InfoAcct 252 Hamilton Semester Project: The Trial Balance

Infoacct 252 Hamiltonsemester Projectm70the Trial Balance For Camp I

Extracted and cleaned assignment instructions: Record July transactions, including journal entries, adjusting entries, and prepare trial balance, balance sheet, income statement, and statement of stockholders' equity for Camp, Inc. for July 2012, based on given trial balance, transactions, and adjustments, following proper accounting principles and procedures.

Paper For Above instruction

Camp, Inc. experienced a series of complex transactions and adjustments during July 2012, necessitating careful recording to accurately reflect its financial position and performance. The company’s accounting activities include asset acquisitions, sales, receivables management, expenses, and adjustments at month-end, culminating in preparing key financial statements.

Initially, on July 1st, Camp, Inc. financed the purchase of equipment worth $12,000 through a combination of cash payment ($2,000) and a 12-month, 8% note payable of $10,000. This transaction increases the Equipment asset account and liabilities, reflecting the company's investment in its operational capacity. The loan terms dictate that interest accrues over the year, requiring the calculation of interest expense accordingly.

Simultaneously, camp collected on an existing notes receivable of $12,000, which originated on January 1st as a 7-month note at 8.5%. The interest accrued monthly during the note’s life must be factored into the collection, resulting in a receivable of this amount at the end of July. This collection enhances cash and reduces notes receivable.

In addition, on July 1st, camp purchased inventory costing $2,500 on account, which will reflect on the trial balance and subsequent income statement as cost of goods sold. The same day, the company made a cash sale of merchandise totaling $4,500, with the inventory costing $1,200, thus recognizing revenue and expenses necessary for calculating gross profit.

The company also declared a cash dividend of $0.75 per share for 800 shares, amounting to $600, payable after month-end. This dividend declaration affects retained earnings and dividends payable in the financial statements.

A unique event occurred on July 9th when Camp, Inc. authorized a write-off of $250 owed by Down the Drain LLC, applying the allowance for doubtful accounts. Additionally, salaries expense was accrued for the period, totaling $3,000, which must be recorded to reflect the company's liabilities accurately.

A significant sale on July 9th involved the disposal of equipment originally purchased for $25,000 three years earlier, with accumulated depreciation of $15,000. The equipment was sold for $15,000—cash of $10,000 and a note receivable of $5,000 with 6 months maturity and 10% interest. Recognizing the gain on disposal adjusts the equipment’s book value and reflects the transaction profit or loss.

Furthermore, on July 15th, camp made a merchandise sale of $5,000 on credit, with terms of 2/10, n/30, and the merchandise had a cost of $2,000. Also, a return of $250 worth of merchandise bought on July 15 occurs, which affects sales revenue, accounts receivable, and inventory.

On July 28th, camp settled an accounts payable of $800, paid cash for additional land, and conducted multiple sales transactions totaling $3,600 in cash, each with proper recognition of inventory and revenue. There was also the purchase of inventory worth $500 on account.

Toward the end of July, the company paid dividends, paid a one-year flood insurance premium of $3,600, and paid off the outstanding accounts payable of July 1, including one month of interest accrued on the note payable. Bank fees of $30 were also paid, and interest received from the checking account was recorded.

At month-end, the company performed several necessary adjusting entries for depreciation and interest accruals. Monthly depreciation was calculated for buildings, vehicles, and equipment using straight-line depreciation methods with specified costs, salvage values, and useful lives. Accrued interest on the long-term note receivable and the note payable was also calculated and recorded. Additionally, at the president’s request, goodwill was adjusted upward from its initial valuation to $20,000 to reflect perceived increased worth.

The preparation of trial balance, financial statements, and detailed ledgers serves as a comprehensive approach to ensuring financial accuracy. These statements include a classified balance sheet detailing assets, liabilities, and equity; an income statement summarizing revenues and expenses; and a statement of stockholders’ equity reflecting changes in capital accounts.

References

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