Question

Compute the correct account balances that should be reported in balance sheet and correct amounts of revenues and expenses that should be reported in income statement.

Financial Data of Bob's Bacon House Inc. as of January 1, 20XX

Accounts Payable	200,500
Account Receivable	165,700
Accumulated Depreciation's	350,000
Additional Paid-In Capital	40,000
Allowance for Doubtful Accounts	2,650
Building and Equipment	1,120,000
Cash	45,300
Common Stock	544,850
Copyrights	112,000
Customer Deposits (expected to be paid in 20XX)	375
Goodwill	225,000
Income Taxes Payable	42,340
Inventories @ $25/unit	315,250
Long-term Investments in Warren Co.	95,630
Deposits With Vendors	47,200
Land	125,000
Mortgage Payable ($2,780 per month)	667,200
2% Notes Payable to Banks (due 20XX)	26,000
Notes Receivable (due 20XX)	16,000
Patents	219,335
Retained Earnings	127,500
Trademarks	115,000
Twenty-year, 3% Bonds, Due 1/1/20XX	600,000

Financial Data of Bob's Bacon House Inc. for the Year 20XX

1	Finished Goods inventory purchased from suppliers on account. 2/10/20XX 10,000 units @ $26 each 6/12/20XX 15,000 units @ $28 each 10/23/20XX 12,000 units @ $29 each 11/25/20XX 8,000 units @ $30 each Bob's Bacon House Inc. uses periodic inventory system and LIFO costing method. All purchases and sales are made on account.
2	Payments made to suppliers on account during 20XX are $1,124,450.
3	Sales made to customers on account are 49,356 units @ $36 each.
4	Cash collected from customers during 20XX is $1,750,700.
5	Total interest paid on notes payable and bonds payable amounted to $17,415.
6	Rental income on property leased out is $25,650.
7	Bob's Bacon House Inc. was operating a retail store in Chicago. Original cost of building and equipment was $120,000 with a book value of $95,000. During 20XX, New York Traders disposed of this store at a loss of $35,800.
8	Bob's Bacon House Inc. wants to make an allowance for doubtful debts at 2% on accounts receivable for the year 20XX.
9	Selling and administrative expenses are $128,475. These expenses include $56,000 depreciation expense on building and equipment but exclude bad debts expenses.
10	Income tax expense paid is $90,500. Bob's Bacon House income tax rate for 20XX is 30%.

Answer 1