TimmyL Baseball Card Co buys and sells baseball cards of a f

TimmyL Baseball Card Co. buys and sells baseball cards of a famous (ex) San Francisco Giants baseball player. The company was formed in 2015. The post-closing trial balance of that company for the end of operations in that first year is:

TimmyL Baseball Card Co.

Trial Balance

December 31, 2015

Account                                   Debit                       Credit

Cash                                                $250,000

Accounts Receivable                                   80,000

Allowance for Bad Debts                                                $ 8,000

Inventory                                 600,000

Supplies                                     10,000

Prepaid Advertising                                             9,000

Land                                                200,000

Building                                  500,000

Accumulated Depreciation-B.                                            8,000

Patent                                                 95,000

Accounts Payable                                                        100,000

Dividends Payable                                                  30,000

Income Tax Payable                                                        75,000

Interest Payable                                                           3,000

Salaries Payable                                                      20,000

Notes Payable                                                         120,000

Common Stock ($10 par value)                                      100,000

Paid in Capital in Excess of Par                                      900,000

Retained Earnings                                                   380,000

Total                                                $1,744,000              $1,744,000

1/5 Paid the salaries due from the previous year.

1/30 The beginning inventory of 2016 consists of 10,000 baseball cards at a cost of $60 each. TimmyL sold 5,000 of these cards, on account, at a price of $200 each. TimmyL uses a perpetual inventory system and uses FIFO as a cost flow assumption.

2/1 Paid our suppliers the entire amount owed on the trade accounts payable from the previous year.

2/15 Collected $900,000 in accounts receivable from customers.

3/1 Paid shareholders the dividend declared in 2015.

3/31 Paid the Notes Payable plus all accrued interest. The Notes Payable account consists of a $120,000, 10 percent, 6 month obligation from the bank on 10/1/15.

4/1 Incurred and paid the utilities bill of $10,000.

4/15 Paid the government the taxes due from 2015.

5/1 Purchased on account 3,000 new baseball cards at a cost of $70 each.

5/15 Paid $200,000 of the amount owed on trade accounts payable.

6/1 Purchased $15,000 in supplies for cash and debited a permanent (real) account [instead of a temporary (nominal) account].

6/15 One customer owing $10,000 was declared bankrupt. TimmyL wrote off this account as uncollectable.

7/1 Purchased online advertising for one year at a cost of $2,000 per month for cash and debited a temporary (nominal) account [instead of a real (permanent) account].

7/5 Sold 5,000 new shares of common stock at a market price of $150 per share.

8/1 Lent the CEO of TimmyL $200,000 and accepted an eight month, eight percent note receivable.

8/15 Paid $50,000 salaries.

8/31 Sold 5,000 baseball cards on account at a price of $250 per card.

9/1 Purchased a computer system for $70,000 by making a $10,000 down payment and issuing a six month six per cent note for the balance.

9/15 Sold a quarter of the land owned by TimmyL for a cash price of $300,000.

10/1 Received $1,200,000 due from customers.

11/1 Received $100,000 in advance from a customer for the future sale of an extra special baseball card that TimmyL will acquire in 2017. TimmyL credited a permanent (real) account [instead of a temporary (nominal) account].

12/15 Declared an annual cash dividend of $5 per common share to shareholders payable in ninety days.

Accounting Cycle : Prepare an unadjusted trial balance at fiscal year end 2016.

Solution

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