The following incorrect Balance Sheet was prepared for Browning Corporation as of
December 31, 2016.
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: 6. The Accounts Receivable balance was computed as follows: Required: Prepare a corrected Balance Sheet in report form. 20 points Use the following account balances of Mango Inc. to prepare a:
1) Multi-step Income Statement, and
2) Statement of Retained Earnings. Accounts payable
Accounts receivable
Accumulated depreciation-machinery
Administrative expenses
Allowance for doubtful accounts
Cash
Common stock
Cost of goods sold
Discontinued operations loss (net of tax)
Dividend revenue
Dividends declared
Interest expense
Interest payable
Land
Machinery
Materials
Notes payable (maturity 7/1/20)
Patents
Retained earnings, January 1, 2016
Sales revenue
Selling expenses
Unearned service revenue $ 60,000
90,000
180,000
170,000
5,000
60,000
200,000
700,000
63,000
8,000
24,000
17,000
1,000
370,000
450,000
40,000
200,000
100,000
270,000
1,250,000
128,000
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. 15 points The following four situations are independent of one another.
Work each situation as it it were a separate problem.
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. 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. 15 points 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. 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. Accounts Receivable Allowance for
Doubtful Accounts Accounts Payable Interest Receivable

 

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