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Nordham Corporation's trial balance at December 31...

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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. Debit Credit Cash $ 23,000 Accounts Receivable 51,000 Merchandise Inventory 22,700 Land 65,000 Building 95,000 Equipment 40,000 Allowance for Doubtful Accounts $ 450 Accumulated Depreciation?Building 30,000 Accumulated Depreciation?Equipment 14,400 Accounts Payable 19,300 Bond Interest Payable ?0? Dividends Payable ?0? Unearned Rent Revenue 8,000 Bonds Payable (10%) 50,000 Common Stock ($10 par) 30,000 Paid-in Capital in Excess of Par?Common Stock 6,000 Preferred Stock ($20 par) ?0? Paid-in Capital in Excess of Par?Preferred Stock ?0? Retained Earnings 75,050 Treasury Stock ?0? Dividends ?0? Sales 570,000 Rent Revenue ?0? Bad Debts Expense ?0? Bond Interest Expense 2,500 Cost of Goods Sold 400,000 Depreciation Expense?Buildings ?0? Depreciation Expense?Equipment ?0? Other Operating Expenses 39,000 Salaries Expense 65,000 Total $803,200 $803,200 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 uncollectible accounts 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. Instructions (Ignore income taxes.) a. Prepare journal entries for the transactions listed above. b. Prepare an updated December 31, 2008, trial balance, reflecting the unrecorded transactions. c. Prepare a multiple-step income statement for the year ending December 31, 2008. d. Prepare a statement of retained earnings for the year ending December 31, 2008. e. Prepare a classified balance sheet as of December 31, 2008.

 

Paper#1915 | Written in 18-Jul-2015

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