Create a journal entry for the all "recordable" events:
- Create a small merchandising company and give your company a name - Examples of merchandising companies include shoe store, clothing store, jewelry store, pet store, restaurant, etc. - Try to think of a unique company that sells a specialty product - Start to raise money for your company by selling stocks to each of your owners (who are also your shareholders) - Raise additional funds by making a loan from the bank (Terms: 5-year loan at 6% annual interest rate) - Sign a lease, on a building, to manufacture your product (5-year lease). - Sign a 1-year advertising contract (for monthly T.V. ads) - Hire five workers to work in your retail business (\$20 hourly wage) - Make a contract with a cleaning company to clean the premises on a weekly basis (note: you must negotiate and then set your weekly contract cleaning fee) - Post all of the recordable entries to T-accounts January 2nd - Purchase furniture \& equipment for your company by paying cash - Purchase an office computer and printer for your company by paying cash - Purchase office supplies by paying cash - Pay one year (twelve month's) lease rental in advance - Pay six month's advertising in advance - Post all of the above entries to T-accounts - Purchase sufficient inventory, on credit, to stock your business (for the first time). January 7th - Record week-1 cash sales to customers (set your cost of goods sold to be 50% of your selling price). Note: Make only on sale entry to keep it simple (this should be a four-line journal) - Receive cleaning invoice for week-1 and pay the bill with cash - Post the above entries to T-accounts January 14th - Record week-2 cash sales to customers (set your cost of goods sold to be 50% of your selling price). Note: Make only one sale entry to keep it simple (this should be a four-line journal) - Receive cleaning invoice for week-2 and pay the bill with cash - Post the above entries to T-accounts January 15th - Pay wages to your workers (for two weeks of work) - Purchase additional inventory, on credit, to replenish your stock (that is running low) - Post the above entries to T-accounts January 21st - Record week-3 cash sales to customers (set your cost of goods sold to be 50% of your selling price). Note: Make only one sale entry to keep it simple (this should be a four-line journal) - Receive cleaning invoice for week-3 and pay the bill with cash - Send some documents to a supplier via FedEx and pay the bill with cash - Post the above entries to T-accounts January 28th - Record week-4 cash sales to customers (set your cost of goods sold to be 50% of your selling price). Note: Make only on sale entry to keep it simple (this should be a four-line journal) - Receive cleaning invoice for week-4 and pay the bill with cash - Pay your workers for two-weeks work - Purchase additional inventory, on credit, to replenish your stock (that is running low) - Post the above entries to T-accounts January 30th - Receive the electric utility bill for January and pay with a check - Receive the water bill for January and pay with a check - Receive the property insurance bill for January and pay with a check - Receive the garbage collection bill for January and pay with a check - Make payment for the inventory that was purchased, on credit, on January 2nd - Post all journal entry to T-accounts
