(a) Write journal entries to record fully all the above information in the financial books of the corporation.
(b) Prepare the corporation balance sheet for April 30, 1918.
Manufacturing Statement
6. The Marine Equipment Co., a corporation, manufactures metal boats and deals in marine supplies. A trial balance of the general ledger, December 31, 1917, is given below:
| Land | $ 20,000.00 | |
| Buildings | 50,000.00 | |
| Machinery and Tools | 40,000.00 | |
| Automobile Trucks | 5,000.00 | |
| Patents | 7,000.00 | |
| Office Furniture and Fixtures. | 700.00 | |
| Accounts Receivable | 19,000.00 | |
| Notes Receivable | 10,700.00 | |
| Notes Receivable Discounted | $ 6,000.00 | |
| Raw Materials Inventory, January 1, 1917 | 20,000.00 | |
| Goods in Process Inventory, January 1, 1917 | 5,000.00 | |
| Metal Boats Finished Inventory, January 1, 1917 | 8,000.00 | |
| Marine Supplies Inventory, January 1, 1917 | 12,000.00 | |
| Union National Bank | 8,740.00 | |
| Capital Stock | 100,000.00 | |
| Surplus | 18,000.00 | |
| Treasury Stock | 10,000.00 | |
| Bonds Payable, 5% First Mortgage | 40,000.00 | |
| Reserve for Depreciation, Buildings | 1,200.00 | |
| Reserve for Depreciation, Machinery and Tools | 1,000.00 | |
| Reserve for Depreciation, Automobile Trucks | 200.00 | |
| Notes Payable | 2,000.00 | |
| Accounts Payable | 24,000.00 | |
| Purchases, Raw Material | 40,000.00 | |
| Purchases, Marine Supplies | 30,000.00 | |
| Freight Inward, Raw Materials | 2,450.00 | |
| Freight Inward, Marine Supplies | 1,340.00 | |
| Freight and Cartage Outward | 824.00 | |
| Sales, Metal Boats | 131,130.00 | |
| Sales, Marine Supplies | 58,960.00 | |
| Productive Labor | 32,400.00 | |
| Non-Productive Labor | 15,230.00 | |
| Superintendence | 3,420.00 | |
| Heat, Light, and Power | 8,500.00 | |
| Shop Supplies | 2,490.00 | |
| Miscellaneous Factory Expense | 1,300.00 | |
| Insurance | 300.00 | |
| Repairs to Machinery and Tools | 2,146.00 | |
| Taxes | 400.00 | |
| Advertising | 3,420.00 | |
| Returned Sales and Allowances, Metal Boats | 1,200.00 | |
| Returned Sales and Allowances, Marine Supplies | 862.00 | |
| Discount on Sales | 3,710.00 | |
| Discount on Purchases | 5,071.00 | |
| Salesmen’s Salaries | 6,570.00 | |
| Salesmen’s Traveling Expenses | 2,354.00 | |
| Advances to Salesmen | 450.00 | |
| Office Salaries | 8,630.00 | |
| Legal Expense | 540.00 | |
| Stationery and Printing | 1,200.00 | |
| Postage | 190.00 | |
| Interest | 315.00 | |
| Miscellaneous Selling Expense | 1,180.00 | |
| $387,561.00 | $387,561.00 |
Additional information to be considered:
| Inventories, December 31, 1917: | |
| Raw Materials | $21,000.00 |
| Goods in Process | 7,000.00 |
| Metal Boats Finished | 13,000.00 |
| Marine Supplies | 8,000.00 |
| Accrued Items: | |
| Interest on Bonds Payable, 1 year at 5% | $2,000.00 |
| Interest on Notes Payable | 40.00 |
| Interest on Notes Receivable | 75.00 |
| Taxes (estimated) | 100.00 |
Unexpired insurance $100.
Provide for Reserve for depreciation on: buildings, 5% on original value; machinery and tools, 10% on diminishing value; automobile trucks, 20% on diminishing value. Also provide a 2% reserve for bad debts. Write off depreciation of 10% on the original cost of furniture and fixtures. Patents expire 14 years from January 1, 1917. One-half of advertising is to be carried to the next period.
Distribute as follows: