Could use some help recording these! Thanks:)
30b 29 Received a bill for bike repair supplies that were used during the month. The total amount of the bill was $250. Review of the odometer on the truck shows that it was driven 2,000 miles during the month. Ben and 30a Elon have decided to use the units of activity/production method for this asset. Record any needed depreciation for the truck The building is to be depreciated using the straight-line depreciation method. Record the depreciation that is needed for the first month of ownership (assume an entire month even though the building was purchased on the 4). BE owes employees for the work performed from the 16" of the month to the 30th. Be will pay them the cash in May. However, the records need to be updated to show that you owe for the work they have done. Gross wages for the two-week period were $1,600. Federal and state income taxes withheld equaled $150. In addition, $100 in Social Security and Medicare tax was withheld from the gross wages. 30c Finally, the employer had to match the Social Security and Medicare tax. Any taxes due to the government will be paid in May. TIP: This entry is going to be similar to what happened on the 17A and 17B entries. Only difference being that it is combined into one line of the grid and that we are recording the "accrued expense" versus paying. 30d If needed, record any adjusting entries needed related to the insurance policy purchased on April 8th. BE decided to use an allowance method for dealing with bad debts. Based on analysis of their 30e outstanding account receivable they estimate that 10% of the outstanding balance will not be collected. Record any needed adjustment. NOTE: Before doing 30f (below) make sure all other April entries are properly reflected. BE Electric Bikes is subject to federal and state income tax of 20%. Accrue the amount of income tax that will be due for the month of April. TIP: Calculate what the net income before taxes would be prior 30f to 30f. After you obtain that number multiply it by 20% and accrue that amount of income tax. At the end of April no income tax has been paid, only owed to the government we will discuss in class week of 11/30. SH ADDER LAND ALLOWANCE TRADEMAR CASH AD INSURANCE MOUNTS MOVABLE WENTONY TRUE BLIN ACOM DE VO FORDI ACCTS 2 3 7 5 . 9 10 7 11 12 11 14 25 10 11 12 11 16 17 18 19 16 LYA 21 20 2 22 27 24 29 30 29 30 76 SE 306 I Cell Styles Format M O ACCOUNTS PAYABLE UNEARNED REVENUE CREDIT CARD LOAN PAYABLE SALES TAX PAYABLE DIVIDENDS PAYABLE PRTAXES PAYABLE WAGES PAYANE INCOME TAXES PAYABLE - 1 2 3 APRIL 2020 TRANSACTIONS (FIRST MONTH) Ben and Elon both invested $50,000 ($100,000 total) cash into the business in exchange for stock. NOTE: You will have to revisit the remainder of this line item after we complete Chapter 11. In exchange for their investment they both received 1,000 shares (2,000 shares in total) of $25 par value Common Stock. The company is authorized to issue up to 3,000 shares A used truck was purchased for $11,000 cash. The truck has an estimated useful life of 50,000 miles and a salvage value of $1,000. Although used, Ben and Elon hope that this truck will last at least five years. BE decided a building was needed for the business. To make sure that the business had enough cash they secured a loan with the local bank for $48,000 (cash). The terms of the loan are: Loan Amount = $48,000; Interest Rate = 12% annual rate; Number of Periods = 4 Years. See Loan Amortization Tab in Excel Workbook for Details The perfect building was found. The building was located on a piece of property ("land"). They purchased the building and land by paying cash in the amount of $100,000. The building was valued at $80,000 and the land was valued at $20,000. The building is estimated to have a useful life of 40 years and a salvage value of $8,000. Rented a small storage space off-premises to keep the extra bike inventory. The total cost of the storage space was $300 for the current month. Cash was paid. Performed repair services for various customers in the amount of $2,000. 25% of the customers paid in cash. The remaining customers received bills. Found a vendor of electric bikes that they wanted to work with (BE would purchase the bikes and then resell to customers). The initial purchase was for ten bikes. Each bicycle was purchased for $1,000. The vendor trusted them and gave them terms. Thus, no payment was madeeeded at this time. NOTE: BE Electric Bikes plans to use the average cost method of dealing with inventory cost flow. 4 5 6 7 7 00 9 10 11 Purchased a twelve-month insurance policy that covers the period of April 1 of the current year to March 31 of the next year. The total amount paid was $2,400 cash. Sold one electric bike to a customer for $1,800 plus 5% sales tax. The customer paid in cash for the purchase (bike and sales tax). NOTE: The sales tax is collected by Be, however, this is money that is owed to the government. Sold two bikes to a customer in Canada. The total amount of the sales was $3,000. As the sale was out of state/country no sales tax was charged. The customers paid Be with cash (U.S. dollars) Received a bill for $800 of advertising that would be used up during the current month. The amount was immediately paid (in full) with cash. Performed $1,000 worth of bike repairs for customers. BE mailed out the invoices to the customers with the expectation that the customers will promptly pay. Purchased $400 of office supplies for the month of April. All supplies will be used by the end of April. The purchase was made on BE's company credit card Paid the telephone bill for the month of April with cash. The telephone bill was $400. Paid $4,000 in cash towards the outstanding balance related to the electric bikes purchased in #7 above. 12 13 14 15 17A 22 16 All the customers from #12 paid (with cash) the outstanding balances that they had with BE. BE employees earned gross wages of $1,500 from April 1 to April 15". Based on the combined W4 selections (federal and state withholding). $150 in tax was withheld by BE Electric Bikes on behalf of the employees. Also, $100 in Social Security and Medicare tax was withheld from employee pay checks. BE will pay the taxes in May. The employees received the net pay amount of $1,250. Based on current law, BE Electric Bikes has to match the Social Security and Medicare tax amounts ($100 17B in total) withheld from the employee pay checks in 17 above. This amount will also be submitted to the government in May. 19 Received a bill for the electricity for the month of April. The total bill was $300. 20 BE discovered another company had a very similar name. To prevent confusion, the business used $3,000 cash to purchase the other company's trademark on the BE name. 21 The customers from April 6th pay the $1,500 outstanding balance that remains on their account Cash is received for this amount. May is anticipated to be a busy month. BE is concerned they may not have enough inventory. Therefore, four more bikes were purchased from their supplier at a price of $1,275 per bike. The purchase was made on their account with the bike store. Sold another bike to a customer that lived in Illinois. No sales tax was charged. The customer did not 23 have his/her wallet so you sent them a bill. The total amount of the sale was $1,600 24 Made a payment of $105 towards the credit card purchase from #12 above. The payment included $10 of interest 25 Made the first loan payment that was due on the bank loan. See the loan amortization tab included in the template to determine the allocation between principal and interest. To be discussed week of 11/30 (in class) Sold two more bikes to a local family. The total sales price was $5,000 plus tax of 5%. The customers 27 paid in full with cash. TIP: Remember tax is charged and collected by the seller, however, the tax amount is "due" to the appropriate governing body. I 28 A dividend in the amount of 10 cents (10) per share is declared. May have to revisit after Chapter 11. Received a bill for bike repair supplies that were used during the month. The total amount of the bill was $250. Review of the odometer on the truck shows that it was driven 2,000 miles during the month. Ben and 30a Elon have decided to use the units of activity/production method for this asset. Record any needed depreciation for the truck. The building is to be depreciated using the straight-line depreciation method. Record the depreciation 30b that is needed for the first month of ownership (assume an entire month even though the building was purchased on the 4). BE owes employees for the work performed from the 16" of the month to the 30". BE will pay them the cash in May. However, the records need to be updated to show that you owe for the work they have done. Gross wages for the two-week period were $1,600. Federal and state income taxes withheld 29 See the list
