Reference no: EM133143469
Question - Cullumber Company's unadjusted trial balance at December 31, 2022, is presented below.
|
|
Debit
|
Credit
|
|
Cash
|
$25,500
|
|
|
Accounts Receivable
|
36,500
|
|
|
Notes Receivable
|
8,800
|
|
|
Interest Receivable
|
0
|
|
|
Inventory
|
36,100
|
|
|
Prepaid Insurance
|
4,800
|
|
|
Land
|
21,100
|
|
|
Buildings
|
142,200
|
|
|
Equipment
|
61,600
|
|
|
Patents
|
9,800
|
|
|
Allowance for Doubtful Accounts
|
|
$550
|
|
Accumulated Depreciation-Buildings
|
|
47,400
|
|
Accumulated Depreciation-Equipment
|
|
24,640
|
|
Accounts Payable
|
|
27,200
|
|
Salaries and Wages Payable
|
|
0
|
|
Unearned Rent Revenue
|
|
5,400
|
|
Notes Payable (due April 30, 2023)
|
|
12,000
|
|
Interest Payable
|
|
0
|
|
Notes Payable (due in 2028)
|
|
36,000
|
|
Owner's Capital
|
|
107,510
|
|
Owner's Drawings
|
15,000
|
|
|
Sales Revenue
|
|
904,000
|
|
Interest Revenue
|
|
0
|
|
Rent Revenue
|
|
0
|
|
Gain on Disposal of Plant Assets
|
|
0
|
|
Bad Debts Expense
|
0
|
|
|
Cost of Goods Sold
|
634,000
|
|
|
Depreciation Expense
|
0
|
|
|
Insurance Expense
|
0
|
|
|
Interest Expense
|
0
|
|
|
Other Operating Expenses
|
61,300
|
|
|
Amortization Expense
|
0
|
|
|
Salaries and Wages Expense
|
108,000
|
|
|
Total
|
$1,164,700
|
$1,164,700
|
Unrecorded transactions:
1. On May 1, 2022, Cullumber purchased equipment for $16,000 plus sales taxes of $600 (all paid in cash).
2. On July 1, 2022, Cullumber sold for $3,600 equipment which originally cost $5,000. Accumulated depreciation on this equipment at January 1, 2022, was $2,000; 2022 depreciation prior to the sale of the equipment was $400.
3. On December 31, 2022, Cullumber sold on account $5,300 of inventory that cost $3,300.
4. Cullumber estimates that uncollectible accounts receivable at year-end are $3,800.
5. The note receivable is a 1-year, 8% note dated April 1, 2022. No interest has been recorded.
6. The balance in prepaid insurance represents payment of a $4,800 6-month premium on September 1, 2022.
7. The building is being depreciated using the straight-line method over 30 years. The salvage value is $33,000.
8. The equipment owned prior to this year is being depreciated using the straight-line method over 5 years. The salvage value is 10% of cost.
9. The equipment purchased on May 1, 2022, is being depreciated using the straight-line method over 5 years, with a salvage value of $2,500.
10. The patent was acquired on January 1, 2022, and has a useful life of 10 years from that date.
11. Unpaid salaries and wages at December 31, 2022, total $2,200.
12. The unearned rent revenue of $5,400 was received on December 1, 2022, for 3 months' rent.
13. Both the short-term and long-term notes payable are dated January 1, 2022, and carry a 9% interest rate. All interest is payable in the next 12 months.
Required - Prepare journal entries for the transactions listed above and adjusting entries.