Hardform Mold Shop Inc. is a company specialized in designing and building molds for the automotive and aircraft industries. The account balances in the company’s general ledger on January 1, 2020 (first day of the annual fiscal year) were as follows (all account balances are in their normal position): Cash $ 3,700 Accounts receivable 5,900 Supplies inventory 29,300 Land 168,500 Buildings 116,500 Accumulated depreciation, buildings 37,500 Equipment 58,500 Accumulated depreciation, equipment 18,000 Accounts payable 25,200 Income tax payable 16,600 Interest payable 4,200 Wages payable (due in 2020) 15,700 Notes payable ($10,000 due June 30, 2021, balance due June 30, 2022) 61,500 Common shares 151,500 Retained earnings, Dec. 31, 2019 52,200 Transactions during 2020: a. The company provided mold design services, all on credit, for $210,300. In addition, the company manufactured molds for customers for $62,300 cash. b. Accounts receivable of $15,600 remain to be collected at December 31, 2020. c. Inventory of $62,900 was purchased on credit and debited to the supplies inventory account. d. Minor parts were purchased for $7,400 cash and debited to the supplies inventory account. e. Wages payable at the beginning of 2020 were paid early in 2020. Wages were earned by employees and paid during 2020 in the amount of $112,000. f. Income tax payable at the beginning of 2020 were paid early in 2020. g. Payments of $73,000 were made to creditors for supplies previously purchased on credit. h. One year’s interest at 9% was paid on the notes payable at July 1, 2020. i. During 2020, James Wilkinson, the principal shareholder, purchased a new care for his wife Sylvia. The new car cost $45,000 and was paid for with personal funds in cash. j. Property taxes were paid on the land and buildings in the amount of $17,000 cash. k. Dividends were declared and paid in the amount of $7,200. Information available for year and adjusting entries: ● Supplies inventory was counted and it was determined the supplies inventory was still on hand at yearend of $31,900. ● Annual depreciation on the buildings is $6,000. ● Annual depreciation on the equipment is $5,500. ● Wages of $4,000 had been earned but were unpaid and unrecorded at yearend. ● Interest for six months at 9% per year on the notes payable is unpaid and unrecorded at yearend. ● Income taxes of $16,500 were unpaid and unrecorded at year end. Required: 1. Post 2020 beginning balances to T-accounts. Prepare journal entries for transactions 1 to 11 above as required and post the journal entries to T-accounts adding any new accounts that you need. 2. Prepare necessary adjusting journal entries and post the adjusting journal entries to the Taccounts adding any new T accounts that you need. 3. Prepare a single step income statement for the year ended December 31, 2020. 4. Prepare a statement of retained earnings for the year ended December 31, 2020. 5. Prepare a classified statement of financial position at December 31, 2020. 6. Prepare closing journal entries for the year ended December 31, 2020.
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
ACCT 1510 (W2021) Integrative Case Assignment Due Date: Feb. 9 (7 pm)
Hardform Mold Shop Inc. is a company specialized in designing and building molds for the
automotive and aircraft industries. The account balances in the company’s general ledger on
January 1, 2020 (first day of the annual fiscal year) were as follows (all account balances are in
their normal position):
Cash $ 3,700
Supplies inventory 29,300
Land 168,500
Buildings 116,500
Accumulated
Equipment 58,500
Accumulated depreciation, equipment 18,000
Accounts payable 25,200
Income tax payable 16,600
Interest payable 4,200
Wages payable (due in 2020) 15,700
Notes payable ($10,000 due June 30, 2021, balance due June 30, 2022) 61,500
Common shares 151,500
Transactions during 2020:
a. The company provided mold design services, all on credit, for $210,300. In addition, the
company manufactured molds for customers for $62,300 cash.
b. Accounts receivable of $15,600 remain to be collected at December 31, 2020.
c. Inventory of $62,900 was purchased on credit and debited to the supplies inventory account.
d. Minor parts were purchased for $7,400 cash and debited to the supplies inventory account.
e. Wages payable at the beginning of 2020 were paid early in 2020. Wages were earned by
employees and paid during 2020 in the amount of $112,000.
f. Income tax payable at the beginning of 2020 were paid early in 2020.
g. Payments of $73,000 were made to creditors for supplies previously purchased on credit.
h. One year’s interest at 9% was paid on the notes payable at July 1, 2020.
i. During 2020, James Wilkinson, the principal shareholder, purchased a new care for his wife
Sylvia. The new car cost $45,000 and was paid for with personal funds in cash.
j. Property taxes were paid on the land and buildings in the amount of $17,000 cash.
k. Dividends were declared and paid in the amount of $7,200.
Information available for year and
● Supplies inventory was counted and it was determined the supplies inventory was still on hand
at yearend of $31,900.
● Annual depreciation on the buildings is $6,000.
● Annual depreciation on the equipment is $5,500.
● Wages of $4,000 had been earned but were unpaid and unrecorded at yearend.
● Interest for six months at 9% per year on the notes payable is unpaid and unrecorded at
yearend.
● Income taxes of $16,500 were unpaid and unrecorded at year end.
Required:
1. Post 2020 beginning balances to T-accounts. Prepare
above as required and post the journal entries to T-accounts adding any new accounts that you
need.
2. Prepare necessary adjusting journal
3. Prepare a single step income statement for the year ended December 31, 2020.
4. Prepare a statement of retained earnings for the year ended December 31, 2020.
5. Prepare a classified
6. Prepare closing journal entries for the year ended December 31, 2020.
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