Reference no: EM1319606
Nordham Corporation's trial balance at December 31, 2008, is presented below. All 2008 transactions have been recorded except for the items described below and on the next page.
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|
Debit
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Credit
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|
Cash
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$ 23,000
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|
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Accounts Receivable
|
51,000
|
|
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Merchandise Inventory
|
22,700
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|
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Land
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65,000
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|
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Building
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95,000
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|
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Equipment
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40,000
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|
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Allowance for Doubtful Accounts
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$ 450
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Accumulated Depreciation-Building
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30,000
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Accumulated Depreciation-Equipment
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14,400
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Accounts Payable
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19,300
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Bond Interest Payable
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-0-
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Dividends Payable
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-0-
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Unearned Rent Revenue
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8,000
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Bonds Payable (10%)
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50,000
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Common Stock ($10 par)
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30,000
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Paid-in Capital in Excess of Par-Common Stock
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6,000
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Preferred Stock ($20 par)
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-0-
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Paid-in Capital in Excess of Par-Preferred Stock
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-0-
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Retained Earnings
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75,050
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Treasury Stock
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-0-
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|
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Dividends
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-0-
|
|
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Sales
|
|
570,000
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|
Rent Revenue
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|
-0-
|
|
Bad Debts Expense
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-0-
|
|
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Bond Interest Expense
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2,500
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|
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Cost of Goods Sold
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400,000
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|
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Depreciation Expense-Buildings
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-0-
|
|
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Depreciation Expense-Equipment
|
-0-
|
|
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Other Operating Expenses
|
39,000
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|
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Salaries Expense
|
65,000
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|
|
Total
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$803,200
|
$803,200
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Unrecorded transactions
1. On January 1, 2008, Nordham issued 1,000 shares of $20 par, 6% preferred stock for $22,000.
2. On January 1, 2008, Nordham also issued 1,000 shares of common stock for $23,000.
3. Nordham reacquired 300 shares of its common stock on July 1, 2008, for $49 per share.
4. On December 31, 2008, Nordham declared the annual preferred stock dividend and a $1.50 per share dividend on the outstanding common stock, all payable on January 15, 2009.
5. Nordham estimates that an uncollectible account receivable at year-end is $5,100.
6. The building is being depreciated using the straight-line method over 30 years. The salvage value is $5,000.
7. The equipment is being depreciated using the straight-line method over 10 years. The salvage value is $4,000.
8. The unearned rent was collected on October 1, 2008. It was receipt of 4 months' rent in advance (October 1, 2008 through January 31, 2009).
9. The 10% bonds payable pay interest every January 1 and July 1. The interest for the 6 months ended December 31, 2008, has not been paid or recorded.
(Ignore income taxes.)
Questions:
a) Prepare journal entries for the transactions listed above.
b) Prepare an updated Dec 31st trial balance, reflecting the unrecorded transaction
c) Prepare a multiple-step income statement for the year ending Dec 31st
d) Prepare a retained earnings statement for the year ending Dec 31
e) Prepare a classified Balance sheet for Dec