Voltaire Corporation’s Balance Sheet December 31 2013 Presented Below Voltaire Corporation B

Voltaire Corporation’s Balance Sheet at December 31, 2013 is presented below: Voltaire Corporation Balance Sheet December 31, 2013 Cash $24,600 Accounts Receivable 45,500 Allowance for Doubtful Accounts (1,500) Supplies 4,400 Land 40,000 Buildings 130,000 Accumulated Depreciation Building (20,000) $223,000 Accounts Payable $25,600 Common Stock($1 par) 50,000 Retained Earnings 147,400 $223,000 During 2014, the following transactions occurred: 1.On January 1, 2014, Voltaire issued 1,500 shares of $20 par, 6% preferred stock for $33,000. 2.On January 1,2014, Voltaire also issued 900 shares of the $1 par value common stock for $6,300. 3.Voltaire performed services for $276,000 on account. 4.On April 1,2014, Voltaire collected fees of $36,000 in advance for services to be performed from April 1, 2014 to March 31, 2015. 5.Voltaire collected $267,000 from customers on account 6. Voltaire brought $26,100 of supplies on account. 7.Voltaire paid $32,200 on accounts payable. 8.Voltaire reacquired 400 shares of its common stock on June 1,2014, for $8 per share. 9.Paid other operating expenses of $188,200 10. On December 31, 2014, Voltaire declared the annual preferred stock dividend and a $.50 per share dividend on the outstanding common stock, all payable on January 15, 2015. 11.An account receivable of $1,300 which originated in 2013 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 recognized 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 a) Set up T- accounts to determine ending balances. b) Prepare journal entries for the transactions listed above and adjusting entries. c) Prepare an adjusted trial balance at December 31, 2014 (Hint: Totals are $647,620)


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