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ACCT 610 The following incorrect Balance Sheet was prepared for Browning Corporation as of December 31, 2016.

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Product Description

The following incorrect Balance Sheet was prepared for Browning Corporation as of December 31, 2016.

20 points

 

 

Browning Corporation

 

Balance Sheet

 

as of December 31, 2016

 

 

 

Cash

$80 000

Accounts payable

$75 000

 

Accounts receivable (net)

52 200

Bonds payable

100 000

 

Inventory

57 000

Common Stock

218 500

 

Investments

76 300

 

 

 

Equipment (net)

96 000

 

 

 

Copyrights

32 000

 

 

 

Total Assets

$393 500

Total Liabilities & Stockholder's Equity

$393 500

 

 

 

Additional information:

 

1. Browning has $3,000 of inventory out on consignment, which is not included in the Inventory account balance, however $3,000 was recorded as an Account Receivable.

 

2. Browning is trying to sell a piece of equipment it no longer uses.  The equipment has a book value of $1,000.  

 

3. The remaining equipment on Browning's ledger has a $40,000 balance in Accumulated Depreciation.

 

4.  Browning Corporation has key-man insurance with a cash surrender value of $9,400, which is included in the balance of the Cash account.

 

5.  A bank overdraft of $2,500 has been deducted from the Cash account.

 

6.  The Investments account balance was computed as follows:

Use the following account balances of Mango Inc. to prepare a:

1) Multi-step Income Statement, and 

2) Statement of Retained Earnings.

15 points

 

 

 

 

Accounts payable

60 000,00 ₽

 

 

Accounts receivable

90 000

 

 

Accumulated depreciation-machinery

180 000

 

 

Administrative expenses

170 000

 

 

Allowance for doubtful accounts

5 000

 

 

Cash

60 000

 

 

Common stock

200 000

 

 

Cost of goods sold

700 000

 

 

Discontinued operations loss (net of tax)

63 000

 

 

Dividend revenue

8 000

 

 

Dividends declared

24 000

 

 

Interest expense

17 000

 

 

Interest payable

1 000

 

 

Land

370 000

 

 

Machinery

450 000

 

 

Materials

40 000

 

 

Notes payable (maturity 7/1/20)

200 000

 

 

Patents

100 000

 

 

Retained earnings, January 1, 2016

270 000

 

 

Sales revenue

1 250 000

 

 

Selling expenses

128 000

 

 

Unearned service revenue

4 400

 

 

 

 

 

 

Additional information:

 

 

 

1) Mango, Inc. has 50,000 shares of Common Stock issued and outstanding.

 

2) Income Tax for continuing operations equals $72,900.

 

3) The tax effect of the loss on Discontinued Operations was $27,000.

The following four situations are independent of one another.  

Work each situation as it it were a separate problem.

15 points

 

 

 

 

  

 

 

 

 

 

 Situation #:

 

 

 

 

 

 

 One

Accounts Receivable: 

Jan. 1, balance $41,000, 

Dec. 31, balance $55,000, 

Uncollectible accounts written off during the year, $6,000; 

Accounts receivable collected during the year, $159,000. 

 

Required: 

1) Prepare an Accounts Receivable T-Account to compute the correct amount, and a 

2) Journal entry to record sales revenue.

 

 

Accounts Receivable

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Two

Allowance for Doubtful Accounts: 

Jan. 1, balance $4,000, 

Dec. 31, balance $7,500, and

Uncollectible accounts written off during the year were $20,000. 

 

Required: 

1) Prepare an Allowance for Doubtful Accounts T-Account to compute the correct amount, and a 

2) Journal entry to record bad debt expense.

 

 

Allowance for

Doubtful Accounts

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Three

Accounts Payable: 

Jan. 1, balance $25,000, 

Dec. 31, balance $54,000, 

Purchases on account for the year, $150,000. 

 

Required: 

1) Prepare an Accounts Payable T-Account to compute the correct amount, and a 

2) Journal entry to record payments on account.

 

 

 Accounts Payable

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Four

Interest Receivable: 

Jan. 1 interest accrued equals $3,000, 

Dec. 31 interestaccrued equals $2,100, 

Interest recognized for the year was $45,000. 

 

Required:

1) Prepare an Interest Receivable T-Account, and the 

2) Journalentry to record cash interest received.

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