a. Journal Entry

b. T accounts

c. Worksheet

d. Income Statement

e. Changes in retained earnings

f. Balance Sheet

The business has adopted the following accounting policies:

l Fixed assets that cost less than $500.00 are expensed.

l The allowance method is used to account for bad debts.

l When calculating depreciation, assets purchased during a month are treated as if

purchased on the first day of the month.

Description of transaction

June 1: Laura, an investor, made an investment in ACC by purchasing 15000 shares of its common stock paying in cash. Market Value is 18$ and the Par Value is 2$.

June 1: Mac, an investor, made an investment in ACC by purchasing 6,700 shares of its common stock paying $32,000.00 in cash, and contributing to ACC office equipment with a fair market value of $90,600.

June 2: Check # 1001 for $30,000 was issued as a down payment for new computer equipment that cost $195,000 on invoice 827364 from Dell. A five-year note was executed by ACC for the balance.

June 4: Office supplies costing $9,500 was purchased on credit from Perez's Discount Supplies Corporation, invoice number AB9865.

June 8: Check # 1002 was issued to purchase a one-year insurance policy covering its computer equipment. The cost of the insurance is $12,000 and paid to Seth's Insurance. The effective date of the policy was June 16 and the invoice number was 2387.

June 10: Check # 1003 was issued for $18,000 as a partial payment on the balance owed to Dell related to the purchase of computer equipment, invoice 827364.

June 16: A check in the amount of $6,500 was received for services performed for Pitman Pictures.

June 17: ACC purchased a building and the land it is on for $155,000.00 to house its repair facilities and to store computer equipment. The lot on which the building is located is valued at $30,000.00.

The balance of the cost is to be allocated to the building. Check # 1004 was used to make the down payment of $21,000.00. A thirty year mortgage with an inital payment due on August 1st, was established for the balance.

June 17: Check # 1005 for $4,200.00 was paid for rent for June and July. Put the total amount into the Prepaid Expense account.

June 17: ACC received invoice number 26354 in the amount of $1600.00 from Fida Marketing Agency for advertising.

June 21: Accounts payable in the amount of $3,400.00 were paid with Check # 1006.

June 21: Billed various miscellaneous local customers $14,700 for consulting services performed.

June 22: Check # 1008 was used to pay salaries of $2,800.00 to equipment operators for the week ending June 18. Ignore payroll taxes.

June 22: Received a bill for $600.00 from Computer Parts and Repair Co. for repairs to the computer equipment. The invoice number was 43254.

June 22: Check # 1009 was used to pay invoice number 26354, the advertising bill that was previously received from Fida Digital Marketing Agency.

June 23: Purchased office supplies for $1550.00 from Office Max on account. The invoice number was 65498.

June 23: Check # 1010 was used to pay invoice number 43254, the computer repair bill that was previously received from Computer Parts and Repair Co.

June 28: Billed various miscellaneous local customers $22,500 for consulting services performed.

June 29: Received a bill for the amount of $670.00 from O & G Oil and Gas Co. The invoice number was 784537.

June 29: ACC received $6,500.00 from customers billed when work was completed.

June 29: Check # 1011 was used to pay salaries of $2,800.00 to equipment operators for the week ending June 25. Ignore payroll taxes.

June 29: Cash in the amount of $6,200 was received on billings.

June 30: Paid a cash dividend of $0.35 per share to the two shareholders of ACC, using Check # 1012 - 1013. [IMPORTANT NOTE: The number of shares of capital stock outstanding can be determined from the first two transactions.]

Adjusting Entries - Round to two decimal places =ROUND (number,num_digits).

June 30: Information relating to the prepaid insurance may be obtained from transaction #5. Record a journal entry to reflect that one half month's insurance has expired.

June 30: The rent payment made in transaction# 9 was for June and July. Expense the amount associated with one month's rent.

June 30: A physical inventory showed that only $4350.00 worth of office supplies remained on hand as of June 30.

June 30: The annual interest rate on the mortgage payable was 8.25 percent. Interest expense for one-half month should be computed because the building and land were purchased and the liability incurred on June 16.

June 30: A review of ACCs job worksheets show that there are unbilled revenues in the amount of $5,900 for the period of June 28-30.

June 30: The fixed assets have :

Building - annual depreciation expense $ 23,500

Computer Equipment - annual depreciation expense $ 15,000

Office Equipment - annual depreciation expense $ 7,200

Calculate the depreciation for one month.

June 30: A review of the payroll records show that unpaid salaries in the amount of $1,300.00 are owed to the employees of ACC for three days, June 28 - 30.

June 30:

The note payable in transaction #4 is a five-year note, with interest at the rate of 9 percent annually. Interest expense should be computed based on a 360 day year.

[IMPORTANT NOTE: The original note on the computer equipment purchased on June 2 was $165,000. On June 10, eight days later, $18,000 was repaid. Interest expense must be

calculated on the $165,000 for eight days. In addition, interest expense on the $147,000 balance of the loan ($165,000 less $18,000 = $147,000) must be calculated for the 20 days remaining in the month of June.]

June 30:Income taxes are to be computed at the rate of 20 percent of net income before taxes.

[IMPORTANT NOTE: Since the income taxes are a percent of the net income you will want to prepare the Income Statements through the Net Income Before Tax line. The worksheet contains all of the accounts and their balances which you can then transfer to the appropriate financial statement.]

Closing Entries

Close the revenue accounts.

Close the dividends account.

Close the expense accounts.