Cohen Fencing Company_adjusted Trial balance and Rochman Water Company_Financial statement

Part 1: At December 31, 2012, Cohen Fencing Company had the following trial balance.

Cohen Fencing Company

Unadjusted Trial Balance

12/31/12

	Dr	Cr
Cash	203,203
Accounts Receivable	60,000
Allowance for Doubtful Accounts		600
Short Term Note Receivable	24,000
Interest Receivable
Prepaid Insurance	11,000
Supplies	6,000
Inventory	65,000
Equipment	175,000
Accumulated Depreciation		75,000
Copyright	48,000
Accounts Payable		35,000
Wages Payable
Interest Payable
Bonds Payable		200,000
Premium on Bonds Payable		11,103
Common Stock		90,000
Retained Earnings		5,000
Dividends	5,200
Sales		923900
Sales Returns & Allowances	4,000
Sales Discounts	9,000
Cost of Goods Sold	375,000
Bad Debts Expense
Depreciation Expense
Wages Expense	260,000
Rent Expense	65,000
Insurance Expense	16,000
Supplies Expense	7,000
Interest Revenue		800
Interest Expense	9,000
Gain on Sale of Equipment		5,000
Income Tax Expense	4,000
Total	1,346,403	1,346,403

Instructions: You must turn in the work performed on the sheets printed with this page. Your assignment will NOT BE ACCEPTED ON PLAIN PAPER.

1. Write the journal entries required for each of the 5 events described below on the General page provided. Use ONLY the accounts listed on the trial balance for your journal entries.

2. Post the journal entry transactions to individual T-accounts and prepare an adjusted trial balance for The Cohen Fencing Company as of December 31, 2012.

Information for the necessary adjustments or calculations as of December 31, 2012:

1. The company last received interest on the note receivable on October 30, 2012. Interest will next be paid on April 30, 2013, when the note matures. Record the accrued interest revenue for the last 2 months of 2012. The annual interest rate is 6%. Round to nearest whole dollar.

2. The Equipment was purchased prior to 2012. The company uses the straight-line method, assumed a $5,000 salvage value and an estimated useful life of 10 years. Record depreciation expense for the full year of 2012.

3. The company uses the allowance method to estimate its uncollectible accounts. The new Chief Financial Officer (CFO) decided to use the percent of receivables method and estimated that 3% of Accounts Receivables at December 31, 2012, will be uncollectible. Record the adjusting entry for bad debt expense for 2012.

4. The company issued 8%, 10-year bonds when the market rate for similar investments is 5%. The company pays interest each year on January 1^st. Using the effective interest method of amortizing the premium on bonds payable, accrue the interest expense as of December 31, 2012. Round to nearest whole dollar for your interest expense calculation.

5. Employees were last paid on December 24, 2012. Several employees worked through December 31^st and wages due but not yet paid are $5,500. These wages will be paid in early January. An adjusting entry needs to be recorded to reflect this liability.

Part 2: Using the trial balance below for Rochman Water Company (this is a different company and new problem), prepare a multi-step income statement and prepare the Statement of Retained Earnings and Classified Balance Sheet on the pages which follow. To get full credit you must include all critical subtotals (see class announcements).

Rochman Water Company

Adjusted Trial Balance

December 31, 2012

	DEBIT	CREDIT
Cash	2,517
Accounts Receivable	1,560
Allowance for Uncollectible Accounts		17
Short term Note Receivable	76
Interest Receivable	2
Supplies	35
Inventory	1,019
Prepaid Expenses	15
Equipment	8,725
Accumulated Depreciation		975
Copyrights	98
Accounts Payable		370
Interest Payable		2
Unearned Revenue		40
Long Term Note Payable		3,400
Common Stock		6,600
Add’l Paid-in-Capital		800
Retained Earnings (1/1/12)		2,000
Dividends	100
Sales		34,900
Sales Returns & Allowances	34
Sales Discounts	65
Cost of Goods Sold	30,200
Bad debt expense	34
Depreciation Expense	276
Amortization Expense	11
Wages Expense	2,000
Rent Expense	500
Office Expense	79
Supplies Expense	100
Selling Expense	816
Interest Expense	100
Interest Revenue		8
Income Tax Expense	750
Totals	49,112	49,112

12 years ago

Report issue

Cohen Fencing Company_adjusted Trial balance and Rochman Water Company_Financial statement

NOT RATED

Purchase the answer to view it

cohen_fencing_company_adjusted_trial_balance_and_rochman_water_company_financial_statement.xlsx

Cohen Fencing Company_adjusted Trial balance and Rochman Water Company_Financial statement

Cohen Fencing Company

Totals