Hampton Corporation\'s balance sheet at December 31, 2011, is presented below. Hampton Corporation Balance Sheet December 31, 2011 Cash $24,600 Accounts receivable $45,500 Allowance for doubtful accounts (1,500) Supplies $4,400 Land $40,000 Buildings $142,000 Accumulated depreciation- buildings (22,000) ______________________________________________________ $233,000 _______________________________________________________ _______________________________________________________ Accounts payable $25,600 Common stock ($10 par) $80,000 Retained earnings $127,400 _______________________________ $233,000 _______________________________ _______________________________ During 2012, the following transactions occurred. 1. On January 1, 2012, Hampton also issued 1,200 shares of $40 pas, 7% preferred stock for $49,200. 2. On January 1, 2012, Hampton also issued 900 shares of the $10 par value common stock for $21,000 3. Hampton performed services for $320,000 on account. 4. On April 1,2012, Hampton collected fees of $36,000 in advance for services to be performed from April 1, 2012, to March 31, 2013. 5. Hampton collected $276,000 from customers on account. 6. Hampton bought $35,100 of supplies on account. 7. Hampton paid $32,200 on accounts payable. 8.Hampton reacquired 400 shares of its common stock on June 1, 2012, for $28 per share. 9. Paid other operating expenses of $188,200. 10. On December 31, 2012, Hampton declared the annual preferred stock dividend and a $1.20 per share dividend on the outstanding common stock, all payable on January 15, 2013. 11. An account receivable of $1,700 which originated in 2011 is written off as uncollectible. Adjustment date: 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%. Instructions: a) Prepare journal entires for the transactions listed above and adjusting entries. b) Prepare an adjusted trial balance at December 31, 2012. c) Prepare an income statement and a retained earnings statement for the year ending December 31, 2012, and a classified balance sheet as of December 31, 2012. Solution Answer question .

1. Hampton Corporation's balance sheet at December 31, 2011, is presented below.
Hampton Corporation
Balance Sheet
December 31, 2011
Cash $24,600
Accounts receivable $45,500
Allowance for doubtful accounts (1,500)
Supplies $4,400
Land $40,000
Buildings $142,000
Accumulated depreciation- buildings (22,000)
______________________________________________________
$233,000
_______________________________________________________
_______________________________________________________
Accounts payable $25,600
Common stock ($10 par) $80,000
Retained earnings $127,400
_______________________________
$233,000
_______________________________
_______________________________
During 2012, the following transactions occurred.
1. On January 1, 2012, Hampton also issued 1,200 shares of $40 pas, 7% preferred stock for
$49,200.
2. On January 1, 2012, Hampton also issued 900 shares of the $10 par value common stock for
$21,000
3. Hampton performed services for $320,000 on account.
4. On April 1,2012, Hampton collected fees of $36,000 in advance for services to be performed
from April 1, 2012, to March 31, 2013.
5. Hampton collected $276,000 from customers on account.
6. Hampton bought $35,100 of supplies on account.
7. Hampton paid $32,200 on accounts payable.
8.Hampton reacquired 400 shares of its common stock on June 1, 2012, for $28 per share.
9. Paid other operating expenses of $188,200.
10. On December 31, 2012, Hampton declared the annual preferred stock dividend and a $1.20
per share dividend on the outstanding common stock, all payable on January 15, 2013.
11. An account receivable of $1,700 which originated in 2011 is written off as uncollectible.
Adjustment date:
1. A count of supplies indicates that $5,900 of supplies remain unused at year-end.

2. 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%.
Instructions:
a) Prepare journal entires for the transactions listed above and adjusting entries.
b) Prepare an adjusted trial balance at December 31, 2012.
c) Prepare an income statement and a retained earnings statement for the year ending December
31, 2012, and a classified balance sheet as of December 31, 2012.
Solution
Answer question