hiatt corporation s balance sheet at december 31 2010 is presented below 497409

Hiatt Corporation s balance sheet at December 31, 2010, is presented below.

HIATT CORPORATION

Balance Sheet

December 31, 2010

Cash $ 24,600 Accounts payable $ 25,600

Accounts receivable 45,500 Common stock ($10 par) 80,000

Allowance for doubtful Retained earnings 127,400

accounts (1,500)

Supplies 4,400

Land 40,000

Building 142,000

Accumulated depreciation building (22,000)

$233,000 $233,000

During 2011, the following transactions occurred.

1. On January 1, 2011, Hiatt issued 1,500 shares of $20 par, 7% preferred stock for $33,000.

2. On January 1, 2011, Hiatt also issued 900 shares of the $10 par value common stock for $21,000.

3. Hiatt performed services for $280,000 on account.

4. On April 1, 2011, Hiatt collected fees of $36,000 in advance for services to be performed

from April 1, 2011, to March 31, 2012.

5. Hiatt collected $267,000 from customers on account.

6. Hiatt bought $35,100 of supplies on account.

7. Hiatt paid $32,200 on accounts payable.

8. Hiatt reacquired 400 shares of its common stock on June 1, 2011, for $38 per share.

9. Paid other operating expenses of $188,200.

10. On December 31, 2011, Hiatt declared the annual preferred stock dividend and a $1.20 per share dividend on the outstanding common stock, all payable on January 15, 2012.

11. An account receivable of $1,300 which originated in 2010 is written off as uncollectible

Adjustment data:

1. A count of supplies indicates that $5,900 of supplies remain unused at year-end.

2. Recorded revenue earned from item 4 above.

3. The allowance for doubtful accounts should have a balance of $3,500 at year end.

4. Depreciation is recorded on the building on a straight-line basis based on a 30-year life and a salvage value of $10,000.

5. The income tax rate is 30%. (Hint: Prepare the income statement up to income before taxes

and multiply by 30% to compute the amount.)

Instructions

(You may want to set up T accounts to determine ending balances.)

(a) Prepare journal entries for the transactions listed above and adjusting entries.

(b) Prepare an adjusted trial balance at December 31, 2011.

(c) Prepare an income statement and a retained earnings statement for the year ending

December 31, 2011, and a classified balance sheet as of December 31, 2011.

Check figures:

(b) Totals $671,350

(c) Net income $54,250

Total assets $361,200