Comprehensive Accounting Cycle Review 9-1 (Part Level Submission) Novak Corp.\'s

Question

Comprehensive Accounting Cycle Review 9-1 (Part Level Submission) Novak Corp.'s unadjusted trial balance at December 1, 2017, is presented below. Debit Credit $26,000 36,700 8,600 Cash Accounts Receivable Notes Receivable dy Interest Receivable Inventony Prepaid Insurance Land Buildings Equipment Patent Allowance for Doubtful Accounts Accumulated Depreciation-Buildings 36,420 3,300 21,000 164,400 60,500 9,720 $450 54,800 24,200 27,600 Accumulated Depreciation-Equipment Accounts Payable Salaries and Wages Payable Notes Payable (due April 30, 2018) Income Taxes Payable 11,700 0

Explanation / Answer

Date Account Titles and Explanation Debit Credit Dec-02 Equipment 17400 Cash 17400 (Equipment purchased for cash) Dec-02 Cash 3550 Accumulated depreciation-equipment 2470 Equipment 5400 Gain on disposal of plant assets 620 (Sale of equipment) Dec-15 Accounts receivable Sales revenue (Sale of inventory on account) Cost of goods sold 3330 Inventory 3330 (Cost of sales) Dec-23 Salaries and wages expense 6680 Cash 6680 (Payment of salaries and wages) Adjusting entries 1 Bad debt expense ($4130 - $450) 3680 Allowance for doubtful accounts 3680 (Bad debt expense) 2 Interest receivable 516 Interest revenue ($8600 x 8% x 9/12) 516 (Interest accrued on note receivable) 3 Insurance expense ($3300 x 4/6) 2200 Prepaid insurance 2200 (Insurance expired) 4 Depreciation expense [($164400 - $31800)/30] 4420 Accumulated depreciation-building 4420 (Depreciation on building) 5 Depreciation expense [($60500 - $6050)/5] 10890 Accumulated depreciation-equipment 10890 (Depreciation on equipment) 6 Depreciation expense [($17400 - $1980)/5] 3084 Accumulated depreciation-equipment 3084 (Depreciation on equipment purchased) 7 Amortization expense ($9720/9) 1080 Patents 1080 (Amortization of patents) 8 Salaries and wages expense 2150 Salaries and wages payable 2150 (Salaries and wages accrued) 9 Interest expense[($11700 + $36000) x 10%] 4770 Interest payable 4770 (Interest accrued on notes payable) 10 Income tax expense 12200 Income taxes payable 12200 (Income taxes payable)

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