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Problem 12.5A Recording adjustments and completing...

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Problem 12.5A Recording adjustments and completing the worksheet. LO 1, 2, 3, 4 Healthy Habits Foods Company is a distributor of nutritious snack foods such as granola bars. On December 31, 2013, the firm?s general ledger contained the accounts and balances that follow. Accounts and Balances Cash $ 30,100 Dr. Accounts Receivable 35,200 Dr. Allowance for Doubtful Accounts 420 Cr. Merchandise Inventory 86,000 Dr. Supplies 10,400 Dr. Prepaid Insurance 5,400 Dr. Office Equipment 8,300 Dr. Accum. Depreciation?Office Equipment 2,650 Cr. Warehouse Equipment 28,000 Dr. Accum. Depreciation?Warehouse Equipment 9,600 Cr. Notes Payable?Bank 32,000 Cr. Accounts Payable 12,200 Cr. Interest Payable Social Security Tax Payable 1,680 Cr. Medicare Tax Payable 388 Cr. Federal Unemployment Tax Payable State Unemployment Tax Payable Salaries Payable Phillip Tucker, Capital 108,684 Cr. Phillip Tucker, Drawing 56,000 Dr. Sales 653,778 Cr. Sales Returns and Allowances 10,000 Dr. Purchases 350,000 Dr. Purchases Returns and Allowances 9,200 Cr. Income Summary Rent Expense 36,000 Dr. Telephone Expense 2,200 Dr. Salaries Expense 160,000 Dr. Payroll Taxes Expense 13,000 Dr. Supplies Expense Insurance Expense Depreciation Expense?Office Equip. Depreciation Expense?Warehouse Equip. Uncollectible Accounts Expense Interest Expense ADJUSTMENTS a.?b. Merchandise inventory on December 31, 2013, is $78,000. c. During 2013, the firm had net credit sales of $560,000; past experience indicates that 0.5 percent of these sales should result in uncollectible accounts. d. On December 31, 2013, an inventory of supplies showed that items costing $1,180 were on hand. e. On May 1, 2013, the firm purchased a one-year insurance policy for $5,400. f. On January 2, 2011, the firm purchased office equipment for $8,300. At that time, the equipment was estimated to have a useful life of six years and a salvage value of $350. g. On January 2, 2011, the firm purchased warehouse equipment for $28,000. At that time, the equipment was estimated to have a useful life of five years and a salvage value of $4,000. h. On November 1, 2013, the firm issued a four-month, 12 percent note for $32,000. i. On December 31, 2013, the firm owed salaries of $5,000 that will not be paid until 2014. j. On December 31, 2013, the firm owed the employer?s social security tax (assume 6.2 percent) and Medicare tax (assume 1.45 percent) on the entire $5,000 of accrued wages. k. On December 31, 2013, the firm owed the federal unemployment tax (assume 0.8 percent) and the state unemployment tax (assume 5.4 percent) on the entire $5,000 of accrued wages. 3. Complete the worksheet. (Leave no cells blank - be certain to enter "0" wherever required. Round your intermediate and final answers to 2 decimal places. Omit the "$" sign in your response.) Healthy Habits Foods Company Worksheet Year Ended December 31, 2013 Trial Balance Adjustments Adjusted Trial Balance Income Statement Balance Sheet Account Name Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit Cash $ $ $ $ $ $ $ $ $ $ Accounts Receivable Allowance for Doubtful Accounts Merchandise Inventory Supplies Prepaid Insurance Office Equipment Accumulated Depr.?Office Equipment Warehouse Equipment Accumulated Depr.?Warehouse Equipment Notes Payable?Bank Accounts Payable Interest Payable Social Security Tax Payable Medicare Tax Payable Federal Unemployment Tax Payable State Unemployment Tax Payable Salaries Payable Phillip Tucker, Capital Phillip Tucker, Drawing Sales Sales Returns and Allowances Purchases Purchases Returns and Allowance Income Summary Rent Expenses Telephone Expense Salaries Expense Payroll Taxes Expense Supplies Expense Insurance Expense Depr. Expense?Office Equipment Depr. Expense?Warehouse Equipment Uncollectible Accounts Expense Interest Expense

 

Paper#6086 | Written in 18-Jul-2015

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