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Borrowed $100,000 cash on a five-year, 12 percent note payable, dated March 1, 2018. Purchased land for a future building site; paid cash, $1,000 and
- Borrowed $100,000 cash on a five-year, 12 percent note payable, dated March 1, 2018.
- Purchased land for a future building site; paid cash, $1,000 and signed an interest free long term note for $14,000.
- Earned $425,000 in revenues for 2018, including $52,000 on account and the rest in cash.
- Sold 8,000 additional shares of capital stock for $30,000 cash on January 1, 2018.
- Incurred the following Expenses for 2018: Rent $45,000, Repairs and Maintenance $37,000, Travel $25,000, Utilities $23,000; $25,000 will be paid later and the rest was paid in cash
- Collected accounts receivable, $32,000.
- Purchased a patent for, $30,000 cash.
- Purchased supplies on account for future use, $28,000.
- Paid accounts payable, $6,000.
- Signed a three-year $30,000 service contract to start February 1, 2019.
- Declared and paid cash dividends, $15,000.
- A customer paid a deposit of $5,500 on Dec. 31, 2018 for a machine to be fixed in January 2019.
- A customer that had a paid a deposit in 2017 for $1,500 was provided the service during the year 2018.
- The company paid for a one year insurance policy for $2,400 on November 1st.
- The company paid employees for wages earned $85,000 for the year.
Data for adjusting entries:
- Supplies counted on December 31, 2018, $15,000.
- Calculate depreciation for the year on the equipment assuming a 10 year life using straight line depreciation.
- Interest accrued on notes payable from #1 only (to be computed).
- Wages earned by employees since the December 24 payroll but not yet paid, $10,000.
- One customer had not been billed for a service that had been completed before the end of the year. The customer owes $15,500 for the service.
- Income tax expense, $11,000, payable in 2019.
- Record bad debt for credit sales with a 1% rate for the year(based on #3)
- Use of insurance policy- #14.
Debit Credit Account Titles Cash $25,000 Accounts Receivable 6,000 Supplies 10,000 Land Building Equipment Accumulated Depreciation 88,000 $17,450 Intangibles Accounts Payable 6,500 14,000 Wages Payable Unearned Revenue 2,500 Interest Payable Income Taxes Payable Long-term Notes Payable Common Stock (4,000 shares, $1.00 par value) Additional Paid in Capital 4,000 80,000 Retained Earnings 17,550 Service Revenue Depreciation expense Supplies expense Wages expenses Interest expense Income Tax expense totals $135,500 $135,500
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