Tri$-$Area Inc.

Worksheet

For Years $2024$ & $2023$

$12/31/2024$ Adjustments Trial balance

Cash $4,7004,700$

Accounts receivable $29,40029,400$

Receivable from factor

Allowance for doubtful accounts $100100$

Inventory $40,00040,000$

Prepaid rent $1,5001,500$

Land $5,0005,000$

Building $35,00035,000$

Less accumulated depreciation$-$ bldg $9,0009,000$

Equipment $84,50084,500$

Less: accumulated depreciation$-$equip $41,50041,500$

Accounts payable $7,5007,500$

Interest payable $2,8002,800$

Unearned revenue $1,8001,800$

Recourse liability

Income tax payable $4,7004,700$

Dividends Payable $900900$

Notes payable $12,00012,000$

Common stock $43,66043,660$

Retained earnngs $24,90024,900$

Dividends declared $4,8004,800$

Sales $169,440169,440$

Service revenue $33,21033,210$

Cost of goods sold $85,56085,560$

Selling $24,26024,260$

Bad debt expense

Depreciation expense

General and administrative $34,60034,600$

Interest expense $1,2001,200$

Gain on sale of equipment $250250$

Loss on sale of receivable

Income tax expense

Wages expense $540540$

Totals $351,410351,410--351,410351,410$

$1$ 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 $1,000$ 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 valueon 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 $0$

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

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

The year ends on Tuesday.

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

The factor will keep $10\%$ for returns to be paid in thirty 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 factor as a separate receivable.

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

On October $15,2023$ Tri$-$Area Inc. entered into a cotract to sell $750$ units

for $$11,250($$$15$ per unit$)$ toDesk Top Inc. Tri$-$Area expexted to deliver the unitss

in December and January. On December $15$ after $500$ units were delivered

reduced the price on the remaining units to $$10\mathrm{.}50$ per unit.