BA 211: Accounting help!?

Here is the 1/1/12 balance sheet of ABC Corporation:

Cash

3,500

Accts payable

2,950

Accts Rec

5,700

Accrued interest

156

Allowance for Doubtful accts

(570)

Notes payable

1,400

Inventory

5,805

Bonds payable-current

500

Prepaid Ins

1,800

Current liabilities

5,006

Current assets

16,235

Bonds payable-long-term

4,000

Equipment

6,500

Buildings

10,000

long-term liabilities

4,000

Accum depr

(2,542)

Total liabilities

9,006

Net P, P and E

13,958

common stock (par $1.00)

2,500

Total assets

30,193

paid in capital

5,300

retained earnings

13,387

Total equity

21,187

total liabilities and equity

30,193

Additional data:

1. The equipment is made up of the following purchases:

5/1/10 $3,200

8/1/11 $3,300

2. The buildings were purchased on 7/1/11

3. Depreciation is recorded using straight line and a 25 year life for the buildings

and double declining balance with a 5 year life for the equipment. No salvage is expected.

4. The beginning inventory is recorded using LIFO and is made up of as:

300 units @ 10.25

3,075

260 units @ 10.50

2,730

5. The allowance for doubtful accounts is calculated using 10% of accounts receivable.

6. The note payable is due on 10/31/12. It was issued on 8/31/11. It bears interest at 9%

which is due on Feb 1, May 1, Aug 1 and Nov 1

7. The prepaid insurance policy was issued on 10/1/11 and was a 12 month policy.

8. The bonds are 10 year bonds which were sold on 1/1/11 for 5,000, par was 5,000.

They bear interest at 6% and interest is paid on Jan 1 and July 1. Principal is

retired each July 1 (1/10 each year)

During the year the following transactions transpired:

9. Sales were 1,000 units for 27,000, all credit, terms net 30

10. Cash collections on these sales were 20,250

11. Purchases of inventory on credit:

230 units @ 10.45

300 units @ 10.55

360 units @ 10.80

12. Salaries of 5,300 were paid in cash

13. On Sep 1, 2012 a 12 month insurance policy was purchased for 4,200 in cash

14. Payments to vendors on account were 5,500

15. 35 shares of common stock were sold for 675 cash

16. Dividends of 750 cash were paid

17. New equipment costing $5,000 was purchased on 9/1/12 for cash

18. The equipment purchased on 5/1/10 was sold for 1,300 cash on 8/1/12

19. Accounts receivable in the amount of 700 were written off during the year.

Required:

1. Prepare all journal entries and accruals necessary for the year 1/1/12 to 12/31/12

2. Prepare an income statement, statement of retained earnings and cash flow statement for the year ended

December 31, 2012. Prepare a classified balance sheet at December 31, 2012

3. Compute as many of the ratios from the text as there is information to do so. Include

any analysis/interpretation of these ratios also.

1 Answer

Relevance
  • hairy1
    Lv 6
    8 years ago
    Favorite Answer

    this is quite an extensive accounting problem. i suggest you contact your fellow students and work with them. i don't mind sharing my knowledge to help beginning accounting students but this abuse of yahoo answers

    Source(s): accountant
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