comprehensive problem

/in /by

Quigley Corporation’s trial balance at December 31, 2014, is presented below. All 2014 transactions have been recorded except for the items described below.

Debit

Credit

Cash

$  23,000

Accounts Receivable

51,000

Inventory

22,700

Land

65,000

Buildings

95,000

Equipment

40,000

Allowance for Doubtful Accounts

$  450

Accumulated Depreciation—Buildings

30,000

Accumulated Depreciation—Equipment

14,400

Accounts Payable

19,300

Interest Payable

-0-

Dividends Payable

-0-

Unearned Rent Revenue

8,000

Bonds Payable (10%)

50,000

Common Stock ($10 par)

30,000

Paid-in Capital in Excess of Par—Common Stock

6,000

Preferred Stock ($20 par)

-0-

Paid-in Capital in Excess of Par—Preferred Stock

-0-

Retained Earnings

75,050

Treasury Stock

-0-

Cash Dividends

-0-

Sales Revenue

570,000

Rent Revenue

-0-

Bad Debt Expense

-0-

Interest Expense

2,500

Cost of Goods Sold

400,000

Depreciation Expense

-0-

Other Operating Expenses

39,000

Salaries and Wages Expense

65,000

Total

$803,200

$803,200

Unrecorded transactions

1. 

On January 1, 2014, Quigley issued 1,000 shares of $20 par, 6% preferred stock for $22,000.

2. 

On January 1, 2014, Quigley also issued 1,000 shares of common stock for $23,000.

3. 

Quigley reacquired 300 shares of its common stock on July 1, 2014, for $49 per share.

4. 

On December 31, 2014, Quigley declared the annual preferred stock dividend and a $1.50 per share dividend on the outstanding common stock, all payable on January 15, 2015.

5. 

Quigley estimates that uncollectible accounts receivable at year-end is $5,100.

6. 

The building is being depreciated using the straight-line method over 30 years. The salvage value is $5,000.

7. 

The equipment is being depreciated using the straight-line method over 10 years. The salvage value is $4,000.

8. 

The unearned rent was collected on October 1, 2014. It was receipt of 4 months’ rent in advance (October 1, 2014 through January 31, 2015).

9. 

The 10% bonds payable pay interest every January 1 and July 1. The interest for the 6 months ended December 31, 2014, has not been paid or recorded.

Instructions

(Ignore income taxes.)

(a) 

Prepare journal entries for the transactions listed above.

(b) 

Prepare an updated December 31, 2014, trial balance, reflecting the unrecorded transactions.

(b) Total $868,700

(c) 

Prepare a multiple-step income statement for the year ending December 31, 2014.

(d) 

Prepare a retained earnings statement for the year ending December 31, 2014.

(e) 

Prepare a classified balance sheet as of December 31, 2014.

(e) Total assets $270,900

 
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