Accounting 200: Comprehensive Homework 3 Part 1 - Cohen Fencing Company

Accounting 200 Comprehensive Homework 3 Part 1: At December 31, 2014, Cohen Fencing Company had the following trial balance. Cohen Fencing Company Unadjusted Trial Balance December 31, 2014 Dr Cr Cash 203,203 Accounts Receivable 60,000 Allowance for Doubtful Accounts 600 Short Term Note Receivable 24,000 Interest Receivable Prepaid Insurance 11,000 Supplies 6,000 Inventory 65,000 Equipment 175,000 Accumulated Depreciation 75,000 Copyright 48,000 Accounts Payable 35,000 Wages Payable Interest Payable Bonds Payable 200,000 Premium on Bonds Payable 11,103 Common Stock 90,000 Retained Earnings 5,000 Dividends 5,200 Sales 923,900 Sales Returns & Allowances 4,000 Sales Discounts 9,000 Cost of Goods Sold 375,000 Bad Debts Expense Depreciation Expense Wages Expense 260,000 Rent Expense 65,000 Insurance Expense 16,000 Supplies Expense 7,000 Interest Revenue 800 Interest Expense 9,000 Gain on Sale of Equipment 5,000 Income Tax Expense 4,000 Total $1,346,403 $1,346,403 Information for the necessary adjustments or calculations as of December 31, 2014: 1. The company last received interest on the note receivable on October 30, 2014. Interest will next be paid on April 30, 2015, when the note matures. Record the accrued interest revenue for the last 2 months of 2014. The annual interest rate is 6%. Round to nearest whole dollar. 2. The Equipment was purchased prior to 2014. The company uses the straight-line method, assumed a $5,000 salvage value and an estimated useful life of 10 years. Record depreciation expense for the full year of 2014. 3. The company uses the allowance method to record its uncollectible accounts. The new Chief Financial Officer (CFO) estimated that 3% of Accounts Receivables at December 31, 2014, will be uncollectible. Record the adjusting entry for bad debt expense for 2014. 4. The company issued 8%, 10-year bonds when the market rate for similar investments is 5%. The company pays interest each year on January 1st. Using the effective interest method of amortizing the premium on bonds payable, accrue the interest expense as of December 31, 2014. Round to nearest whole dollar for your interest expense calculation. 5. Employees were last paid on December 24, 2014. Several employees worked through December 31st and wages due but not yet paid are $5,500. These wages will be paid in early January. An adjusting entry needs to be recorded to reflect this liability at Dec 31, 2014. Instructions: You must turn in the work performed on the sheets printed with this page. Your assignment will NOT BE ACCEPTED ON PLAIN PAPER. 1. Write the journal entries required for each of the 5 events described below on the General page provided. Use ONLY the accounts listed on the trial balance for your journal entries. 2. Post the journal entry transactions to individual T-accounts and prepare an adjusted trial balance for The Cohen Fencing Company as of December 31, 2014. Use the space below for T-accounts (REQUIRED FOR GRADING). For each account in the journal entries, you will need to adjust the balance from the unadjusted trial balance with the debit or credit from the journal entry. (You only need to provide T-accounts for those that change)