Accounting Midterm exam

PRIVATE Mid-term Exam

Acct 372, 2017 summer

Name:__________________________

ID#:___________________________

Problem

The following trial balance was taken from the books of COYOTE Co. on Dec. 31, 2016.

Account Debit Credit

Cash $10,000

Accounts receivable 50,000

Allowance for doubtful accounts $ 2,000

Prepaid insurance 30,000

Inventory, January 1, 2016 50,000

Furniture and equipment 290,000

Accumulated depreciation 140,000

Patents 50,000

Copyrights 30,000

Accounts payable 38,000

Accrued expenses 30,000

Bonds payable 50,000

Common stock 60,000

Retained earnings 20,000

Dividends 30,000

Sales 400,000

Rental revenue 50,000

Loss on fire (extra ordinary) 10,000

Purchase 200,000

Salary expense 70,000

Rent expense 30,000

Totals 820,000 820,000

At the year end, the following items have not been recorded.

Prepaid insurance expired during the 2016, $22,000.

Estimated bad debts expense for 2016 is $1,000.

Five month rent of $30,000 was paid in advance on September 1, 2016 and charged to rent expense then.

d. Inventory as of December 31, 2016, $40,000 (using periodic inventory procedure).

Furniture and equipment have an average useful life of 4 years and salvage value of $10,000. Use the straight line method.

Utility bill of $3,000 for the month of December 2016 will

be paid on its due date, January 10, 2015.

Office salaries accrued but not yet paid by December 31, 2016 are $4,000.

The tax rate is 30%.

Instruction:

Prepare any necessary adjusting entries.

Prepare income statement, statement of retained earnings, & balance sheet of COYOTE Company for the year 2016.

Prepare closing entries of COYOTE for the year 2016.

Presume the above trial balance is an adjusted trial balance, and prepare

Multiple step income statement and

Multiple step balance sheet.