Cash$11,350 Accounts Receivable57,050 Allowance for Doubtful Accounts $745Fair Value – NI Investments8,850Inventory55,600 Prepaid Insurance2,912 Prepaid Rent13,440 Fair Value – OCI Investments14,700Bond Investment at Amortized Cost20,000 Land10,950 Equipment105,500 Accumulated Depreciation—Equipment 17,000Accounts Payable 6,900Bonds Payable 60,000Common Shares 102,100Retained Earnings 99,682Sales Revenue 221,900Rent Revenue 10,380Purchases169,000 Purchase Discounts 2,050Freight-out8,500 Freight-in3,000 Salaries and Wages Expense34,000 Interest Expense5,100 Miscellaneous Expense805 $520,757$520,757
1.On November 1, 2017, Sarasota received $10,380 rent from its lessee for a 12-month lease beginning on that date. This was credited to Rent Revenue.2.Sarasota estimates that 5% of the Accounts Receivable balances on December 31, 2017, will be uncollectible. On December 28, 2017, the bookkeeper incorrectly credited Sales Revenue for a receipt of $1,050 on account. This error had not yet been corrected on December 31.3.After a physical count, inventory on hand at December 31, 2017, was $78,500. (Use “Inventory” account for closing out the beginning inventory amount and recording the ending inventory amount.)
4.Prepaid insurance contains the premium costs of two policies: Policy A, cost of $1,368, two-year term, taken out on April 1, 2017; Policy B, cost of $1,544, three-year term, taken out on September 1, 2017.5.The regular rate of depreciation is 10% of cost per year. Acquisitions and retirements during a year are depreciated at half this rate. There were no retirements during the year. On December 31, 2016, the balance of Equipment was $85,000.6.On April 1, 2017, Sarasota issued at par value 60 $1,000, 12% bonds maturing on April 1, 2020. Interest is paid on April 1 and October 1.7.On August 1, 2017, Sarasota purchased at par value 20 $1,000, 10% Metlock, Inc. bonds, maturing on July 31, 2019. Interest is paid on July 31 and January 31.8.On May 30, 2017, Sarasota rented a warehouse for $1,120 per month and debited Prepaid Rent for an advance payment of $13,440.9.Sarasota’s FV-NI investments consist of shares with total market value of $9,380 as at December 31, 2017.10.The FV-OCI investment is an investment of 465 shares in Yop Inc., with current market value of $25 per share as of December 31, 2017.
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