1.) Below are several accounts from a company’s trial balance at year end December 31:


Sales Revenue 44,000 Accounts Receivable 8,200
Accounts Payable 1,500 Rent Expenses 2,100
Cash 5,600 Prepaid Rent 1,500
Salaries Expense 2,900 Salaries Payable 800
Dividends 4,000 Utilities Expense 3,600
Depreciation Expense 1,000 Supplies 900
Supplies Expense 2,200 Interest Revenue 200
Cost of Goods Sold 28,000
Retained Earnings, Jan 1 10,000

-Prepare all necessary year-end closing entries
-Why are these closing entries necessary


2.) A company lost its entire inventory in a fire. Some accounting records were recovered but the perpetual inventory records were destroyed. Over the past three years the company’s average gross profit ratio has been 40%. The following information for the current period was obtained from the accounting records:
- Determine the estimated cost of the inventory lost in the fire, showing the calculations
- Assume the estimated value of the inventory was $67,800 and the company received $50,000 from the insurance company in a settlement. Prepare the required journal entry
- A company issues 10-year bonds with a par value of $20,000,000 and an 8% annual face on January 2, 2008. The issue price of the bond issue was $19,866,397 which reflected and 8.1% effective interest rate. A.) Prepare the journal entry to record the issuance of the bonds and B) Give the journal entry to record the recognition of interest expense at December 31, 2008. Any premium or discount should be amortized using the effective interest rate method.

3.) A company completed the following purchase transactions during April. Credit terms for all purchases are 1/10, n/30. The company uses the periodic inventory system.

April 1 Purchased merchandise on credit for $7,000
April 30 Paid for the April 1 purchase

-Prepare the required journal entries


4.) Several years ago a company purchased a patent and has since been amortizing it on a straight line basis over its estimated useful life. The company’s comparative balance sheets contain the following items:
December 31, 2008 December 31, 2007

Patent, less accumulated
Amortization of $70,000
(2008) and $52,500 (2007) $280,000 $297,500

- How much amortization expense was recorded during 2008? Show calculations please.


5.) Callaco Cars started the year with total assests of $400,000 and total liabilities of $185,000. Net income for the year is $65,000, and dividends declared and paid during the year are $20,000. What is the amount of Callaco’s total stockholders’ equity at the end of the year. Show calculations please

Do your work first, then if you have a specific question we will try to help you.

Very big problem. Answer to 1) First try to make trial balance.
Then Debit all income and credit to income summary,
Debit income summary and credit to all expense account,
The balance need to be transferred to income summary account to retained earnings i.e there is excess credit balance of income summary(i.e profit),it will be debited to income summary and credited to retained earnings and vice-versa.
Answer to 2) Cost of goods sold $17800
Claim from insurance Co. 50000
Inventory $67800
(To record loss on fire and insurance claim) to be continued next please ask single questions.