Homework Help is Here – Start Your Trial Now!
Business
Accounting
Please explain proper steps by Step and Do Not Give Solution In Image Format And Fast Answering Please Thanks In Advance ?

Please explain proper steps by Step and Do Not Give Solution In Image Format And Fast Answering Please Thanks In Advance ?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question

Please explain proper steps by Step and Do Not Give Solution In Image Format And Fast Answering Please Thanks In Advance ?

Scenario: You have been hired as an accountant by Russell Industries on December 31, 2023. Upon arriving on your first day, you are handed a trial balance by the CEO. Cash Accounts Receivable Allowance for Expected Credit Losses Prepaid Expenses Inventory Equipment Accumulated Depreciation - Equipment Building Accumulated Depreciation - Building Land Long-term investments Accounts Payable Salaries Payable Bank Loan Payable Share Capital Retained Earnings Dividends Declared Sales Revenue Sales Returns and Allowances Purchases Insurance Expense Interest and Bank Charges Expense Salaries Expense Russel Industries Trial Balance December 31, 2023 Debit $1,082,000 1,295,000 11,000 454,330 66,000 516,000 150,000 10,000 16,000 Credit $13,000 26,400 103,200 138,000 14,000 200,000 1,000 2,586,230 2,800,000 224,000 1,300,000 24,000 5,500 728,000 $5,881,830 $5,881,830
Transcribed Image Text:Scenario: You have been hired as an accountant by Russell Industries on December 31, 2023. Upon arriving on your first day, you are handed a trial balance by the CEO. Cash Accounts Receivable Allowance for Expected Credit Losses Prepaid Expenses Inventory Equipment Accumulated Depreciation - Equipment Building Accumulated Depreciation - Building Land Long-term investments Accounts Payable Salaries Payable Bank Loan Payable Share Capital Retained Earnings Dividends Declared Sales Revenue Sales Returns and Allowances Purchases Insurance Expense Interest and Bank Charges Expense Salaries Expense Russel Industries Trial Balance December 31, 2023 Debit $1,082,000 1,295,000 11,000 454,330 66,000 516,000 150,000 10,000 16,000 Credit $13,000 26,400 103,200 138,000 14,000 200,000 1,000 2,586,230 2,800,000 224,000 1,300,000 24,000 5,500 728,000 $5,881,830 $5,881,830
After reviewing the trial balance and other accounting records you discover the following: a) The company uses a periodic inventory system with a FIFO cost flow method. A count of inventory on December 31st showed 97,000 units on hand. Russell Industries only sells one product. b) Below is a summary of the inventory purchases for the year ended December 31, 2023 Date Jan 15 Mar 22 July 19 Sept 30 Nov 16 Units 66,000 14,000 106,000 35,640 82,000 Age Under 60 days 61-90 days 91-120 days Over 120 days c) 40,000 units of inventory were shipped by the supplier on December 31, 2023 fob shipping point at a cost of $172,800. Insurance for the inventory while in transit costs $3,449. This shipment is not included in the above listing, or the physical inventory count. No adjustment has been recorded for this purchase. d) The CEO provides the following collectability information for accounts receivable. He also mentions that included in the over 120 days balance is $52,000 owing from a company that has since gone bankrupt. No collection is expected. Cost/Unit 4.44 4.24 4.16 4.00 4.44 Balance $767,000 $435,000 $27,000 $66,000 g) The bank loan payments are as follows: a. May 31st, 2024 - $50,000 b. November 30, 2024 - $50,000 c. May 31, 2025 - $50,000 d. November 30, 2025 - $50,000 Estimated collectible % 92% 88% 80% 44% No adjustments have been recorded to the allowance for doubtful accounts. e) Bank fees of $472 for the month of December have not been recorded. Outstanding cheques total $34,000 and there is an outstanding deposit of $15,000. The bank made an error when cashing a cheque on December 15th. The cheque was written for $625 but cashed for $652. The bank account balance per the bank statement is $1,100,501 at December 31st. f) Annual depreciation of $6,600 on the equipment and $20,640 on the building has not yet been. recorded. Show Transcribed Text Required: 1) Prepare any necessary adjusting entries. 2) Calculate the value of ending inventory and cost of goods sold. 3) Prepare a bank reconciliation at December 31, 2023 4) Prepare Russell Industries income statement and statement of changes in equity for the year ended December 31, 2023. Prepare a classified statement of financial position as at December 31, 2023. 5) Prepare the closing entries for the year ended December 31, 2023. 6) Prepare the post-closing trial balance. 7) It was discovered that the ending inventory count missed 5,000 units of inventory. Discuss how this error would impact the financial statements.
Transcribed Image Text:After reviewing the trial balance and other accounting records you discover the following: a) The company uses a periodic inventory system with a FIFO cost flow method. A count of inventory on December 31st showed 97,000 units on hand. Russell Industries only sells one product. b) Below is a summary of the inventory purchases for the year ended December 31, 2023 Date Jan 15 Mar 22 July 19 Sept 30 Nov 16 Units 66,000 14,000 106,000 35,640 82,000 Age Under 60 days 61-90 days 91-120 days Over 120 days c) 40,000 units of inventory were shipped by the supplier on December 31, 2023 fob shipping point at a cost of $172,800. Insurance for the inventory while in transit costs $3,449. This shipment is not included in the above listing, or the physical inventory count. No adjustment has been recorded for this purchase. d) The CEO provides the following collectability information for accounts receivable. He also mentions that included in the over 120 days balance is $52,000 owing from a company that has since gone bankrupt. No collection is expected. Cost/Unit 4.44 4.24 4.16 4.00 4.44 Balance $767,000 $435,000 $27,000 $66,000 g) The bank loan payments are as follows: a. May 31st, 2024 - $50,000 b. November 30, 2024 - $50,000 c. May 31, 2025 - $50,000 d. November 30, 2025 - $50,000 Estimated collectible % 92% 88% 80% 44% No adjustments have been recorded to the allowance for doubtful accounts. e) Bank fees of $472 for the month of December have not been recorded. Outstanding cheques total $34,000 and there is an outstanding deposit of $15,000. The bank made an error when cashing a cheque on December 15th. The cheque was written for $625 but cashed for $652. The bank account balance per the bank statement is $1,100,501 at December 31st. f) Annual depreciation of $6,600 on the equipment and $20,640 on the building has not yet been. recorded. Show Transcribed Text Required: 1) Prepare any necessary adjusting entries. 2) Calculate the value of ending inventory and cost of goods sold. 3) Prepare a bank reconciliation at December 31, 2023 4) Prepare Russell Industries income statement and statement of changes in equity for the year ended December 31, 2023. Prepare a classified statement of financial position as at December 31, 2023. 5) Prepare the closing entries for the year ended December 31, 2023. 6) Prepare the post-closing trial balance. 7) It was discovered that the ending inventory count missed 5,000 units of inventory. Discuss how this error would impact the financial statements.
Expert Solution
steps

Step by step

Solved in 5 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Cash Flows
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS