Show the Building account and its depreciation reserve at the end of the fifth year.
4. The Office Supplies account shows $450, of which $400 is still on hand at the end of the period. Show the account properly adjusted and closed.
5. From the data of [Problem 1], prepare a single Merchandise account. Assume a final inventory of $75,000, and show the account adjusted and closed.
6. Analyze the following transactions relating to a business plant, and name the debit and credit elements of each to show:
- 1. The increase or decrease of assets, liabilities, and proprietorship.
- 2. The account titles under each of the general groups.
- Purchased a building for $100,000 from James Jackson & Co.
- Paid James Jackson & Co. $40,000 cash and executed a mortgage
- for the balance.
- Installed a new heating plant at a cost of $15,000 cash,
- $1,000 cash being received from sale of old plant.
- A new roof, at a cost of $5,000 cash, was put on.
- The old roof had no value as scrap.
- One year later the entire heating plant was covered with
- asbestos to conserve fuel. The cost was $500 cash.
- The roof was repainted at a cost of $100 cash.
- Glass broken by a hail storm was replaced at a cost of $50 cash.
- Two new skylights costing $750 cash were built.
- Gutters and down-spouts were replaced at a cost of $150.
XIV
1. Allowing five lines for each account and for the necessary depreciation reserve accounts which should follow immediately their particular assets, set up the following accounts on the ledger in proper form and under correct titles, and take a trial balance as of December 31, 19—.
- C. M. Loomis, capital investment $50,000.
- Withdrawals $3,000.
- Initial inventory of merchandise $19,740.
- Purchases $63,800; returns $1,524.50.
- Sales $99,360; returns $1,480.
- Cash in bank $2,750.
- Office equipment $800.
- Delivery trucks $5,000.
- Accounts receivable $40,950.
- Notes receivable $5,000.
- Liberty bonds $5,000.
- Notes payable $1,700.
- Interest and discount $90, Dr.
- Supplies $600.
- Salesmen’s salaries $3,500.
- Advertising $1,200.
- Delivery expenses $569.50.
- Office salaries $4,655.
- Legal advice $50.
- Light and heat $150.
- Insurance $75.
- Building $22,910.
- Taxes $245.
- Land $2,500.
- Mortgage $10,000.
- Accounts payable $18,980.
- Depreciation incurred during previous years on
- buildings $2,000; on delivery equipment $500.
2. Loomis’ final merchandise inventory is $20,680. He estimates depreciation on buildings at 5%, and on delivery equipment at 10%. 5% of the outstanding accounts and notes are deemed uncollectible. Office equipment is to be written down $300. Unexpired insurance is $25; accrued mortgage interest $300; accrued taxes $250; accrued sales salaries $350; and supplies on hand $200.
Prepare a statement of profit and loss and a balance sheet.