The following additional information is available December 31, 2021: Store Supplies on hand on December 31, 2021, amounted to $800,000. Insurance of $2,660,000 was paid on January 1, 2021, for the 14-months to February 28, 2022 Prepaid rent expired December 31, 2021, amounted to $2,100,000 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. The delivery van cost relates to two Toyoda Vans purchased for $2,000,000 each by the company on January 1, 2015. The double-declining balance method of depreciation is used to compute the van’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 van is $241,592 each. On September 1, 2021, the company sold one of the vans to ZM Company for $680,000 on credit. Round off answers to the nearest dollar. Salaries earned by employees and not yet paid amounted to $120,000 on Dec 31, 2021. Accrued interest expense as of December 31, 2021, $145,000. On Dec 31, 2021, $1,350,000 of the previously unearned sales revenue had been earned The aging of the Accounts Receivable schedule on Dec 31, 2021, indicated that the Allowance for Bad Debts should be $500,000 A physical count of inventory was done on December 31, 2021, after making all the other adjustments and this revealed that there was $4,700,000 worth of inventory on hand at this point. Other data: The business is expected to make principal payments totalling $780,000 towards the loan during the fiscal year to November 31,2022. Required: Prepare the necessary adjusting journal entries on Dec 31, 2021.[Narrations are not required] (Trial Balance has been inserted in the image)

The following additional information is available December 31, 2021: Store Supplies on hand on December 31, 2021, amounted to $800,000. Insurance of $2,660,000 was paid on January 1, 2021, for the 14-months to February 28, 2022 Prepaid rent expired December 31, 2021, amounted to $2,100,000 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. The delivery van cost relates to two Toyoda Vans purchased for $2,000,000 each by the company on January 1, 2015. The double-declining balance method of depreciation is used to compute the van’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 van is $241,592 each. On September 1, 2021, the company sold one of the vans to ZM Company for $680,000 on credit. Round off answers to the nearest dollar. Salaries earned by employees and not yet paid amounted to $120,000 on Dec 31, 2021. Accrued interest expense as of December 31, 2021, $145,000. On Dec 31, 2021, $1,350,000 of the previously unearned sales revenue had been earned The aging of the Accounts Receivable schedule on Dec 31, 2021, indicated that the Allowance for Bad Debts should be $500,000 A physical count of inventory was done on December 31, 2021, after making all the other adjustments and this revealed that there was $4,700,000 worth of inventory on hand at this point. Other data: The business is expected to make principal payments totalling $780,000 towards the loan during the fiscal year to November 31,2022. Required: Prepare the necessary adjusting journal entries on Dec 31, 2021.[Narrations are not required] (Trial Balance has been inserted in the image)

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter2: The Accounting Information System

Section: Chapter Questions

Problem 18CE: CORNERSTONE 2.1 Four statements are given below. Pewterschmidt Company values its inventory reported...

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The following additional information is available December 31, 2021:

Store Supplies on hand on December 31, 2021, amounted to $800,000.
Insurance of $2,660,000 was paid on January 1, 2021, for the 14-months to February 28, 2022
Prepaid rent expired December 31, 2021, amounted to $2,100,000
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.
The delivery van cost relates to two Toyoda Vans purchased for $2,000,000 each by the company on January 1, 2015. The double-declining balance method of depreciation is used to compute the van’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 van is $241,592 each. On September 1, 2021, the company sold one of the vans to ZM Company for $680,000 on credit. Round off answers to the nearest dollar.
Salaries earned by employees and not yet paid amounted to $120,000 on Dec 31, 2021.
Accrued interest expense as of December 31, 2021, $145,000.
On Dec 31, 2021, $1,350,000 of the previously unearned sales revenue had been earned
The aging of the Accounts Receivable schedule on Dec 31, 2021, indicated that the Allowance for Bad Debts should be $500,000
A physical count of inventory was done on December 31, 2021, after making all the other adjustments and this revealed that there was $4,700,000 worth of inventory on hand at this point.

Other data:

The business is expected to make principal payments totalling $780,000 towards the loan during the fiscal year to November 31,2022.

Required:

Prepare the necessary adjusting journal entries on Dec 31, 2021.[Narrations are not required] (Trial Balance has been inserted in the image)

A/C Name
Belvidere Pharmaceuticals B-Town Division
Trial Balance as of December 31, 2021
Cash
Accounts receivable
Allowance for bad debt
Other debtors
Merchandise Inventory
Store Supplies
Prepaid Insurance
Prepaid rent
Furniture & Equipment
Accumulated depreciation-Furniture and equipment
Delivery Van
Accumulated depreciation- Delivery Van
Accounts payable
Salary payable
Interest payable
Unearned Sales revenue
Note Payable, long term
Patty Patterson, Capital
Withdrawals
Sales revenue
Sales discount
Sales returns and allowances
Cost of goods sold
Salaries expense
Insurance Expense
Utilities Expense
Rent Expense
Depreciation Expense - Furniture and Equipment
Depreciation Expense - Delivery Van
Store Supplies Expense
Gain on Disposal of Delivery Van
Bad Debt Expense
Interest Expense
Trial Balance
DR
2,500,000
5,000,000
5,000,000
1,800,000
2,660,000
2,940,000
8,000,000
4,000,000
180,000
1,200,000
950,000
9,500,000
8,889,000
750,000
2,940,000
CR
400,000
3,120,000
2,951,424
1,450,000
1,650,000
6,000,000
9,600,000
31,137,576
56,309,000 56,309,000

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