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P 27-6A Net income $104,845 Work sheet, adjusting entries, and financial statements Herrera Company had the following trial balance columns on its work sheet. Herrera Company Trail Balance December 31, 20— Account Title Debit Balance Credit Balance Cash———————————————————–30,300.00————————————— Government Notes——————————————5,000.00————————————– Interest Receivable——————————————————————————————– Accounts Receivable————————————–34,000.00—————————————- Allowance for Bad Debts——————————————————————-530.00——— Finished Goods Inventory——————————–24,000.00————————————– Work in Process Inventory———————————9,000.00————————————– Materials Inventory——————————————8,500.00————————————– Office-Supplies————————————————3,100.00————————————– Factory Supplies———————————————–3,800.00—————————————- Land———————————————————–100,000.00————————————— Factory Building———————————————120,000.00————————————– Accumulated Depreciation—Factory Building———————————– 10,000.00 Factory Equipment——————————————-40,000.00—————————————— Accumulated Depreciation—Factory Equipment—————————————–5,000.00 Interest Payable—————————————————————————————————– Accounts Payable———————————————————————————13,800.00 Income Tax Payable———————————————————————————————– Bonds Payable————————————————————————————–80,000.00 Capital Stock—————————————————————————————-50,000.00 Paid-In Capital in Excess of Par—————————————————————–30,000.00 Retained Earnings———————————————————————————-92,400.00 Cash Dividends———————————————-30,000.00————————————— Sales———————————————————————————————-405,100.00— Interest Revenue———————————————————————————–300.00— Factory Overhead——————————————-78,630.00—————————————- Cost of Goods Sold—————————————–190,700.00————————————————- Wages Expense———————————————–70,000.00————————————————— Office Supplies Expense——————————————————————————————————- Bad Debit Expense—————————————————————————————————————- Utilities Expense—Office————————————4,400.00——————————————————- Interest Expense———————————————–7,000.00—————————————————— Income Tax Expense—————————————18,000.00——————————————————— ——————————————————————-776,430.00———————776,430.00—————— Data for adjusting the accounts are as follows: a. Factory overhead to be applied to work in process ending inventory $3,100 b. Interest receivable $75 c. Interest payable 600 d. Estimate of uncollectible accounts based on an aging of accounts receivable 2,930 e. Office supplies consumed 2,900 f. Factory supplies consumed 3,300 g. Factory building depreciation 5,000 h. Factory equipment depreciation 4,000 i. Over applied factory 1,470 j. Provision for corporate income taxes 6,100 k. Physical counts of the inventories agreed with the amounts in the books. Additional information needed to prepare the financial statements is as follows: Beginning inventories: Finished goods January 1 $18,000 Work in process, January 1 7,300 Materials inventory, January 1 9,500 Materials purchases for the year 51,500 Direct labor 60,000 Actual factory overhead 90,930 Indirect materials charged to production 3,400 Required: 1. Prepare a work sheet 2. Prepare the following financial statements and schedule: a. Income statement b. Schedule of cost of goods manufactured c. Retained earnings statement d. Balance sheet

P 27-6A Net income $104,845

Work sheet, adjusting entries, and financial statements Herrera Company had the following trial balance columns on its work sheet.

Herrera Company

Trail Balance

December 31, 20—

Account Title Debit Balance Credit Balance

Cash———————————————————–30,300.00—————————————

Government Notes——————————————5,000.00————————————–

Interest Receivable——————————————————————————————–

Accounts Receivable————————————–34,000.00—————————————-

Allowance for Bad Debts——————————————————————-530.00———

Finished Goods Inventory——————————–24,000.00————————————–

Work in Process Inventory———————————9,000.00————————————–

Materials Inventory——————————————8,500.00————————————–

Office-Supplies————————————————3,100.00————————————–

Factory Supplies———————————————–3,800.00—————————————-

Land———————————————————–100,000.00—————————————

Factory Building———————————————120,000.00————————————–

Accumulated Depreciation—Factory Building———————————– 10,000.00

Factory Equipment——————————————-40,000.00——————————————

Accumulated Depreciation—Factory Equipment—————————————–5,000.00

Interest Payable—————————————————————————————————–

Accounts Payable———————————————————————————13,800.00

Income Tax Payable———————————————————————————————–

Bonds Payable————————————————————————————–80,000.00

Capital Stock—————————————————————————————-50,000.00

Paid-In Capital in Excess of Par—————————————————————–30,000.00

Retained Earnings———————————————————————————-92,400.00

Cash Dividends———————————————-30,000.00—————————————

Sales———————————————————————————————-405,100.00—

Interest Revenue———————————————————————————–300.00—

Factory Overhead——————————————-78,630.00—————————————-

Cost of Goods Sold—————————————–190,700.00————————————————-

Wages Expense———————————————–70,000.00—————————————————

Office Supplies Expense——————————————————————————————————-

Bad Debit Expense—————————————————————————————————————-

Utilities Expense—Office————————————4,400.00——————————————————-

Interest Expense———————————————–7,000.00——————————————————

Income Tax Expense—————————————18,000.00———————————————————

——————————————————————-776,430.00———————776,430.00——————

Data for adjusting the accounts are as follows:

a. Factory overhead to be applied to work in process ending inventory $3,100

b. Interest receivable $75

c. Interest payable 600

d. Estimate of uncollectible accounts based on an aging of accounts receivable 2,930

e. Office supplies consumed 2,900

f. Factory supplies consumed 3,300

g. Factory building depreciation 5,000

h. Factory equipment depreciation 4,000

i. Over applied factory 1,470

j. Provision for corporate income taxes 6,100

k. Physical counts of the inventories agreed with the amounts in the books.

Additional information needed to prepare the financial statements is as follows:

Beginning inventories:

Finished goods January 1 $18,000

Work in process, January 1 7,300

Materials inventory, January 1 9,500

Materials purchases for the year 51,500

Direct labor 60,000

Actual factory overhead 90,930

Indirect materials charged to production 3,400

Required:

1. Prepare a work sheet

2. Prepare the following financial statements and schedule:

a. Income statement

b. Schedule of cost of goods manufactured

c. Retained earnings statement

d. Balance sheet

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