Instructions
Question 1: Recording events in the general journal, posting it to T-accounts, and preparing trial balance
The following events apply to Computer Services Inc. in the first year of operation:
Acquired $100,000 cash from the issue of common s tock
Performed services and received cash $50,000.
Incurred cas operating expenses $15,200.
Received an advance $20,000 for services to be provided in future
Reocgnized $450 of accrued interest revenue.
Paid $2,400 cash for salary expense.
Purchased $1,600 of supplies on account
Recognized $10,000 of revenue for services provided in event 4.
Recorded $1,600 of accrued salary expense
Provided services on account $20,000
Paid $2,000 cash dividend to shareholders.
A physical examination of end of the year showed that only $200 worth supplies remaining in the company.
Question 2: Final Accounts – Merchandizing Business
The following trial balance pertains to Feazell Hardware as of January 1, 2013.
Account Title Debit Credit
Cash $ 28,000
Account Receivable 18,000
Merchandise Inventory 120,000
Accounts Payable $ 10,000
Common Stock 140,000
Retained Earnings 16,000
The following events occurred in 2013. Assume that Feazell Hardware uses the periodic inventory system.
Purchased land for $16,000 cash
Purchased merchandise on account for $46,000, terms 2/10 n/30.
The merchandise purchased by Feazell was shipped FOB shipping point for $460 cash.
Returned $4,000 of defective merchandise purchased in Event 2
Sold merchandise for $40,000 cash
Sold merchandise on account for $100,000, terms 1/20 n/30.
Paid cash within the discount period on accounts payable due on merchandise purchased in Event 2.
Paid $2,400 cash for selling expenses.
Collected $70,000 of accounts receivable within the discount period.
Collected $30,000 of accounts receivable but not within the discount period.
Paid $6,400 of other operating expenses.
Performed a physical count indicating that $30,000 of inventory was on hand at the end of the accounting period.
Requirements
Record these transactions in a general journal.
Post the transactions to ledger T-accounts.
Prepare a schedule of cost of goods sold, an income statement, a statement of changes in stockholder’s equity, a balance sheet and a statement of cash flows for 2013.
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