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I'm having trouble getting my balance sheet to balance and I'm not sure where I went wrong, this is the question: Prepare a single-step income statement and retained earings statement, as well as a balance sheet. Indicate the likely note disclosure for balance sheet items.
Adjusted Trial Balance
31 December 2005
Debit Balance Accounts
Land (used for building site) 129000
Cost of goods sold 150000
Short-term securities 42000
Merchandise Inventory 29000
Office supplies inventory 2000
Operating expenses 55000
Income tax expense 17500
Bond discount (unamortized) 7500
prepaid incurance 900
Building (atcost) 150000
Accrued interest receivable 300
Land (hel for speculation) 75000
Accounts receivable (trade) 22700
Note receivable, 10% (long-term investment) 30000
Subscriber lists (net) 9000
Deferred plant rearrangement costs 26000
Dividends, paid during 2005 15000
Correction of error from prior year-no income tax effect 15000
Credit Balance Accounts
Reserve for bad debts 1100
Accounts payable (trade) 15000
Deferred income tax 47500
Note payable (short term) 12000
Common shares, no par, authorized 50000 shares,
10000 shares outstanding 100000
Reserve for depreciaton, building 90000
Retained earnings, 1 January 2005 188500
Accrued wages 2100
Non-controlling interest (balance sheet account) 10000
Reserve for patent amortization 4000
Cash advance form customer 3000
Accrued property taxes 800
Rent revenue collected in advance 1500
Bonds payable, 11% (25000 due 1 June 2006) 175000
Note Payable (long term) 16000
Additional information ( no accounting erros are involved):
a) The market value of the short-term marketable securities is 44000
b) Merchandise inventory is based on FIFO, lower of cost or market.
c)The patent is being amortized (written off) over a 10-year period. The amortization for 2005 has already been recorded.
d) Operating expenses as given include amortization and interest expense, and revenues include interest and ivestment revenues.
e) The "cas advance form customer" was for a special order that will not be completed and shipped until March 2006; the sales price has not been definitely established because it is to be based on cost (no revenue should be recognized for 2005).
Excel file contains :
1. Single step income statement
2. Retained earnings statement
3. Balance sheet.