P 27-6A_ Herrera Company_ Work sheet, adjusting entries, and financial statements

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Description

P
27-6A
Net income $104,845

Work sheet, adjusting entries, and
financial statements Herrera Company had the following trial balance columns on
its work sheet.

Herrera
Company

Trail
Balance

December
31, 20—

Account
Title
Debit Balance Credit Balance

Cash———————————————————–30,300.00—————————————

Government
Notes——————————————5,000.00————————————–

Interest Receivable——————————————————————————————–

Accounts
Receivable————————————–34,000.00—————————————-

Allowance for Bad
Debts——————————————————————-530.00———

Finished Goods
Inventory——————————–24,000.00————————————–

Work in Process
Inventory———————————9,000.00————————————–

Materials
Inventory——————————————8,500.00————————————–

Office-Supplies————————————————3,100.00————————————–

Factory Supplies———————————————–3,800.00—————————————-

Land———————————————————–100,000.00—————————————

Factory Building———————————————120,000.00————————————–

Accumulated Depreciation—Factory
Building———————————– 10,000.00

Factory
Equipment——————————————-40,000.00——————————————

Accumulated Depreciation—Factory
Equipment—————————————–5,000.00

Interest
Payable—————————————————————————————————–

Accounts Payable———————————————————————————13,800.00

Income Tax
Payable———————————————————————————————–

Bonds
Payable————————————————————————————–80,000.00

Capital
Stock—————————————————————————————-50,000.00

Paid-In Capital in Excess of
Par—————————————————————–30,000.00

Retained
Earnings———————————————————————————-92,400.00

Cash Dividends———————————————-30,000.00—————————————

Sales———————————————————————————————-405,100.00—

Interest
Revenue———————————————————————————–300.00—

Factory
Overhead——————————————-78,630.00—————————————-

Cost of Goods
Sold—————————————–190,700.00————————————————-

Wages
Expense———————————————–70,000.00—————————————————

Office Supplies
Expense——————————————————————————————————-

Bad Debit
Expense—————————————————————————————————————-

Utilities
Expense—Office————————————4,400.00——————————————————-

Interest
Expense———————————————–7,000.00——————————————————

Income Tax
Expense—————————————18,000.00———————————————————

——————————————————————-776,430.00———————776,430.00——————

Data
for adjusting the accounts are as follows:

a.
Factory overhead to be applied
to work in process ending inventory $3,100

b.
Interest receivable
$75

c.
Interest payable 600

d.
Estimate of uncollectible
accounts based on an aging of accounts receivable 2,930

e.
Office supplies consumed 2,900

f.
Factory supplies consumed 3,300

g.
Factory building
depreciation 5,000

h.
Factory equipment depreciation 4,000

i.
Over applied factory 1,470

j.
Provision for corporate income
taxes 6,100

k.
Physical counts of the
inventories agreed with the amounts in the books.

Additional information needed to prepare the financial
statements is as follows:

Beginning
inventories:

Finished goods January 1 $18,000

Work in process, January 1 7,300

Materials inventory, January 1 9,500

Materials purchases for the year 51,500

Direct labor 60,000

Actual factory overhead 90,930

Indirect materials charged to
production 3,400

Required:

1.
Prepare a work sheet

2.
Prepare the following financial
statements and schedule:

a.
Income statement

b.
Schedule of cost of goods
manufactured

c.
Retained earnings statement

d.
Balance sheet

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