Pina Colada Corp.’s unadjusted trial balance at December 1, 2017, is presented below. Debit Credit Cash $25,900 Accounts Receivable 35,100 Notes Receivable 8,400 Interest Receivable 0 Inventory 36,280 Prepaid Insurance 3,600 Land 21,800 Buildings 140,100 Equipment 60,500 Patent 9,630 Allowance for Doubtful Accounts $600 Accumulated Depreciation—Buildings 46,700 Accumulated Depreciation—Equipment 24,200 Accounts Payable 28,100 Salaries and Wages Payable 0 Notes Payable (due April 30, 2018) 12,900 Income Taxes Payable 0 Interest Payable 0 Notes Payable (due in 2023) 36,000 Common Stock 56,400 Retained Earnings 24,410 Dividends 13,500 Sales Revenue 923,500 Interest Revenue 0 Gain on Disposal of Plant Assets 0 Bad Debt Expense 0 Cost of Goods Sold 631,500 Depreciation Expense 0 Income Tax Expense 0 Insurance Expense 0 Interest Expense 0 Other Operating Expenses 61,000 Amortization Expense 0 Salaries and Wages Expense 105,500 Total $1,152,810 $1,152,810 The following transactions occurred during December. Dec. 2 Purchased equipment for $16,200, plus sales taxes of $1,800 (paid in cash). 2 Pina sold for $3,550 equipment which originally cost $4,800. Accumulated depreciation on this equipment at January 1, 2017, was $1,850; 2017 depreciation prior to the sale of equipment was $480. 15 Pina sold for $5,450 on account inventory that cost $3,280. 23 Salaries and wages of $6,370 were paid. Adjustment data: 1. Pina estimates that uncollectible accounts receivable at year-end are $4,190. 2. The note receivable is a one-year, 8% note dated April 1, 2017. No interest has been recorded. 3. The balance in prepaid insurance represents payment of a $3,600, 6-month premium on September 1, 2017. 4. The building is being depreciated using the straight-line method over 30 years. The salvage value is $30,600. 5. The equipment owned prior to this year is being depreciated using the straight-line method over 5 years. The salvage value is 10% of cost. 6. The equipment purchased on December 2, 2017, is being depreciated using the straight-line method over 5 years, with a salvage value of $2,340. 7. The patent was acquired on January 1, 2017, and has a useful life of 9 years from that date. 8. Unpaid salaries at December 31, 2017, total $2,070. 9. Both the short-term and long-term notes payable are dated January 1, 2017, and carry a 10% interest rate. All interest is payable in the next 12 months. 10 Income tax expense was $12,000. It was unpaid at December 31. *(a) Your answer is correct. Prepare journal entries for the transactions listed above and adjusting entries. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit Dec. 2 Equipment 18000 Cash 18000 Dec. 2 Depreciation Expense 480 Accumulated Depreciation-Equipment 480 (To record depreciation expense on equipment.) Cash 3550 Accumulated Depreciation-Equipment 2330 Gain on Disposal of Plant Assets 1080 Equipment 4800 (To record sale of equipment.) Dec. 15 Accounts Receivable 5450 Sales Revenue 5450 (To record sales revenue.) Cost of Goods Sold 3280 Inventory 3280 (To record cost of goods sold.) Dec. 23 Salaries and Wages Expense 6370 Cash 6370 Dec. 31 1. Bad Debt Expense 3590 Allowance for Doubtful Accounts 3590 2. Interest Receivable 504 Interest Revenue 504 3. Insurance Expense 2400 Prepaid Insurance 2400 4. Depreciation Expense 3650 Accumulated Depreciation-Buildings 3650 5. Depreciation Expense 10026 Accumulated Depreciation-Equipment 10026 6. Depreciation Expense 261 Accumulated Depreciation-Equipment 261 7. Amortization Expense 1070 Patents 1070 8. Salaries and Wages Expense 2070 Salaries and Wages Payable 2070 9. Interest Expense 4890 Interest Payable 4890 10. Income Tax Expense 12,000 Income Taxes Payable 12,000 *(b) Prepare an adjusted trial balance at December 31, 2017.

Pina Colada Corp.’s unadjusted trial balance at December 1, 2017, is presented below. Debit Credit Cash $25,900 Accounts Receivable 35,100 Notes Receivable 8,400 Interest Receivable 0 Inventory 36,280 Prepaid Insurance 3,600 Land 21,800 Buildings 140,100 Equipment 60,500 Patent 9,630 Allowance for Doubtful Accounts $600 Accumulated Depreciation—Buildings 46,700 Accumulated Depreciation—Equipment 24,200 Accounts Payable 28,100 Salaries and Wages Payable 0 Notes Payable (due April 30, 2018) 12,900 Income Taxes Payable 0 Interest Payable 0 Notes Payable (due in 2023) 36,000 Common Stock 56,400 Retained Earnings 24,410 Dividends 13,500 Sales Revenue 923,500 Interest Revenue 0 Gain on Disposal of Plant Assets 0 Bad Debt Expense 0 Cost of Goods Sold 631,500 Depreciation Expense 0 Income Tax Expense 0 Insurance Expense 0 Interest Expense 0 Other Operating Expenses 61,000 Amortization Expense 0 Salaries and Wages Expense 105,500 Total $1,152,810 $1,152,810 The following transactions occurred during December. Dec. 2 Purchased equipment for $16,200, plus sales taxes of $1,800 (paid in cash). 2 Pina sold for $3,550 equipment which originally cost $4,800. Accumulated depreciation on this equipment at January 1, 2017, was $1,850; 2017 depreciation prior to the sale of equipment was $480. 15 Pina sold for $5,450 on account inventory that cost $3,280. 23 Salaries and wages of $6,370 were paid. Adjustment data: 1. Pina estimates that uncollectible accounts receivable at year-end are $4,190. 2. The note receivable is a one-year, 8% note dated April 1, 2017. No interest has been recorded. 3. The balance in prepaid insurance represents payment of a $3,600, 6-month premium on September 1, 2017. 4. The building is being depreciated using the straight-line method over 30 years. The salvage value is $30,600. 5. The equipment owned prior to this year is being depreciated using the straight-line method over 5 years. The salvage value is 10% of cost. 6. The equipment purchased on December 2, 2017, is being depreciated using the straight-line method over 5 years, with a salvage value of $2,340. 7. The patent was acquired on January 1, 2017, and has a useful life of 9 years from that date. 8. Unpaid salaries at December 31, 2017, total $2,070. 9. Both the short-term and long-term notes payable are dated January 1, 2017, and carry a 10% interest rate. All interest is payable in the next 12 months. 10 Income tax expense was $12,000. It was unpaid at December 31. (a) Your answer is correct. Prepare journal entries for the transactions listed above and adjusting entries. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit Dec. 2 Equipment 18000 Cash 18000 Dec. 2 Depreciation Expense 480 Accumulated Depreciation-Equipment 480 (To record depreciation expense on equipment.) Cash 3550 Accumulated Depreciation-Equipment 2330 Gain on Disposal of Plant Assets 1080 Equipment 4800 (To record sale of equipment.) Dec. 15 Accounts Receivable 5450 Sales Revenue 5450 (To record sales revenue.) Cost of Goods Sold 3280 Inventory 3280 (To record cost of goods sold.) Dec. 23 Salaries and Wages Expense 6370 Cash 6370 Dec. 31 1. Bad Debt Expense 3590 Allowance for Doubtful Accounts 3590 2. Interest Receivable 504 Interest Revenue 504 3. Insurance Expense 2400 Prepaid Insurance 2400 4. Depreciation Expense 3650 Accumulated Depreciation-Buildings 3650 5. Depreciation Expense 10026 Accumulated Depreciation-Equipment 10026 6. Depreciation Expense 261 Accumulated Depreciation-Equipment 261 7. Amortization Expense 1070 Patents 1070 8. Salaries and Wages Expense 2070 Salaries and Wages Payable 2070 9. Interest Expense 4890 Interest Payable 4890 10. Income Tax Expense 12,000 Income Taxes Payable 12,000 (b) Prepare an adjusted trial balance at December 31, 2017.

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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Question

Pina Colada Corp.’s unadjusted trial balance at December 1, 2017, is presented below.

	Debit	Credit
Cash	$25,900
Accounts Receivable	35,100
Notes Receivable	8,400
Interest Receivable	0
Inventory	36,280
Prepaid Insurance	3,600
Land	21,800
Buildings	140,100
Equipment	60,500
Patent	9,630
Allowance for Doubtful Accounts		$600
Accumulated Depreciation—Buildings		46,700
Accumulated Depreciation—Equipment		24,200
Accounts Payable		28,100
Salaries and Wages Payable		0
Notes Payable (due April 30, 2018)		12,900
Income Taxes Payable		0
Interest Payable		0
Notes Payable (due in 2023)		36,000
Common Stock		56,400
Retained Earnings		24,410
Dividends	13,500
Sales Revenue		923,500
Interest Revenue		0
Gain on Disposal of Plant Assets		0
Bad Debt Expense	0
Cost of Goods Sold	631,500
Depreciation Expense	0
Income Tax Expense	0
Insurance Expense	0
Interest Expense	0
Other Operating Expenses	61,000
Amortization Expense	0
Salaries and Wages Expense	105,500
Total	$1,152,810	$1,152,810

The following transactions occurred during December.

Dec. 2		Purchased equipment for $16,200, plus sales taxes of $1,800 (paid in cash).
2		Pina sold for $3,550 equipment which originally cost $4,800. Accumulated depreciation on this equipment at January 1, 2017, was $1,850; 2017 depreciation prior to the sale of equipment was $480.
15		Pina sold for $5,450 on account inventory that cost $3,280.
23		Salaries and wages of $6,370 were paid.

Adjustment data:

1.		Pina estimates that uncollectible accounts receivable at year-end are $4,190.
2.		The note receivable is a one-year, 8% note dated April 1, 2017. No interest has been recorded.
3.		The balance in prepaid insurance represents payment of a $3,600, 6-month premium on September 1, 2017.
4.		The building is being depreciated using the straight-line method over 30 years. The salvage value is $30,600.
5.		The equipment owned prior to this year is being depreciated using the straight-line method over 5 years. The salvage value is 10% of cost.
6.		The equipment purchased on December 2, 2017, is being depreciated using the straight-line method over 5 years, with a salvage value of $2,340.
7.		The patent was acquired on January 1, 2017, and has a useful life of 9 years from that date.
8.		Unpaid salaries at December 31, 2017, total $2,070.
9.		Both the short-term and long-term notes payable are dated January 1, 2017, and carry a 10% interest rate. All interest is payable in the next 12 months.
10		Income tax expense was $12,000. It was unpaid at December 31.

*(a)


	Your answer is correct.

Prepare journal entries for the transactions listed above and adjusting entries. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.)

Date		Account Titles and Explanation	Debit	Credit
Dec. 2		Equipment	18000
		Cash		18000
Dec. 2		Depreciation Expense	480
		Accumulated Depreciation-Equipment		480
		(To record depreciation expense on equipment.)
		Cash	3550
		Accumulated Depreciation-Equipment	2330
		Gain on Disposal of Plant Assets		1080
		Equipment		4800
		(To record sale of equipment.)
Dec. 15		Accounts Receivable	5450
		Sales Revenue		5450
		(To record sales revenue.)
		Cost of Goods Sold	3280
		Inventory		3280
		(To record cost of goods sold.)
Dec. 23		Salaries and Wages Expense	6370
		Cash		6370
Dec. 31	1.	Bad Debt Expense	3590
		Allowance for Doubtful Accounts		3590
	2.	Interest Receivable	504
		Interest Revenue		504
	3.	Insurance Expense	2400
		Prepaid Insurance		2400
	4.	Depreciation Expense	3650
		Accumulated Depreciation-Buildings		3650
	5.	Depreciation Expense	10026
		Accumulated Depreciation-Equipment		10026
	6.	Depreciation Expense	261
		Accumulated Depreciation-Equipment		261
	7.	Amortization Expense	1070
		Patents		1070
	8.	Salaries and Wages Expense	2070
		Salaries and Wages Payable		2070
	9.	Interest Expense	4890
		Interest Payable		4890
	10.	Income Tax Expense	12,000
		Income Taxes Payable		12,000

*(b)

Prepare an adjusted trial balance at December 31, 2017.

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