Question
Below are accounting events for the Smith Companys Year 2 operations. We analyzed Smith Companys Year 1 transactions in Week 2 Example 2. Be sure
Below are accounting events for the Smith Companys Year 2 operations. We analyzed Smith Companys Year 1 transactions in Week 2 Example 2. Be sure to start this analysis with the ending balances from Week 2 Example 2.
1. On January 1, issued additional common stock for $10,000 cash.
2. On January 3, moved into new offices and paid the building owner $12,000 for Year 2 rent (consider January to be a full month).
3. Recognized $2,700 of consulting revenue earned on account. (The company has completed the work and sent a bill to the customers. The customers have not yet paid the bills in cash.)
4. Collected $2,800 cash from accounts receivable.
5. Accrued salary expense of $1,500.
6. Paid salaried employees $1,350 cash related to salaries payable. 7. Received $1,000 cash from customers on the completion date for completed consulting projects. 8. Paid dividends of $300 to the stockholders. 9. Paid $420 on March 1 to renew the insurance policy for another one-year term.
Required A. Record Smith Companys Year 2 events in the transactions record. Your work should include beginning balances for permanent accounts related to Year 1 activity as discussed in Week 2 Example 2. B. Record any necessary adjusting entries for Year 2 (there are three). Do not forget activity in Year 2 might be connected to accruals and/or deferrals from Year 1. Be sure to label any adjusting entries to correspond to the transaction being adjusted. C. Prepare four financial statements in the worksheet tabs. Income Statement Statement of Changes in Stockholders Equity Balance Sheet Statement of Cash Flows
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