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Shówn below are selected 202 account balances (before adjustments) taken from the books of SING Corporation: Sales salaries and commissions Advertising expense Legal services Insurance and licenses 70,000 32,180 4,450 17,000 7,120 12,200 9,600 1,400 12,800 2,950 Salesmen's traveling expense Depreciation expense - delivery equipment Depreciation expense - office equipment Interest income Utilities Telephone and postage Supplies inventory Miscellaneous selling expenses 4,360 4,400 66,000 14,300 9,040 Dividends Dividend income Interest expense Allowance for doubtful accounts (credit balance) Officers' salaries 740 73,200 990,400 22,400 1,760 32,000 179,400 41,100 Sales Sales returns and allowances Sales discounts Gain on sale of equipment Inventory, January 1, 2020 Inventory, December 31, 2020 Purchases Freight in Accounts receivable Extraordinary loss before income tax Ordinary share capital Retained earnings, January 1. 2020 345,000 11,000 525,000 145,000 78,000 881.000

Shówn below are selected 202 account balances (before adjustments) taken from the books of SING Corporation: Sales salaries and commissions Advertising expense Legal services Insurance and licenses 70,000 32,180 4,450 17,000 7,120 12,200 9,600 1,400 12,800 2,950 Salesmen's traveling expense Depreciation expense - delivery equipment Depreciation expense - office equipment Interest income Utilities Telephone and postage Supplies inventory Miscellaneous selling expenses 4,360 4,400 66,000 14,300 9,040 Dividends Dividend income Interest expense Allowance for doubtful accounts (credit balance) Officers' salaries 740 73,200 990,400 22,400 1,760 32,000 179,400 41,100 Sales Sales returns and allowances Sales discounts Gain on sale of equipment Inventory, January 1, 2020 Inventory, December 31, 2020 Purchases Freight in Accounts receivable Extraordinary loss before income tax Ordinary share capital Retained earnings, January 1. 2020 345,000 11,000 525,000 145,000 78,000 881.000

Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter9: Long-term Liabilities
Section: Chapter Questions
Problem 89E: Ratio Analysis Rising Stars Academy provided the following information on its 2019 balance sheet and...
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Shown below are selected 2020 account balances (before adjustments) taken from the books of SINO Corporation: Sales salaries and commissions 70,000 32,180 Advertising expense Legal services Insurance and licenses Salesmen's traveling expense Depreciation expense - delivery equipment Depreciation expense - office equipment 4,450 17,000 7,120 12,200 9,600 1,400 12,800 2,950 4,360 4,400 66,000 14,300 9,040 Interest income Utilities Telephone and postage Supplies inventory Miscellaneous selling expenses Dividends Dividend income Interest expense Allowance for doubtful accounts (credit balance) Officers' salaries Sales 740 73,200 990,400 Sales returns and allowances 22,400 1,760 32,000 179,400 41,100 345,000 11,000 525,000 145,000 78,000 881,000 Sales discounts Gain on sale of equipment Inventory, January 1, 2020 Inventory, December 31, 2020 Purchases Freight in Accounts receivable Extraordinary loss before income tax Ordinary share capital Retained earnings, January 1, 2020
Transcribed Image Text:Shown below are selected 2020 account balances (before adjustments) taken from the books of SINO Corporation: Sales salaries and commissions 70,000 32,180 Advertising expense Legal services Insurance and licenses Salesmen's traveling expense Depreciation expense - delivery equipment Depreciation expense - office equipment 4,450 17,000 7,120 12,200 9,600 1,400 12,800 2,950 4,360 4,400 66,000 14,300 9,040 Interest income Utilities Telephone and postage Supplies inventory Miscellaneous selling expenses Dividends Dividend income Interest expense Allowance for doubtful accounts (credit balance) Officers' salaries Sales 740 73,200 990,400 Sales returns and allowances 22,400 1,760 32,000 179,400 41,100 345,000 11,000 525,000 145,000 78,000 881,000 Sales discounts Gain on sale of equipment Inventory, January 1, 2020 Inventory, December 31, 2020 Purchases Freight in Accounts receivable Extraordinary loss before income tax Ordinary share capital Retained earnings, January 1, 2020
Additional information: a. Sales commission for the last day of the year had not been accrued. Total sales for that day were P27,700. Sales commission averages 3% of sales. b. No accrual had been made for a freight bill of P1,500 received on January 5, 2021 for goods received on December 29, 2020. c. An advertising campaign was initiated on November 2, 2020. The cost of P4,200 incurred in November and December was debited to prepaid advertising. d. Depreciation on new office equipment purchased on March 1, 2020 had not been recognized. Equipment are depreciated on a straight-line basis using estimated useful life of 5 years. Salvage value is ignored. The equipment was purchased for P15,600. e. Freight charges of P15,000 paid on sold merchandise and not passed on to the buyers were netted against sales. f. The extraordinary loss represents amount of lost supplies and unsalable inventories heavily damaged by flood in August 2020. g. Cost of inventory in the possession of consignees as of December 31, 2020 amounting to P67,000 was not included in the ending inventory balance. h. Based on the aging of accounts receivable, the allowance for doubtful accounts should be set at 3% of ending accounts receivable balance. Required: Prepare a statement of comprehensive income in good form, with proper heading and supporting notes. Use the functional presentation and assume 30% income tax rate.
Transcribed Image Text:Additional information: a. Sales commission for the last day of the year had not been accrued. Total sales for that day were P27,700. Sales commission averages 3% of sales. b. No accrual had been made for a freight bill of P1,500 received on January 5, 2021 for goods received on December 29, 2020. c. An advertising campaign was initiated on November 2, 2020. The cost of P4,200 incurred in November and December was debited to prepaid advertising. d. Depreciation on new office equipment purchased on March 1, 2020 had not been recognized. Equipment are depreciated on a straight-line basis using estimated useful life of 5 years. Salvage value is ignored. The equipment was purchased for P15,600. e. Freight charges of P15,000 paid on sold merchandise and not passed on to the buyers were netted against sales. f. The extraordinary loss represents amount of lost supplies and unsalable inventories heavily damaged by flood in August 2020. g. Cost of inventory in the possession of consignees as of December 31, 2020 amounting to P67,000 was not included in the ending inventory balance. h. Based on the aging of accounts receivable, the allowance for doubtful accounts should be set at 3% of ending accounts receivable balance. Required: Prepare a statement of comprehensive income in good form, with proper heading and supporting notes. Use the functional presentation and assume 30% income tax rate.
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