Shamrock Corporation Balance Sheet December 31, 2024 Cash $75,000 Accounts payable $34,375 Inventory 76,875 Interest payable 6,250 Prepaid insurance 14,000 Bonds payable 125,000 Equipment 95,000 Common stock 62,500 Retained earnings $32,750 $260,875 $260,875 During 2025, the following transactions occurred. Shamrock uses a perpetual inventory system. 1. Shamrock paid $6,250 interest on the bonds on January 1, 2025. 2. Shamrock purchased $602,750 of inventory on account. 3. Shamrock sold for $1,200,000 cash inventory which cost $660,000. Shamrock also collected $72,000 sales taxes. 4. Shamrock paid $575,000 on accounts payable. 5. Shamrock paid $6,250 interest on the bonds on July 1, 2025. 6. The prepaid insurance ($14,000) expired on July 31 7. On August 1, Shamrock paid $24.480 for insurance coverage from August 1, 2025, through July 31, 2026. 8. Shamrock paid $42,500 sales taxes to the state. 9. Paid other operating expenses, $227.500. 10. 11 Redeemed the bonds on December 31, 2025, by paying $120,000 plus $6,250 interest. Issued $225,000 of 8%, 10-year bonds on December 31, 2025, at 103. The bonds pay interest every June 30 and December 31. Adjustment data: 2 3. Recorded the insurance expired from item 7. The equipment was acquired on December 31, 2024, and will be depreciated on a straight-line basis over 5 years with a $7,600 salvage value. The income tax rate is 30%. (Hint Prepare the income statement up to income before taxes and multiply by 30% to compute the amount.) Prepare journal entries for the transactions listed above and adjusting entries. (List all debit entries before credit 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.)
Shamrock Corporation Balance Sheet December 31, 2024 Cash $75,000 Accounts payable $34,375 Inventory 76,875 Interest payable 6,250 Prepaid insurance 14,000 Bonds payable 125,000 Equipment 95,000 Common stock 62,500 Retained earnings $32,750 $260,875 $260,875 During 2025, the following transactions occurred. Shamrock uses a perpetual inventory system. 1. Shamrock paid $6,250 interest on the bonds on January 1, 2025. 2. Shamrock purchased $602,750 of inventory on account. 3. Shamrock sold for $1,200,000 cash inventory which cost $660,000. Shamrock also collected $72,000 sales taxes. 4. Shamrock paid $575,000 on accounts payable. 5. Shamrock paid $6,250 interest on the bonds on July 1, 2025. 6. The prepaid insurance ($14,000) expired on July 31 7. On August 1, Shamrock paid $24.480 for insurance coverage from August 1, 2025, through July 31, 2026. 8. Shamrock paid $42,500 sales taxes to the state. 9. Paid other operating expenses, $227.500. 10. 11 Redeemed the bonds on December 31, 2025, by paying $120,000 plus $6,250 interest. Issued $225,000 of 8%, 10-year bonds on December 31, 2025, at 103. The bonds pay interest every June 30 and December 31. Adjustment data: 2 3. Recorded the insurance expired from item 7. The equipment was acquired on December 31, 2024, and will be depreciated on a straight-line basis over 5 years with a $7,600 salvage value. The income tax rate is 30%. (Hint Prepare the income statement up to income before taxes and multiply by 30% to compute the amount.) Prepare journal entries for the transactions listed above and adjusting entries. (List all debit entries before credit 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.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Give me correct answer with explanation.vi
Transcribed Image Text:Shamrock Corporation
Balance Sheet
December 31, 2024
Cash
$75,000
Accounts payable
$34,375
Inventory
76,875
Interest payable
6,250
Prepaid insurance
14,000
Bonds payable
125,000
Equipment
95,000
Common stock
62,500
Retained earnings
$32,750
$260,875
$260,875
During 2025, the following transactions occurred. Shamrock uses a perpetual inventory system.
1. Shamrock paid $6,250 interest on the bonds on January 1, 2025.
2.
Shamrock purchased $602,750 of inventory on account.
3.
Shamrock sold for $1,200,000 cash inventory which cost $660,000. Shamrock also collected $72,000 sales taxes.
4.
Shamrock paid $575,000 on accounts payable.
5.
Shamrock paid $6,250 interest on the bonds on July 1, 2025.
6.
The prepaid insurance ($14,000) expired on July 31
7.
On August 1, Shamrock paid $24.480 for insurance coverage from August 1, 2025, through July 31, 2026.
8.
Shamrock paid $42,500 sales taxes to the state.
9.
Paid other operating expenses, $227.500.
10.
11
Redeemed the bonds on December 31, 2025, by paying $120,000 plus $6,250 interest.
Issued $225,000 of 8%, 10-year bonds on December 31, 2025, at 103. The bonds pay interest every June 30 and December
31.
Adjustment data:
2
3.
Recorded the insurance expired from item 7.
The equipment was acquired on December 31, 2024, and will be depreciated on a straight-line basis over 5 years with a
$7,600 salvage value.
The income tax rate is 30%. (Hint Prepare the income statement up to income before taxes and multiply by 30% to compute
the amount.)
Prepare journal entries for the transactions listed above and adjusting entries. (List all debit entries before credit 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.)
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