Solution for QID #79579: Debit Credit Retained profits (1 Jan 2020) | StudyHelpMe

Debit Credit Retained profits (1 Jan 2020)   $ 3,087,000 Cost of Building $ 12,000,000   Acct dep for Building (1 Jan 2020)   $ 3,000,000 Prepaid insurance (building) $ 120,000   Accounts payable   $ 780,000 Business checking account $ 400,500   8% long term loan   $ 3,000,000 Accounts receivable $ 675,000   Land $ 3,000,000   Cost of Machinery $ 5,625,000   Acct dep for Machinery (1 Jan 2020)   $ 3,510,000 Transportation cost $ 570,000   Revenue   $ 7,500,000 Purchases $ 4,800,000   Return from customers $ 96,000   Administrative expenses $ 768,000   Provision for bad debt   $ 97,500 Long term loan interest $ 120,000 $ 57,000 Inventory (1 Jan 2020) $ 357,000   Ordinary shares ($1 per share)   $ 6,750,000 Share premium   $ 750,000   $ 28,531,500 $ 28,531,500 Additional notes: A customer declared bankruptcy, write off $40,000. Provision for bad debt is 5% of *remaining* accounts receivables. Prepaid insurance (building) was $100,000 on Dec, 31, 2020. Tax is $120,000 The management issued extra 20,000 shares ($2.5 each) on Dec, 30, 2020. Proceeds are paid as bonuses to workers. No interest has been recorded so far for the long term loan. Land is now valued at $4,500,000 as a result of a new appraisal. Land-no depreciation. Building-2% per year straight line Machinery-10% reducing balance method. Audit expense is $30,000