The following additional information is available December 31, 2021: 1) Store Supplies on hand on December 31, 2021, amounted to $1,580,000. 2) Insurance of $3,640,000 was paid on January 1, 2021, for the 13-months to January 31, 2022 3) Prepaid rent expired December 31, 2021, amounted to $2,500,000 4) The furniture and equipment have an estimated useful life of 10 years and is being depreciated on the straight-line method down to a residual value of $200,000. 5) The Motor Car cost relates to two Yama cars purchased for $2,100,000 each by the company on January 1, 2015. The double-declining balance method of depreciation is used to compute the car's depreciation charges and their expected useful life is 10 years or 100,000 miles. In 2015, 10,000 miles were driven, 16,500 in 2016, 12,600 in 2017, 16,000 in 2018, 16,500 in 2019, 14,800 in 2020 and 16,800 in 2021. The residual value on both car is $241,592 each. On September 1, 2021, the company sold one of the cars to ZM Company for $640,000 on credit. Round off answers to the nearest dollar. 6) Salaries earned by employees and not yet paid amounted to $245,000 on Dec 31, 2021. 7) Accrued interest expense as of December 31, 2021, $155,000. 8) On Dec 31, 2021, $1,400,000 of the previously unearned sales revenue had been earned. 9) The aging of the Accounts Receivable schedule on Dec 31, 2021, indicated that the Allowance for Bad Debts should be $700,000 10) A physical count of inventory was done on December 31, 2021, after making all the other adjustments and this revealed that there was $7,300,000 worth of inventory on hand at this point.

Survey of Accounting (Accounting I)

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ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter9: Metric-analysis Of Financial Statements

Section: Chapter Questions

Problem 9.23E: Unusual income statement items Assume that the amount of each of the following items is material to...

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Prepare the necessary adjusting journal entries on Dec 31, 2021. [Narrations are not required]
Prepare the Adjusted Trial balance for the period ending December 31, 2021.

Using the Adjusted trial balance, generate the statements requested by Belvidere Pharmaceutical E -Town Division, i.e.

A Multiple-step income statement & a Statement of owner’s equity for the year ended December 31, 2021
A Classified balance sheet, in report format, at December 31, 2021.

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The following additional information is available December 31, 2021:
1) Store Supplies on hand on December 31, 2021, amounted to $1,580,000.
2) Insurance of $3,640,000 was paid on January 1, 2021, for the 13-months to January 31, 2022
3) Prepaid rent expired December 31, 2021, amounted to $2,500,000
4) The furniture and equipment have an estimated useful life of 10 years and is being depreciated
on the straight-line method down to a residual value of $200,000.
5) The Motor Car cost relates to two Yama cars purchased for $2,100,000 each by the company on
January 1, 2015. The double-declining balance method of depreciation is used to compute the car's
depreciation charges and their expected useful life is 10 years or 100,000 miles. In 2015, 10,000
miles were driven, 16,500 in 2016, 12,600 in 2017, 16,000 in 2018, 16,500 in 2019, 14,800 in
2020 and 16,800 in 2021. The residual value on both car is $241,592 each. On September 1,
2021, the company sold one of the cars to ZM Company for $640,000 on credit. Round off
answers to the nearest dollar.
Salaries earned by employees and not yet paid amounted to $245,000 on Dec 31, 2021.
Accrued interest expense as of December 31, 2021, $155,000.
6)
7)
8)
On Dec 31, 2021, $1,400,000 of the previously unearned sales revenue had been earned.
9) The aging of the Accounts Receivable schedule on Dec 31, 2021, indicated that the Allowance
for Bad Debts should be $700,000
10) A physical count of inventory was done on December 31, 2021, after making all the other
adjustments and this revealed that there was $7,300,000 worth of inventory on hand at this
point.
78
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A/C Name
Belvidere Pharmaceuticals E-Town Division
Trial Balance as of December 31, 2021
Accounts receivable
Allowance for bad debt
Other debtors
Merchandise Inventory
Store Supplies
Prepaid Insurance
Prepaid rent
Fumiture & Equipment
Accumulated deprecation-Fumiture and equipment
Motor Car
Accumulated depreciation Motor Car
Accounts payable
Salary payable
Interest payable
Uneamed Sales revenue
Note Payable, long term
Patty Patterson, Capital
Withdrawals
Sales revenue
Sales discount
Sales retums and allowances
Cost of goods sold
Salanes expense
Insurance Expense
Utilities Expense
Rent Expense
Depreciation Expense - Furniture and Equipment
Depreciation Expense - Motor Car
Store Supplies Expense
Gain loss on Disposal of Fixed Asset
Bad-Debt Expense
Interest Expense
Trial Balance
DR
2,600,000
7,000,000
7,210,000
2,580,800
3,640,000
3,500,000
14,000,000
4,200,000
110,000
1,010,100
1,201,010
10,500,500
10,000,000
1,100,000
3,500,000
CR
625,500
www
5520 000
3,098 995
1,800,000
3.000.000
7,500,000
14.500,000
36,107,915
72,152,410 72,152,410

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