Refer to trial balance of VIII to see the method pursued in making the opening entries for the corporation.
VIII
The following trial balance was taken from the books of the Ironclad Trunk Corporation at the close of its first year. From it and the additional notations appended thereto you are asked to furnish:
- (a) Working sheet.
- (b) Balance sheet.
- (c) Income statement.
- (d) Closing journal entries.
Ironclad Trunk Corporation
Trial Balance, October 31, 1913
| Fifth National Bank | $ 7,940.00 | |
| Imprest Cash | 200.00 | |
| Land | 10,000.00 | |
| Buildings | 30,000.00 | |
| Machinery and Tools | 25,000.00 | |
| Materials and Supplies, October 31, 1912 | 9,000.00 | |
| Accounts Receivable | 12,000.00 | |
| Notes Receivable | 10,000.00 | |
| Notes Receivable Discounted | $ 4,000.00 | |
| Advertising Unexpired | 1,000.00 | |
| Insurance Prepaid | 200.00 | |
| Purchases—Material | 108,000.00 | |
| Notes Payable | 18,000.00 | |
| Taxes Accrued | 200.00 | |
| Wages Accrued | 3,400.00 | |
| Returned Sales | 2,200.00 | |
| Returned Purchases | 2,800.00 | |
| Factory Supplies | 2,600.00 | |
| Labor—Direct | 70,000.00 | |
| Superintendence | 4,000.00 | |
| Heat, Light, and Power | 12,000.00 | |
| Miscellaneous Wages—Factory | 3,620.00 | |
| Factory Expense | 400.00 | |
| Accounts Payable | 26,000.00 | |
| Reserve for Depreciation, Buildings | 3,000.00 | |
| Interest Accrued on Notes Payable | 700.00 | |
| Sales | 214,706.00 | |
| Interest on Bank Balances | 46.00 | |
| Freight Inward | 2,770.00 | |
| General Expense | 1,920.00 | |
| Taxes | 350.00 | |
| Rent of Building | 1,000.00 | |
| Reserve for Depreciation, Machinery | 2,500.00 | |
| Salesmen’s Salaries | 4,200.00 | |
| Repairs to Machinery | 630.00 | |
| Reserve for Bad Debts | 1,000.00 | |
| Cash Discount on Purchases | 3,110.00 | |
| Interest Earned | 418.00 | |
| Commissions—Salesmen | 3,600.00 | |
| Office Salaries | 2,800.00 | |
| Insurance | 150.00 | |
| Freight Outward | 1,100.00 | |
| Bad Debts | 1,000.00 | |
| Furniture and Fixtures | 3,700.00 | |
| Authorized Capital Stock—Preferred | 25,000.00 | |
| Authorized Capital Stock—Common | 75,000.00 | |
| Unissued Stock—Preferred | 12,000.00 | |
| Unissued Stock—Common | 20,000.00 | |
| Subscriptions | 4,000.00 | |
| Notes Received—Stock Subscription | 6,000.00 | |
| Bonding Employees—Office | 100.00 | |
| Cash Discount on Sales | 2,300.00 | |
| Depreciation | 5,500.00 | |
| Advertising | 600.00 | |
| $380,880.00 | $380,880.00 |
You are presented with properly certified statements showing the present inventory of materials and supplies to be $16,300; goods in process $1,400; finished goods $9,800, and factory supplies in storeroom $700. It has been estimated that $200 of the freight inward is applicable to the present inventory of materials and supplies. Salesmen have been overpaid $600 on their salary accounts. Items aggregating $400 which have been charged to Expense are found to be on hand. In the customers ledger you find accounts having credit balances amounting to $1,500, and uncollectible accounts to the amount of $710. You decide to write down furniture and fixtures 10%.
Instructions
It will be noted that the trial balance presented indicates that the books have been partially adjusted. The uncollectible accounts of $710 were taken into consideration when the estimate for reserve for doubtful accounts was made. Charge them against the reserve.
IX