Roxy & HarleyCorporation
Unadjusted Balances
12/31/2016
Debit
Credit
101
Cash
$ 850,000
102
Cash Equivalents
$ 76,000
301
Common Stock ($10 par)
$ 1,470,000
103
Accounts Receivable
$ 1,650,000
131
Goodwill
$ 350,000
125
Investments
$ 1,351,735
602
Bad debts expenses
$ 0
122
Building
$ 1,750,000
613
Telephone Expense
$ 40,398
617
Research & Development
$ 580,000
601
Office Expenses
$ 430,000
107
Other Current Assets
$ 51,063
121
Equipment
$ 974,000
618
Insurance Expense
$ 170,000
620
Payroll taxes Expense
$ 336,975
204
Payroll taxes payable
$ 36000
608
Office Wages Expense
$ 800,000
132
Other Intangible Assets
$ 500,000
310
Dividends
$ 100,000
123
Land
$ 620,000
106
Prepaid expenses
$ 245,186
614
Utilities Expenses
$ 156,000
615
Wages Expense
$ 1,924,000
616
Travel & Entertainment Expense
$ 440,000
105
Inventory
$ 2,750,000
315
Treasury Stock
$ 500,000
404
Sales Discounts
$ 539,000
420
Investment Income
$ 56,580
421
Gain/Loss on Disposal
205
Interest Payable
$ 25,100
619
Income Tax Expense
210
Income Tax payable
104
Allowance for Doubtful Accounts
$ 50,000
612
Dues and subscriptions Expense
$ 45,920
695
Interest Expense
$ 95,000
501
Cost of Goods Sold
$ 10,200,000
607
Legal Fees
$ 410,000
124
Accumulated Depreciation
$ 915,000
609
Accounting Consultants
$ 200,000
610
Property Taxes
$ 215,662
611
Maintenance Expense
$ 85,000
221
Long Term Liabilities
$ 1,377,000
207
Unearned Revenue
$ 375,000
401
Product Sales Revenue
$ 18,561,346
402
Service Revenue
$ 3,085,356
302
Paid-in Capital Common Stock
$ 315,000
201
Accounts Payable
$ 2,289,850
604
Advertising Expense
$ 337,000
605
Depreciation Expense
320
Retained Earnings
$ 739,400
603
Equipment Repair Expense
$ 300,000
206
Dividends Payable
$ 100,000
403
Sales Returns
$ 325,000
202
Wages Payable
$ 160,000
699
Miscellaneous Expense
$ 157,693
Totals
$ 29,555,632
$ 29,555,632
625
Compensated Absence Expense
212
Compensated Absence Payable
1. $300,000 in sales on account had not been recorded but wereshipped FOB Shipping Point on December 31. The cost of thisinventory was $140,000. Roxy and Harley uses a perpetual inventorysystem.
2. Employees are allowed to carry over up to 10 days of earnedvacation days per year up to 40 days. Employees earn an average of$190 per day. A total of 1,000 earned vacation days will be carriedover to 2017. It is probable that the employees will take thevacation days.
3. Income tax expense is 30% of income before income tax.
4. The Research and Development account includes current yearcosts of $380,000 and R& D Equipment with a cost of $200,000and an estimated useful life of 10 years.
5. You discover that a product sale was made and recorded inDecember for $100,000; the product had not yet been shipped. Thecost of the product was $58,000.
6. The Prepaid Expense account balance includes the $300,000cost of a two year insurance policy purchased on April 1, 2016.
7. Depreciation & Amortization expense for the year is$275,000
8. Interest expense accrued on its long-term liabilities is$82,620.
9. A dividend of $147,000 was declared on December 16, to bepaid on January 15, 2017
10. It is estimated that 6% of accounts receivable will beuncollectable.
INSTRUCTIONS:
A. Correct the trial balance by putting the accounts in thetypical account number order
B. Record the adjusting journal entries
C. Compute the adjusted trial balance amounts
D. Prepare in good form: a. Income Statement b. Balance Sheet c.Retained Earnings Statement
E. Compute the following ratios: Current Ratio, Profit Margin onSales, Debt to Assets, Earnings per Share, and Book Value per shareF. Record Closing Entries
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