Reference no: EM131338740

Assignment

1. Plicta Motors is an automobile service center offering a full range of repair services for high performance cars. The following information is pertinent to adjusting entries that are needed for Plicta as of March 31, 20X5. Plicta has a fiscal year ending on March 31 and only records adjusting entries at year end.

Plicta has a large investment in repair equipment and maintains detailed asset records. These records show that depreciation for fiscal "X5" is $123,400.

As of March 31, 20X5 accrued interest on loans owed by Plicta is $21,678.

Auto dealerships outsource work to Plicta. This work is done on account and billed monthly. As of March 31, 20X5 $54,800 of unbilled services have been provided.

Plicta maintains a general business liability insurance policy. The prepaid annual premium is $6,000. The policy was purchased on October 1, 20X4. Another policy is a 6-month property and casualty policy obtained on December 1, 20X4 at a cost of $3,000. Both policies were initially recorded as prepaid insurance.

The company prepared a detailed count of shop supplies at March 31, 20X4 with $37,904 on hand at that date. Management believed this level was greater than necessary and undertook a strategy to reduce these levels over the next year. During the fiscal year 20X5, Plicta purchased an additional $125,000 of supplies and debited the Supplies account. By March 31, 20X5, the effort to reduce inventory was successful as the count revealed an ending balance of only $13,600.

During the fiscal year, Plicta began offering a service contract to retail customers entitling them regular tire rotations, car washing, and other routine maintenance items. Customers prepay for this service agreement, and Plicta records the proceeds in the Unearned Revenue account. The service plan is a flat fee of $219, and Plicta sold the plan to 456 customers. At March 31, 20X5, it is estimated that 25% of the necessary work has been provided under these agreements.

Plicta's primary advertising is on billboards. Lamzar Outdoor Advertising sold Plicta a plan for multiple sign locations around the city. Because Plicta agreed to prepay the full price of $26,000, Lamzar agreed to leave the signs up for 13 months. Plicta paid on June 1, 20X4 and recorded the full amount as a prepaid. However, the advertising campaign was not begun until July 1, 20X4. It will conclude on July 31, 20X5.
Plicta leases shop space. Monthly rent is due and payable on the first day of each month. Plicta paid the Marc rent on March 1, and expects to pay the April rent on April 1.

Prepare adjusting entries (hint: when necessary) for Plicta, as of March 31, 20X5.

2. Reagan Sakai is in charge of financial management for Land Monitrix. Land Monitrix utilizes satellite technology and sophisticated mapping software to alert its customers to trespassing, illegal dumping, and other encroachments on property these customers own around the globe. Customers typically purchase one-year contracts for this service, and the pricing depends on the number and size of sites monitored.

Mr. Sakai desires to review financial reports -- an income statement, statement of retained earnings, and balance sheet. Prepare these reports from the following adjusted trial balance. Mr. Sakai needs this information for internal review purposes, and does not require a classified balance sheet. The operating data relate to the full year, and the blank worksheet already includes partial data.

LAND MONITRIX CORPORATION Adjusted Trial Balance As of December 31, 20X5
	Debits	Credits
Cash	$ 834,221	$ -
Accounts receivable	345,909	-
Prepaid expenses	45,787	-
Supplies	66,665	-
Satellite equipment	3,009,000	-
Accumulated depreciation	-	1,222,199
Accounts payable	-	544,190
Unearned revenues	-	455,000
Loan payable	-	1,000,000
Capital stock	-	560,000
Retained earnings, Jan. 1	-	228,892
Dividends	50,000	-
Revenues	-	2,373,402
Selling expenses	476,445	-
Interest expense	80,000	-
Salaries expense	677,667	-
Maintenance and supplies expense	222,989	-
Depreciation expense	575,000	-
	$ 6,383,683	$ 6,383,683

3. Timber Creek prepared the following adjusted trial balance on December 31, 20X3. The company has completed preparation of financial statements and is now ready to prepare closing entries.

TIMBER CREEK Adjusted Trial Balance As of December 31, 20X3
		Debits		Credits
	Cash	$           35,600		$                    -
	Accounts receivable	23,700		-
	Supplies	7,500		-
	Equipment	325,700		-
	Accumulated depreciation	-		40,400
	Accounts payable	-		34,800
	Loan payable	-		100,000
	Capital stock	-		80,000
	Retained earnings	-		70,000
	Dividends	20,000		-
	Revenues	-		478,400
	Rent expense	120,000		-
	Salaries expense	235,600		-
	Supplies expense	18,000		-
	Interest expense	7,400		-
	Depreciation expense	10,100		-
		$          803,600		$          803,600

(a) Prepare the necessary closing entries.
(b) Use T-accounts to determine the post-closing balances of the accounts.
(c) Prepare the post-closing trial balance.

4. Use this randomly arranged data to prepare a classified balance sheet for Imamani Corporation as of December 31, 20X5. Some of the accounts do not belong in the balance sheet, and 20% of the loan payable matures each June 30.

Capital Stock	$ 755,000
Patent	275,000
Accumulated depreciation (equipment)	(477,654)
Building	1,990,776
Land held for speculation	156,098
Dividends	50,000
Cash	182,345
Retained earnings	646,992
Accounts receivable	56,766
Accounts payable	78,011
Income tax expense	123,334
Prepaid insurance	3,883
Accumulated depreciation (building)	(988,777)
Loan payable	1,000,000
Equipment	887,885
Land	278,790
Interest payable	31,117
Inventories	121,008
Cash value of life insurance	25,000

Attachment:- Assignment.xls