ACCT 215 (CT) Accounting Cycle Problem The Company, Inc., which provides consulting services to major utility companies, was formed on January 2 of this year. Transactions completed during the first year of operation were as follows:

January 2 Issued 600,000 shares of stock for $10,500,000.

January 10 Acquired equipment in exchange for $2,500,000 cash and a $5,000,000 note payable. The note is due in ten years.

February 1 Paid $12,000 for a business insurance policy covering the two-year period beginning on February 1.

February 22 Purchased $950,000 of supplies on account

March 1 Paid wages of $185,600

March 23 Billed $2,820,000 for services rendered on account

April 1 Paid $110,000 of the amount due on the supplies purchased February 22.

April 17 Collected $240,000 of the accounts receivable

May 1 Paid wages of $200,400.

May 8 Received and paid bill for $96,000 for utilities.

May 24 Paid $43,000 for sales commissions.

June 1 Made the first payment of 250,000 on the note issued

January 10. The payment consisted of $50,000 interest and $200,000 applied against the principal of the note.

June 16 Billed customers for $550,000 of services rendered.

June 30 Collected $320,000 on accounts receivable.

July 10 Purchased $150,000 of supplies on account. August 25 Paid $155,000 for administrative expenses.

September 23 Paid $31,000 for warehouse repairs.

October 1 Paid general wages of $91,000.

November 20 Purchased supplies for $62,000 cash.

December 15 Collected $145,000 in advance for services to be provided in December and January.

December 30 Declared and paid a $55,000 dividend to shareholders. The chart of accounts that Company, Inc. uses is as follows:

Assets:

101 Cash

102 Accounts receivable

103 Supplies

104 Prepaid insurance

110 Equipment

112 Accumulated depreciation

Liabilities:

201 Accounts payable

202 Unearned service revenue

203 Wages payable

210 Interest payable

220 Notes payable

Stockholders Equity:

301 Common stock

310 Retained earnings

320 Dividends

Revenues:

401 Service revenue

Expenses:

501 Wage expense

502 Utility expense

503 Selling expense

504 Administrative expense

505 Repairs expense

506 Insurance expense

507 Supplies expense

510 Depreciation expense

520 Interest expense

Other:

601 Income summary

QUESTIONS:

(Template provided Below):

1. Journalize the transactions for the year.

2. Post the journal entries to a T account.

3. Prepare an unadjusted trial balance as of December 31.

4. Journalize and post adjusting entries to the T accounts based on the following additional information:

a. Eleven months of the insurance policy expired by the end of the year. b. Depreciation for equipment is $400,000. c. The company provided $90,000 of services related to the advance collection of December 15. d. There are $535,000 of supplies on hand at the end of the year. e. An additional $175,000 of interest has accrued on the note by the end of the year. f. Marshall accrued wages of $205,000 at the end of the ear. 5. Prepare an adjusted trial balance as of December 31. 6. Prepare a single-step income statement and statement of retained earnings for the year ended December 31 and a classified balance sheet as of December 31. 7. Journalize and post the closing entries 8. Prepare a post-closing trial balance as of December 31. USE EXCEL

\begin{tabular}{|r|r|l|} \hline Date & Amount & \\ \hline 2-Jan & 600,000 & Shares issued \\ \hline & 10,500,000 & Amount paid for shares \\ \hline 10-Jan & 2,500,000 & Cash paid for equipment \\ \hline & 5,000,000 & 10 year note payable for remainder of equipment \\ \hline 1-Feb & 12,000 & Two year insurance policy beginning February 1 \\ \hline 22-Feb & 950,000 & Purchase supplies on account \\ \hline 1-Mar & 185,600 & Paid Wages \\ \hline 23-Mar & 2,820,000 & Billed for services rendered on account \\ \hline 1-Apr & 110,000 & Partial payment for supplies purchased on February 22 \\ \hline 17-Apr & 240,000 & Collected part of accounts receivable \\ \hline 1-May & 200,400 & Paid Wages \\ \hline 8-May & 96,000 & Received and paid bill for utilities \\ \hline 24-May & 43,000 & Paid sales commissions \\ \hline 1-Jun & 50,000 & Interest on first payment for note issued January 10th \\ \hline & 200,000 & Principle on first payment for note issued January 10th \\ \hline 16-Jun & 550,000 & Billed customers for services rendered \\ \hline 30-Jun & 320,000 & Collected part of accounts receivable \\ \hline 10-Jul & 150,000 & Purchased supplies on account \\ \hline 25-Aug & 155,000 & Paid for administrative expenses. \\ \hline 23-Sep & 31,000 & Paid for warehouse repairs. \\ \hline 1-Oct & 91,000 & Paid general wages \\ \hline 20-Nov & 62,000 & Purchased supplies for cash. \\ \hline 15-Dec & 145,000 & Collected in advance for services to be provided in December and January. \\ \hline 30-Dec & 55,000 & Declared and paid a dividend to shareholders. \\ \hline \end{tabular} \begin{tabular}{|r|l|l|} \hline Date & Amount & \\ \hline 31-Dec & 11 & Months of the insurance policy expired by the end of the year. \\ \hline 24 & Total months of the insurance policy \\ \hline 400,000 & Depreciation for equipment \\ \hline 90,000 & The company provided services related to the advance collection of December 15. \\ \hline 535,000 & Supplies on hand at the end of the year. \\ \hline 175,000 & Interest has accrued on the note by the end of the year. \\ \hline 205,000 & Marshall accrued wages at the end of the ear. \\ \hline \end{tabular} Totals Date Acct # Trial Balance Worksheets John Marshal Company Income Statement for the Year ended 12/31/2020 Expenses John Marshal Company Statement of Retained Earnings for the Year ended 12/31/2020 John Marshal Company Balance Sheet as of 12/31/2020