Comprehensive Problem, cont.
Requirement 2, cont.
Date Accounts Debit Credit
Dec. 10 Accounts Payable 150,000
Cash 150,000
15 FICA—OASDI Taxes Payable ($868 + $868) 1,736
FICA—Medicare Taxes Payable ($203 + $203) 406
Employee Income Taxes Payable 3,250
Employee Health Insurance Payable 900
State Unemployment Taxes Payable 324
Federal Unemployment Taxes Payable 36
Cash 6,652
15 Sales Tax Payable 8,400
Cash 8,400
18 Utilities Expense 220
Cash 220
Comprehensive Problem, cont.
Requirement 2, cont.
Date Accounts Debit Credit
Dec. 31 Salaries Expense 14,000
FICA—OASDI Taxes Payable 868
FICA—Medicare Taxes Payable 203
Employee Income Taxes Payable 3,250
Employee Health Insurance Payable 900
Cash 8,779
Comprehensive Problem, cont.
Requirements 3 and 5
Cash
Oct. 1 250,000 160 Oct. 15
Oct. 31 196,100 8,779 Oct. 31
Nov. 30 148,400 2,425 Nov. 1
Dec. 15 6,000 125,000 Nov. 3
Comprehensive Problem, cont.
Requirements 3 and 5
Accumulated Depreciation
1,000 Adj. a
125 Adj. b
1,125 Bal.
1,736 Bal.
FICA—Medicare Taxes Payable
Nov. 15 406 203 Oct. 31
Dec. 15 406 203 Oct. 31
203 Nov. 30
203 Nov. 30
203 Dec. 31
203 Dec. 31
406 Bal.
Comprehensive Problem, cont.
Requirements 3 and 5
State Unemployment Taxes Payable
Nov. 15 756 756 Oct. 31
Dec. 15 324 324 Nov. 30
54 Dec. 31
54 Bal.
16,800 Dec. 31
29,300 Bal.
Interest Payable
250 Adj. c
1,319 Adj. d
1,569 Bal.
Comprehensive Problem, cont.
Requirements 3 and 5
Mortgages Payable
Nov. 1 1,092 200,000 Oct. 1
Dec. 1 1,099
197,809 Bal.
Common Stock—$1 Par Value
25,000 Oct. 1
25,000 Bal.
Bal. 24,500
Sales Revenue
185,000 Oct. 31
140,000 Nov. 30
210,000 Dec. 31
535,000 Bal.
Comprehensive Problem, cont.
Requirements 3 and 5
Salaries Expense
Oct. 31 14,000
Nov. 30 14,000
Dec. 31 14,000
Bal. 42,000
Payroll Tax Expense
Oct. 31 1,911
Nov. 30 1,431
Dec. 31 1,131
Bal. 4,473
Income Tax Expense
Adj. e 36,000
Bal. 36,000
Comprehensive Problem, cont.
Requirement 4
Date Accounts Debit Credit
Adjusting Entries
a. Depreciation Expense(1) 1,000
Accumulated Depreciation 1,000
(1) $160,000 / 40 years × 3/12 = $1,000
Comprehensive Problem, cont.
Requirement 5
THE TUSQUITTEE COMPANY
Adjusted Trial Balance
December 31, 2018
Balance
Account Debit Credit
Cash $ 437,504
Merchandise Inventory 45,000
Land 40,000
Building 160,000
Store Fixtures 10,000
Accumulated Depreciation $ 1,125
Accounts Payable 90,000
Dividends Payable
Notes Payable 10,000
Mortgages Payable 197,809
Common Stock—$1 Par Value 25,000
Paid-in Capital in Excess of Par—Common 225,000
Treasury Stock—Common 3,000
Paid-in Capital from Treasury Stock Transactions 1,500
Retained Earnings
Cash Dividends 24,500
Sales Revenue 535,000
Comprehensive Problem, cont.
Requirement 6
THE TUSQUITTEE COMPANY
Income Statement
For Quarter Ended December 31, 2018
Net Sales Revenue $ 535,000
Warranty Expense 42,800
Total Operating Expenses 91,023
Operating Income 123,977
Other Income and (Expenses)
Interest Expense (4,228)
Total Other Income and (Expenses) (4,228)
Income before Income Taxes 119,749
Income Tax Expense 36,000
Net Income $ 83,749
THE TUSQUITTEE COMPANY
Balance Sheet
December 31, 2018
Assets
Current Assets:
Cash $ 437,504
Merchandise Inventory 45,000
Total Current Assets $ 482,504
Property, Plant, and Equipment: