Reference no: EM131732640

Question 1 - Below is the trial balance of Bellemy Fashion Center as at year end, November 30, 2014:

 

BELLEMY FASHION CENTER - TRIAL BALANCE (30-Nov-14)
	Debit	Credit
Cash	$33,530
Accounts Receivable	37,400
Inventory	48,700
Supplies	9,200
Equipment	140,400
Accumulated Depreciation-Equipment		$26,260
Notes Payable		54,700
Accounts Payable		52,200
Common Stock		93,700
Retained Earnings		11,700
Sales Revenue		765,730
Sales Returns and Allowances	4,200
Cost of Goods Sold	495,400
Salaries and Wages Expense	138,960
Advertising Expense	27,530
Utilities Expenses	15,040
Maintenance and Repairs Expense	12,100
Delivery Expense	16,700
Rent Expense	25,130
Totals	$1,004,290	$1,004,290

 

Other information:

 

• Depreciation is $16,695 on the equipment.
• Supplies on hand totaled $5,200.
• Interest of $15,140 is accrued on notes payable at November 30.

 

Required:

 

1. Prepare the necessary adjusting journal entries as of November 30, 2014.
2. Prepare an adjusted trial balance as of November 30, 2014.                                        

 

Question 2 - Shown below is an income statement for 2010 that was prepared by a poorly trained bookkeeper of Howell Corporation.

 

Howell Corporation INCOME STATEMENT December 31, 2010

 

                Sales revenue                                                                           $945,000

 

                Investment revenue                                                                      19,500

 

                Cost of merchandise sold                                                           (408,500)

 

                Selling expenses                                                                       (145,000)

 

                Administrative expense                                                              (215,000)

 

                Interest expense                                                                         (13,000)

 

                Income before special items                                                        183,000

 

                Special items

 

                Loss on disposal of a component of the business                            (30,000)

 

                Major casualty loss (extraordinary item)                                       (70,000)

 

                Net federal income tax liability                                                    (24,900)

 

                Net income                                                                               $  58,100

 

Required

 

Prepare a multiple-step income statement for 2010 for Howell Corporation that is presented in accordance with generally accepted accounting principles (including format and terminology). Howell Corporation has 50,000 shares of common stock outstanding and has a 30% federal income tax rate on all tax related items. Round all earnings per share figures to the nearest cent.

 

Question 3 - The following balance sheet was prepared by Kraus Company as of December 31, 2010.

 

Kraus Company Balance Sheet as of December 31, 2010

 

Cash                                                      $  80,000                Accounts payable                      $  75,000

 

Accounts receivable (net)                            52,200                Long-term liabilities                       100,000

 

Inventories                                                  57,000                Stockholders' equity                     218,500

 

Investments                                                76,300

 

Equipment (net)                                           96,000

 

Patents                                                       32,000                                                                                                                   

 

                                                              $393,500                                                                 $393,500

 

The following additional information is provided:

 

1. Cash includes the cash surrender value of a life insurance policy $9,400, and a bank overdraft of $2,500 has been deducted.

 

2. The net accounts receivable balance includes:

 

(a) accounts receivable-debit balances $60,000;

 

(b) accounts receivable-credit balances $4,000;

(c) allowance for doubtful accounts $3,800.

 

3. Investments include investments in common stock, trading $19,000 and available-for-sale $48,300, and franchises $9,000.

 

4. Equipment costing $5,000 with accumulated depreciation $4,000 is no longer used and is held for sale. Accumulated depreciation on the other equipment is $40,000.

 

Required: Prepare a balance sheet in good form (stockholders' equity details can be omitted.)

 

You should also attach the word or excel file so that we can see how you arrived at your numbers.