2021 Transactions

1. In 2021, a new gift card program was started and customers purchased $32,000 in gift cards (i.e. deferred revenue).

2. During 2021, $147,000 in sales were made on account. Collections of AR from customers were $143,000 for the year.

3. During 2021, $113,000 in inventory purchases were made on account. Payments to vendors were $117,000 for the year.

4. During 2021, $31,000 in salary cost was incurred from employees working. Salary paid was $32,000 for the year.

5. On March 15, 2021, income taxes accrued in 2020 were paid.

6. On March 31, 2021, 10 months of rent was paid in advance for $10,000. 12 months were used during 2021.

7. On October 1, 2021, excess land is sold for $4,000; the land was previously purchased in 2020 at a cost of $3,000.

8. On November 1, 2021, a $2 per share dividend is declared, record date November 15, and payment date December 1, 2021.

9. Equipment and building were used during 2021 & depreciation recorded (building used SL, equipment DDB)

10. Inventory is counted and $21,000 remains unsold on December 31, 2021.

11. The income tax rate is 40%.

Required:

1. Write journal entries for each transaction as well as year-end adjusting entries.

2. Post each transaction to a general ledger (T-account or spreadsheet format) and prepare the adjusted trial balance.

3. Prepare the basic financial statements for the year.