Financial Statement Preparation – (40 points)Using the adjusted trial balance below, prepare the following financial statements:
1) Income Statement for the year ending 12/31/16 (15 points)
2) Statement of Owner’s Equity for the year ending 12/31/16 (10 points)
3) Balance Sheet as of 12/31/16 (15 points)
Cookie Company – Adjusted Trial Balance
12/31/16
Debit
Credit
Cash
$100
Accounts Receivable
Equipment
Accumulated Deprn – Equipment
Accounts Payable
Unearned Revenue
Dog, Capital
Dog, Drawing
Service Revenue
Wage Expense
Supplies Expense
Phone Expense
50
200
40
20
60
165
30
150
30
15
10
(30 points)
Equipment cost = $ 100, Salvage value at end of useful life = $10
useful life = 3
years
Calculate depreciation expense in years 1 & 3 under:
a) STRAIGHT LINE
deprn expense in year 1:
deprn expense
in
year 3:
b) DOUBLE DECLINING BALANCE (DDB)
deprn expense in year 1:
deprn expense in year 3:
3) UNITS OF ACTIVITY (total units for entire life = 30 units)
Year 1, actual units = 8 deprn expense
Year 3, actual units = 10 deprn expense =
2) “ALLOWANCE METHOD” FOR UNCOLLECTIBLE ACCOUNTS (30 pc
Prepare the adjusting entries :
a) Using the % of Sales Method
Firm concludes that 1% of sales will be uncollectible. Sales = $100
“Allowance for Doubtful Accounts” has a credit balance = $ 7
b) Using Percentage of Receivables Method
Firm concludes that 5% of Accounts Receivable (A/R) will be uncollectible.
A/R = $100 “Allowance for Doubtful Accounts” has a credit balance of $ 2
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
