Raymond Companyâs trial balance at December 31, 2014
Raymond Companyâs trial balance at December 31, 2014, is presented below. All 2014 transactions have been recorded except for the items described shown below.DebitCreditCash$28,000Accounts receivable36,000Notes receivable10,000Interest receivable0Inventory36,200Prepaid insurance4,400Land20,000Buildings160,000Equipment60,000Patents8,000Allowances for doubtful accounts300Accumulated depreciation-Buildings49,000Accumulated depreciation-Equipment24,000Accounts payable28,300Income taxes payable0Salaries and wages payable0Unearned rent revenue6,000Notes payable(due in 2015)11,000Interest payable0Notes payable (due after 2015)35,000Common stock50,000Retained earnings63,000Dividends12,000Sales revenue910,000Interest revenue0Rent revenue0Gain on disposal of plant assets0Bad debt expense0Cost of goods sold630,000…….and so on……..1. On May 1, 2014, Raymond purchased equipment for $13,000 plus sales taxes of $780 (all paid in cash).2. On July 1, 2014, Raymond sold for $3,500 equipment which originally cost $5,000.Accumulated depreciation on this equipment at January 1, 2014, was $1,800; 2014 depreciation prior to the sale of the equipment was $450.3. On December 31, 2014, Raymond sold for $9,400 on account inventory that cost $6,600.4. Raymond estimates that uncollectible accounts receivable at year-end is $4,000.5. The note receivable is a one-year, 8% note dated April 1, 2014. No interest has been recorded.6. The balance in prepaid insurance represents payment of a $4,400 6-month premium on October 1, 2014.7. The building is being depreciated using the straight-line method over 40 years. The salvage value is $20,000.8. The equipment owned prior to this year is being depreciated using the straight-line method over 5 years. The salvage value is 10% of cost.9. The equipment purchased on May 1, 2014, is being depreciated using the straight-line method over 5 years, with a salvage value of $1,000.10. The patent was acquired on January 1, 2014, and has a useful life of 10 years from that date.11. Unpaid salaries and wages at December 31, 2014, total $2,200.12. The unearned rent revenue of $6,000 was received on December 1, 2014, for 4 months rent.13. Both the short-term and long-term notes payable are dated January 1, 2014, and carry a 9% interest rate. All interest is payable in the next 12 months.14. Income tax expense was $17,000. It was unpaid at December 31.Instructions(a) Prepare journal entries for the transactions listed above.(b) Prepare an updated December 31, 2014, trial balance.(c) Prepare a 2014 income statement and a 2014 retained earnings statement.(d) Prepare a December 31, 2014, classified balance sheet.