Question: 1. Prepare all required adjusting journal entries
2. Prepare an adjusted trial balance
3. prepare a complete set of financial statements for the year ended december 31, 2013, in good form
Additional info:
Jacobson companies policy is to prepare financial statements annually and therefore adjusting entries are only done at year-end, December 31.
The short-term note payable for $50,000 was issued on November 1, 2013 and matures on September 30, 2014. The terms of the note call for interest of 6% payable a maturity. As of December 31, no interest has been accrued in Jacobson Company's accounting records.
The bonds payable were issued at a discount on July 1, 2010 and mature on June 30, 2020. Interest is paid semiannually every June 30 and December 31. All interest payments have been made on the designated date.
The buildings are depreciated on a straight-line basis. The Company's policy is to assume a 10% salvage value on all property and an estimated useful life of twenty-five years. All machinery and equipment assumes a 5% salvage value and an estimated useful life of ten years. Depreciation is also calculated on a straight-line basis.
Jacobson Company uses the allowance method to account for its uncollectible accounts. They estimate that 4% of he gross receivables will ultimately be uncollectible.
At year-end, Jacobson Company did a physical inventory count and valued the inventory using a first-in, first-out flow with a value of $359,003.
At year-end, he company estimated that $6,100 of supplies remained on hand.
During 2013, a number of customers placed orders for merchandise and were required to pay in advance. The total payments made amounted to $6,500. As of December 31, deliveries of some of those orders were made with sales value totaling $4,400.
On March 1, 2013, Jacobson Company paid $4,500 for an insurance policy, coverage which commenced on that day. The policy is for a twelve month period and thus expires on February 28, 2014.
The final payday of the year was on Friday December 20. The paymaster estimates that the value of work done by the employees since the last payday amounted $3,122.
Jacobson had 25,000 shares outstanding during the 2013 fiscal year.
Also given:
Jacobson Company
Unadjusted Trial Balance
December 31, 2013
Cash 45,233
Accounts Receivable 225,300
Allowance for uncollectible accounts 2,230
Merchandise Inventory 331,472
Supplies 22,134
Prepaid Insurance 4,500
Land 305,200
Buildings 450,000
Accumulated depreciation: buildings 120,000
Machinery and Equipment 215,000
Accumulated depreciation: machinery and Equip. 83,835
Accounts payable 184,894
Notes Payable, maturing September 30, 2014 50,000
Unearned Revenue 6,500
Bonds Payable, maturing June 30, 2020 300,000
Discount on Bonds Payable 15,320
Common Stock, $5 par value 125,000
Additional paid-in capital 236,074
Retained earnings, January 1, 2013 270,353
Dividends Declared 5,000
Sales Revenue 844,944
Purchases 492,356
Purchase discounts 2,476
Transportation-in 12,233
Salaries and Wage expense 85,788
Interest Expense 16,770