1 Start with the Journal Entries worksheet. Complete the journal entries for the economic events stated. You need to compute the Cost of Goods Sold. Note that it should not be the same as the Sales. The store marks up the inventory so it can makes a profit. 2 Post the journal entries to the T accounts in the T Accounts worksheet. 3 Compute the balance in each account. Be sure that you net the debits and credits when you are computing the balance in each Taccount. For example, an increase in the asset cash is a debit. When a cash payment is made, the cash account is reduced with a credit. 4 Complete the financial statement in the "Financial Statements" worksheet. Fill in the name of the account in the left column and the amount in the right hand column in the appropriate area of the worksheet. Note the five columns in the T Accounts worksheet correspond to the five areas on the statements. 1 | 12/1/22 2 12/1/22 Dan buys 1,000 shares of common stock with a par value of $1 in his newly formed company for $14,000. The company borrows $15,000 from the bank. The interest rate on the loan is 6%. 3 12/2/22 The company pays rent expense of $2,100. 4 ! 12/2/22 5 12/2/22 FedEx delivers inventory ordered "on account." The box includes an invoice for $25,000 (500 toys at $50 each). The invoice (bill) is due in 30 days. The corporation uses a 100% markup which means the retail price of each toy will be $100. The company paid cash for $4,800 of equipment. The equipment estimated useful life is 4 years. 6 12/31/22 The store sold 300 toys for $100 each to customers on account. The company sent an invoice for the sales price plus the 8% sales tax 7 12/31/22 8 12/31/22 9 12/31/22 10 12/31/22 Record the cost of goods sold for the 300 toys sold and remove the amount from the asset account inventory. The company uses the allowance for bad debt method and it estimates that bad debts will be 3% of sales. Estimate based on sales revenue. Using straight line depreciation and an estimated useful life of four years to record depreciation expense for one month on the equipment purchased 12/2/22. Compute the interest expense on the bank loan for the days in December. Use 365 days as the number of days in the year. 11 ! 12/31/22 The corporation declares and pays a dividend of $400 to the shareholder. Asset Accounts Debit Cash T Accounts Worksheet (General Ledger Equivalent) Liability Accounts Accounts Payable Credit Dobit Equity Accounts Common Stock Credit Debit LODE Cread Dobd Debit Credi Dob Credit Revenue Accounts Expense Accounts Sales Revenue Cost of Goods Sold Credit Dobit Credit Debit Credit Paid in Capital Credi Retained Earn. Beg. of Year Debit Credit Debn Creat Debit Credit Dividends Paid Debit Credit Debit Credit Debit Credit Debil Credit Debit Debit Debit Credit Credit Credit Debit Credit Toy Shoppe Balance Sheet as of December 31, 2022 Assets (debits) Cash Total Assets Liabilities (credits) Accounts Payable Total Liabilities Equity (credits) Common Stock Paid in Capital Retained Earnings Total Equity Total Liabilities & Equity Income Statement for the Month Ended December 31, 2022 Revenue/Income (credits) Total Revenue Expenses (debits) Net Income Total Expenses Net Income Retained Earnings Detail Beginning of Year Dividends Paid Total Retained Earnings