Company Information: CREATE T_CHARTS with following info McDoogan provides printing services to customers. They began operations on
Question:
Company Information:
CREATE T_CHARTS with following info
McDoogan provides printing services to customers. They began operations on January 1, 2020. In January 2021, they realized the current VP had not created the records in an accounting system, and due to a time issue, the financial information must be recorded by hand to produce GAAP based financials for the year ending 2020. As such, they have hired you as the Accountant to get the manual system completed before implementing software for 2021. The research begins:
First, you find the company uses straight-line depreciation for all long-term depreciable assets. They also must use the Allowance method to account for uncollectible accounts to be in line with GAAP. The company has decided to use the calendar year, so December 31 is the companys year-end.
The company hired two employees on November 1, 2020. The employees will receive a salary of $2,000 each. Payroll is processed on the 27th of the month creating the employee and the employer taxes and then net pay is paid on the last day of each month. The tax rates are 10% for Federal Income Tax, 8% for state income tax, 7.65% for FICA taxes, and 6.2% for federal and state unemployment on the first $7,000 of each employee earnings per year.
McDoogan Inc. engaged in the following transactions in 2020.
Jan 1 | The owner invested $70,000 into the company in exchange for 5,000 shares of no-par common stock. |
Jan 1 | Purchased a computer system for $32,000. |
Jan 14 | Purchased $1,200 of supplies on account. |
Feb 25 | Invoiced clients for services provided on account, $36,000. |
Mar 31 | Paid rent for two years, $19,200. |
April 1 | The company borrowed $50,000 from Bank of America. |
May 14 | Collected $8,500 on account. |
June 1 | Purchase a delivery van to delivery copies to customers, the van had a purchase price of $53,000, taxes on the van were $5,000 and document charges of $1,500 were paid. |
July 31 | Paid $800 on account for supplies purchased on January 14. |
Aug 10 | Received cash for services provided, $10,200. |
Sept 1 | Paid utilities of $4,000. |
Oct 1 | Received $30,000 in advance for services to be provided in the future. |
Nov 15 | Paid for an ad in the local newspaper, $1,500. |
Nov 27 | Processed employee payroll and employer taxes, gross earnings were $4,000. |
Nov 30 | Paid the employee salaries, taxes are not due until January. |
Dec 15 | The company declared and paid $6,000 in dividends. |
Dec 30 | Invoiced clients for services performed totaling $9,000. |
Dec 27 | Processed employee payroll and employer taxes, gross earnings were $4,000. |
Dec 30 | Paid the employee salaries, taxes are not due until January. |
McDoogan Inc. T accounts Post External Transactions Journal Entries, Adjusting Journal Entries, and Closing Journal Entries
Cash | Accounts Receivable | Supplies | |||||||||||
Allowance for Uncollectible Accounts | Prepaid Rent | ||||||||||||
Deferred Revenue | Notes Payable | ||||||||||||
Equipment - Computer | Accumulated Depreciation-Computer |
| Delivery Van |
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Accumulated Depreciation Delivery Van |
Accounts Payable | Interest Payable | Deferred Revenue |
Salaries Payable | Federal Income Taxes Payable | State Income Taxes Payable |
FICA Taxes Payable | Unemployment Taxes Payable | Notes Payable |
Common Stock | Retained Earnings | Dividends | |||||
Service Revenue | Salaries Expense | Interest Expense | |||||
Advertising Expense | Depreciation Expense | Supplies Expense | |||||
Utilities Expense | Rent Expense | Bad Debt Expense |
Payroll Tax Expense |
Stats Data And Models
ISBN: 662
4th Edition
Authors: Richard D. De Veaux, Paul D. Velleman, David E. Bock