This is a Comprehensive problem from cengage.com an online textbook platform. Before accepting final answers I will check them on cengage to verify that they are correct. The following is the problem:
Comprehensive Problem 3
Part 1:
Selected transactions completed by Kornett Company during its first fiscal year ended December 31 2014 were as follows:
1. Journalize the selected transactions. Assume 360 days per year.
If no entry is required select No entry required from the dropdown and leave the amount boxes blank. For a compound transaction if an amount box does not require an entry leave it blank.
January 3:Issued a check to establish a petty cash fund of $4500.
February 26:Replenished the petty cash fund based on the following summary of petty cash receipts: office supplies $1680; miscellaneous selling expense $570; miscellaneous administrative expense $880.
April 14:Purchased $31300 of merchandise on account terms 1/10 n/30. The perpetual inventory system is used to account for inventory.
May 13:Paid the invoice of April 14 after the discount period had passed.
May 17:Received cash from daily cash sales for $21200. The amount indicated by the cash register was $21240.
June 2:Received a 60-day 8% note for $180000 on the Ryanair account.
August 1:Received amount owed on June 2 note plus interest at the maturity date.
August 24:Received $7600 on the Finley account and wrote off the remainder owed on a $9000 accounts receivable balance. (The allowance method is used in accounting for uncollectible receivables.)
September 15:Reinstated the Finley account written off on August 24 and received $1400 cash in full payment.
September 15:Purchased land by issuing a $670000 90-day note to Zahorik Co. which discounted it at 9%.
October 17:Sold office equipment in exchange for $135000 cash plus receipt of a $100000 90-day 9% note. The equipment had a cost of $320000 and accumulated depreciation of $64000 as of October 17.
November 30:Journalized the monthly payroll for November based on the following data:
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November 30:Journalized the employer’s payroll taxes on the payroll.
December 14:Journalized the payment of the September 15 note at maturity.
December 31:The pension cost for the year was $190400 of which $139700 was paid to the pension plan trustee.
2.
Comprehensive Problem 3
Part 2:
The following is a comprehensive problem which encompasses all of the elements learned in previous chapters. You can refer to the objectives for each chapter covered as a review of the concepts.
Note:You must complete part 1 before completing part 2.
Based on the following data prepare a bank reconciliation for December of the current year:
a. Balance according to the bank statement at December 31 $283000.
b. Balance according to the ledger at December 31 $245410.
c. Checks outstanding at December 31 $68540.
d. Deposit in transit not recorded by bank $29500.
e. Bank debit memo for service charges $750.
f. A check for $12700 in payment of an invoice was incorrectly recorded in the accounts as $12000.
Enter all amounts as positive numbers.
Bank Reconciliation
December 31 2014
3.
Comprehensive Problem 3
Part 3:
Note:You must complete parts 1 and 2 before completing part 3 of this comprehensive problem.
Based on the bank reconciliation prepared in (2) journalize the entry or entries to be made by Kornett Company. If an amount box does not require an entry leave it blank.
4.
Comprehensive Problem 3
Part 4:
Note:You must complete parts 1 2 and 3 before completing part 4 of this comprehensive problem.
Based on the following selected data journalize the adjusting entries as of December 31 of the current year.
For a compound transaction if an amount box does not require an entry leave it blank. If no entry is required select No entry required from the dropdown and leave the amount boxes blank.
a.Estimated uncollectible accounts at December 31 $16000 based on an aging of accounts receivable. The balance of Allowance for Doubtful Accounts at December 31 was $2000 (debit).
b.The physical inventory on December 31 indicated an inventory shrinkage of $3300.
c.Prepaid insurance expired during the year $22820.
d.Office supplies used during the year $3920.
e.Depreciation is computed as follows:
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f.A patent costing $48000 when acquired on January 2 has a remaining legal lie of 10 years and is expected to have value for eight years.
g.The cost of mineral rights was $546000. Of the estimated deposit of 910000 tons of ore 50000 tons were mined and sold during the year.
h.Vacation pay expense for December $10500.
i.A product warranty was granted beginning December 1 and covering a one-year period. The estimated cost is 4% of sales which totaled $1900000 in December.
j.Interest was accrued on the note receivable received on October 17. Assume 360 days per year.
5.
Comprehensive Problem 3
Part 5:
Note:You must complete parts 1 2 3 and 4 of this comprehensive problem before completing part 5.
Based on the following information and the post-closing trial balance shown below prepare a balance sheet in report form at December 31 of the current year.
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Balance Sheet
December 31 2014