Paulson Corporation’s unadjusted trial balance at December 1, 20

what is an unadjusted trial balance

Paulson Corporation’s unadjusted trial balance at December 1, 2012, is presented below.

The following transactions occurred during December.

Dec. 2 Paulson purchased equipment for $16,000, plus sales taxes of $800 (all paid in cash).

2 Paulson sold for $3,500 equipment which originally cost $5,000. Accumulated depreciation on this equipment at January 1, 2012, was $1,800; 2012 depreciation prior to the sale of equipment was $450.

15 Paulson sold for $5,000 on account inventory that cost $3,500.

23 Salaries and wages of $6,600 were paid.

Adjustment data:

1. Paulson estimates that uncollectible accounts receivable at year-end are $4,000.

2. The note receivable is a one-year, 8% note dated April 1, 2012. No interest has been recorded.

3. The balance in prepaid insurance represents payment of a $3,600, 6-month premium on September 1, 2012.

4. The building is being depreciated using the straight-line method over 30 years. The salvage value is $30,000.

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, 2012, is being depreciated using the straight-line method over 5 years, with a salvage value of $1,800.

7. The patent was acquired on January 1, 2012, and has a useful life of 9 years from that date.

8. Unpaid salaries at December 31, 2012, total $2,200.

9. Both the short-term and long-term notes payable are dated January 1, 2012, and carry a 10% interest rate. All interest is payable in the next 12 months.

10. Income tax expense was $15,000. It was unpaid at December 31.

Instructions

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

(b) Prepare an adjusted trial balance at December 31, 2012.

(c) Prepare a 2012 income statement and a 2012 retained earnings statement.

(d) Prepare a December 31, 2012, balance sheet.

Source: www.solutioninn.com

Category: Forex

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