1. $300,000 in sales on account had not been recorded but were shipped FOB Shipping Point on December 31. The cost of this inventory was $140,000. Bruce and Emmett use a perpetual inventory system.
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ACCT495 Capstone Project Fall 2019 Part 1 Adjusting entries & Statements 12/31/2019 Year-end Adjustment Data for Bruce and Emmett Corp is as follows:
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2. Employees are allowed to carry over up to 10 days of earned vacation days per year up to 40 days. Employees earn an average of $150 per day. A total of 500 earned vacation days will be carried over to 2020. It is probable that the employees will take the vacation days.
3. Accrued wages at December 31, 2019 amount to $50,000.
4. You discover that a product sale was made and recorded in December for $50,000; the product had not yet been shipped. The cost of the product was $24,000.
5. The Prepaid Expense account balance includes the $24,000 cost of a two year insurance policy purchased on April 1, 2019. (Prepaid Expense was debited for $24,000 on April 1, 2019)
6. Depreciation & Amortization expense for the year is $150,000
7. Interest expense accrued on its long-term liabilities is $35,000.
8. A dividend of $40,000 was declared on December 16, to be paid on January 15, 2020
9. It is estimated that 5% of accounts receivable will be uncollectable.
10. Income tax expense is 30% of income before income tax.
INSTRUCTIONS:
A. Record the adjusting journal entries
B. Compute the adjusted trial balance amounts
C. Prepare in good form:
a. Multiple Step Income Statement with an other gains and losses section
b. Balance Sheet
c. Retained Earnings Statement
D. Compute the following ratios: Current Ratio, Profit Margin on Sales, Debt to Assets, Earnings per Share, and Book Value per share
E. Record Closing Entries
Sheet1
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Bruce and Emmett Corporation |
| Unadjusted Balances |
| 12/31/19 |
| Debit |
Credit |
| 101 |
Cash |
$ 425,000 |
| 102 |
Cash Equivalents |
$ 38,000 |
| 103 |
Accounts Receivable |
$ 825,000 |
| 104 |
Allowance for Doubtful Accounts |
$ 25,000 |
| 105 |
Inventory |
$ 1,375,000 |
| 106 |
Prepaid expenses |
$
| 122 |
,593
| 107 |
Other Current Assets |
$ 25,531 |
| 121 |
Equipment |
$ 487,000 |
122
| Building |
$ 875,000 |
| 123 |
Land |
$
| 310 |
,000
| 124 |
Accumulated Depreciation |
$ 457,500 |
| 125 |
Investments |
$ 675,868 |
| 131 |
Goodwill |
$ 175,000 |
| 132 |
Other Intangible Assets |
| $ 250,000 |
| 201 |
Accounts Payable |
$ 1,144,925 |
| 202 |
Wages Payable |
$ 80,000 |
| 204 |
Payroll taxes payable |
$ 18,000 |
| 205 |
Interest Payable |
$ 12,550 |
| 206 |
| Dividends |
Payable
| $ 50,000 |
| 207 |
Unearned Revenue |
$ 187,500 |
| 210 |
Income Tax payable |
| 212 |
Compensated Absence Payable |
| 221 |
Long Term Liabilities |
$ 688,500 |
| 301 |
Common Stock ($10 par) |
$ 735,000 |
| 302 |
Paid-in Capital Common Stock |
$ 157,500 |
310 Dividends $ 50,000
| 315 |
Treasury Stock |
$ 250,000
| 320 |
Retained Earnings |
$ 369,700 |
| 401 |
Product Sales Revenue |
$ 9,280,673 |
| 402 |
Service Revenue |
$ 1,542,678 |
| 403 |
Sales Returns |
$ 162,500 |
| 404 |
Sales Discounts |
$ 269,500 |
| 420 |
Investment Income |
$ 28,290 |
| 421 |
Gain/Loss on Disposal |
| 501 |
Cost of Goods Sold |
$ 5,100,000 |
| 601 |
Office Expenses |
$ 215,000 |
| 602 |
Bad debts expenses |
$ – 0 |
| 603 |
Equipment Repair Expense |
$ 150,000 |
| 604 |
Advertising Expense |
$ 168,500 |
| 605 |
Depreciation Expense |
| 607 |
Legal Fees |
$ 205,000 |
| 608 |
Office
| Wages Expense |
$ 400,000 |
| 609 |
Accounting Consultants |
$ 100,000 |
| 610 |
Property Taxes |
$ 107,831 |
| 611 |
Maintenance Expense |
$ 42,500 |
| 612 |
Dues and subscriptions Expense |
$ 22,960 |
| 613 |
Telephone Expense |
$ 20,199 |
| 614 |
Utilities Expenses |
$ 78,000 |
| 615 |
Wages Expense
$ 962,000 |
| 616 |
Travel & Entertainment Expense |
$ 220,000 |
| 617 |
Research & Development |
$ 290,000 |
| 618 |
Insurance Expense |
$ 85,000 |
| 619 |
Income Tax Expense |
| 620 |
Payroll taxes Expense |
$ 168,488 |
| 625 |
Compensated Absence Expense |
| 695 |
Interest Expense |
$ 47,500 |
| 699 |
Miscellaneous Expense |
$ 78,846 |
| Totals |
| $ 14,777,816 |
$ 14,777,816
