Reference no: EM131006821

Question 1:

Berry Corporation prepared the following preliminary trial balance. The trial balance and other information was evaluated by Delton Wiser, CPA. Delton has returned a list of proposed adjustments that are necessary to facilitate preparation of correct financial statements for the year ending December 31, 20X3.

BERRY CORPORATION
Trial Balance
December 31, 20X3
		Debits		Credits
	Cash	$       30,540		$                -
	Accounts receivable	45,000		-
	Supplies	7,000		-
	Equipment	244,500		-
	Accumulated depreciation	-		46,500
	Accounts payable	-		12,700
	Unearned revenue	-		31,250
	Notes payable	-		80,000
	Capital stock	-		100,000
	Retained earnings, Jan. 1	-		63,200
	Dividends	12,000		-
	Revenues	-		289,800
	Wages expense	214,600		-
	Utilities expense	8,700		-
	Selling expense	41,610		-
	Depreciation expense	12,000		-
	Interest expense	7,500		-
		$      623,450		$      623,450

Delton discovered that 40% of the unearned revenue appearing in the trial balance had actually been earned as of the end of the year.

A physical count of supplies on hand revealed a year-end balance of only $3,000.

Unpaid and unrecorded invoices for utilities for December amounted to $1,500.

The last payday was December 26. Employees are owed an additional $3,900 that has not been recorded.

Additional depreciation of $3,100 needs to be recorded.

(a) Prepare journal entries relating to the adjustments.

(b) Prepare an adjusted trial balance (you might utilize a partial worksheet for this task, as shown in the downloadable form).

(c) Prepare an income statement and statement of retained earnings for 20X3, and a classified balance sheet as of the end of the year.

(d) Berry's bookkeeper argued with Delton that there was no need to record the adjustments since they have no "net" effect on income. Evaluate whether this observation is true of false, and comment on the appropriateness of this logic.

Question 2:

Use this randomly arranged data to prepare a classified balance sheet for Imamani Corporation as of December 31, 20X5. Some of the accounts do not belong in the balance sheet, and 20% of the loan payable matures each June 30.

Capital Stock	$ 755,000
Patent	275,000
Accumulated depreciation (equipment)	(477,654)
Building	1,990,776
Land held for speculation	156,098
Dividends	50,000
Cash	182,345
Retained earnings	646,992
Accounts receivable	56,766
Accounts payable	78,011
Income tax expense	123,334
Prepaid insurance	3,883
Accumulated depreciation (building)	(988,777)
Loan payable	1,000,000
Equipment	887,885
Land	278,790
Interest payable	31,117
Inventories	121,008
Cash value of life insurance	25,000

Attachment:- Assignment.rar