HAMPTON CORPORATION Balance Sheet December 31, 2011 Cash $ 24,600 Accounts payable $ 25,600 Accounts receivable 45,500 Common stock ($10 par) 80,000 Allowance for doubtful accounts (1,500) Retained earnings 127,400 Supplies 4,400 Land 40,000 Buildings 142,000 Accumulated depreciation buildings (22,000) During 2012, the following transactions occurred.
1. On January 1, 2012, Hampton issued 1,200 shares of $40 par, 7% preferred stock for $49,200.
2. On January 1, 2012, Hampton also issued 900 shares of the $10 par value common stock for $21,000.
3. Hampton performed services for $320,000 on account.
4. On April 1, 2012, Hampton collected fees of $36,000 in advance for services to be performed from April 1, 2012, to March 31, 2013.
5. Hampton collected $276,000 from customers on account.
6. Hampton bought $35,100 of supplies on account.
7. Hampton paid $32,200 on accounts payable.
8. Hampton reacquired 400 shares of its common stock on June 1, 2012, for $28 per share.
9. Paid other operating expenses of $188,200.
10. On December 31, 2012, Hampton declared the annual preferred stock dividend and a 1.20 per share dividend on the outstanding common stock , all payable on January 15, 2013
11. An account receivable of $1700 which originated in 2011 is written off as uncollectiable.
Adjustment data:
1. A count of supplies indicates that $5,900 of supplies remain unused at year-end.
2. Recorded revenue earned from item 4 above.
3. The allowance for doubtful accounts should have a balanceof $3,500 at year end.
4. Depreciation is recorded on the building on astraight-line basis based on a 30-year life and a salvage value of $10,000.
5. The income tax rate is 30%. (Hint: Prepare the income statement up to income before taxes and multiply by 30% to compute the amount.) Instructions: a.) Create Income statement b. Retained Earnings c. Balance sheet d. trail balance e. adjusted trail balance.