1) (10 points) Michael Company has just completed operations for the year ended December 31, 2018. This is the second year of operations for the company. The following data have been assembled for the business.

Accounts Payable	$12,200	Office Expense	$6,500
Accounts Receivable	14,500	Rent Expense	9,600
Cash	8,200	Retained Earnings, Jan. 1, 2018	8,300
Common Stock	9,000	Salaries Expense	36,000
Dividends	13,500	Service Revenue	84,000
Equipment	15,000	Utilities Expense	6,200
Insurance Expense	4,000

Prepare the income statement, statement of retained earnings, and balance sheet. Use a proper heading.

2) (10 points) Mason's Restaurant and Catering had the following transactions during the month of May.

May 1	Mason contributed $45,000 cash in exchange for common stock.
5	Paid monthly rent on the restaurant equipment, $1,650.
12	Purchased office supplies on account, $1,500.
15	Borrowed $25,000 from the bank for business use.
26	Paid $30,000 cash for a delivery van.
28	Paid $1,500 on account.
29	The business received $1,600 for catering services for a wedding on June 11.
30	Revenues earned during the month included $20,500 cash and $14,500 on account.
31	Received the May utility bill for $1,000. The amount is due on June 10 and will be paid on that date.
31	Paid cash dividends of $4,000.

The business uses the following accounts: Cash; Accounts Receivable; Office Supplies; Delivery Van; Accounts Payable; Utilities Payable; Unearned Revenue; Notes Payable; Common Stock; Dividends; Service Revenue; Equipment Rent Expense; and Utilities Expense.

Journalize each transaction. Explanations are not needed.

3) (6 points) The accounting records of Mason Service Company include the following selected, unadjusted balances at June 30: Accounts Receivable, $2,700; Office Supplies, $1,800; Prepaid Rent, $3,600; Equipment, $15,000; Accumulated Depreciation - Equipment, $1,800; Salaries Payable, $0; Unearned Revenue, $2,400; Office Supplies Expense, $2,800; Rent Expense, $0; Salaries Expense, $15,000; Service Revenue, $40,500.

The following data developed for adjusting entries are as follows:

a.Service revenue was earned and invoice was submitted to customer, $1,400

b.Unearned Revenue was recorded on June 1 for a 3-month contract (hint: calculate how much was earned at June 30)

c.Office Supplies were inventoried and amount determined on hand, $700

d.The only employee earns a salary of $1,800 per work week (Monday-Friday). June 30 falls on a Wednesday. Salary of $1,800 will be paid on Friday, July 2.

e.One month of prepaid rent has expired, $1,200

f.Depreciation on equipment, $1,500

Journalize the adjusting entries. Omit explanations.

4) (4 points) The following is the adjusted trial balance as of December 31, 2018 of Bravo Photography:

Account	Debit	Credit
Cash	$1,700
Accounts Receivable	8,500
Supplies	100
Equipment	7,500
Accumulated DepreciationEquipment		$2,000
Accounts Payable		1,200
Salaries Payable		800
Unearned Revenue		600
Common Stock		3,400
Dividends	2,300
Service Revenue		40,000
Salaries Expense	24,000
Supplies Expense	2,300
Depreciation ExpenseEquipment	1,600	______
Total	$48,000	$48,000

Provide all of the closing entries. Omit explanation.

5) (6 points) Journalize the following purchase transactions for Main Street Office Supplies using the periodic inventory system and then using the same information, journalize the purchase transactions using the perpetual inventory system. Explanations are not required.

May 12	Main Street buys $167,500 worth of merchandise inventory on account with credit terms of 2/10, n/30.
May 16	Main Street returns $18,600 of the merchandise to the vendor due to damage during shipment.
May 21	Main Street pays the amount due.

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