Based on the following information in the pictures, if the numbers i wrote in red are not clear or do not make sense you can change them. Please solve the following questions (detailed solving steps is needed):
1. Journalize and post transactions during December;
2. Prepare an unadjusted trial balance at the end of December;
3. Journalize and post adjusting entries. Prepare an adjusted trial balance.
4. Prepare a balance sheet on December 31, 2022. Beginning balance of Retained Earnings
account is zero (0). By the end of December, changes in Retained Earnings account will be
at the amount of Net Income.
5. Prepare a multiple-step income statement with basic earnings per share disclosure for the
year ended December 31, 2022.
6. Prepare a statement of cash flows for the year ended December 31, 2022. Use the indirect
method to present cash flows from operating activities, assuming that the company classifies interest as an operating cash flow.
11. By the end of December, your company incurred and paid a total of $1000 (provided by your simulation) in cash for its other selling expenses (including advertising, marketing, payroll, cart transportation, trailer rental, etc.). The following information was also available during December for your company. - At the end of December, your company incurred monthly interest expense on its debt borrowing as described in Transaction 2. - At the end of December, your prepayment, from Transaction 3, on business licenses and permits expired for the month. - As described in Transaction 4, your company's PP\&E had an estimated life of two years with a $300 residual (salvage) value. Your company used the straight-line depreciation method. - At the end of December, your prepayment, from Transaction 5, on insurance expired for the month. - At the end of December, your company estimated 10% of its outstanding accounts receivable as possibly uncollectible. - The income tax rate was 20% for your company. Accrue income tax expense. Taxes would be paid in January. - The beginning balance of all accounts were zero (0) as of December 1,2022. - No dividends were declared. Beginning balance of Retained Earnings account is zero ( 0 ). By the end of December, changes in Retained Earnings account will be at the amount of Net Income. Tasks: 1. Journalize and post transactions during December; 2. Prepare an unadjusted trial balance at the end of December; 3. Journalize and post adjusting entries. Prepare an adjusted trial balance. 4. Prepare a balance sheet on December 31, 2022. Beginning balance of Retained Earnings account is zero ( 0 ). By the end of December, changes in Retained Earnings account will be at the amount of Net Income. 5. Prepare a multiple-step income statement with basic earnings per share disclosure for the year ended December 31, 2022. 6. Prepare a statement of cash flows for the year ended December 31, 2022. Use the indirect method to present cash flows from operating activities, assuming that the company classifies interest as an operating cash flow. 1. 100 shares of common stock were issued at $10 per share for cash on December 1 . 2. On December 1, your company borrowed $9,000 from a local bank, on a 10% note for 5 years. The interest and principal would be paid semi-annually on each May 1 and December 1 . 3. On December 1, your company paid $750 fees to local government agencies for business licenses and permits, for a period of one year. 4. On December 1, your company acquired a mobile cart, a business sign, and other equipment for a total of $4,200 (all paid in cash). You estimated that the life of these PP\&E items was 2 years with a residual value (salvage) of $300. 5. On December 1, your company paid $1,200 for its annual insurance; the policy started on December 1 . 6. During December (chooseadate), your company acquired merchandise, totaling $5000 (provided by your simulation). At the time of purchase, 70% of the merchandise was acquired on account. Your company promised to pay the remaining balances in 20 days. 7. For the merchandise purchases in Transaction 6, toward the end of December (ehoose ardare) your company paid an additional 20% of the total merchandise price in cash to its suppliers. 8. During December (ehoose a date), your company delivered merchandise and earned $6000 sales revenue (provided by your simulation), of which 30% was on credit. The cost, to your company, of the merchandise sold, was $7000 (provided by your simulation). 9. On December 28, your company signed a sales contract with a customer, Mini-Soda Company, to deliver a total of $5,000 in merchandise on January 7 . Your company collected $2,000 cash in advance from this customer on December 28. 10. By the end of December (cheese a date), your company collected 50% of its accounts receivable from various customers from Transaction 8
