ACR 9-1 (Continued)
(b) MILO CORPORATION
Adjusted Trial Balance
December 31, 2017
Debits
Credits
Cash ………………………………………………………….
Buildings ……………………………………………………
Equipment ………………………………………………….
Patent ……………………………………………………….
Allowance for Doubtful Accounts ………………..
Accumulated Depreciation—Buildings ………..
Accumulated Depreciation—Equipment ………
Accounts Payable ………………………………………
Salaries and Wages Payable ……………………….
Bad Debt Expense ………………………………………
Cost of Goods Sold …………………………………….
Depreciation Expense …………………………………
Insurance Expense ……………………………………..
Interest Expense …………………………………………
$ 2,100
150,000
71,800
8,000
3,500
633,500
14,975
2,400
4,600
$ 4,000
54,000
32,350
27,300
2,200
ACR 9-1 (Continued)
(c) MILO CORPORATION
Income Statement
For the Year Ended December 31, 2017
Sales revenue ……………………………………………..
Cost of goods sold …………………………..
Gross profit ………………………………………………..
Operating expenses
Salaries and wages expense…………………..
Total operating expenses …………………………..
Income from operations …………………………..
Other revenues and gains
Gain on disposal of plant assets …………….
Interest revenue …………………………..
$905,000
633,500
271,500
202,475
69,025
1,725
MILO CORPORATION
Retained Earnings Statement
For the Year Ending December 31, 2017
Retained earnings, 1/1/17 …………………………………….
Add: Net income ……………………………………………….
$ 63,600
51,150
ACR 9-1 (Continued)
(d) MILO CORPORATION
Balance Sheet
December 31, 2017
Current assets
Cash ……………………………………………………..
Property, plant, and equipment
Land ……………………………………………………..
Buildings ………………………………………………
Less: Accum. depr.—buildings ……………..
Current liabilities
Notes payable (due April 30, 2018) …………
Accounts payable ………………………………….
Income taxes payable …………………………..
Interest payable …………………………………….
Salaries and wages payable …………………..
Total current liabilities ……………………..
Long-term liabilities
$150,000
54,000
20,000
96,000
$ 11,000
27,300
15,000
4,600
2,200
$ 2,100
60,100
ACR9-2 ACCOUNTING CYCLE REVIEW
(a)
Date
Account Titles
Debit
Credit
2/1/2017
Cash
12,000
Unearned Service Revenue
12,000
Equipment
9,600
Cash
Accounts Payable
3/1/2017
Patents
9,600
Cash
3/28/2017
Account Receivable
140,000
Service Revenue
140,000
3/29/2017
Cash
133,000
Accounts Receivable
133,000
3/29/2017
Accounts Payable
16,370
Cash
16,370
3/29/2017
Operating Expenses
97,525
Cash
97,525
3/31/2017
Allowance for Doubtful Accounts
Accounts Receivable
3/31/2017
Depreciation Expense
Accumulated Depreciation – Equipment
Cash
1,620
Accumulated Depreciation – Equipment
8,500
Loss on Disposal of Plant Assets
Equipment
11,000
ACR 9-2 (Continued)
(b), (c), and (f)
Cash
Bal.
24,300
Feb. 1
12,000
3,000
Feb. 1
Mar. 29
Mar. 1
Mar. 31
44,325
Accounts Receivable
Bal. 22,400
Mar. 28 140,000
133,000 Mar. 29
200 Mar. 31
29,200
1,200 Bal.
Mar. 31 200
1,800
Equipment
Bal. 20,000
Feb. 1 9,600
11,000 Mar. 31
Accum Depreciation—Equipment
15,000 Bal.
Mar. 31 8,500
7,505
Land
Bal. 20,000
20,000
Buildings
Bal. 100,000
100,000
Accum Depreciation—Buildings
15,000 Bal.
15,750
Patents
Mar. 1 9,600
80 Adj Mar. 31
9,520
Accounts Payable
Mar. 29 16,370
12,370 Bal.
6,600 Feb. 1
Unearned Service Revenue
12,000 Feb. 1
Adj Mar. 31 2,000
10,000
12,258 Mar. 31 Adj.
12,258
Common Stock
90,000 Bal.
90,000
53,130 Bal.
53,130
Service Revenue
140,000 Mar. 28
2,000 Mar. 31 Adj.
142,000
Mar. 29 97,525
Mar. 31 Adj. 100
97,625
Depreciation Expense
Mar. 31 500
Mar. 31 Adj. 505
Mar. 31 Adj. 750
1,755
880
Patent Amortization Exp
Mar. 31 Adj. 80
80
Mar. 31 Adj. 800
800
Income Tax Expense
Mar. 31 Adj. 12,258
12,258
(d) and (g) Aberkonkie Corporation
Trial Balance 3/31/17
Adjusted Trial Balance
Accounts
Debit
Credit
Debit
Credit
Cash
44,425
44,325
Accounts receivable
29,200
29,200
Allowance for doubtful accounts
1,000
1,800
Land
20,000
20,000
Buildings
Acc. depreciation-buildings
15,000
15,750
Equipment
18,600
18,600
Acc depreciation-equipment
7,000
7,505
Patents
9,600
9,520
Accounts payable
2,600
2,600
Unearned service revenue
12,000
10,000
Income taxes payable
12,258
Common stock
90,000
90,000
Retained earnings
53,130
53,130
Service revenue
Operating expenses
97,525
97,625
Depreciation expense
1,755
Patent amortization expense
Bad debt expense
Loss on disp. of plant assets
Income tax expense
12,258
Total
320,730
(e) BANK RECONCILIATION
Balance per Bank ………………………………………………….. $64,594
Add: Deposits in Transit 3/31/17 …………………………….. 1,620
Less: Outstanding Checks ……………………………… #440 $3,444
#454 5,845
Date
Account titles
Debit
Credit
3/31/2017
Operating Expense
100
Cash
Unearned Service Revenue
Service Revenue
Bad Debt Expense
800
Allowance for Doubtful Accounts
Depreciation Expense
505
Accumulated Depreciation – Equipment
505
(($9,000/10) × (3/12) = $225 + [($9,600 – $1,200)/5) × (2/12) = $280]
Depreciation Expense
750
Accumulated Depreciation – Buildings
750
(($100,000 – $10,000)/30) × (3/12)
Patent Amortization Expense
Patents
Income Tax Expense
Income Taxes Payable
Aberkonkie Corporation
Income Statement
For the Quarter Ended 3/31/17
Service Revenue ……………………………………………………. $142,000
Operating expenses
Operating Expenses …………………………………………… $97,625
Aberkonkie Corporation
Retained Earnings Statement
For the Quarter Ended 3/31/17
Retained Earnings, 1/1/17 ………………………………………. $53,130
Aberkonkie Corporation
Balance Sheet
3/31/2017
Assets
Current Assets
Property, Plant, and Equipment
Land ………………………………………………………. 20,000
Equipment ……………………………………………… $ 18,600
Less: Accumulated Depreciation—Equip. … 7,505 11,095
Liabilities & Stockholder’s Equity
Current Liabilities
Accounts Payable ……………………………………… $ 2,600
Unearned Revenue ……………………………………… 10,000
(All amounts are in millions)
(a) At September 27, 2014, total cost of property, plant and equipment
was $39,015; book value was $20,624.
(b) Depreciation is computed by use of the straight-line method over the
estimated useful lives of the assets.
CT 9-1 FINANCIAL REPORTING PROBLEM