Hiatt Corporation?s statement of financial position at December 31, 2010, is presented below.
During 2011, the following transactions occurred.
1. On January 1.2011, Hiatt issued 1,500 shares of £20 par, 7% preference shares for £33,000.
2. On January 1, 2011, Hiatt also issued 900 shares of the £10 par value ordinary shares for £21,000.
3. Hiatt performed services for £280,000 on account.
4. On April 1, 2011, Hiatt collected fees of £36,000 in advance for services to be performed from April 1, 2011, to March 31, 2012.
5. Hiatt collected £267,000 from customers on account.
6. Hiatt bought £35,100 of supplies on account.
7. Hiatt paid £32,200 on accounts payable.
8. Hiatt reacquired 400 of its ordinary shares on June 1, 2011, for £38 per share.
9. Paid other operating expenses of £188,200.
10. On December 31, 2011, Hiatt declared the annual preference dividend and a £1.20 per share dividend on the outstanding ordinary shares, all payable on January 15, 2012.
11. An account receivable of £1,300, which originated in 2010, is written off as uncollectible.
1. A count of supplies indicates that £5,900 of supplies remain unused at year-end.
2. Recorded revenue earned from item 4 above.
3. The allowance for doubtful accounts should have a balance of £3,500 at year end.
4. Depreciation is recorded on the building on a straight-line basis based on a 30-year life and a salvage value of £10,000.
5. The income tax rate is 30%.
(You may want to set up T accounts to determine ending balances.)
(a) Prepare journal entries for the transactions listed above and adjusting entries.
(b) Prepare an adjusted trial balance at December 31, 201.
(c) Prepare an income statement and a retained earnings statement for the year ending December 31, 2011, and a classified statement of financial position as of December 31,2011.
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