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CP9 Pinkerton Corporation's trial balance at December 31, 2010, is presented below.

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Question;CP9 Pinkerton Corporation's trial balance at December 31, 2010, is presented below.CP9 Pinkerton Corporation's trial balance at December 31, 2010, is presented below. All 2010 transactions have been recorded except for the items described after the trial balance.Debit CreditCash $ 28,000Accounts Receivable 36,800Notes Receivable 10,000Interest Receivable ?0?Merchandise Inventory 36,200Prepaid Insurance 3,600Land 20,000Building 150,000Equipment 60,000Patent 9,000Allowance for Doubtful Accounts $ 500Accumulated Depreciation?Building 50,000Accumulated Depreciation?Equipment 24,000Accounts Payable 27,300Salaries Payable ?0?Unearned Rent 6,000Notes Payable (short-term) 11,000Interest Payable ?0?Notes Payable (long-term) 35,000Common Stock 50,000Retained Earnings 63,600Dividends 12,000Sales 900,000Interest Revenue ?0?Rent Revenue ?0?Gain on Disposal ?0?Bad Debts Expense ?0?Cost of Goods Sold 630,000Depreciation Expense?Buildings ?0?Depreciation Expense?Equipment ?0?Insurance Expense ?0?Interest Expense ?0?Other Operating Expenses 61,800Amortization Expense?Patents ?0?Salaries Expense 110,000Total $1,167,400 $1,167,400Unrecorded transactions1. On May 1, 2010, Pinkerton purchased equipment for $16,000 plus sales taxes of $800 (all paid in cash).2. On July 1, 2010, Pinkerton sold for $3,500 equipment which originally cost $5,000. Accumulated depreciation on this equipment at January 1, 2010, was $1,800, 2010 depreciation prior to the sale of equipment was $450.3. On December 31, 2010, Pinkerton sold for $5,000 on account inventory that cost $3,500.4. Pinkerton estimates that uncollectible accounts receivable at year-end are $4,000.5. The note receivable is a one-year, 8% note dated April 1, 2010. No interest has been recorded.6. The balance in prepaid insurance represents payment of a $3,600, 6-month premium on September 1, 2010.7. The building is being depreciated using the straight-line method over 30 years. The salvage value is $30,000.8. 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, 2010, is being depreciated using the straight-line method over 5 years, with a salvage value of $1,800.10. The patent was acquired on January 1, 2010, and has a useful life of 9 years from that date.11. Unpaid salaries at December 31, 2010, total $2,200.12. The unearned rent of $6,000 was received on December 1, 2010, for 3 months rent.13. Both the short-term and long-term notes payable are dated January 1, 2010, and carry a 10% interest rate. All interest is payable in the next 12 months.14. Income tax expense was $15,000. It was unpaid at December 31.Instructions(a) Prepare journal entries for the transactions listed above.(b) Prepare an updated December 31, 2010, trial balance.Totals $1,213,150(c) Prepare a 2010 income statement and a 2010 retained earnings statement.Net income $58,000(d) Prepare a December 31, 2010, balance sheet.Total assets $258,700

 

Paper#44998 | Written in 18-Jul-2015

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