Practice Data
Summarize and post the books and take a trial balance as of December 31, 1917. Record the trial balance in the usual place.
XXIII
Problem
A trial balance taken from the general ledger of the Metal Bed Manufacturing Co. for December 31, 1917, showed as follows:
| Bed Sales | $325,198.67 | |
| Bed Sales Returns and Allowances | $10,240.80 | |
| Bed Accessories Sales | 192,460.90 | |
| Bed Accessories Sales Returns | ||
| and Allowances | 8,175.25 | |
| Raw Material Inventory | 25,240.16 | |
| In-Freight and Drayage | 1,460.24 | |
| Beds in Process | 15,970.20 | |
| Finished Beds | 42,490.70 | |
| Accessories Inventory | 19,580.65 | |
| Direct Labor | 35,918.60 | |
| Indirect Labor | 10,372.40 | |
| Light, Heat, and Power | 8,917.18 | |
| Manufacturing Expense | 5,890.10 | |
| Rent | 3,300.00 | |
| Machinery Repairs and Renewals | 575.00 | |
| Raw Materials Purchases | 175,460.18 | |
| Raw Materials Purchases Returns | ||
| and Allowances | 9,840.60 | |
| Accessories Purchases | 95,640.81 | |
| Accessories Purchases Returns | ||
| and Allowances | 4,890.06 | |
| Advertising | 4,800.00 | |
| Salesmen’s Salaries | 13,690.75 | |
| Salesmen’s Commissions | 4,610.15 | |
| Traveling Expense | 10,111.25 | |
| Out-Freight and Shipping | 790.20 | |
| Delivery Expense | 3,816.25 | |
| Insurance on Sales Room Stock | 475.00 | |
| Insurance on Factory Materials | 820.00 | |
| Insurance on Buildings and Equipment | 1,890.00 | |
| Miscellaneous Selling Expense | 4,175.30 | |
| Office Salaries | 15,210.40 | |
| Interest and Discount | 3,620.55 | |
| Bank Expense | 125.45 | |
| Office Furniture and Fixtures | 1,240.00 | |
| Depreciation Reserve Office Furniture | ||
| and Fixtures | 620.00 | |
| Office Supplies | 720.20 | |
| Miscellaneous Office Expense | 1,810.65 | |
| Leasehold (99 years) | 99,000.00 | |
| Extinction Reserve for Leasehold | 24,000.00 | |
| Buildings | 125,000.00 | |
| Depreciation Reserve for Buildings | 50,000.00 | |
| Machinery | 72,520.70 | |
| Depreciation Reserve for Machinery | 21,490.16 | |
| Tools | 5,140.17 | |
| Patterns | 7,500.00 | |
| Depreciation Reserve for Patterns | 5,405.14 | |
| Factory Furniture and Fixtures | 8,100.00 | |
| Depreciation Reserve Factory | ||
| Furniture and Fixtures | 3,190.20 | |
| Sales Room Furniture and Fixtures | 10,250.00 | |
| Depreciation Reserve Sales Room | ||
| Furniture and Fixtures | 4,330.10 | |
| Sales Discount | 8,440.05 | |
| Purchases Discount | 10,375.90 | |
| Good-Will | 50,000.00 | |
| Accounts Receivable | 110,472.05 | |
| Notes Receivable | 5,640.10 | |
| Accounts Payable | 62,490.35 | |
| Notes Payable | 10,000.00 | |
| Mortgage Payable | 15,000.00 | |
| Petty Cash | 150.00 | |
| Surplus | 150,154.24 | |
| Reserve for Doubtful Accounts | 3,519.72 | |
| Capital Stock Common | 100,000.00 | |
| Capital Stock Preferred 6% | 50,000.00 | |
| Harriman National Bank | 10,114.55 | |
| Common Dividend No. 37 | 2,000.00 | |
| Preferred Dividend No. 25 | 1,500.00 | |
| $1,042,966.04 | $1,042,966.04 |
The company conducts a factory for the manufacture of metal beds. It deals also in mattresses, springs, bed furnishings, etc., which it buys ready-made and sells to the retail trade. Its two classes of sales, beds and accessories are kept distinct.
Draw up a balance sheet and profit and loss statement for the year, taking into account the following inventories and other adjustments:
| Inventories: | |
| Raw Materials | $31,216.15 |
| Beds in Process | 18,793.80 |
| Finished Beds | 31,470.95 |
| Bed Accessories | 24,640.10 |
| Accrued Expenses: | |
| Direct Labor | 690.20 |
| Indirect Labor | 325.00 |
| Rent | 300.00 |
| Light, Heat, and Power | 180.20 |
| Advertising | 590.00 |
| Sales Commissions | 319.40 |
| Interest | 150.00 |
| Prepaid Expenses: | |
| Coal, Waste, Oil, etc. | $125.00 |
| Advertising | 300.00 |
| Office Supplies | 75.00 |
| Bank Discount | 125.00 |
| Insurance on Sales Room Stock | 50.00 |
| Insurance on Factory Materials | 125.00 |
| Insurance on Buildings and Equipment | 256.40 |
| Interest earned on Notes Receivable but not yet due | 75.20 |
| Depreciation is estimated as follows on a yearly basis: | |
| Office Furniture and Fixtures | 8⅓% |
| Factory Furniture and Fixtures | 10% |
| Sales Room Furniture and Fixtures | 10% |
| Buildings | 2% |
| Machinery | 10% |
| Patterns | 20% |
The leasehold was originally for 99 years of which 25 years have now expired. Bad debts are calculated as 2% of the accounts and notes outstanding. Tools now on hand amount to $4,800.25. In-freight and drayage is to be charged 55% to Factory and 45% to Selling. Light, heat, and power charge 90% to Factory, 9% to Selling, and 1% to Office. Rent, charge 60% to Factory, 35% to Selling, and 5% to Office. Insurance on buildings and equipment distribute according to the values invested, separating buildings’ values on the same basis as rent. Dividends No. 26 for 3% on preferred and No. 38 for 6% on the common are declared and paid.