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    Prepare entries for each event balance sheet

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    The 2012 balance sheet of the Blackberry Mountain Inc. is attached. During 2013, the following events occurred.
    1. Paid cash $36,000 in advance for 3 years' rent of office on January 1.
    2. On January 1, purchased 50 personal computers at a cost of $1,500 each, paying cash upon delivery.
    3. On January 14, paid employees $5,560 which was earned and payable at the end of last year.
    4. On February 10, Purchased merchandise on account from Texas Star Supply Co. $78,000, term 1/10, n/30. Assume the company used the periodic inventory system.
    5. Purchased merchandise from Louisiana Gumbo Inc. and paid cash $82,000 on February 12.
    6. On February 15, sold merchandise to Titan Inc. and received cash $42,000.
    7. Paid off the balance to Texas Star Supply Co. on February 18.
    8. On March 10, sold merchandise to Waco Trading Co. on account $130,000, term 2/10, n/30. Freight $1,200, F.O.B. destination.
    9. On April 1, a tract of land was purchased for $40,000 and cash was paid.
    10. Waco Trading Co. paid off its balance on April 5.
    11. An additional $200,000 in common stock was issued at par on May 1.
    12. Cash dividends totaling $10,000 were declared on June 13 and paid to stockholders on July 5.
    13. On July 1, another land was purchased through the issuance of $80,000 in additional bonds (five year, interest rate 8%, paying interest semiannually on Jan. 1 and July 1.).
    14. On July 30, the company paid the utilities expenses $10,208 in cash.
    15. On August 1, sold merchandise to Tyler Exporting Inc. on account $200,000, term 1/10, n/30. Freight $1,500, F.O.B. shipping point.
    16. Tyler Exporting Inc. paid off half of the balance on August 10.
    17. On August 15, write off $1,350 bad debt for one account, Irvine Trading, LLC.
    18. Tyler Exporting Inc. paid off the rest of its balance on August 30.
    19. On September 1, pay cash $97,532 to Laredo Supply Co. for merchandise purchased last year.
    20. Paid off bank loans $80,000 and accrued interest $6,000 on October 1.
    21. Over the year, sales and office employees earned $98,900 in salaries and wages, of which $3,000 was still payable at the end of year.
    22. An unpaid utilities bill (December, $1,292) is due on January 10 next year.
    Additional Information at the end of the year:
    1. Depreciation expense for the year was $24,350.
    2. The company estimated that it has to pay federal income tax, $13,290.
    3. After physically counting, the company decided that the ending inventories worth $455,113.
    4. Based on its historical data, the company estimated that the bad debts were about 1% of credit sales.
    5. The company used the gross method to record its purchases and sales on credit.

    Instructions:
    1. Prepare journal entries for each event.
    2. Prepare adjusting entries.
    3. Prepare adjusted trial balance.

    4. Prepare Income Statement, Balance Sheet, and Statement of Cash Flows.
    5. Prepare closing entries.

    BLACKBERRY MOUNTAIN INC.
    BALANCE SHEET
    DECEMBER 31, 2012
    Current Assets
    Cash
    62,485
    Short-term Investments
    51,030
    Accounts Receivable
    165,824
    Less: Allowance for Doubtful Accounts
    (1,850)
    Prepaid expenses
    16,252
    Inventories
    489,713
    Total Current Assets
    783,454
    Non-Current Assets
    Long-term Investments
    Investments in held-for-maturity securities
    82,000
    Land held for future development
    5,500
    Property, Plant, and Equipment
    Land
    125,000
    Buildings
    975,800
    Less: Accumulated Depreciation
    (341,200)
    Intangible Assets
    Capitalized Development Costs
    6,000
    Goodwill
    66,000
    Other Identifiable Intangible Assets
    28,000
    Total Non-Current Assets
    947,100
    Total Assets
    1,730,554
    Current Liabilities
    Deposit Received from Customers
    4,380
    Provisions Related to Warranties
    12,500
    Salary and Wages Payable
    5,560
    Interest Payable
    20,500
    Accounts Payable
    197,532
    Notes Payable
    80,000
    Total Current Liabilities
    320,472
    Non-Current Liabilities
    Provisions Related to Pensions
    75,000
    Bonds Payable
    425,000
    Total Non-Current Liabilities
    500,000
    Total Liabilities
    820,472
    Stockholders' Equity
    Common Stock
    400,000
    Preferred Stock
    300,000
    Paid-in-capital - Common Stock
    27,500
    Paid-in-capital - Preferred Stock
    10,000
    Retained Earnings
    180,482
    Accumulated Other Comprehensive Income
    4,850
    Less: Treasury Stock
    (12,750)
    Total Stockholders' Equity
    910,082
    Total Liabilities and Stockholders' Equity
    1,730,554

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    https://brainmass.com/business/financial-statements/prepare-entries-each-event-balance-sheet-456533

    Solution Summary

    The expert prepares entries for each event balance sheets, adjusting entries, adjusted trial balance income statement, balance sheet, statement of cash flows and closing entries

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