Problem - MRyan Co., purveyor of fine, fine things, had the following balances at December 31,2015
|
Cash
|
40,000
|
|
Accounts Receivable
|
60,000
|
|
Allowance for doubtful accts
|
1,000
|
|
Inventory
|
50,000 (1 thing)
|
|
Equipment
|
190,000
|
|
Accumulated Depreciation-Equipment
|
60,000
|
|
Land
|
50,000
|
|
Patent
|
20,000
|
|
Accounts Payable
|
40,000
|
|
Salary Payable
|
1,000
|
|
Rent Payable
|
2,000
|
|
Taxes Payable
|
3,000
|
|
Long Term Debt
|
80,000
|
|
Common Stock ($1 per share)
|
90,000
|
|
Retained Earnings
|
133,000
|
During 2016 the following transactions occurred:
Jan 1, received all beg A/R and paid all Beg A/P
Mar 1, bought 2 things for $60,000 each, (paid 25% down and the rest payable in one year)
April 15, paid year 2015 taxes payable
May 1, sold one thing for $80,000 (paid 25% down and rest payable in one year)
July 1, company wrote off $600 in bad debts
July 1, sold one thing for $160,000 (received 75% down and the rest will be paid in one year)
Aug 1, purchased piece of equipment for $10,000 cash
Sept 1, exchanged 40,000 shares of common stock for piece of land worth $40,000.
Dec 1, declared and paid $.10 per share dividend
Dec 31, paid an annual payment on long term debt-$28,000. Of that amount, $8,000 was for interest and $20,000 was for principal
During the year the company paid 15 months' rent of $15,000. Also during the year the company paid salaries of $12,000 in cash, and at the end of the year they owned $3,000 for salaries, Depreciation for the year is $10,000. The long-term debt is payable in $20,000 principal payments plus interest of 10% each December 31. The tax rate us 30% and during the year the company paid 2015 taxes payable and the 50% of 2016 taxes. The company uses the FIFO inventory system. The company estimates the 2% of its receivables will ultimately be uncollectible. Journalize the above transactions and post them to T-Accounts. Prepare any necessary adjustments. Prepare a P&L, Statement of Owners Equity, Balance Sheet and Cash Flow Statement for the year 2016.