Kenseth Corporation’s unadjusted trial balance at December 1, 2014, is presented
ID: 2450212 • Letter: K
Question
Kenseth Corporation’s unadjusted trial balance at December 1, 2014, is presented below.
Cash $26,030 DR
Accounts Receivable 36,060 DR
Notes Receivable 9,900 DR
Interest Receivable –0– DR
Inventory 36,140 DR
Prepaid Insurance 3,360 DR
Land 20,800 DR
Buildings 159,000 DR
Equipment 61,400 DR
Patent 10,260 DR
Allowance for Doubtful Accounts $530 CR
Accumulated Depreciation—Buildings 53,000 CR
Accumulated Depreciation—Equipment 24,560 CR
Accounts Payable 27,000 CR
Salaries and Wages Payable –0– CR
Notes Payable (due April 30, 2015) 11,600 CR
Interest Payable –0– CR
Notes Payable (due in 2020) 35,860 CR
Common Stock 53,200 CR
Retained Earnings 62,880 CR
Dividends 12,400 DR
Sales Revenue 907,900 CR
Interest Revenue –0– CR
Gain on Disposal of Plant Assets –0– CR
Bad Debt Expense –0– DR
Cost of Goods Sold 633,200 DR
Depreciation Expense –0– DR
Insurance Expense –0– DR
Interest Expense –0– DR
Other Operating Expenses 61,080 DR
Amortization Expense –0– DR
Salaries and Wages Expense 106,900 DR
Total $1,176,530 DR
$1,176,530 CR
The following transactions occurred during December.
Dec. 2 Kenseth purchased equipment for $16,200, plus sales taxes of $1,800 (all paid in cash).
2 Kenseth sold for $3,520 equipment which originally cost $5,200. Accumulated depreciation on this equipment at January 1, 2014, was $1,910; 2014 depreciation prior to the sale of equipment was $480.
15 Kenseth sold for $5,240 on account inventory that cost $3,350.
23 Salaries and wages of $6,440 were paid. Adjustment data:
1. Kenseth estimates that uncollectible accounts receivable at year-end are $3,880.
2. The note receivable is a one-year, 8% note dated April 1, 2014. No interest has been recorded.
3. The balance in prepaid insurance represents payment of a $3,360, 6-month premium on September 1, 2014.
4. The building is being depreciated using the straight-line method over 30 years. The salvage value is $33,000.
5. The equipment owned prior to this year is being depreciated using the straight-line method over 5 years. The salvage value is 10% of cost.
6. The equipment purchased on December 2, 2014, is being depreciated using the straight-line method over 5 years, with a salvage value of $2,100.
7. The patent was acquired on January 1, 2014, and has a useful life of 9 years from that date.
8. Unpaid salaries at December 31, 2014, total $2,100.
9. Both the short-term and long-term notes payable are dated January 1, 2014, and carry a 10% interest rate. All interest is payable in the next 12 months.
10 Income tax expense was $14,800. It was unpaid at December 31.
Explanation / Answer
Journal entries;
To accumulated dep
( 18000-2100)/5 *1/12
To interest payable
( 11600+ 35860) @10%
dec 7 Equipment $18,000 to Cash $18,000 dec2 Cash $3520 Accumulated depreciation 2390 To equipment $5,200 To Gain on sale of equipment 710 Dec 15 A/c recievable $5240 To sales $5240 COGS $3350 To Inventory $3350 Dec 23 Salary and wages $6440 To Cash $6440 Adjutment entires Bad debts expense $3330 To allowance ofr bad debts( 3880 - 550) $3330 Interest recievable $594 To interest income (9900 *8% *9/12) $594 Insurance expense $2240 To Prepaid insurance $2240 Depreciation $4200 To Accumulated depreciation ( 159,000 - 33000)/30 $4200Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.