Accounting and Finance Homework help: November 2014

On December 1, 2014, Westmoreland Company had the following account balances.

	Debit		Credit
Cash	$18,200	Accumulated Depreciation Equipment	$3,000
Notes receivable	2,000	Accounts payable	6,100
Accounts receivable	7,200	Common stock	50,000
Inventory	16,000	Retained earnings	14,200
Prepaid insurance	1,600
Equipment	28,000
	$73,300		$73,300

During December, the company completed the following transactions.

Dec. 7 Received $3,600 cash from customers in payment of account (no discount allowed).

12 Purchased merchandise on account from Alice Co. $12,000, terms 1/10, n/30.

17 Sold merchandise on account $16,000, terms 2/10, n/30. The cost of the merchandise sold was $10,000.

19 Paid salaries $2,200.

22 Paid Alice Co. in full, less discount.

26 Received collections in full, less discounts, from customers billed on December 17.

31 Received $2,700 cash from customers in payment of account (no discount allowed).

Adjustment data:

1. Depreciation $200 per month.
2. Insurance expired $400.

Instructions

(a) Journalize the December transactions. (Assume a perpetual inventory system.)

(b) Enter the December 1 balances in the ledger T-accounts and post the December transactions. Use Cost of Goods Sold, Depreciation Expense, Insurance Expense, Salaries and Wages Expense, Sales Revenue, and Sales Discounts.

A comparison of the bank statement with the Cash account revealed the following facts.

1. The bank collected a note receivable of $2,000 for Westmoreland Company on December 15.

2. The December 31 receipts were deposited in a night deposit vault on December 31.

These deposits were recorded by the bank in January.

3. Checks outstanding on December 31 totaled $1,210.

4. On December 31, the bank statement showed a NSF charge of $680 for a check received by the company from K. Quinn, a customer, on account.
Prepare a bank reconciliation as of December 31 based on the available information.
(d) Journalize the adjusting entries resulting from the bank reconciliation and adjustment data.
(e) Post the adjusting entries to the ledger T-accounts.
(f) Prepare an adjusted trial balance.
(g) Prepare an income statement for December and a classified balance sheet at December31.

TUTORIAL PREVIEW

(a)	Dec. 7	Cash	3,600
(a)	Dec. 7	Accounts Receivable		3,600
	12	Inventory	12,000
	12	Accounts Payable	12,000	12,000
	17	Accounts Receivable	16,000
		Sales Revenue		16,000

		Cost of Goods Sold	10,000
		Inventory		10,000

File name: Westmoreland Company.xls File type: xls PRICE: $15

Raymond Company’s trial balance at December 31, 2014, is presented below. All 2014 transactions have been recorded except for the items described shown below.

	Debit	Credit
Cash	$28,000
Accounts receivable	36,000
Notes receivable	10,000
Interest receivable	0
Inventory	36,200
Prepaid insurance	4,400
Land	20,000
Buildings	160,000
Equipment	60,000
Patents	8,000
Allowances for doubtful accounts		300
Accumulated depreciation-Buildings		49,000
Accumulated depreciation-Equipment		24,000
Accounts payable		28,300
Income taxes payable		0
Salaries and wages payable		0
Unearned rent revenue		6,000
Notes payable(due in 2015)		11,000
Interest payable		0
Notes payable (due after 2015)		35,000
Common stock		50,000
Retained earnings		63,000
Dividends	12,000
Sales revenue		910,000
Interest revenue		0
Rent revenue		0
Gain on disposal of plant assets		0
Bad debt expense	0
Cost of goods sold	630,000

.......and so on........

1. On May 1, 2014, Raymond purchased equipment for $13,000 plus sales taxes of $780 (all paid in cash).

2. On July 1, 2014, Raymond sold for $3,500 equipment which originally cost $5,000.

Accumulated depreciation on this equipment at January 1, 2014, was $1,800; 2014 depreciation prior to the sale of the equipment was $450.

3. On December 31, 2014, Raymond sold for $9,400 on account inventory that cost $6,600.

4. Raymond estimates that uncollectible accounts receivable at year-end is $4,000.

5. The note receivable is a one-year, 8% note dated April 1, 2014. No interest has been recorded.

6. The balance in prepaid insurance represents payment of a $4,400 6-month premium on October 1, 2014.

7. The building is being depreciated using the straight-line method over 40 years. The salvage value is $20,000.

8. 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.

9. The equipment purchased on May 1, 2014, is being depreciated using the straight-line method over 5 years, with a salvage value of $1,000.

10. The patent was acquired on January 1, 2014, and has a useful life of 10 years from that date.

11. Unpaid salaries and wages at December 31, 2014, total $2,200.

12. The unearned rent revenue of $6,000 was received on December 1, 2014, for 4 months rent.

13. Both the short-term and long-term notes payable are dated January 1, 2014, and carry a 9% interest rate. All interest is payable in the next 12 months.

14. Income tax expense was $17,000. It was unpaid at December 31.

Instructions

(a) Prepare journal entries for the transactions listed above.

(b) Prepare an updated December 31, 2014, trial balance.

(d) Prepare a December 31, 2014, classified balance sheet.

TUTORIAL PREVIEW

(a)		Account title	Debit	Credit
	1	Equipment	13,780
		Cash		13,780

	2	Depreciation Expense	450
		Accumulated Depreciation—Equipment		450

		Cash	3,500

File name: Raymond Company.xls File type: xls PRICE: $15

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On December 1, 2014, Westmoreland Company had the following account balances.

Raymond Company’s trial balance at December 31, 2014, is presented below. All 2014 transactions have been recorded except for the items described shown below.