. B co E F G Adomain Balance Sheet As of December 31, Year O 7 $80,000 6,700 20,000 25,000 34,700 10,500 15,000 $191,900 4 Assets 5 Cash 6 Marketable Securities Accounts Receivable 8 Inventory 9 PP&E (net) 10 Intangible Assets 11 Other Long-Term Assets 12 Total Assets 13 14 Liabilities & Equity 15 Accounts Payable 16 Notes Payable 17 Unearned Revenue 18 Income Tax Payable 19 Common Stock 20 Retained Earnings 21 Total Liabilities & Equity $45,000 28,500 50,000 4,300 45,000 19, 100 $191,900 22 23 "Assume these notes represent non-interest-bearing loans from owners, due in 5 years. Year 1 Transactions for Adomain anuary 1 Purchased a patent for $32,000 in cash March 15 Paid $18.500 in cash for long-term assets April 1 Prepaid $36,000 for rent for the next 12 months and recorded the transaction as an asset April 1 issued 1000 common shares to investors for $60.000 April 1 Sold inventory on account for $120.0001). The cost of the inventory was $10,000(D),AISO, paid a sales commission on this sale of $10,000 (c). April 5 Paid $13,400 in cash for costs related to research and development of new products May 1 Received $24,000 in cash in advance for services. The services will be provided over the course of 6 months beginning on Dec 1 of this year. May 1 Received the cash to settle $65,000 of the receivables recorded on April 1. N July 31Purchased Inventory for $15,000. Paid ,000 in cash and recorded an Accounts Payable for the remaining balance. July 31 Received $20,000 in cash relating to the Accounts Receivable in transaction 5. Sept 30Purchased supplies for $7.000 in cash. The accountant accidentally recorded the supplies in the Accounts Receivable account October 1 The accountant recorded an adustment to correct the entry made in 12a (so that the accounts will reflect what should have been recorded October 1Purchased marketable securities for $6,000 in cash. October 1 Borrowed $20.000 from a local bank and signed a 3-year note payable promising to pay 10% interest per year (interest is due and recorded on Dec 31). Dec 1 Employee salaries earned amounted to $34,000. The company paid $4,000 on Dec 1 and the remainder will be paid on Jan 1, Year 2 Dec 31 Income Tax for Year 1 is $5.500, $3.500 is paid ts year and the remainder will be paid on June 30 of Year 2 Dec 31 Record the appropriate adjusting entry related to transaction 3. I Dec 31 Record the appropriate adiusting entry Dec 31 $2000 of supplies are still on hand on Dec 31, Record the appropriate adjusting entry to reflect the supplies used during the year. Refer to transaction 12. Dec 31 Record the appropriate adjusting entry related to the note payable described in transaction 14 (assuming interest will be paid in Year 2). 17 FORMULAS MUST BE USED DO NOT HARD CODE ANY NUMBER Marthe Sus Service Reven An Resim Accounts Payable Sales Revenue Rent Expen HHHHHHH HHHHHH Notes Payable Cost of Gands Sold Seslissen P ent Une med Rece Sales Commissions Income Tax Payable Income Tax Expense Salaries Payable C D E F G H I J Adomain Income Statement For the year ended December 31, Year! 4 Revenues Cells highlighted in blue must include formulas and may not be hard coded. Expenses 10 14 Income from Operations 15 16 Income before Taxes 18 Net Income D E F G H I J . Adomain Balance Sheet As of December 31, Year! Cells highlighted in blue must include formulas and may not be hard coded. Llabildes & Equity Total Liabilities & Equity C D E F G H I Post-Closing Trial Balance DR Total
