a. Create a t account and trial balance using the Journal entries
b. Create an income Statement
c. Create a statement of equity
d. Create a balance sheet as of January 31, 2020
Transactions for January of 2020 Balance Sheet for end of 2019 Assets Cash Accounts Receivable (net of allowance of 7200) Inventory Prepaid Insurance Supplies Total Current Assets 77,250 237,884 45,500 (1000 units at $45.50 each) 1,600 1,625 363,859 Property, Plant and Equipment, Net Land 177,500 32,000 Total Assets 573,359 1/3/20 Paid interest payable plus $3,000 toward long term debt 1/2/20 Paid salaries payable 1/3/20 Purchased inventory (500 units at $46) on credit 1/4/20 Paid shipping on inventory of $250 1/6/20 Purchased supplies on credit for $850 1/9/20 Received $2,500 from customers for products to deliver in March 1/10/20 Sold 600 units on credit with a sales price of $105 (assume perpetual LIFO) 1/15/20 Purchased inventory on account (700 units at $47) 1/20/20 Paid $41,600 on accounts payable 1/21/20 Collected $121,350 in cash from customers in payment for earlier sales 1/22/20 Wrote off accounts receivable for $815 1/25/20 Sold 200 units on credit with a sales price of $105 (still perpetual LIFO) 1/26/20 Paid wages to employees for work done in January $31,000 1/26/20 Received utility bill for $7,200 for utilities used in January that will be paid in February 1/31/20 Delivered 100 units of product to customers that they paid 10,000 for in 2019 (unearned revenue) 1/31/20 Counted supplies and found $1,240 remaining 1/31/20 Employees worked and earned $4,700 in January that will not be paid until February 1/31/20 Interest at 12% per year on the long term debt (new balance) has not been paid 1/31/20 The prepaid insurance will last 4 months into 2020 before a new policy will be required 1/31/20 The allowance for bad debts is estimated at 4% of total accounts receivable 1/31/20 A count of inventory showed that 50 units were damaged such that they are worthless and will be thrown away Liabilities Accounts Payable Unearned Revenue Interest Payable Salaries Payable Total Current Liabilities 94,552 45,200 2,100 6,600 148,452 Long Term Debt 246,100 Total Liabilities 394,552 Capital Stock Retained Earnings 100,000 78,807 Total Liabilities and Stockholders Equity 573,359 A B D 1 Credit 2 3 4 5 Debit $ 2,100 $ 3,000 $ 5,100 $ 6,600 6 $ 6,600 $ 23,000 7 8 $ 23,000 9 $ 250 10 $ 250 11 $ 850 12 $ 850 S 2,500 13 14 $ 2,500 $ 63,000 15 16 17 $ 63,000 $ 32,900 18 $ 32,900 19 $ 41,600 $ 41,600 20 21 22 $ 121,350 $ 121,350 Date Account Name 1/3/20 Interest Payable Long term Debt Cash 1/2/20Salaries Payable Cash 1/3/20 Purchase Account Accounts Payable 1/4/20 Shipping/Freight Cash 1/6/20Supplies Accounts Payable 1/9/20 Cash Unearned Revenue 1/10/20 Accounts Receivable Unearned Revenue 1/15/20 Purchase Account Accounts Payable 1/20/20 Accounts Payable Cash 1/21/20|Cash Accounts Receivable 1/22/20 Bad Debt Expenses Accounts Receivable 1/25/20|Accounts Receivable Sales 1/26/20Wages Cash 1/26/20 Utility Expenses Accounts Payable 1/31/20 Supplies Expenses Supplies 1/31/20 Salary Expenses Salary Payable 1/31/20 Interest Expense Interest Payable 1/31/20Insurance Expense Prepaid Insuranse 1/31/20 Allowance for bad debt Account Receivable 1/31/20Cost of Goods Sold Purchases 1/31/20Cost of Goods Sold Inventory $ 815 $ 815 $ 21,000 $ 21,000 $ 31,000 $ 31,000 $ 7,200 $ 7,200 $ 1,235 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 $ 1,235 S 4,700 $ 4,700 $ 2,431 $ 2,431 $ 400 $ 400 $ 7,988 $ 7,988 41 S 2,350 $ 2,350 42 43 $ 31,550 $ 31,550 44 45
