Monday
December 22, 2014

Homework Help: Accounting Question

Posted by jason on Sunday, May 11, 2008 at 2:37am.

Below are two questions from my accounting class. I am not sure how to approach this kind of problem. Any help or suggestions would be greatly appreciated.

Thanks in advance!

------------------------------

The following trial balance of Trane Corp. at December 31, 2001 has

been properly adjusted except for the income tax expense adjustment.



Trane Corp.

Trial Balance

December 31, 2001

Dr. Cr.

___________ __________

Cash $ 875,000

Accounts receivable (net) 2,695,000

Inventory 2,085,000

Property, plant, and equipment (net) 7,366,000

Accounts payable and accrued liabilities $ 1,501,000

Income taxes payable 654,000

Deferred income tax liability 85,000

Common stock 2,350,000

Additional paid-in capital 3,680,000

Retained earnings, 1/1/01 3,650,000

Net sales and other revenues 13,360,000

Costs and expenses 11,080,000

Income tax expenses 1,179,000

___________ ___________

$25,280,000 $25,280,000



Other financial data for the year ended December 31, 2001:

Included in accounts receivable is $960,000 due from a

customer and payable in quarterly installments of $120,000. The last

payment is due December 29, 2003.

The balance in the Deferred Income Tax Liability account

pertains to a temporary difference that arose in a prior year, of

which $20,000 is classified as a current liability.

During the year, estimated tax payments of $425,000 for the year 2002

were charged to income tax expense.



In Trane's December 31, 2001 balance sheet,

14. The current assets total is

a. $6,080,000.

b. $5,655,000.

c. $5,535,000.

d. $5,175,000.



15. The final retained earnings balance is

a. $4,751,000.

b. $4,836,000.

c. $5,176,000.

d. $5,105,000.

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