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You have been asked to do the bookkeeping for KidK...




You have been asked to do the bookkeeping for KidKare Inc. for the last few days of December while their regular bookkeeper is ill. KidKare Inc. began operations on July 1, 2010. It provides childcare services Monday through Friday, except for holidays. End of month adjusting entries have been made for July through November. No entries have been made since Friday, December 24th. KidKare has a December 31st fiscal year end, but prepares monthly interim financial statements. KidKare was closed on Friday, December 24th. Laken Henry, manager and principle shareholder, provides you with the following: Trial Balance as of December 24, 2010 Ref. # Account Title Debit Credit 101 Cash $ 11,906 110 Accounts Receivable 240 112 Allowance for Uncollectible Accounts $ 122 120 Supplies on Hand 1,025 135 Prepaid Insurance 420 145 Other Prepaids 150 150 Office Equipment 3,400 155 Accumulated Depreciation?Office Equipment 565 160 Play Equipment 9,200 165 Accumulated Depreciation?Play Equipment 375 170 Van 25,000 175 Accumulated Depreciation?Van 1,600 190 KidKare Trademark 210 201 Accounts Payable 280 240 Income Taxes Payable 220 260 Notes Payable, 6% due through 2013 15,687 310 Common Stock, $1 par value (20,000 shares) 20,000 315 Additional Paid-in Capital 10,000 410 Childcare Revenue 60,600 425 Interest Revenue 61 515 Salaries & Wages Expense 42,500 525 Rent Expense 5,400 530 Utilities Expense 940 532 Insurance Expense 300 535 Supplies Expense 5,040 540 Bad Debt Expense 202 550 Depreciation Expense 2,540 560 Miscellaneous Expense 132 570 Interest Expense 427 580 Income Tax Expense 478 Totals $109,510 $109,510 An examination of the Chart of Accounts revealed the following additional accounts: 140 Prepaid Rent 210 Revenue Received in Advance 215 Utilities Payable 220 Salaries & Wages Payable 235 Interest Payable 245 Dividends Payable 250 Other Short-term Obligations 340 Retained Earnings 380 Dividends 390 Income Summary 430 Miscellaneous Revenue Information after December 24th: a. On December 27, KidKare received $1,920 ($40 per day per child for 12 children for 4 days) from parents for child care services for the week of December 28. (KidKare was closed on Friday, December 31st.) b. On December 28, KidKare ordered 10 folding chairs for $28 each from Seats-Here Company to be delivered and paid for on January 4th. c. On December 29, KidKare paid $270 for the purchase of food snacks (supplies) for the children. d. On December 30, KidKare?s Board of Directors declared a $.05 per share dividend on the 20,000 shares outstanding. The dividend will be paid on January 11, 2011. e. On December 30, KidKare received a $200 check from the parents of one of the children for care the week of January 3th through 7th. f. On December 30, KidKare paid $900 rent for the building for the month of January 2011. g. On December 30, KidKare received the electricity bill of $230 for December. The bill was paid January 4, 2011. h. On December 30, Kidcare noted that the parents of two children had not paid the $320 they owed for child care services for the week of December 27-30 ($40/day per child for four days). Kidcare billed the parents. i. A physical count revealed $588 of supplies was left on hand on December 30. j. On January 3, KidKare received and paid the phone bill of $72 for December. k. On Monday, January 3, KidKare paid payroll of $1,200 in wages and $500 in salary for the week of December 27 through 31 (including the paid holiday, Friday). l. On January 5, KidKare received its December bank statement from National Sovereign Bank. The $5 monthly checking account fee had been deducted and the $14 of interest earned on its savings account had been added to KidKare?s accounts. m. The December 23rd balance in ?Other Prepaids? contains $150, paid December 1, for water and sewer service for the three months of December, January and February. n. The van was purchased July 1, 2010 for $25,000 by paying $7,000 down in cash and signing a 6%, $18,000 note. The note requires monthly payments of $548 due by the 2nd of each month which includes the interest on the outstanding balance. The payments are made by automatic transfer on the 1st day of the month. The van has a 50,000 mile estimated useful life and an estimated salvage value of $5,000. KidKare uses the units of activity method of depreciation. The van was driven 600 miles in December. o. The office equipment was put into use on July 1, 2010. It has a five-year estimated useful life and a $400 estimated salvage value. Kidcare uses the double-declining balance method to depreciate it. (Round depreciation to the nearest month.) p. The play equipment was purchased July 1, 2010. It has a ten-year estimated useful life and a $200 estimated salvage value. Kidcare depreciates it using the straight-line method. (Round depreciation to the nearest month.) q. Prepaid Insurance represents the remaining seven months (December through June) on a one-year liability policy purchased July 1, 2010 for $720. r. KidKare estimates uncollectible accounts at .4% (or .004) of total childcare revenue. (Hint: Calculate bad debt expense for the entire six months. Then subtract the amount already recognized to calculate the amount to be added to bad debt expense for December.) s. KidKare is subject to a 30% income tax rate on net earnings. t. The December 23rd balance in Account Receivable is related to the care of two children, who abruptly stopped care in late November and whose home address is no longer valid. Attempts to collect are still being made. u. The Account Payable amount is related to a supplies purchase made earlier in December. It is expected to be paid in early January. v. For financial reporting purposes $5,792 of the remaining balance on the note is considered ?current,? the rest is considered ?long-term.? Required: Using either the MS Word file provided or the MS Excel file provided. (Round all final results to the nearest dollar amount.) 1. Make the appropriate journal entries for December 24 through 31. Use journal page G15. (You may exclude explanations.) 2. Post the journal entries to the general ledger. 3. Journalize and post the adjusting entries. Use journal page G16. (Show calculations as the explanation in the journal.) 4. Prepare an adjusted trial balance as of December 31, 2010. 5. Prepare an Income Statement and Retained Earnings Statement for the six months fiscal period ending December 31, 2010 and a Balance Sheet as of December 31, 2010, in good form (including an income statement with operating income and income before taxes subtotals shown and a classified balance sheet). 6. Journalize and post closing entries for December 31, 2010. Use journal page G17. 7. Prepare a post-closing trial balance as of December 31, 2010.,THIS IS THE UPLOADED FILE TO THE ONE THAT WAS EMBEDDED,SURE SO 12 NOON ON SUNDAY.,is there a specific way to extend the deadline hours?


Paper#3233 | Written in 18-Jul-2015

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