Belvidere Pharmaceuticals F -Town Division Trial Balance as of December 31, 2021 A/C Name Trial Balance DR CR Cash 2,850,000 Accounts receivable 8,000,000 Allowance for bad debt 710,100 Other debtors Merchandise Inventory 8,000,000 Store Supplies 1,800,000 Prepaid Insurance 4,200,000 Prepaid rent 3,850,000 Furniture & Equipment 16,000,000 Accumulated deprecation-Furniture and equipment 6,320,000 Motor Car 3,600,000 Accumulated depreciation- Motor Car 2,656,282 Accounts payable 1,650,050 Salary payable Interest payable Unearned Sales revenue 2,800,000 Note Payable, long term 8,000,000 Patty Patterson, Capital 24,500,000 Withdrawals 150,000 Sales revenue 32,688,568 Sales discount 1,250,000 Sales returns and allowances 1,525,000 Cost of goods sold 10,500,000 Salaries expense 12,500,000 Insurance Expense Utilities Expense 1,250,000 Rent Expense 3,850,000 Depreciation Expense – Furniture and Equipment Depreciation Expense – Motor Car Store Supplies Expense Gain/loss onDisposalofFixedAsset Bad-Debt Expense Interest Expense 79,325,000 79,325,000 ACCT1002 – Introduction to Financial Accounting Assignment # 2 Page | 13 The following additional information is available December 31, 2021: 1) Store Supplies on hand on December 31, 2021, amounted to $1,500,000. 2) Insurance of $4,200,000 was paid on January 1, 2021, for the 14-months to February 28, 2022 3) Prepaid rent expired December 31, 2021, amounted to $2,750,000 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) TheMotorCarcostrelatestotwoSosacarspurchasedfor$1,800,000eachbythecompanyon 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 $720,000 on credit. Round off answers to the nearest dollar. 6) Salaries earned by employees and not yet paid amounted to $65,000 on Dec 31, 2021. 7) Accrued interest expense as of December 31, 2021, $65,000. 8) On Dec 31, 2021, $2,500,000 of the previously unearned sales revenue had been earned. 9) TheagingoftheAccountsReceivablescheduleonDec31,2021,indicatedthattheAllowance for Bad Debts should be $800,000 10) A physical count of inventory was done on December 31, 2021, after making all the other adjustments and this revealed that there was $7,850,000 worth of inventory on hand at this point. Other data: 11) The business is expected to make principal payments totalling $1,450,000 towards the loan during the fiscal year to December 31, 2022. Required: a) Prepare the necessary adjusting journal entries on Dec 31, 2021. [Narrations are not required] b) Prepare the Adjusted Trial balance for the period ending December 31, 2021. c) Using the Adjusted trial balance, generate the statements requested by Belvidere Pharmaceutical F -Town Division, i.e
Belvidere Pharmaceuticals F -Town Division
A/C Name Trial Balance
DR CR
|
Cash |
2,850,000 |
|
|
|
8,000,000 |
|
|
Allowance for bad debt |
710,100 |
|
|
Other debtors |
||
|
Merchandise Inventory |
8,000,000 |
|
|
Store Supplies |
1,800,000 |
|
|
Prepaid Insurance |
4,200,000 |
|
|
Prepaid rent |
3,850,000 |
|
|
Furniture & Equipment |
16,000,000 |
|
|
Accumulated deprecation-Furniture and equipment |
6,320,000 |
|
|
Motor Car |
3,600,000 |
|
|
|
2,656,282 |
|
|
Accounts payable |
1,650,050 |
|
|
Salary payable |
||
|
Interest payable |
||
|
Unearned Sales revenue |
2,800,000 |
|
|
Note Payable, long term |
8,000,000 |
|
|
Patty Patterson, Capital |
24,500,000 |
|
|
Withdrawals |
150,000 |
|
|
Sales revenue |
32,688,568 |
|
|
Sales discount |
1,250,000 |
|
|
Sales returns and allowances |
1,525,000 |
|
|
Cost of goods sold |
10,500,000 |
|
|
Salaries expense |
12,500,000 |
|
|
Insurance Expense |
||
|
Utilities Expense |
1,250,000 |
|
|
Rent Expense |
3,850,000 |
|
|
Depreciation Expense – Furniture and Equipment |
||
|
Depreciation Expense – Motor Car |
||
|
Store Supplies Expense |
||
|
Gain/loss onDisposalofFixedAsset |
||
|
Bad-Debt Expense |
||
|
Interest Expense |
||
|
79,325,000 |
79,325,000 |
ACCT1002 – Introduction to Financial Accounting Assignment # 2
Page | 13
The following additional information is available December 31, 2021:
-
1) Store Supplies on hand on December 31, 2021, amounted to $1,500,000.
-
2) Insurance of $4,200,000 was paid on January 1, 2021, for the 14-months to February 28, 2022
-
3) Prepaid rent expired December 31, 2021, amounted to $2,750,000
-
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) TheMotorCarcostrelatestotwoSosacarspurchasedfor$1,800,000eachbythecompanyon 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 $720,000 on credit. Round off answers to the nearest dollar.
-
6) Salaries earned by employees and not yet paid amounted to $65,000 on Dec 31, 2021.
-
7) Accrued interest expense as of December 31, 2021, $65,000.
-
8) On Dec 31, 2021, $2,500,000 of the previously unearned sales revenue had been earned.
-
9) TheagingoftheAccountsReceivablescheduleonDec31,2021,indicatedthattheAllowance for
Bad Debts should be $800,000 -
10) A physical count of inventory was done on December 31, 2021, after making all the other adjustments and this revealed that there was $7,850,000 worth of inventory on hand at this point.
Other data:
11) The business is expected to make principal payments totalling $1,450,000 towards the loan during the fiscal year to December 31, 2022.
Required:
-
a) Prepare the necessary
adjusting journal entries on Dec 31, 2021. [Narrations are not required] -
b) Prepare the Adjusted Trial balance for the period ending December 31, 2021.
-
c) Using the Adjusted trial balance, generate the statements requested by Belvidere Pharmaceutical F -Town Division, i.e
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