Physical count for merchandise inventory

Assignment Help Financial Accounting

Reference no: EM13912567

Company's December 31, 2014 trial balance is as follows:

Amount	Debit	Credit
Cash	$43,500
Accounts Recivable	$53,500
Allowance For Doubtful Accounts	$1,500
Notes Receivable	$30,000
Merchandise Inventory	$55,000
Land	$20,000
Building	$150,000
Accumulated Depreciation, Building		$15,000
Equipment	$50,000
Accumulated Depreciation, Equipment		$21,000
Goodwill	$26,000
Accounts Payable		$25,000
Long Term Notes Payab;e		$75,000
Commin Stock, $10 par. 2,000 shares authorized & outstanding		$20,000
Retained Earnings		$147,000
		$700,000

Floppy is a small company and records adjusting entries & closing entries only at fiscal (calendar) year end. Correcting and adjusting entries have not been recorded.

Additional Information:

a. Notes Receivable is a 3-months, 6% note accepted on November 1, 2014.

b. Long Term Notes Payable is a 5-year, 5% note, that was signed on July 1, 2014. Interest is payable annually.

c. Building is depreciated at 3% per year. There is no salvage value.

d. Equipment is depreciated at 15% year. There is no salvage value.

e. Floppy discovered, on December 30^th, that the inexperienced bookkeeper recorded in the general journal and general ledger that day's $1,500 cash sales as a debit to Accounts Receivable and a credit to Sales Revenue.

f. The year-end physical count for Merchandise Inventory reflected a value of $51,500. Any difference in value will not be considered theft or loss.

g. Salaries for the last half of December, payable in January, amount to $5,500.

h. Floppy estimates that of the Accounts Receivable 5% will not be collectable.

QUESTION:

a. Prepare in journal form, any required correcting entries.

b. Prepare in journal form, all end-of-the period adjusting entries.

c. Prepare a December adjusted trial balance.

d. Prepare a classified balance sheet for the year ended December 31, 2014

e. Prepare in journal form, the closing entries for the year ended December 31, 2014

Reference no: EM13912567

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