The following additional information is available December 31, 2022: Store Supplies on hand on December 31, 2022, amounted to $350,000. Insurance of $5,850,000 was paid on January 1, 2022, for the 18-months to June 30, 2023 Prepaid rent expired December 31, 2022, amounted to $1,110,000. The furniture and equipment have an estimated useful life of 10 years and is being depreciated on the straight-line method down to a residual value of $100,000. The motor truck cost relates to two Livi Trucks purchased for $1,300,000 each by the company on January 1, 2016. The double-declining balance method of depreciation is used to compute the truck’s depreciation charges and their expected useful life is 10 years or 100,000 miles. In 2016, 15,000 miles were driven, 18,500 in 2017, 15,600 in 2018, 17,000 in 2019, 14,500 in 2020, 10,800 in 2021 and 12,800 in 2022. The residual value on both truck is $272,630 each. On July 1, 2022, the company sold one of the trucks to Daley Company for $480,000 on credit. Round off answers to the nearest dollar. Salaries earned by employees and not yet paid amounted to $1,500,000 on Dec 31, 2022. Accrued interest expense as of December 31, 2022, $220,000. On Dec 31, 2022, $875,000 of the previously unearned sales revenue had been earned. The aging of the Accounts Receivable schedule on Dec 31, 2022, indicated that the Allowance for Bad Debts should be $359,000. A physical count of inventory was done on December 31, 2022, after making all the other adjustments and this revealed that there was $8,450,000 worth of inventory on hand at this point. Other data: The business is expected to make principal payments totalling $550,500 towards the loan during the fiscal year to December 31,2023 Required: Prepare the necessary adjusting journal entries on Dec 31, 2022. [Narrations are not required] Prepare the Adjusted Trial balance for the period ending December 31, 2022. Prepare the following financial statements for the division: A Multiple-step income statement & a Statement of owner’s equity for the year ended December 31, 2022 A Classified balance sheet, in report format, at December 31, 2022.

The following additional information is available December 31, 2022: Store Supplies on hand on December 31, 2022, amounted to $350,000. Insurance of $5,850,000 was paid on January 1, 2022, for the 18-months to June 30, 2023 Prepaid rent expired December 31, 2022, amounted to $1,110,000. The furniture and equipment have an estimated useful life of 10 years and is being depreciated on the straight-line method down to a residual value of $100,000. The motor truck cost relates to two Livi Trucks purchased for $1,300,000 each by the company on January 1, 2016. The double-declining balance method of depreciation is used to compute the truck’s depreciation charges and their expected useful life is 10 years or 100,000 miles. In 2016, 15,000 miles were driven, 18,500 in 2017, 15,600 in 2018, 17,000 in 2019, 14,500 in 2020, 10,800 in 2021 and 12,800 in 2022. The residual value on both truck is $272,630 each. On July 1, 2022, the company sold one of the trucks to Daley Company for $480,000 on credit. Round off answers to the nearest dollar. Salaries earned by employees and not yet paid amounted to $1,500,000 on Dec 31, 2022. Accrued interest expense as of December 31, 2022, $220,000. On Dec 31, 2022, $875,000 of the previously unearned sales revenue had been earned. The aging of the Accounts Receivable schedule on Dec 31, 2022, indicated that the Allowance for Bad Debts should be $359,000. A physical count of inventory was done on December 31, 2022, after making all the other adjustments and this revealed that there was $8,450,000 worth of inventory on hand at this point. Other data: The business is expected to make principal payments totalling $550,500 towards the loan during the fiscal year to December 31,2023 Required: Prepare the necessary adjusting journal entries on Dec 31, 2022. [Narrations are not required] Prepare the Adjusted Trial balance for the period ending December 31, 2022. Prepare the following financial statements for the division: A Multiple-step income statement & a Statement of owner’s equity for the year ended December 31, 2022 A Classified balance sheet, in report format, at December 31, 2022.

Name: The following additional information is available December 31, 2022: S
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Description: The following additional information is available December 31, 2022: Store Supplies on hand on December 31, 2022, amounted to $350,000. Insurance of $5,850,000 was paid on January 1, 2022, for the 18-months to June 30, 2023 Prepaid rent expired Decem

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

The following additional information is available December 31, 2022:

Store Supplies on hand on December 31, 2022, amounted to $350,000.
Insurance of $5,850,000 was paid on January 1, 2022, for the 18-months to June 30, 2023
Prepaid rent expired December 31, 2022, amounted to $1,110,000.
The furniture and equipment have an estimated useful life of 10 years and is being depreciated on the straight-line method down to a residual value of $100,000.
The motor truck cost relates to two Livi Trucks purchased for $1,300,000 each by the company on January 1, 2016. The double-declining balance method of depreciation is used to compute the truck’s depreciation charges and their expected useful life is 10 years or 100,000 miles. In 2016, 15,000 miles were driven, 18,500 in 2017, 15,600 in 2018, 17,000 in 2019, 14,500 in 2020, 10,800 in 2021 and 12,800 in 2022. The residual value on both truck is $272,630 each. On July 1, 2022, the company sold one of the trucks to Daley Company for $480,000 on credit. Round off answers to the nearest dollar.
Salaries earned by employees and not yet paid amounted to $1,500,000 on Dec 31, 2022.
Accrued interest expense as of December 31, 2022, $220,000.
On Dec 31, 2022, $875,000 of the previously unearned sales revenue had been earned.
The aging of the Accounts Receivable schedule on Dec 31, 2022, indicated that the Allowance for Bad Debts should be $359,000.
A physical count of inventory was done on December 31, 2022, after making all the other adjustments and this revealed that there was $8,450,000 worth of inventory on hand at this point.

Other data:

The business is expected to make principal payments totalling $550,500 towards the loan during the fiscal year to December 31,2023

Required:

Prepare the necessary adjusting journal entries on Dec 31, 2022. [Narrations are not required]
Prepare the Adjusted Trial balance for the period ending December 31, 2022.
Prepare the following financial statements for the division:

- A Multiple-step income statement & a Statement of owner’s equity for the year ended December 31, 2022
- A Classified balance sheet, in report format, at December 31, 2022.

Cash
Accounts receivable
Allowance for bad debt
Other debtors
Merchandise Inventory
Store Supplies
Prepaid Insurance
Prepaid rent
Furniture & Equipment
Accumulated deprecation-Furniture and equipment
Motor Truck
Accumulated depreciation- Motor Truck
Accounts payable
Salary payable
Interest payable
Unearned Sales revenue
Note Payable, long term
Capital
Withdrawals
Sales revenue
Sales discount
Sales returns and allowances
Cost of goods sold
Salaries expense
Insurance Expense
Utilities Expense
Rent Expense
Depreciation Expense - Furniture and Equipment
Depreciation Expense - Motor truck
Store Supplies Expense
Gain/loss on Disposal of Fixed Asset
Bad-Debt Expense
Interest Expense
DR
3,950,000
3,590,000
8,400,000
500,000
5,850,000
1,554,000
8,800,000
2,600,000
65,500
655,500
655,500
10,500,000
8,500,000
690,000
1,554,000
CR
300,000
3,480,000
1,918,426
330,000
900,000
3,255,000
18,500,000
29,181,074
57,864,500 57,864,500

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