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ACCT$201$ Final Project Part $1($Adjusting Entries$)$

Additional information

$1.$ Equipment was purchased with cash. $14,000$

$2.$ Equipment costing was sold $4,500$

$3.$ Accumulated depreciation $3,500$

$4.$ Gain on sale $250$

$5.$ Cash dividend declared $4,800$

$6.$ All other charges were for cash

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Requirements:

$1.$ Make the appropriate adjusting entries

$2.$ From the adjusted trail balance do the required financial statements:

MultiStep Income Statement

Statement of Retained Earnings

Classified Balance Sheet

Statement of Cash Flows $($either method$)$

$3.$ Prepare closing entries

$4.$ Prepare the post closing trial balance

$5.$ Prepare reversing entries.

Adjustments:

$1-$ Bad debt is estimated to be a percentage of Accounts Receivable. $3\mathrm{.}0\%$

$27650*\mathrm{.}03830$

$2-$Took out a new note for $$4,500$ on $6/1/24,$ for new equipment.

Bookkeeper has not recorded the note or interest. $8\mathrm{.}0\%$

$3-$ Need to bill a client for work performed. Contract was for $$1,00$ shirts at $$5$ per shirt. Shipped $650$ shirts.

$4-$ Discovered when we took a physical count we had shrinkage of $$500.$

$5-$ Depreciation

Building straight line for $20$ years no residual value on original building.

New addition estimated to be for $10$ years no residual value.

$6-$ Depreciation equipment

Old equipment $10\%$ of cost

New equipment $5\%$ of cost the first year

$7-$ Income tax rate $30\%$

$8-$ Tri$-$Area Inc. has $1$ employee that earns $$1,500$ each week.

The company has $10$ employees with a weekly income of $$900.$

The year ends on Tuesday.

$9-$ On December $30$th of this year Tri$-$Area factored $$5,000$ of the accounts receivable.

The factor will keep $10\%$ for returns to be paid in $30$ days.

The discount rate is $9\%$ with recourse of $$400.$

This was not recorded due to the bookkeeper not sure how to record the entry.

Keep the receivable from the factor as a seperate receivable.

$10-$ Contract Modification$-$ Cummulative Catch$-$Up Method$-$

On October $15,2023$ Tri$-$Area Inc. entered into a contract to sell $750$ units for $$11,250($$$15$ per shirt$)$ to Desk Top Inc. Tri$-$Area expected to deliver the units in December and January. On Decemeber $15$th after $500$ units were delivered they reduced the price on the remaining units to $$10\mathrm{.}50$ per unit.

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