Prepare the entry for the inventories adjustment to cash from operations. Note: Enter debits before credits. Transaction (g2) General Journal Debit Credit
| December 31, | ||||||
| 20X1 | 20X0 | |||||
| Assets | ||||||
| Cash | $ | 174,000 | $ | 223,200 | ||
| 306,000 | 327,600 | |||||
| Allowance for uncollectible accounts | (19,200 | ) | (20,400 | ) | ||
| Inventories | 579,600 | 645,600 | ||||
| Machinery and equipment | 1,112,400 | 776,400 | ||||
| (499,200 | ) | (446,400 | ) | |||
| Leasehold improvements | 104,400 | 104,400 | ||||
| Accumulated amortization on leasehold improvements | (69,600 | ) | (58,800 | ) | ||
| Securities held for plant expansion | 180,000 | 0 | ||||
| Patents | 33,360 | 36,000 | ||||
| Totals | $ | 1,901,760 | $ | 1,587,600 | ||
| Liabilities and |
||||||
| Accounts payable | $ | 279,360 | $ | 126,000 | ||
| Dividend payable | 48,000 | 0 | ||||
| Current portion of 6% serial bonds payable | 60,000 | 60,000 | ||||
| 6% serial bonds payable—noncurrent portion | 300,000 | 360,000 | ||||
| Preferred stock | 108,000 | 120,000 | ||||
| Common stock | 600,000 | 600,000 | ||||
| 506,400 | 321,600 | |||||
| Totals | $ | 1,901,760 | $ | 1,587,600 | ||
Supplemental Information:
a. The following table presents a comparative analysis of retained earnings as of December 31, 20X1, and December 31, 20X0.
| December 31, | |||||||
| 20X1 | 20X0 | ||||||
| Beginning balance | $ | 321,600 | $ | 157,200 | |||
| Net income | 234,000 | 206,400 | |||||
| 555,600 | 363,600 | ||||||
| Dividends declared | (48,000 | ) | (42,000 | ) | |||
| Premium on repurchased preferred Stock | (1,200 | ) | -0- | ||||
|
Ending balance |
$ | 506,400 | $ | 321,600 | |||
b. On December 10, 20X1, the board of directors declared a cash dividend of $0.24 per share, payable to holders of common stock on January 10, 20X2.
c Purchased new machinery for $463,000. In addition, Banciu sold certain machinery it was no longer using for $57,600. The machinery cost $127,000 and had accumulated depreciation of $53,800 at the date of the sale. Banciu made no other entries in Machinery and equipment or related accounts other than for depreciation.
d. Purchased 120
e. Paid $2,400 of legal costs in successful defense of a new patent, which it correctly debited to the Patents account. It recorded patent amortization amounting to $5,040 during the year ended December 31, 20X1.
f. During 20X1, Banciu wrote off accounts receivable totaling $3,600 as uncollectible.
g. During 20X1, Banciu purchased $180,000 of securities that are being held for future plant expansion.
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