3 Question 1 Continued............... iv) v) vi) vii) vill) ix) x) xi) The computer equipment was acquired on March 1, 2023, and is being depreciated over 5 years on the double-declining balance method of depreciation, down to a -residue of $30,000. Wages earned by employees not yet paid amounted to $11,000 at June 30, 2023. Merchandise valued at $28,500 was sold on account to a customer on April 20, 2023. The revenue associated with the sale was neither recorded nor posted. The long-term loan bears interest of 5% per annum. The unadjusted Interest Expense account equals to the amount accrued for the first three quarters of the 2023 fiscal year. The accrued interest for the last quarter has not yet been paid nor recorded. At June 30, 2023, $54,000 of the previously unearned sales revenue had been earned. The aging of the Accounts Receivable schedule at June 30, 2023, indicated that the Allowance for Bad-Debts should be $18,500. A physical count of inventory at June 30, 2023, reveals $184,000 worth of inventory on hand. Other data: The business is expected to make principal payments totalling $45,000 toward the note payable during the fiscal year to June 30, 2024. Required: a b) c) d) Prepare the necessary adjusting journal entries on June 30, 2023. [Narrations are not required] Prepare P & T Enterprise multiple-step income statement for the year ended June 30, 2023. Prepare P & T Enterprise statement of owner's equity for the year ended June 30, 2023. Prepare P & T Enterprise classified balance sheet, in report format, at June 30, 2023. e) Calculate the following ratios for P & T Enterprise for the year ended June 30, 2023 (i) Current Ratio f) ii) Debt Ratio iii) Return on Owner's Equity iv) Inventory Tumover (Inventory on hand at June 30, 2022 was $84,000) v) Accounts Receivable Turnover (Net Receivables at June 30, 2022 was $203,600) With the aid of journal entries, explain the steps necessary in recording collections on an account which was previously written-off as bad under the allowance method. What impact will this have on the net receivables of the business? The following trial balance was extracted from the books of P & T Enterprise, a merchandising business, at June 30, the end of the business's fiscal year. The principal owner of the business is Anthony Peart and is in the business of selling items of clothing and accessories. P&T Enterprise Trial Balance as at June 30, 2023 Dr S Cr $ Cash 208,500 Accounts Receivable 235,000 Allowance for Bad-Debts 12,750 Merchandise Inventory 189,000 Stationery & Supplies 42,250 Prepaid Rent 84,000 Furniture & Fixtures 800,000 Accumulated Depreciation: Furniture & Fixtures 280,000 Computer Equipment 450,000 Accumulated Depreciation: Computer Equipment Accounts Payable 234,000 Wages & Salaries Payable Interest Payable 13,500 Unearned Sales Revenue desig89,000 Long-Term Loan Anthony Peart, Capital Anthony Peart, Withdrawals Sales Revenue Earned Sales Discount 360,000 832,500 135,000 1,052,000 3,800 Sales Returns & Allowances HYO 9,200 Cost of Goods Sold 397,000 Wages & Salaries Expense 161,000 Rent Expense 140,000 Utilities Expense 52,500 Depreciation Expense - Furniture & Fixtures Depreciation Expense - Computer Equipment Gain on Disposal of Old Computer Equipment Stationery & Supplies Expense Bad-Debt Expense Interest Expense Total 147,000 13,500 12.920.750 2.920.750 The following additional information is available at June 30, 2023: i) ii) iii) Stationery & Supplies on hand at June 30, 2023, amounted to $16,250. Rent of $84,000 was paid on April 30, 2023, for the 6-months to October 31, 2023. The furniture and fixtures have an estimated useful life of 10 years and is being depreciated on the fixed-instalment method down to a residual value of $160,000.
3 Question 1 Continued............... iv) v) vi) vii) vill) ix) x) xi) The computer equipment was acquired on March 1, 2023, and is being depreciated over 5 years on the double-declining balance method of depreciation, down to a -residue of $30,000. Wages earned by employees not yet paid amounted to $11,000 at June 30, 2023. Merchandise valued at $28,500 was sold on account to a customer on April 20, 2023. The revenue associated with the sale was neither recorded nor posted. The long-term loan bears interest of 5% per annum. The unadjusted Interest Expense account equals to the amount accrued for the first three quarters of the 2023 fiscal year. The accrued interest for the last quarter has not yet been paid nor recorded. At June 30, 2023, $54,000 of the previously unearned sales revenue had been earned. The aging of the Accounts Receivable schedule at June 30, 2023, indicated that the Allowance for Bad-Debts should be $18,500. A physical count of inventory at June 30, 2023, reveals $184,000 worth of inventory on hand. Other data: The business is expected to make principal payments totalling $45,000 toward the note payable during the fiscal year to June 30, 2024. Required: a b) c) d) Prepare the necessary adjusting journal entries on June 30, 2023. [Narrations are not required] Prepare P & T Enterprise multiple-step income statement for the year ended June 30, 2023. Prepare P & T Enterprise statement of owner's equity for the year ended June 30, 2023. Prepare P & T Enterprise classified balance sheet, in report format, at June 30, 2023. e) Calculate the following ratios for P & T Enterprise for the year ended June 30, 2023 (i) Current Ratio f) ii) Debt Ratio iii) Return on Owner's Equity iv) Inventory Tumover (Inventory on hand at June 30, 2022 was $84,000) v) Accounts Receivable Turnover (Net Receivables at June 30, 2022 was $203,600) With the aid of journal entries, explain the steps necessary in recording collections on an account which was previously written-off as bad under the allowance method. What impact will this have on the net receivables of the business? The following trial balance was extracted from the books of P & T Enterprise, a merchandising business, at June 30, the end of the business's fiscal year. The principal owner of the business is Anthony Peart and is in the business of selling items of clothing and accessories. P&T Enterprise Trial Balance as at June 30, 2023 Dr S Cr $ Cash 208,500 Accounts Receivable 235,000 Allowance for Bad-Debts 12,750 Merchandise Inventory 189,000 Stationery & Supplies 42,250 Prepaid Rent 84,000 Furniture & Fixtures 800,000 Accumulated Depreciation: Furniture & Fixtures 280,000 Computer Equipment 450,000 Accumulated Depreciation: Computer Equipment Accounts Payable 234,000 Wages & Salaries Payable Interest Payable 13,500 Unearned Sales Revenue desig89,000 Long-Term Loan Anthony Peart, Capital Anthony Peart, Withdrawals Sales Revenue Earned Sales Discount 360,000 832,500 135,000 1,052,000 3,800 Sales Returns & Allowances HYO 9,200 Cost of Goods Sold 397,000 Wages & Salaries Expense 161,000 Rent Expense 140,000 Utilities Expense 52,500 Depreciation Expense - Furniture & Fixtures Depreciation Expense - Computer Equipment Gain on Disposal of Old Computer Equipment Stationery & Supplies Expense Bad-Debt Expense Interest Expense Total 147,000 13,500 12.920.750 2.920.750 The following additional information is available at June 30, 2023: i) ii) iii) Stationery & Supplies on hand at June 30, 2023, amounted to $16,250. Rent of $84,000 was paid on April 30, 2023, for the 6-months to October 31, 2023. The furniture and fixtures have an estimated useful life of 10 years and is being depreciated on the fixed-instalment method down to a residual value of $160,000.
Chapter12: Current Liabilities
Section: Chapter Questions
Problem 5EB: Review the following transactions and prepare any necessary journal entries for Lands Inc. A. On...
Related questions
Question
100%
Please solve this question,
thank you
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 4 images
Recommended textbooks for you
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
College Accounting (Book Only): A Career Approach
Accounting
ISBN:
9781337280570
Author:
Scott, Cathy J.
Publisher:
South-Western College Pub
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
College Accounting (Book Only): A Career Approach
Accounting
ISBN:
9781337280570
Author:
Scott, Cathy J.
Publisher:
South-Western College Pub
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,
Century 21 Accounting Multicolumn Journal
Accounting
ISBN:
9781337679503
Author:
Gilbertson
Publisher:
Cengage