Question

Noswetta Company (Homework) The accounts listed below comprise the general ledger of Noswetta Company at December 31, 2018. Account balances are before the end-of-period adjusting entries. Accounts having a zero balance are activated during the adjustment process. 172,000 180,000 1,000 100,000 4,000 12,000 500,000 95,000 70,000 Cash...... ....................................... Accounts receivable. Allowance for doubtful accounts Inventory Office supplies....... Unexpired insurance.......... Machinery.. Accumulated depreciation Machinery.... Patents .......... Accounts payable (suppliers......... Note payable........ Salaries payable...... Rent payable................ Interest payable... Common stock, $10 par value...... Paid-in capital in excess of par value..... Retained earnings (Bal.,1/1/18). Treasury stock (2,000 shares, at cost)... 40,000 20,000 320,000 400,000 308,000 50,000 Sales.... 960,000 40,000 345,000 570,000 66,000 5,000 Sales returns.. Cost of Goods Sold........ Salaries expense .......... Rent expense... Interest expense.............. Insurance expense.. Office supplies expense..... Depreciation expense............... Bad Debts expense...................... Patent amortization expense...... Misc. operating expenses... 30,000 2,145,000 2,145,000

Answer 1

NOSWETTA COMPANY
Adjusting Journal Entries
For the Year Ended December 31,2018
Account Title and Explanation	Debit	Credit
Salaries Expense	$3,000
Salaries Payable		$3,000
( to record the salaries accrued on Dec 31)
Rent Expense	$6,000
Rent Payable		$6,000
(to record the rent expenses payable for the month of December)
Interest Expense	$1,000
Interest Payabe		$1,000
(to record the interest on Notes payable accrued on Dec 31)
Insurance Expense	$2,000
Unexpired Insurance		$2,000
(to record the insurance expense for the year)
Office Supplies Expenses	$3,500
Office Supplies		$3,500
(to record the office supplies consumed during the year)
Bad Debt Expense	$8,000
Allowance for Doubful Debts		$8,000
(to record the provision of doubtful debts for the year)
Depreciation Expense	$40,500
Accumulated Depreciation - Machinery		$40,500
(to record the depreciation on machinery for the year)
Patent Amortization Expense	$7,000
Patents		$7,000
(to record the amortization of patents for the year)
NOSWETTA COMPANY
Income Statement
For the Year Ended December 31,2018
	$	$
Revenue
Sales	$960,000
Less: Sales returns	(40,000)
Net sales revenue		920,000
Less:
Cost of Goods Sold		345,000
Gross Income		575,000
Expenses
Salaries expense	573,000
Rent expense	72,000
Interest expense	6,000
Insurance expense	2,000
Office supplies expense	3,500
Depreciation expense	40,500
Bad Debt expense	8,000
Patent amortization expense	7,000
Misc.operating expense	30,000
		742,000
Net income/(loss)		($167,000)
NOSWETTA COMPANY
Statement of Retained Earnings
For the Year Ended December 31,2018
	$
Beginning Balance as on Jan 1, 2018	$308,000
Adjustment during the year
Restatements during the year
Balance after adjustments and restatements	308,000
Less: Net loss for the year	(167,000)
Ending Balance as on Dec 31,2018	$141,000
NOSWETTA COMPANY
Balance Sheet
For the Year Ended December 31,2018
	$	$
Current Assets
Cash		172,000
Accounts receivable	180,000
Less: Allowance for doubtful debts	(9,000)	171,000
Inventory		100,000
Office supplies		500
Unexpired insurance		10,000
Total Current Assets		453,500
Non-current Assets
Machinery	500,000
Less:Accumulated depreciation	(135,500)	364,500
Patents	70,000
Less:Patent amortization expense	(7,000)	63,000
Total Non-Current Assets		427,500
Total Assets		$881,000
Current Liabilities
Accounts payable		40,000
Notes payable		20,000
Salaries payable		3,000
Rent payable		6,000
Interest payable		1,000
Total Current Liabilities		70,000
Stockholders' Equity
Common stock at par value	320,000
Paid-in capital in excess of par value	400,000
Less: Treasury stock	(50,000)
		670,000
Retained earnings		141,000
Total Stockholders' equity		811,000
Total Liabilities and Stockholders' Equity		$881,000