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Nordham Corporation’s trial balance at December 31, 2008, is presented below. All 2008 transactions have been recorded except for the items described below and on the next page.
|Allowance for Doubtful Accounts||$ 450|
|Bond Interest Payable||-0-|
|Unearned Rent Revenue||8,000|
|Bonds Payable (10%)||50,000|
|Common Stock ($10 par)||30,000|
|Paid-in Capital in Excess of Par-Common Stock||6,000|
|Preferred Stock ($20 par)||-0-|
|Paid-in Capital in Excess of Par-Preferred Stock||-0-|
|Bad Debts Expense||-0-|
|Bond Interest Expense||2,500|
|Cost of Goods Sold||400,000|
|Other Operating Expenses||39,000|
1. On January 1, 2008, Nordham issued 1,000 shares of $20 par, 6% preferred stock for $22,000.
2. On January 1, 2008, Nordham also issued 1,000 shares of common stock for $23,000.
3. Nordham reacquired 300 shares of its common stock on July 1, 2008, for $49 per share.
4. On December 31, 2008, Nordham declared the annual preferred stock dividend and a $1.50 per share dividend on the outstanding common stock, all payable on January 15, 2009.
5. Nordham estimates that an uncollectible account receivable at year-end is $5,100.
6. The building is being depreciated using the straight-line method over 30 years. The salvage value is $5,000.
7. The equipment is being depreciated using the straight-line method over 10 years. The salvage value is $4,000.
8. The unearned rent was collected on October 1, 2008. It was receipt of 4 months’ rent in advance (October 1, 2008 through January 31, 2009).
9. The 10% bonds payable pay interest every January 1 and July 1. The interest for the 6 months ended December 31, 2008, has not been paid or recorded.
(Ignore income taxes.)
a) Prepare journal entries for the transactions listed above.
b) Prepare an updated Dec 31st trial balance, reflecting the unrecorded transaction
c) Prepare a multiple-step income statement for the year ending Dec 31st
d) Prepare a retained earnings statement for the year ending dec 31
e) Prepare a classified Balance sheet for Dec