Chapter 7
Corporations: The Financial Statements
361
AP-10B (
5
)
Below is the adjusted trial balance for Busy Town Inc.
Busy Town Inc.
Adjusted Trial Balance
December 31, 2016
Debit
Credit
Accounts Payable
$69,420
Accounts Receivable
$78,000
Accumulated Depreciation
27,300
Cash
66,300
Common Shares
147,500
Cost of Goods Sold
93,600
Depreciation Expense
34,320
Insurance Expense
35,100
Interest Payable
936
Interest Receivable
1,560
Interest Revenue
10,400
Inventory
87,750
Non-Current Debt
46,800
Loss on Sale of Equipment
1,800
Notes Receivable
130,000
Preferred Shares
148,530
Short-Term Investment
27,300
Equipment
171,600
Rent Expense
64,350
Retained Earnings
5,784
Salary Expense
70,200
Salary Payable
33,150
Sales Returns
11,700
Sales Revenue
390,000
Unearned Revenue
48,360
Utilities Expense
54,600
Total
$928,180
$928,180
Additional Information
• Net income for the year was $34,730 and retained earnings at January 1, 2016 was
$70,484. Dividends of $64,700 were declared and paid in the year.
• Busy Town has a note receivable that matures in December 2019, with no
installment payments received until maturity. Busy Town also has long term debt
that is due in 4 years. The principal payments are $975 per month.
• Preferred shares are $1, non-cumulative; 95,000 shares have been authorized and
24,700 shares are issued and outstanding. For common shares, 200,000 shares have
been authorized and 29,800 shares have been issued.
