Reference no: EM131883588
Problem
Jim Squishy a distributor of processed can foods commenced operations in 2010 and the company's financial year end is December 31 each year. The company has provided the following trial balance for December 31, 2015.
Jim Squishy Company. Trial Balance December 31, 2015:
Cash 291,000
Accounts Receivable 1,246,000
Merchandise Inventory 10,176,000
Store Supplies 199,000
Prepaid Insurance 320,000
Furniture and Fixture 6,400,000
Accumulated Depreciation: Furniture & Fixtures 2,600,000
Accounts Payable 4,977,000
Notes Payable, Long-term 5,780,000
Unearned Sales Revenue 4,250,000
Jim Squishy, Capital 10,490,500
Jim Squishy, Withdrawals 3,620,000
Sales Revenue 18,750,000
Sales Discount 1,337,500
Sales Returns & Allowances 350,000
Cost of Goods sold 16,109,000
Salary Expense 4,658,000
Rent Expense 1,463,000
Utilities Expense 678,000
The company has presented the following adjustment data at December 31, 2015:
A. Insurance of $320,000 was paid on January 1, 2015 for sixteen (16) months to April 31, 2016.
B. The furniture and fixtures have an estimated useful life of ten (10) years and are being depreciated on the straight-line method down to a residue of $100,000.
C. Store supplies on hand at December 31, 2015 amounted to $129,000.
D. A physical count of the inventory on December 31, 2015 reveals $9,400,000 worth of inventory on hand.
E. The unpaid interest as at December 31, 2015 on the note payable amounted to $745,000.
F. At December 31, 2015, $3,250,000 of the previously unearned sales revenue had been earned.
Required:
1. Prepare the necessary adjusting journal entries on December 31, 2015.
2. Prepare the multi-step income statement for the year ended December 31 2015.
3. Prepare the owner's equity statement for the year ended December 31 2015.
4. Prepare the balance sheet for the year ended December 31 2015.