Insurance Expense
Utilities Expense 1,250,000
Rent Expense 3,850,000
Depreciation Expense – Furniture and Equipment
Depreciation Expense – Motor Car
Store Supplies Expense
Gain/loss on Disposal of Fixed Asset
Bad-Debt Expense
Interest Expense
79,325,000 79,325,000
1) Store Supplies on hand on December 31, 2021, amounted to $1,500,000.
2) Insurance of $4,200,000 was paid on January 1, 2021, for the 14-months to February 28,
2022
3) Prepaid rent expired December 31, 2021, amounted to $2,750,000
4) The furniture and equipment have an estimated useful life of 10 years and is being depreciated
on the straight-line method down to a residual value of $200,000.
5) The Motor Car cost relates to two Sosa cars purchased for $1,800,000 each by the company on
January 1, 2015. The double-declining balance method of depreciation is used to compute the car’s
depreciation charges and their expected useful life is 10 years or 100,000 miles. In 2015, 10,000
miles were driven, 16,500 in 2016, 12,600 in 2017, 16,000 in 2018, 16,500 in 2019, 14,800 in
2020 and 16,800 in 2021. The residual value on both car is $241,592 each. On September 1,
2021, the company sold one of the cars to ZM Company for $720,000 on credit. Round off
answers to the nearest dollar.
6) Salaries earned by employees and not yet paid amounted to $65,000 on Dec 31, 2021.
7) Accrued interest expense as of December 31, 2021, $65,000.
8) On Dec 31, 2021, $2,500,000 of the previously unearned sales revenue had been earned.
9) The aging of the Accounts Receivable schedule on Dec 31, 2021, indicated that the Allowance
for
10) A physical count of inventory was done on December 31, 2021, after making all the other
adjustments and this revealed that there was $7,850,000 worth of inventory on hand at this
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