Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Barbara Jones opened Barb's Book Business on February 1. You have been hired to maintain the company's financial records. The following transactions occurred in February,

image text in transcribed
Barbara Jones opened Barb's Book Business on February 1. You have been hired to maintain the company's financial records. The following transactions occurred in February, the first month of operations. a. Received shareholders' cash contributions on February 1 totaling $29,000 to form the corporation; issued 1,000 shares of common stock. b. Pald $2,415 cash on February 2 for three months' rent for office space. TIP: For convenience, simply record the full amount of the payment as an asset (Prepaid Rent). At the end of the month, this account will be adjusted to its proper balance. c. Purchased and received supplies on February 3 for $680 cash. d. Signed a promissory note on February 4, payable in two years; deposited $14.000 in the company's bank account e On February 5, pald cash to buy equipment for $2.850 and land for $11,150. f. Placed an advertisement in the local paper on Felhsary 6 for $560 cash. g. Recorded sales on February 7 totaling $2,400: $2,170 was in cash and the rest on accounts receivable. h Collected accounts receivable of $20 from customers on February 8. On February 9, repaired one of the computers for $182 cash. TIP: Most repairs involve costs that do not provide additional future economic benefits. J. Incurred and paid employee wages on February 28 of $670. Required: 1. Prepare the journal entry for each of the above transactions 2. Post the transaction activity from requirement to the T-Accounts below. All accounts begin with zero balances because this is the first month of operations. 3. Prepare an unadjusted trial balance at the end of February 4-6. Refer to the revenues and expenses shown on the unadjusted trial balance. Based on this information calculate preliminary net income and net profit margin? 4.b. Determine whether the net profit margin is better or worse than the 19.5 percent earned by a close competitor

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Accounting Reporting And Analysis, 2017 Update

Authors: James M. Wahlen, Jefferson P. Jones, Donald Pagach

2nd Edition

1337505625, 9781337505628

More Books

Students also viewed these Accounting questions