1. On May 1, 2017, Hasselhouf purchased equipment for $21,200 plus sales taxes of $1,600 (all paid in cash) 2. On July 1, 2017, Hasselhouf sold for $3,500 equipment which originally cost $5,000. Accumulated depreciation on this equipment at January 1, 2017 was $1,800; 2017 depreciation priort to the sale of the equipment was $450. 3. On December 31, 2017, Hasselhouf sold on account $9,000 of inventory that cost $6,300.
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Hasselhouf Company's
| Debit | Credit | |
|---|---|---|
| Cash | $28,000 | |
| Accounts Receivable | 36,800 | |
| Notes Receivable | 10,000 | |
| Interest Receivable | 0 | |
| Inventory | 36,200 | |
| Prepaid Insurance | 3,600 | |
| Land | 20,000 | |
| Buildings | 150,000 | |
| Equipment | 60,000 | |
| Patents | 9,000 | |
| Allowance for Doubtful Accounts | $500 | |
| 50,000 | ||
| Accumulated Depreciation - Equipment | 24,000 | |
| Accounts Payable | 27,300 | |
| Salaries and Wages Payable | 0 | |
| Unearned Rent Revenue | 6,000 | |
| Notes Payable (due in 2018) | 11,000 | |
| Interest Payable | 0 | |
| Notes Payable (due after 2018 | 30,000 | |
| Common Stock | 50,000 | |
| 63,600 | ||
| Dividends | 12,000 | |
| Sales Revenue | 905,000 | |
| Interest Revenue | 0 | |
| Rent Revenue | 0 | |
| Gain on Disposal of Plant Assets | 0 | |
| 0 | ||
| Cost of Goods Sold | 630,000 | |
| Depreciation Expense | 0 | |
| Insurance Expense | 0 | |
| Interest Expense | 0 | |
| Other Operating Expenses | 61,800 | |
| Amortization Expense | 0} | |
| Salaries and Wages Expense | 110,000 | |
| Total | $1,167,400 | $1,167,400 |
Unrecorded transactions:
1. On May 1, 2017, Hasselhouf purchased equipment for $21,200 plus sales taxes of $1,600 (all paid in cash)
2. On July 1, 2017, Hasselhouf sold for $3,500 equipment which originally cost $5,000. Accumulated depreciation on this equipment at January 1, 2017 was $1,800; 2017 depreciation priort to the sale of the equipment was $450.
3. On December 31, 2017, Hasselhouf sold on account $9,000 of inventory that cost $6,300.
4. Hasselhouf estimates that uncollectible accounts reeivable at year-end is $3,500
5. The not receivable is a one-year 8% note dated April 1, 2017. NO interest has been recorded.
6. The balance is prepaid insurance represents payment of a $3,600 6-month premium on September 1, 2017.
7. The building is being depreiated using the straight-line method over 5 years. The salvage valueis 10% of cost
9. The equipment purchased on May 1, 2017, is being
10. The patent was acquired on January 1, 2017, and had a useful ide of 10 yers from that date.
11. Unpaid salaries and wages at December 31, 2017, total $5,200.
12. The unearned rent revenue of $6,000 was received on December 1, 2017, for 3 months rent.
13. Both the short-term and long-term notes payable are dated January 1, 2017, and carry a 9% interest rate. Al interest is payable in the next 12 months.
Instructions
a. Prepare journal entires for the transactions listed above.
b. Prepare an updated December 31, 2017 trial balance.
c. Prepare a 2017 income statement and a retained earnings statement.
d. Prepare a Deceber 31, 2017, classified balance sheet.
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