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Extra Credit 3 - Due in TA mailbox Saturday December 13th at 10pm.;GRADING: Worth up to 15 points. Read the requirements carefully.;Partially completed problems will earn no credit?that means all requirements must be FULLY completed.;If you complete all items as requested, you will earn at least 8 points.;The remaining points are dependent upon the accuracy of your answers!;Konkle Bells, Inc. balance sheet at 12/31/13 is presented below.;Three Wise Konks Company;Balance Sheet;12/31/2013;Cash $ 73,400 Accounts payable $ 32,400;Merchandise Inventory 36,000 Common stock ($1 par) 10,000;Prepaid Insurance 3,600 Paid in capital in excess of par 60,000;Equipment 75,000 Retained earnings 64,600;Accumulated depreciation (21,000);$ 167,000 $ 167,000;During 2013, the following transactions occurred;1. Purchased $119,500 inventory on account. Three Wise Konks Company uses the perpetual method for valuing inventory.;2. $180,000 in sales, plus 5.6% sales tax, were made to customers on account. Cost of the goods sold were $105,600.;3. Received $26,000 cash down payment for orders that will be shipped next year.;4. Issued 20 year, $40,000 face value, 8% bonds on 7/2/14 at 106. The bonds pay interest every 1/1 and 7/1.;5. Collected $135,200 on account.;6. Paid other operating expenses of $22,600.;7. Paid $117,630 on account.;8. Paid $10,000 to the state for a portion of the sales tax collected from customers.;9. On 1/1/14 sold equipment with an original cost of $15,000 for $5,000 cash. The equipment's;accumulated depreciation is $8,500.;10. Issued 1,200 shares of $125 par 8% preferred stock for $165,000 cash.;11. Purchased equipment on 7/1/14 for $100,000 cash.;12. Purchased 500 shares of Three Wise Konks Inc. common stock from a disgruntled shareholder for $40 per share.;13. Recorded wage and payroll taxes. Employee gross wages were $30,000, FICA tax was withheld at a 7.65% rate;federal income taxes (FIT) of $1,800 were withheld, and state income taxes (SIT) of $600 were withheld.;Additionally, the Federal unemployment tax (FUTA) rate is 0.9% and the state unemployment (SUTA) rate is 3.5%.;The net wage checks were cut and immediately given to employees. The payroll taxes are not due to be remitted until;after year end.;Requirement A;i - Journalize 1 - 13 above;ii - Post to the ledger;iii - Prepare an unadjusted trial balance which will be used as the first 2 columns of a worksheet.;(See Requirement B.);*** Four Optional solution templates have been prepared to assist you. They can be accessed by clicking on;the tabs below. Use of Microsoft Excel is optional. Hand prepared solutions are also acceptable.;Requirement B;Using the unadjusted trial balance prepared in requirement A-iii above and the following data for adjusting;entries, prepare a 10 column worksheet similar to the one in chapter 4 appendix of your text.;(a) Straight-line depreciation, with a 10-year useful life and no salvage value is used for equipment purchased in previous years.;For the 2014 purchase (#11 above) use double declining balance with a useful life of 10 years, and $15,000 salvage value.;(b) Accrue bond interest payable and amortize bond premium as well.;(c) The prepaid insurance relates to a policy purchased last year that expires at a rate of $80 per month.;(d) The company estimates that all accounts receivable are collectible--in other words, don't worry about bad debts.;Requirement C;Prepare a Statement of Cash Flows.;Hints: In operating activities subtract gains and premium amortization.


Paper#74319 | Written in 18-Jul-2015

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