Question

Problem:

Rockford Corporation is a wholesale plumbing supply distributor. The corporation was organized in 1981, under the laws of the State of Illinois, with an authorized capitalization of 10,000 shares of no-par common stock with a stated value of $30 per share. The common stock is sold over the counter in the local area. You have been hired as of Friday, December 26, 2014, to replace the controller, who has resigned. As controller, you are responsible for the corporation’s accounting records, preparation of the financial statements, safeguarding the corporate assets, and providing management with financial information to set prices and to monitor and control operations. You have an assistant who keeps the payroll records, the plant asset ledger, and the perpetual inventory. There is an inventory subsidiary ledger that is posted to daily for purchases and sales. This ledger is not included in this practice set. The corporation secretary maintains the stockholder records, and the receptionist/secretary acts as the petty cashier.

Rockford Corporation closes its books annually on December 31 but prepares financial statements quarterly. Adjusting entries are posted to the general ledger only at year-end; at the end of the first, second, and third quarter the adjustments are entered only on a ten-column work sheet, not in the general ledger. Therefore, the adjusting entries to be recorded on December 31 are annual adjustments that you must journalize and then post to the general ledger accounts before preparing the financial statements.

Rockford Corporation maintains a perpetual inventory system and takes a physical count each year to adjust the inventory carrying amount. Purchases are recorded at the gross amount (discounts taken are recognized at the date of payment) of the supplier’s invoice, and the terms vary with each supplier. Sales on account are subject to terms of 2/10, n/30. Discounts are taken and granted only when the terms are met. The cost of all inventory sold in December was 80% of the sales price. The corporation uses the following journals and ledgers:

JOURNALS

A sales journal (S)–to record sales of merchandise on account.
A purchases journal (P)–to record purchases of merchandise on account.
A cash receipts journal (CR)–to record all cash receipts.
A cash disbursements journal (CD)–to record all cash payments.
A general journal (J)–to record all transactions that cannot be recorded in the other journals.

LEDGERS

A general ledger.
An accounts receivable subsidiary ledger.
An accounts payable subsidiary ledger.

In recording sales transactions, each sale should be posted on the day of the sale directly to the customer’s account in the subsidiary ledger, using the invoice number as the posting reference number in the subsidiary account. Also, cash receipts from customers should be posted to the subsidiary ledger on the day they are received. The purchase order number should be used as the posting reference number in the subsidiary ledger for purchases on account from suppliers. Purchases from suppliers and payments to them should be posted daily. All other individual posting may be made weekly or at the month-end. Account numbers should be used as posting reference numbers in the journals.

Officers and office personnel are salaried employees and are paid monthly on the last day of each month. The delivery truck drivers and warehouse employees are hourly wage employees and are paid biweekly. Each biweekly pay period ends Friday. On the following Monday your assistant, who maintains the payroll records, provides you with a payroll summary from which you prepare general journal entries to record the biweekly payroll and the employer’s taxes on the payroll. The biweekly employees’ paychecks are distributed on the following day (Tuesday).

The January 1, 2014, balances appear in the general ledger accounts as well as the November 30, 2014, balances, for those accounts whose balances have changed. All transactions affecting the noncurrent accounts from January 1, 2014, through November 30, 2014, with explanations, appear in these accounts to facilitate the preparation of the statement of cash flows.

Subsidiary ledger account balances as of November 30, 2014, are as follows (the balances appear in the appropriate subsidiary ledger accounts):

Boecker Builders $62,920
The Potts Company 50,300
Swanson Brothers Construction 24,050
Trudy’s Plumbing 15,100
Coconino Contractors, Inc. 27,800
Rankin Plumbing Corp. 74,350
Beverly’s Building Products 14,000
Bilder Construction Company 45,200
Iwanaga Plumbing and Heating 3,700
Total accounts receivable $317,420

Accounts Receivable

Accounts Payable

Phoenix Plastics $17,450
Edward’s Plumbing Supplies, Inc. 20,050
Oxenford Copperworks 26,400
Smith Pipe Company 38,100
Ron & Rod’s Plumbing Products 14,850
Khatan Steel Corp. 10,000
Total accounts payable $126,850

The transactions through December 23 have already been recorded by the former controller. You are to begin your work by entering the transaction of December 26 for the payment of cash to repurchase stock.

December 1 Received a check in the amount of $23,569 from Swanson Brothers Construction in full payment of invoice No. 1120 dated November 26 in the amount of $24,050.
1 Sold sewer and drainage pipe to Beverly’s Building Products on account, invoice No. 1201 for $13,150.
2 Purchased copper tubing and fittings from Edward’s Plumbing Supplies Inc. on account, purchase order No. 315 for $24,320, terms n/60.
2 Issued check No. 1580 for $26,400 to Oxenford Copperworks in settlement of the balance owed on purchase order No. 280.
3 A court notice indicates that Iwanaga Plumbing and Heating is bankrupt and payment of its account improbable; the president orders the account to be written off as a bad debt (invoice No. 780).
3 Sold bathroom fixtures to Bilder Construction Company on account, invoice No.1202 for $44,900.
4 Received a check in the amount of $49,294 from The Potts Company in full payment of invoice No. 1128 dated November 27 for $50,300.
4 Sold plumbing supplies and plastic pipe to Coconino Contractors, Inc. on account, invoice No. 1203 for $10,300.
4 Issued check No. 1581 for $810 to Standard Oil Co. in payment of gas, oil, and truck repair from Tierney’s Standard Service.
5 Issued check No. 1582 for $9,900 to Khatan Steel Corp. in full settlement of purchase order No. 312 for $10,000.
5 Issued check No. 1583 for $10,486 to Phoenix Plastics in full payment of Phoenix’s invoice dated November 28 in the amount of $10,700, for purchase order No. 313, terms 2/10, n/30.
5 Received a check in the amount of $72,863 from Rankin Plumbing Corp. in full payment of invoice No. 1129 dated November 28 for $74,350.
8 Sold cast pipe to Trudy’s Plumbing on account, invoice No. 1204 for $29,300.
8 Received a check in the amount of $27,800 from Coconino Contractors, Inc. in full payment of invoice No. 1091 dated October 20.
8 Purchased bathroom fixtures from Phoenix Plastics, on account, purchase order No. 316 for $52,700 terms 1/10, n/30.
8 Received a check in the amount of $29,000 from Boecker Builders in partial payment of balance outstanding covering invoice Nos. 1050 and 1071.
9 The payroll summary for the biweekly pay period ended Friday, December 5 contained the following information:

Delivery and warehouse wages.............................. $4,860
FICA taxes withheld ................................................ 350
Federal income taxes withheld .............................. 900
State income taxes withheld .................................. 190
Net pay.............................................................. $3,420
Employer’s payroll taxes:
FICA tax ............................................................ $350
Federal unemployment tax..............................
-
State unemployment tax ..................................
-

Issued check No. 1584 for the amount of the net pay and deposited it in the payroll bank account. Individual payroll checks were then prepared for distribution to the biweekly employees on Tuesday, December 9.
9 Issued check No. 1585 for $600 to Scooter Gordon for lettering and sign painting on some delivery trucks.
9 Issued check No. 1586 for $6,750 to Phoenix Plastics, in payment of Phoenix’s invoice dated November 12 in the amount of $6,750, our purchase order No. 299.
10 Issued check No. 1587 for $37,719 to Smith Pipe Company in full payment of their invoice dated November 28, terms 1/15, n/60, our purchase order No. 314.
10 Received a check in the amount of $15,100 from Trudy’s Plumbing in full settlement of invoice No. 1106 dated November 7.
10 Sold pipe, fixtures, and accessories to Trudy’s Plumbing on account, invoice No. 1205 for $28,850.
11 Sold plumbing supplies and copper tubing to The Potts Company on account, invoice No. 1206 for $31,450
11 Received a check in the amount of $33,920 from Boecker Builders in full payment of invoice No. 1071.
11 Cash sales to date totaled $12,292.
12 Received a check in the amount of $28,714 from Trudy’s Plumbing in payment of invoice No. 1204.
12 Sold plumbing fixtures and supplies to Boecker Builders, on account, invoice No. 1207 for $24,730.
15 The Potts Company returned defective copper tubing that it purchased on December 10. A credit memo in the amount of $4,680 is issued relative to invoice No. 1206. The copper tubing had a cost of $3,550.
15 The defective copper tubing is returned to Edward’s Plumbing Supplies, Inc. along with a debit memo in the amount of $3,550 in reduction of purchase order No. 315.
15 Issued check No. 1588 for $399 in payment of November telephone bill to Northern Illinois Communications.
16 Issued check No. 1589 in the amount of $11,360 in payment of federal withholding taxes, $9,573, and FICA taxes, $1,787, payable on November salaries and wages; the check is remitted to the Winnebago County Bank as the depository.
16 Issued check No. 1590 for $52,173 to Phoenix Plastics, Inc. in payment of purchase order No. 316.
17 The president informs you that Bilder Construction Company agrees to convert the $45,200 overdue account receivable (invoice No. 1120) to a 14% note due six months from today.
17 Purchased plumbing materials from Smith Pipe Company on account, purchase order No. 317 for $50,800 terms 1/15, n/60.
17 Sold drain tile, plastic pipe, and copper tubing to A & B Hardware on account, invoice No. 1208 for $7,920.
18 Sold fixtures and materials to Coconino Contractors, Inc. on account, invoice No. 1209 for $42,780.
18 An invoice in the amount of $1,021 was received from S. White Trucking Company for freight on purchase order No. 317 and paid by issuing check No. 1591.
18 Received a check in the amount of $28,273 from Trudy’s Plumbing in payment of invoice No. 1205.
19 Purchased office supplies from the Pen & Pad, issuing check No. 1592 in the amount of $1,360. (Note: Debit asset account).
19 Purchased a new Faith computer for $6,100 from Business Basics, Inc., purchase order No. 318, paying $600 down through Check No. 1593 with the balance due in thirty days (n/30). The computer has an estimated life of five years with a salvage value of $1,300. Use subsidiary account No. 16. Journalize the entire entry in the cash disbursements journal.
22 Purchased bathroom and kitchen fixtures from Phoenix Plastics, on account, purchase order No. 319 for $48,330, terms 1/10, n/30.
22 Received a bill from DeKalb Transport for $2,300 for freight costs incurred during the last 30 days, terms n/30.
23 The payroll summary for the biweekly pay period ended Friday, December 19, contained the following information:

Delivery and warehouse wages..............................
$5,770
FICA taxes withheld ................................................
415
Federal income taxes withheld ..............................
1,067
State income taxes withheld .................................. 225
Net pay.............................................................. $4,063
Employer’s payroll taxes:
FICA tax ............................................................
$ 415
Federal unemployment tax..............................
-
State unemployment tax ..................................
-

Issued check No. 1594 for the amount of the net pay and deposited it in the payroll bank account. Individual payroll checks were then prepared for distribution to the biweekly employees on Tuesday, December 23.
NOTE: Transactions up to this point have been recorded. At this point you became controller and are responsible for recording all further transactions.
26 The board of directors voted to purchase 1,000 shares of its own stock from stockholder Dionne Schivone at $83 per share and issued check No. 1595 in payment. Stock repurchases are recorded at cost. Rockford is purchasing these shares because Ms. Schivone had been a valuable employee.
26 The board of directors declared a $1.80 per-share cash dividend payable on January 14 to stockholders of record on December 26 (after purchase of stock). Opening balance in Treasury Stock account of $42,610 on January 1, 2014 is reflecting cost of 700 shares.
26 The president informs you that Beverly’s Building Products agrees to convert the $14,000 overdue accounts receivable (invoice No. 1119) balance to a 12% note due six months from today.
29 A half-acre parcel of land adjacent to the building is acquired in exchange for 600 shares of unissued common stock. The land has a fair value of $54,000 and will be used immediately as an outside storage lot and parking lot.
29 An invoice in the amount of $2,650 is received from Wayne McManus, lawyer, for legal services involved in the acquisition of the adjacent parcel of land; check No. 1596 is issued in payment.
29 Sold pipe and plumbing materials to Boecker Builders on account, invoice No. 1210 for $49,040.
30 Issued check No. 1597 in the amount of $500 to the Northern Star for advertisement run in the home building supplement of December 13.
30 Issued check No. 1598 in the amount of $925 to Standard Oil Co. in payment of gas, oil, and truck repairs from Standard Oil Co. (use Freight-out).
30 Purchased copper and cast iron pipe from Oxenford Copperworks on account, purchase order No. 320 for $63,940, terms 1/10, n/30.
30 Check No. 1599 for $15,000 is issued to the bond sinking fund trustee, Chicago Trust Co., for deposit in the sinking fund. (Use Other Assets).
30 Sold plumbing supplies to Swanson Brothers Construction on account, invoice No. 1211 for $24,650.
31 Received a check for $24,730 from Boecker Builders in payment of invoice No. 1207.
31 Issued check No. 1600 for $50,292 to Smith Pipe Company in payment of purchase order No. 317.
31 The custodian of the petty cash fund submits the following receipts for reimbursement and reports a cash-on-hand count of $8.

Postage stamps used .............................................. $68
United Parcel (freight-out) .................................... 23
C.O.D. postage (freight costs) .................................... 51

Check No. 1601 is issued and cashed to reimburse the fund.
31 Sold an electric truck-lift to Leila Stierman Co. for $2,500 cash. The original cost was $7,900 with salvage value of $900, a life of 10 years, and accumulated depreciation recorded through 12/31/13 of $4,550. The straight-line method is used. (Note: the company follows the practice of recording a half year’s depreciation in the year of acquisition and a half year in the year of disposal.) First, bring the depreciation expense up to date in the general journal. Then journalize the entire entry for the sale in the general journal.
31 Sold bathroom fixtures and plumbing supplies to Trudy’s Plumbing on account, invoice No. 1212 for $55,770.
31 Because for some time the petty cash fund has been smaller than required for monthly expenditures, the fund is increased by $75 by cashing check No. 1602 and placing the money in the petty cash fund.
31 The payroll summary for the monthly paid employees is submitted so that December checks can be distributed before the year-end; the details are as follows:

Office and administrative salaries.......................... $42,900
Federal income taxes withheld .............................. 7,696
State income taxes withheld .................................. 1,517
FICA taxes withheld ................................................ 3,120
Net pay.............................................................. $30,567

Issued check No. 1603 for the amount of the net pay and deposited it in the payroll bank account. Individual payroll checks were prepared for distribution to all monthly employees by the end of the day.

Employer’s payroll taxes:
FICA tax (all office and administrative).......... $3,120
Federal unemployment tax..............................
-
State unemployment tax ..................................
-

31 Cash sales since December 13 total $29,980.
Adjusting entries

Assets
Date Acquired
Cost
Estimated Usage or Life
Salvage Value
Depreciation
Method
Building
7/1/10
$306,000
25 years
$20,000
sum-of-the-years’ digits
Truck No. 1
4/1/11
28,000
60,000 miles
3,100
miles driven
Truck No. 2
9/1/13
33,000
60,000 miles
4,200
miles driven
Lift No. 1
8/17/07
7,900
10 years
900
straight-line
(Sold 12/31/14)
Lift No. 2
3/29/11
4,500 10 years 500
straight-line
Lift No. 3
9/16/12
5,000 10 years 500
straight-line
Office
All prior to
32,800 7 years 2,000
straight-line
Equipment
1/1/14
Computer
12/22/14
6,100 5 years 1,300
Double-decling balance

Truck No. 1 has been driven 45,000 miles prior to 1/1/14 and truck No. 2 has been driven 30,500 miles prior to 1/1/14. During 2014 truck No. 1 was driven 12,000 miles and truck No. 2 was driven 14,000 miles. Remember that the Rockford Company takes a half-year’s depreciation in the year of acquisition and a half-year in the year of sale.

first $50,000 @15%
next 25,000 @25%
remainder @34%

Income between $100,000 and $335,000 is assessed a 5% federal surtax, not to exceed $11,750.

Hint: Corporations subject to federal income tax must make estimated tax payments throughout the year. At the time of the payment, the account Income Tax Expense is debited and Cash is credited. To determine the taxable income at year end, net the total debits and total credits from the income statement in the worksheet. Note that the estimated income tax expense is listed as a debit and must be subtracted from total debits when determining taxable income (federal tax is not a deductible item).
   
Instructions:

To print this page, right click anywhere on the screen you want to print and click on Print.
To display/view the beginning balances use the Reports menu and click on the Trial Balance report. To print a report, right click anywhere on the screen and click on Print (online version) or use the print icon (CD version).
Rockford Corporation uses special journals.

The Purchases Journal is used to record all purchases of merchandise on account.
The Sales Journal is used to record all sales of merchandise on account.
The Receipts Journal is used to record all cash receipts. (Except for sale of Trucks)
The Payments Journal is used to record all cash payments.
The General Journal is used to record all other transactions including adjusting and closing entries.

Use the Entries menu to journalize the transactions listed in the problem using a perpetual inventory system. Choose which journal you need to use for each transaction. Instructions for each of the journals are listed with the general instructions. The account balances shown at the beginning of the problem have been journalized and posted.
Use the Reports menu to display/print and review your entries.
If you need to make changes return to the Entries menu and select the correct journal. Get the entry by the number of the transaction. Make your correction and Save the entry.
Use the Post menu to post the journal entries when instructed.
If you need to make changes to an entry once it has been posted, use the Entries menu to get the entry, click on the Void icon, then enter the transaction with a new entry and save and post that entry.
Use the Reports menu to access/print the Unadjusted Trial Balance.
Use the Entries menu to record the Adjusting Entries listed in the problem. Check the box next to Adjusting Entries.
Use the Reports menu to display/print the entries.
Use the Post menu to post the adjusting entries.
Use the Reports menu to access/print the Adjusted Trial balance, Income Statement, Owners' Equity Statement and Balance Sheet.
Manually pass the entry to close Dividends declared to Retained earnings. Check the box next to Closing Entries.
Use the Close menu to close the books. Enter a zero in the dialog box when asked for the closing inventory amount. Click on Continue when requested.
Use the Reports menu to access/print the post closing Trial Balance.
To close a page click on the X in the upper right corner of the page.

Answer 1

The general jounal is provided below Date Account Titles Ref Debit Credit 3-Dec Allowance for Doutful Account 113 Accounts Receivable - Iwanaga Plumbing and Heating 112/190 3,700 3,700 9-Dec Payroll Tax Expense 730 214 350 FICA Taxes Payable 350 15-Dec Sales Returns and Allowance 412 4,680 Accounts Receivable-The Potts Co 112/122 4,680 120 505 Invento 3,550 Cost of Goods Sold 3,550 15-Dec Accounts Payable - Edward's Plumbing Supplies Inc 201/18 3,550 Invento 120 3,550 115 112/180 17-Dec Notes Receivable 45,200 Accounts Receivable -Bilder Construction 45,200 22-Dec Invento 120 2,300 Accounts Payable -DeKalb Transport 201/20 2,300 23-Dec Payroll Tax Ex 730 214 ses 415 FICA Taxes Payable 415 The purchase jounal is provided below: Date Order No Account Credited Account No Amount 315 Edward's Plumbing Supplies, Inc. n/60 316 Phoenix Plastics 1/10, n/30 317 Smith Pipe Company 1/15, n/60 318 (see cash disbursements journal) 319 Phoenix Plastics 1/10, n/30 2-Dec 24,320 18 14 52,700 39 17 50,800 19 14 48,330

The cash disbursement journal is provided below: Date Check No Payee Cash Cr Ref AP Dr Inventory Cr Sundry Acct. Acct No Dr 1580 Oxenford Co 1581 Standard Oil Compan 1582 Khatan Steel 1583 Phoenix Plastics 1584 Payroll Bank Account 2-Dec 26,400 35 26,400 810 644 810 9,900 57 10,000 10,486 14 10,700 100 214 3,420 726 4,860 214 216 218 610 600 900 190 1585 Scooter Gordon 1586 Phoenix Plastics 1587 Smith Pipe Com 1588 N. ILL. Communications 1589 Winnebago County Bank 600 6,750 14 6,750 37,719 39 38,100 10 381 399 732 399 216 9,573 214 1,787 16 11,360 52,173 14 52.700 16 18 19 19 1590 Phoenix Plastics 1591 S. White Truckin 1592 Pen & Pad 1593 Business Basics Inc 527 1,021 1,360 600 120 1,021 126 1,360 151 6,100 201/16 5,500 23 1594 Payroll Bank Account 4,063 726 5,770 214 216 218 415 1,067 225

Account: Interest Receivable 118 DebitCreditBalance Date Explanation Ref 30-Nov Balance 0 Account: Interest Receivable Date 118 Explanation Ref Debit Credit Balance 30-Nov Balance 0 Account: Invento 120 Date Explanation Ref Debit Credit Balance 30-Nov Balance 531960 126 Account: Supplies Date Explanation Ref Debit Credit Balance 30-Nov Balance 2320 Account: Prepaid Insurance Date 130 Explanation Ref Debit redit Balance 30-Nov Balance 11020 Account: Prepaid Rent Date 131 Explanation Ref Debit Credit Balance 30-Nov Balance 25410 Account:Other Assets 135 Explanation Ref Debit Credit Balance 30-Nov Balance 141647 Account:Land 140 Date Explanation Ref Debit Credit Balance 1-Janl Balance 43000 Account:Buildin Date 145 Explanation Ref Debit Credit Balance 1-Jan Balance 306000

Account:Accum. Depr - Buildin Date 146 Explanation Ref Debi Credit Balance 1-Jan Balance 73040 Account:Equipment 151 Date Explanation Ref Debit Credit Balance 1-Jan Balance 32800 Account:Accum. Depr - Buildin Date 152 Explanation Ref Debit Credit Balance 1-Jan Balance 13200 Account:Trucks Date 163 Explanation Ref Debit Credit Balance 1-Jan Balance 78400 164 Account:Accum. Depr- Buildin Date Explanation Ref Debit Credit Balance 1-Jan Balance 39540

Account:Notes Payable Date 200 Explanation Ref Debit redit Balance 1-Jan Balance 15000 Account:Accounts Payable Date 201 Explanation Ref Debit Credit Balance 30-Nov Balance 126850 212 Account:Salries and Wages Payable Date Explanation Ref Debit Credit Balance 30-Nov Balance Account:FICA Taxes Payable Date 214 Explanation Ref Debit Credit Balance 30-Nov Balance 1787 Account:Income Taxes Payable Date 215 Explanation Ref Debit Credit Balance 30-Nov Balance 0 Account:Federal Withholding Taxes Payable Date 216 Explanation Ref Debit Credit Balance 30-Nov Balance 9573

Account:State Withholding Taxes Payable Date 218 Explanation Ref Debit Credit Balance 30-Nov Balance 2486 Account:FUTA Taxes Payable Date 224 Explanation Ref Debit Credit Balance 30-Nov Balance 400 225 Account:SUTA Taxes Payable Date Explanation Ref Debit Credit Balance 30-Nov Balance 2600 Account:Interest Payable Date 230 Explanation Ref Debit Credit Balance 30-Nov Balance 0 Account:Dividends Payable Date 250 Explanation Ref Debit Credit Balance 30-Nov Balance 268 Account:Notes Payable (Long term) Date Explanation Ref Debit Credit Balance 1-JulBalance 113000 Account: Bonds Payable Date 270 Explanation Ref Debit Credit Balance 1-Jan Balance 275000

Account: Discount on Bonds Payable Date 273 Explanation Ref Debit Credit Balance 1-Jan Balance 9753 Account: Common Stock- $30 Stated Value Date 311 Explanation Ref Debit Credit Balance 1-Jan Balance (6300 shares 189000 317 Account: Paid-in Captial in Excess of Stated Value Date Explanation Ref Debit Credit Balance 1-Jan Balance 256400 Account: Retained Earnings Date 320 Explanation Ref Debit Credit Balance 1-Jan Balance 362748 Account: Treasury Stock 330 Explanation 1-Jan Balance (700 shares Date Ref Debit Credit Balance 42610 332 Account: Dividends Date Explanation Ref Debit Credit Balance Account: Income Summa 350 ebitCredit Balance Date Explanation Ref

644 Account: Freight-out Date Ref Debi Credit Balance Explanation 17732 30-Nov 649 Account: Misc Expense Ref Debit Credit Balance Date Explanation Account: Depreciation Expense Ref Debit Credit Balance Date Explanation 722 Account: Insurance Expense Date Ref Debi Credit Balance Explanation 726 Account: Salaries and Wages Expense Date Ref Debit Credit Balance Explanation 933122 30-Nov 729 Account: Rent Expense Ref Debit Credit Balance Date Explanation 730 Account: Payroll Tax Expense Date Ref Debi Credit Balance Explanation 82916 30-Nov 732 Account: Utilities Expense Date Ref Debit Credit Balance Explanation 16270 30-Nov

820 Account: Interest Revenue Date Ref Debit Credit Balance Explanation 3150 30-Nov 826 Account: Gain on Disposal of Plant Assets Date Ref Debit Credit Balance Explanation 905 Account: Interest Expense Date Ref Debit Credit Balance Explanation 24570 30-Nov 921 Account:Loss on Disposal of Plant Assets Date Ref Debit Credit Balance Explanation Account:Income Tax Expense Ref Debit Credit Balance Date Explanation 72000 30-Nov