XIII-XIV
The directors of the Ironclad Trunk Corporation, after receiving full authority from the stockholders, set December 31 as the close of the fiscal year, thereby making the present fiscal period fourteen months instead of one year.
From the following trial balance and supplementary data prepare:
- (a) Condensed balance sheet, supported by schedules.
- (b) Condensed income statement, supported by schedules.
Trial Balance, December 31, 1918
| Land Donated | $ 40,000.00 | |
| Buildings | 129,000.00 | |
| Machinery | 47,000.00 | |
| Tools | 4,680.00 | |
| Delivery Equipment | 5,900.00 | |
| Furniture and Fixtures | 2,300.00 | |
| Patents | 108,000.00 | |
| Loans to Employees | 6,320.00 | |
| Dividend No. 6, Cumulative Preferred Stock | ||
| (Payable January 10, 1919) | $ 1,400.00 | |
| Dividend No. 7, Preferred Stock | ||
| (Payable January 10, 1919) | 1,500.00 | |
| Dividend No. 8, Common Stock | ||
| (Payable January 10, 1919) | 3,000.00 | |
| Interest Accrued on Bonds Receivable | 3,200.00 | |
| Freight Inward | 4,334.82 | |
| Freight and Express Outward | 2,613.07 | |
| Royal Leather Preferred Stock (100 shares) | 7,480.00 | |
| Fire Loss | 6,000.00 | |
| Strike Loss | 4,200.00 | |
| Credit Department Expenses | 2,950.40 | |
| Pamphlets, Price Lists, and Posters | 973.00 | |
| Advertising Space Prepaid | 260.00 | |
| Advertising | 731.40 | |
| Directors’ Fees | 200.00 | |
| Entertainment of Customers’ Agents | 174.50 | |
| Charity | 60.00 | |
| Workmen’s Compensation Insurance Premiums | 640.00 | |
| Rent from Houses for Employees | 2,390.00 | |
| Maintenance of Houses for Employees | 318.30 | |
| Watchmen’s Wages | 700.00 | |
| Bonuses Paid to Employees (Direct Labor) | 1,980.10 | |
| Experimental Expense | 2,300.00 | |
| Contingent Royalties Fund | 2,140.00 | |
| Mercantile Agency Reports | 80.00 | |
| Accounting Expense | 500.00 | |
| Legal Expenses | 300.00 | |
| Claims Against Transportation Companies | 3,792.00 | |
| Bright—Special | 14,500.00 | |
| Suspense | 370.00 | |
| Delivery Expense | 1,194.50 | |
| Due to Consignors | 4,387.20 | |
| Imprest Cash | 200.00 | |
| Raw Materials Inventory, October 31, 1917 | 21,304.00 | |
| Trade Customers | 108,946.63 | |
| Finished Goods Inventory, October 31, 1917 | 22,100.00 | |
| Notes Receivable | 18,000.00 | |
| Notes Receivable Discounted | 3,460.00 | |
| Insurance Prepaid | 200.00 | |
| Insurance | 480.00 | |
| Raw Materials Purchases | 240,000.00 | |
| Accrued Office Salaries | 760.40 | |
| Accrued Taxes | 1,220.00 | |
| Accrued Advertising | 190.00 | |
| Sales, Trunks | 416,775.00 | |
| Sales, Bags | 93,518.80 | |
| Returned Sales, Trunks | 1,750.00 | |
| Returned Sales, Bags | 619.00 | |
| Returned Purchases, Raw Material | 2,320.00 | |
| Returned Purchases, Bags | 974.00 | |
| Factory Supplies | 2,436.00 | |
| Labor, Direct | 78,751.20 | |
| Labor, Indirect | 3,497.00 | |
| Factory Superintendence | 3,200.00 | |
| Heat, Light, and Power Service | 7,147.10 | |
| Miscellaneous Factory Expense | 283.14 | |
| Trade Creditors | 40,309.00 | |
| Reserve for Depreciation, Buildings | 13,810.00 | |
| Reserve for Depreciation, Machinery | 18,411.00 | |
| Reserve for Depreciation, Delivery Equipment | 2,300.00 | |
| Reserve for Depreciation, Furniture and Fixtures | 750.00 | |
| Reserve for Expiration of Patents | 21,000.00 | |
| Reserve for Sinking Fund—Bonds of 1933 | 18,128.08 | |
| Reserve for Contingent Royalties | 2,140.00 | |
| Reserve for Supersession of Patents | 20,000.00 | |
| Interest Earned | 7,810.00 | |
| Interest Paid | 11,200.00 | |
| Office Expense | 1,873.38 | |
| Warehouse Labor on Raw Materials | 1,143.26 | |
| Salesmen’s Salaries | 4,500.00 | |
| Salesmen’s Commissions | 12,305.40 | |
| Repairs to Machinery | 1,748.80 | |
| Repairs to Buildings | 3,755.50 | |
| Reserve for Doubtful Accounts | 3,330.70 | |
| Discount on Purchases | 3,751.30 | |
| Discount on Sales | 6,400.00 | |
| Office Salaries | 7,974.00 | |
| Provision for Doubtful Accounts | 2,379.12 | |
| Capital Stock, Cumulative Preferred | 100,000.00 | |
| Capital Stock, Preferred | 50,000.00 | |
| Capital Stock, Common | 200,000.00 | |
| Unissued Stock, Common | 10,000.00 | |
| Treasury Stock, Common | 40,000.00 | |
| Assessment for Street Improvements | ||
| (Donated Land) | 2,000.00 | |
| Bonding Employees—Office | 200.00 | |
| Surplus | 41,394.49 | |
| Drawings and Patterns | 4,606.00 | |
| Mortgage Receivable (due 1923) | 38,000.00 | |
| Accrued Pay-Roll | 957.75 | |
| Reserve for Land Donated | 40,000.00 | |
| Bonds Payable | 100,000.00 | |
| Employees’ Pension Fund | 47,500.00 | |
| Reserve for Employees’ Pension Fund | 47,500.00 | |
| Discount on Bonds Payable | 7,332.33 | |
| Wrapping and Crating Supplies | 1,418.90 | |
| Ralston National Bank | 17,841.53 | |
| Bond Sinking Fund | 18,128.08 | |
| Redemption Fund—Cumulative Preferred Stock | 40,000.00 | |
| Reserve for Redemption of Cumulative | ||
| Preferred Stock | 40,000.00 | |
| Houses and Land for Employees | 24,600.00 | |
| Purchases—Bags | 91,360.00 | |
| Trunks in Process, October 31, 1917 | 4,984.20 | |
| Commissions Earned | 564.80 | |
| Notes Payable | 7,108.00 | |
| Taxes | 1,520.00 | |
| Accrued Interest Receivable | 250.00 | |
| $1,314,143.59 | $1,314,143.59 |
A careful investigation disclosed the following:
Interim dividends had been paid May 15, 1918: No. 5, cumulative preferred stock, $1,400; No. 6, preferred stock, $1,500; No. 7, common stock, $3,000.
The Royal Leather Co. stock now has a market value of $90 per share.
Items to be distributed: