Store Supplies on hand on December 31, 2020, amounted to $255,500. (ii) Insurance of $2,775,000 was paid on January 1, 2020, for the 15-months to March 31, 2021 (iii) Prepaid rent expired December 31, 2020, amounts to $850,000 (iv) The furniture and fixtures have an estimated useful life of 10 years and is being depreciated on the straight-line method down to a residual value of $50,000. (v) The machinery cost includes two coffee drink machines purchased for $900,000 each by the company on January 1, 2014. The double-declining balance method of depreciation is used to compute the machinery’s depreciation charges and their expected useful life is 10 years or 100,000 drinks. In 2014, 5,000 drinks were sold,  6,500 in 2015, 7,800 in 2016, 9,000 in 2017,

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

The following information is available December 31, 2020:

(i) Store Supplies on hand on December 31, 2020, amounted to $255,500.

(ii) Insurance of $2,775,000 was paid on January 1, 2020, for the 15-months to March 31, 2021

(iii) Prepaid rent expired December 31, 2020, amounts to $850,000

(iv) The furniture and fixtures have an estimated useful life of 10 years and is being depreciated on the straight-line method down to a residual value of $50,000.

(v) The machinery cost includes two coffee drink machines purchased for $900,000 each by

the company on January 1, 2014. The double-declining balance method of depreciation is used to compute the machinery’s depreciation charges and their expected useful life is 10 years or 100,000 drinks.

In 2014, 5,000 drinks were sold,

 6,500 in 2015,

7,800 in 2016,

9,000 in 2017,

11,500 in 2018,

 12,800 in 2019

15,900 sold in 2020.

The residual value on both machines is $96,637 each. On September 1, 2020, the company sold one of the coffee drinks machines for $480,000 cash.

(vi) Salaries earned by employees and not yet paid amounted to $180,000 on Dec 31, 2020.

(vii) Accrued interest expense as of December 31, 2020, $98,000.

(viii) On Dec 31, 2020, $695,000 of the previously unearned sales revenue had been earned

(ix) The aging of the Accounts Receivable schedule on Dec 31, 2020, indicated that the Allowance for Bad Debts should be $371,000

(x) A physical count of inventory was done on December 31, 2020, after making all the other adjustments and this revealed that there was $2,400,000 worth of inventory on hand at this point.

Other data:

(xi) The business is expected to make principal payments totaling $400,000 towards the loan during the fiscal year to December 31,2021.

Other data:

(xi) The business is expected to make principal payments totaling $400,000 towards the

loan during the fiscal year to December 31,2021.

Required:

Other data:

(xi) The business is expected to make principal payments totaling $400,000 towards the loan during the fiscal year to December 31,2021.

Required:

Other data:

(xi) The business is expected to make principal payments totaling $400,000 towards the loan during the fiscal year to December 31,2021.

Required:

a) Using the Adjusted trial balance, generate:

  • A Classified balance sheet, in report format, at December 31, 2020.

 

A ACCT1002 Assignment 2.pdf - Adobe Acrobat Reader DC (32-bit)
File Edit View Sign Window Help
Home
Tools
How to access pow.
ACCT1002 Assign. x
Sign In
3 /6
66.7%
The Pizza and Coffee Company
Trial Balance as of December 31, 2020
A/C Name
Trial Balance
DR
CR
560,000
Cash
Accounts receivable
3,710,000
Allowance for bad debt
290,000
Merchandise Inventory
Store Supplies
Prepaid Insurance
Prepaid rent
Fumiture
Accumulated deprecation-Fumiture
Machinery
Accumulated depreciation- Machinery
Accounts payable
Salary payable
Interest payable
2,580,000
1,300,000
2,775,000
1,000,000
2,650,000
2,080,000
1,800,000
1,328,141
630,000
Uneamed Sales revenue
800,000
2,500,000
Note Payable, long term
Patterson, Capital
Patty
Patty Patterson, Withdrawals
Sales revenue
Sales discount
5,200,000
280,000
22,726,859
1.200,000
800.000
Sales returns and allowances
Cost of goods sold
Salaries expense
Insurance Expense
Utilities Expense
Rent Expense
Depreciation Expense - Fumiture
Depreciation Expense - Machinery
Store Supplies Expense
Gain on Disposal of Machinery
Bad-Debt Expense
Interest Expense
8,100,000
7,270,000
580,000
950,000
7:12 PM
Activate Windows
10/26/2021
35,555,000 35,555,000
Go to Settings to activate Windows.
O E E
마 묘
Transcribed Image Text:A ACCT1002 Assignment 2.pdf - Adobe Acrobat Reader DC (32-bit) File Edit View Sign Window Help Home Tools How to access pow. ACCT1002 Assign. x Sign In 3 /6 66.7% The Pizza and Coffee Company Trial Balance as of December 31, 2020 A/C Name Trial Balance DR CR 560,000 Cash Accounts receivable 3,710,000 Allowance for bad debt 290,000 Merchandise Inventory Store Supplies Prepaid Insurance Prepaid rent Fumiture Accumulated deprecation-Fumiture Machinery Accumulated depreciation- Machinery Accounts payable Salary payable Interest payable 2,580,000 1,300,000 2,775,000 1,000,000 2,650,000 2,080,000 1,800,000 1,328,141 630,000 Uneamed Sales revenue 800,000 2,500,000 Note Payable, long term Patterson, Capital Patty Patty Patterson, Withdrawals Sales revenue Sales discount 5,200,000 280,000 22,726,859 1.200,000 800.000 Sales returns and allowances Cost of goods sold Salaries expense Insurance Expense Utilities Expense Rent Expense Depreciation Expense - Fumiture Depreciation Expense - Machinery Store Supplies Expense Gain on Disposal of Machinery Bad-Debt Expense Interest Expense 8,100,000 7,270,000 580,000 950,000 7:12 PM Activate Windows 10/26/2021 35,555,000 35,555,000 Go to Settings to activate Windows. O E E 마 묘
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

Blurred answer
Knowledge Booster
Depreciation Accounting
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
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