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December 31, 2014Account Debit CreditCash $43,500Accounts Receivable 54,500Allowance for Doubtful Accounts 500Notes Receivable 30,000Merchandise Inventory 55,000Land 20,000Building 150,000Accumulated Depreciation, Building $15,000Equipment 50,000Accumulated Depreciation, Equipment 21,000Goodwill 26,000Accounts Payable 25,000Long Term Notes Payable 75,000Common Stock, $10 par, 2,000 shares authorized &outstanding 20,000Retained Earnings 147,000Sales Revenue 700,000Salaries Expense 150,000Utilities Expense 3,500Cost of Goods Sold 350,000Administrative Expenses 55,000Sales Expenses 15,000 _______Totals $1,003,000 $1,003,000Flip is a small company and records adjusting entries & closing entries only atfiscal (calendar) year end. Correcting and adjusting entries have not been recorded. Additional Information:a. Notes Receivable is a 3-months, 6% note accepted on December 1, 2014.b. Long Term Notes Payable is a 5-year, 5% note, that was signed on July 1,2014. Interest is payable annually.c. Building is depreciated at 3% per year. There is no salvage value.d. Equipment is depreciated at 15% year. There is no salvage value.e. Flip discovered, on December 30th, that the inexperienced bookkeeper recordedin the general journal and general ledger that days $1,500 cash sales as a debit toAccounts Receivable and a credit to Sales Revenue.f. The year-end physical count for Merchandise Inventory reflected a value of$52,500. Any difference in value will not be considered theft or loss.g. Salaries for the last half of December, payable in January, amount to $6,500.h. Flip estimates that of the Accounts Receivable 5% will not be collectable. a. Prepare in journal form, any required correcting entriesb. Prepare in journal form, all end-of-the period adjusting entriesc. Prepare a December adjusted trial balanced. Prepare a classified balance sheet for the year ended December 31, 2014e. Prepare in journal form, the closing entries for the year ended December 31,2014 uses the period method and had the following inventory events during January:DateUnitsPurchasedUnit Cost Date Units SoldUnit Sales PriceJan. 1 150 $7.00 Jan. 2 100 $10.00Jan. 5 225 7.25 Jan. 7 125 10.00Jan. 10 100 7.50 Jan. 12 75 12.00Jan. 15 150 7.50 Jan. 17 200 12.00Jan. 20 200 7.75 Jan. 24 150 15.00Jan. 25 150 8.00Jan. 30 75 8.25Note: January 1 amount was the beginning inventory and unit value. Required:a. Calculate cost of goods available for sale.b. Calculate the dollar value of sales.c. Calculate the value of Ending Inventory and Cost of Good Sold under the followingindependent assumptions:1) LIFO method2) FIFO method Required: Prepare Flips Supply Co. general journal entries for the followingtransactions:Jan. 1 Accepted Flops 120 days, 10% note, as settlement of an outstanding$15,000 account receivable for goods sold last yearJan. 15 Purchased $10,000 Equipment from Floozy, signing a 9 month, 12% noteJan. 25 Loaned Flam Co. $30,000 cash, accepting a 90 days, 10% noteJan. 31 Prepared accrual adjusting entry for any interest revenueApr. 25 Received payment in full from Flam Co. for outstanding note & interestMay 1 Received payment in full from Flop Co. for outstanding note & interestOct. 15 Paid in full. Purchased a refrigerated delivery truck for $65,000 on April 1, 2016. Theplan is to use the truck for 4 years and then replace it. At the end of its useful life thetruck is expected to have a salvage value of $10,000.a. Prepare the depreciation table for Flips truck assuming that the company usesthe straight-line method for depreciation.b. Prepare the depreciation table for Flips truck assuming that the truck waspurchased on January 1, 2016 and the company uses the double-declining-balancedepreciation method.c. Compute the depreciation expense for 2016 for Flips truck assuming the truckhas an expected life of 200,000 miles and during 2016 the truck was driven24,540 miles. Round your depreciation expense per mile to three decimal places. Flip Company has a January 15 mid-month gross salaries expense of $25,000. All issubject to FICA Social Security (6.2%), FICA Medicare (1.45%), state income tax (5%)and federal income tax (15%) withholdings. Additionally, all is subject to employer taxesto include FUTA (0.8%) and SUTA (5.4%) taxes. (Round all calculations to the nearestpenny.)Required:a. Prepare the general journal entry to record the employers payroll liability.b. Prepare the general journal entry to record the employers payroll tax liability.c. Prepare the general journal entry to liquidate the liabilities accrued in parts (a)and (b) on January 22. Flip Company at the end of the fiscal 2014 year has the following information: CreditSales, $2,500,000 Sales Returns & Allowances $25,000 Accounts Receivable $200,000and Allowance for Doubtful Accounts with a debit o $1,500. a. Prepare the general journal entry to record the end of the year adjusting entry ifFlip uses 0.5% of Net Credit Sales as the basis for determining Bad Debt Expense.b. Prepare the general journal entry to record the end of the year adjusting entry ifFlip uses 5% of Accounts Receivable as the basis for determining Bad Debt Expense.Purchase the answer to view itPurchase the answer to view itPurchase the answer to view it
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