ACC 502: Accounting for Management Assignment 1 < Part 1 > A recent KSOM grad ("Grad") started a high-tech consulting business (Hi-Tec) on January 1, 2022. During the month if January, Hi-Tec had the following transactions: a) January 1: Issued common stock to friends and family for $50,000. b) January 1: Bought advertising in the "Daily Scranton" for $1,000 in cash (for the month of January). c) January 1: Paid $15,000 in cash for three months' rent on a storefront in downtown Scranton. d) January 1: Bought a very fancy computer system for $6,000 on account with payment due in 60 days. The computer system has an expected life of 2 years and will be worthless at the end of two years. e) January 12: Provided three hours of consulting time to a computer science undergrad for $300 in cash. f) January 23: Provided five hours of consulting time to a KSOM professor for $1,000 on account, with the $1,000 due within 30 days. g) January 24: Paid $3,000 to the company from which it bought the computer (see d) above). h) January 25: Received $400 in cash from the KSOM professor (see f) above) Grad did not focus on accounting while at KSOM, preferring to concentrate on entrepreneurship. However, the agreement with Grad's investors requires monthly income statements and balance sheets to be prepared on the accrual basis and sent to each of them. As a result, she reached out to you for assistance in preparing an income statement and balance sheet for the month ended January 2022. Answer the following questions with respect to the two statements that you prepare for Grad to give to Hi- Tec's investors. Show work in following two pages. Answer the following questions with respect to the two statements that you prepare for Grad to give to Hi- Tec's investors. Show work in following two pages. a) How much cash was on Hi-Tec's balance sheet as of January 31, 2022? b) What were the total liabilities on Hi-Tec's balance sheet as of January 31, 2022? c) What were Hi-Tec's revenues for the month of January 2022? d) What were Hi-Tec's expenses for the month of January 2022? e) What were the total assets on Hi-Tec's balance sheet as of January 31, 2022? f) What was the total shareholders' equity on Hi-Tec's balance sheet as of January 31, 2022? Journal Entries a) b) c) d) e) f) g) h) Account Name Debit Credit Adjusting Entries on January 31 Account Name Debit 1) 2) 3) Credit T-Accounts Assets Liabilities Cash Accounts Payable Prepaid Advertisement Equity Common Stock Prepaid Rent Equipment - Computer Accumulated Depreciation - Computer Account Receivable Service Revenue Advertisement Expense Rent Expense Depreciation Expense < Part 2 > Jay's Company has been in business since 2020 and has December 31 fiscal year end. It uses a perpetual inventory system and straight-line depreciation method. Beginning balance of permanent accounts are shown on the T-accounts. Beginning inventory consists of 300 units of merchandises with unit cost of $40. The following transactions and events occurred during the fiscal year 2021. Jan. 10 Feb. 5 Purchased 400 units of merchandises at $50 each on account. Paid for the balance related to the purchase on Jan. 10 Mar. 15 Sold 300 units of merchandises in inventory at $80 each. The units sold were inventory from the beginning of the year. Apr. 1 July 1 July 5 Borrowed $20,000 from a local bank by signing a note, 12% annual rate maturing in 12 months. Purchased an equipment for $12,000 paying $3,000 in cash and the balance on account. This equipment is to be used for one year with no salvage value. Paid the remaining balance related to the purchase on July 1. Renewed annual rent contract, paying all 12-month rent upfront totaling $36,000. Oct. 1 Nov. 10 Paid $500 to repair the equipment Sold 400 units of merchandises in inventory at $100 each on account. Dec. 1 Dec. 5 100 units of merchandises from Dec. 1 sales are returned for credit. Dec. 20 Received an online order for 50 units of merchandises and received $5,000. Merchandises are scheduled to be shipped on Jan. 10, 2022. Dec. 31 Fiscal year 2021 has ended and adjusting entries are made. Instruction: Complete the posting of the transactions, including adjusting entries on the T-accounts. (No need to write the dates) Inventory Accounts Receivable 100,000 Cash 12,000 Prepaid Rent Equipment Accumulated Depreciation Accounts Payable Notes Payable Unearned Revenue Interest Payable Sales Revenue Sales Return & Allowance COGS Repair Expense Depreciation Expense Rent Expense Interest Expense Owner's Capital 112,000