90.2K

Verified Solution

Link Copied!

ASSETS

Current Assets

Cash $11,980$

Accounts Receivable $20,520$

Merchandise Inventory $317,060$

Total Current Assets $349,560$

Long$-$Term Assets

Investments $66,775$

Property, Plant and Equipment $($PP&E$)750,000$

Less: Accumulated Depreciation $(90,000)660,000$

Total Long$-$Term Assets $726,775$

Intangible Assets

Trademarks $200,000$

Less: Accumulated Amortization $(10,000)190,000$

Total Assets $1,266,335$

LIABILITIES

Accounts Payable $50,722$

Total Liabilities $50,722$

STOCKHOLDERS' EQUITY

Common Stock

$(300,000$ shares authorized, par value $$1,$

$200,000$ shares issued and outstanding$)200,000$

Paid$-$in Capital in Excess of Par $-$ Common Stock $979,278$

Retained Earnings $36,335$

Total Stockholders' Equity $1,215,613$

Total Liabilities and Stockholders' Equity $1,266,335$

GeneralProducts, Inc. provided the following financial and business$-$related data for $2022$ below:

All sales were on credit and totaled $$940,560,$ with the associated COGS totaling $$780,650.$ The sales and COGS have not yet been recorded, so a consolidated journal entry will be required.

Cash collected from customers totaled $$906,450.$ These cash collections have not yet been recorded, so a consolidated journal entry will be required.

Purchases of merchandise inventory from suppliers totaled $$689,525.$ All purchases were on credit. These purchases have not yet been recorded, so a consolidated journal entry will be required.

Cash paid to suppliers for credit purchases of merchandise inventory totaled $$728,254.$ These payments have not yet been recorded, so a consolidated journal entry will be required.

Selling and Administrative Expenses $($these are all cash expenses$)$ totaling $$87,345$ were incurred and paid. These expenses and payments have not yet been recorded, so a consolidated journal entry will be required.

GeneralProducts purchased land for $$30,000$ in advance of construction of a building and paid the amount in full. This purchase and payment have not yet been recorded, so a consolidated journal entry will be required.

PP&E is depreciated using the straight$-$line method over $25$ years of life. PP&E depreciation for $2022$ has not yet been recorded, so a consolidated journal entry will be required.

Trademarks were previously acquired for $$200,000$ on January $1,2021.$ Estimated useful life at the time of acquisition was $20$ years.

However, in early $2022,$ a competitor initiated litigation challenging these trademarks, but GeneralProducts successfully

defended these trademarks at a total legal cost of $$60,000.$ Moving forward, the new $($updated$)$ useful life of the trademarks is now estimated to be $25$ years, spanning the current year $2022$ through the end of $2046.$

The legal expenses have not yet been recorded, so an appropriate journal entry will be required, and Trademark amortization will also need to be recorded for $2022.$

Included in the total sales of $$940,560($already noted in Item #$1$ above$)$ were the sales of $6,000$ boxes of a new brand of smoothie mix.

As a promotional premium offer to increase sales of this new smoothie mix, customers can download one digital coupon for every box of smoothie mix they purchase. Customers can then present $4$ of these coupons

to redeem them for one free "premium" item, a decorative metal sipping straw. Based on past experience, $60\%$ of the coupons are expected to be downloaded and redeemed by customers.

To support this special promotion, in $2022$ GeneralProducts purchased $900$ of the premium items $($decorative metal sipping straws$)$ at $$1\mathrm{.}00$ each for cash.

This purchase of the decorative metal sipping straws will need to be recorded in a special new account titled "Premium Inventory" to distinguish it from the company's Merchandise Inventory account.

During $2022,3,400$ coupons were actually redeemed by customers. Journal entries will need to be made to Premium Expense and Premium Liability accounts, as appropriate.

GeneralProducts issued bonds with a face amount $($total maturity value$)$ of $$100,000$ at a stated annual interest rate of $5\%,$ sold to yield an effective annual interest rate of $6\%.$

The maturity period of these $5\%$ bonds is $10$ years and interest is paid semiannually on January $1$ and June $30$ of each year.

The $5\%$ bonds were issued at a discount of $$7,439$ for an initial carrying value

Answer & Explanation Solved by verified expert

See Answer