1. Examine the January transactions and make the necessary journal entry preparations. Recall that adjustments are only entered at the conclusion of each quarter.

2. Post the January journal entries to the appropriate ledger accounts.

3. As on January 31, 20X3, build a trial balance. For this criterion, use the worksheet's trial balance column.

4. Analyze the January information, enter adjusting entries in the worksheet, and make the adjusted trial balance columns of the worksheet.

Journal Entries for January: Jan. 2:

Debit: Cash $750,000 Credit: Capital Stock $750,000 (Issuing shares to shareholders) Jan. 2:

Debit: Miscellaneous Expense $1,415 Credit: Cash $1,415 (Reimbursement to Mike McKesson) Jan. 3:

Debit: Rent Expense $45,000 (6 months * $7,500) Credit: Prepaid Rent $45,000 (Payment for leased space) Jan. 4:

Debit: Equipment $403,200 Credit: Cash $403,200 (Purchase of restaurant equipment) Jan. 4:

Debit: Furniture $196,800 Credit: Cash $196,800 (Purchase of furniture) Jan. 10:

Debit: Cash $500,000 Credit: Bank Loan Payable $500,000 (Receiving a loan from Zone Bank) Jan. 11:

Debit: Restaurant Supplies $15,000 Credit: Accounts Payable $15,000 (Purchase of restaurant supplies) Jan. 12:

Debit: Food Inventory $60,500 ([$60,000 - $500] - Adjustment for return and credit memo) Credit: Accounts Payable $60,500 (Purchase of food inventory + freight) Jan. 14:

Debit: Wage Expense $11,400 Credit: Cash $11,400 (Payment to payroll service company) Jan. 15:

Debit: Prepaid Advertising $3,000 Credit: Cash $3,000 (Payment for newspaper advertisements) Jan. 17:

Debit: Food Inventory $55,000 Credit: Accounts Payable $55,000 (Purchase of food inventory) Jan. 18:

Debit: Miscellaneous Expense $2,400 Credit: Accounts Payable $2,400 (Hosting a dinner party for Permian Company) Jan. 19:

Debit: Cash $212,400 Credit: Sales $212,400 (Recording accumulated daily sales) Jan. 20:

Debit: Cash $3,500 Credit: Unearned Revenue $3,500 (Sale of gift cards) Jan. 26:

Debit: Accounts Payable $115,500 ($60,500 + $55,000) Credit: Cash $115,500 (Payment for food inventory purchases) Jan. 28:

Debit: Wage Expense $12,500 Credit: Cash $12,500 (Payment to payroll service company) Jan. 29:

Debit: Dividends $3,750 Credit: Cash $3,750 (Payment of dividends to shareholders) Jan. 31:

Debit: Utilities Expense $13,000 Credit: Utilities Payable $13,000 (Accrued but unbilled utilities) Jan. 31:

Debit: Tax Expense $20,000 Credit: Taxes Payable $20,000 (Accrued taxes) Jan. 31:

Debit: Prepaid Insurance $3,600 Credit: Cash $3,600 (Payment for insurance policy) Jan. 31:

Debit: Food Inventory $12,500 Credit: Income Summary $12,500 (Adjustment for ending inventory) Jan. 31:

Debit: Restaurant Supplies $3,600 Credit: Income Summary $3,600 (Adjustment for ending supplies) Jan. 31:

Debit: Income Summary $160,250 Credit: Sales $160,250 (Recording accumulated daily sales)

6. Review the transactions for February and March, and prepare the appropriate journal entries.

7. Post the February and March journal entries to the appropriate ledger accounts.

8. Analyze all information and prepare adjusting journal entries as of March 31, 20X3. Post these entries to the appropriate ledger accounts.

9. Create an adjusted trial balance as of March 31, 20X3.

10. Make the first quarter "multiple-step" income statement and statement of retained earnings, as well as the March 31, 20X3 balance sheet.

February Transactions

• Feb. 10: Utilities Expense Dr. $13,000 | Cash Cr. $13,000
• Feb. 12: Cash Dr. $2,400 | Unearned Revenue Cr. $2,400
• Feb. 12: Supplies Expense Dr. $12,000 | Cash Cr. $12,000
• Feb. 14: Sales Revenue Dr. $232,790 | Cash/Acc. Receivables Cr. $232,790
• Feb. 15: Inventory Dr. $105,000 | Accounts Payable Cr. $105,000
• Feb. 16: Payroll Expense Dr. $16,400 | Cash Cr. $16,400
• Feb. 20: Dividends Dr. $5,250 | Cash Cr. $5,250
• Feb. 21: Accounts Receivable Dr. $1,400 | Sales Revenue Cr. $1,400
• Feb. 28: Cash Dr. $1,372 | Accounts Receivable Cr. $1,372
• Feb. 28: Sales Revenue Dr. $199,100 | Cash/Acc. Receivables Cr. $199,100

March Transactions

• Mar. 2: Payroll Expense Dr. $19,900 | Cash Cr. $19,900
• Mar. 3: Accounts Payable Dr. $105,000 | Cash Cr. $105,000
• Mar. 11: Utilities Expense Dr. $14,125 | Cash Cr. $14,125
• Mar. 15: Sales Revenue Dr. $185,400 | Cash/Acc. Receivables Cr. $185,400
• Mar. 16: Inventory Dr. $88,000 | Accounts Payable Cr. $88,000
• Mar. 24: Dividends Dr. $4,400 | Cash Cr. $4,400
• Mar. 25: Supplies Expense Dr. $7,100 | Cash Cr. $7,100
• Mar. 26: Payroll Expense Dr. $17,400 | Cash Cr. $17,400
• Mar. 31: Sales Revenue Dr. $256,600 | Cash/Acc. Receivables Cr. $256,600
• Mar. 31: Interest Expense Dr. $10,125 | Loan Payable Cr. $50,000 | Cash Cr. $60,125