CP10 Winterschid Company’s trial balance at December 31, 2012

Price: $10


CP10 Winterschid Company’s trial balance at December 31, 2012, is presented below. All 2012
transactions have been recorded except for the items described on page 500.

Debit Credit
Cash $ 28,000
Accounts Receivable 36,800
Notes Receivable 10,000
Interest Receivable –0–
Inventory 36,200
Prepaid Insurance 3,600
Land 20,000
Buildings 150,000
Equipment 60,000
Patents 9,000
Allowance for Doubtful Accounts $ 500
Accumulated Depreciation—Buildings 50,000
Accumulated Depreciation—Equipment 24,000
Accounts Payable 27,300
Salaries and Wages Payable –0–
Unearned Rent Revenue 6,000
Notes Payable (due in 2013) 11,000
Interest Payable –0–
Notes Payable (due after 2013) 35,000
Owner’s Capital 113,600
Owner’s Drawings 12,000

and so on ....

Unrecorded transactions:
1. On May 1, 2012, Winterschid purchased equipment for $13,200 plus sales taxes of $600 (all
paid in cash).
2. On July 1, 2012, Winterschid sold for $3,500 equipment which originally cost $5,000.
Accumulated depreciation on this equipment at January 1, 2012, was $1,800; 2012 depreciation
prior to the sale of the equipment was $450.
3. On December 31, 2012, Winterschid sold for $9,000 on account inventory that cost $6,300.
4. Winterschid estimates that uncollectible accounts receivable at year-end is $4,000.
5. The note receivable is a one-year, 8% note dated April 1, 2012. No interest has been
recorded.
6. The balance in prepaid insurance represents payment of a $3,600 6-month premium on
September 1, 2012.
7. The building is being depreciated using the straight-line method over 30 years. The salvage
value is $30,000.
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, 2012, is being depreciated using the straight-line method
over 5 years, with a salvage value of $1,800.
10. The patent was acquired on January 1, 2012, and has a useful life of 10 years from that date.
11. Unpaid salaries and wages at December 31, 2012, total $2,200.
12. The unearned rent revenue of $6,000 was received on December 1, 2012, for 3 months rent.
13. Both the short-term and long-term notes payable are dated January 1, 2012, and carry a 9%
interest rate. All interest is payable in the next 12 months.

Instructions

(a) Prepare journal entries for the transactions listed above.

(b) Prepare an updated December 31, 2012, trial balance.

(c) Prepare a 2012 income statement and an owner’s equity statement.

(d) Prepare a December 31, 2012, classifi ed balance sheet.