Date Event November 1, 2017 Jack Deal created Deals Cleaning Service Corporation and hired a lawyer to perform the incorporation for a fee of $500. The par value of the common stock will be $1 per share and 50,000 shares are authorized in the charter of incorporation. Jack purchased 20,000 shares of the corporations common stock for $20,000 using his personal funds. The corporation will operate an office cleaning service business in Pike Road, Alabama. The business will prepare financial statements on a monthly basis and calculate depreciation/amortization at June 30 and December 31, respectively, using the straight-line method. Any fixed assets purchased during the month are treated as if purchased at beginning of month. Interest is accrued at year-end and when paid. Jack paid the lawyer the incorporation fee. November 1, 2017 The investors of the Deals Cleaning Service appointed three individuals to the companys Board of Directors. The board will meet once every quarter to review the operations and set overall policy for the company, but it will not be involved in the day to day operations. Jack is appointed CEO of the corporation. The board appointed a clerk-secretary to assist Jack in his duties. The clerk-secretary will not receive any compensation. Jack is allowed to draw up to $1500 per month as a personal dividend but the Board will decide to pay shareholders a normal dividend. November 1, 2017 Later in the day, two other investors purchased common shares of Deals Cleaning Service Corporation. Investor #2 purchased 2,000 shares for $2,000 and Investor #3 purchased 3,000 shares for $3,000. November 1, 2017 Deal purchased a 1-year insurance policy effective immediately. The policy is for the bonding of employees ($1300 annually) and insurance for the business and temporary headquarters ($500 annually). Deal pays for the insurance policy in cash. November 1, 2017 A new investor supplied 2 acres of land in exchange for common stock and a mortgage note. The land has been appraised at $70,000 and the investor received 10,000 shares of stock and a note with a face value of $60,000. The note requires Deals Cleaning Service to pay interest at a rate of 10% per year and the principal is due in five years. Interest is due each year on Nov 1. Deal purchases a used truck for $10,000 paying $2,000 cash and the balance in a notes ACCT 3110 Fall 2021 Smith Practice Case 2 November 1, 2017 payable. The terms of the note are monthly payments for 4 years with a 5% annual interest rate. Jack fills up the truck with gasoline at a cost of $47. Jack decides that the truck will be useful for 4 years with a residual value of $1000. Simple interest is used for calculation of monthly payments and is not accrued until the 1st of the month when the payment is made. Jack purchases annual insurance for truck at a cost of $600 which he paid in cash. November 6, 2017 Deal signs up 14 weekly customers at a rate of $120 per week and 8 customers who will require cleaning every 2 weeks for a rate of $160 per service. Customers are to be billed on 15th of month and at end of month with a 2% cash discount if paid within 3 days of billing, otherwise, the balance is due with 10 days of billing. Cleaning will be split between Vic and Emelia equally. Weekly and bi-weekly cleaning will commence on November 16, 2017 after Jack hires employees. November 13, 2017 After going through several interviews, Jack hires an office manager, Linda, and two cleaning staff, Emelia and Vic. The cleaning personnel will each earn $12.00 per hour and the manager will earn $800 at every payday. All employees will work an eight-hour day, 5 days per week and will be paid on the 15th and last day of the month. Employees are aware that they may have to work weekends for overtime rate at 1.5 times their hourly wages. At present, the employees will be treated as if they are contract employees and no taxes will be taken out of payroll. Employees are scheduled to begin work on November 16, 2017. November 15, 2017 Deals Cleaning Service agrees to rent a trailer that it will use as a temporary office. The rental cost, as determined by Ferry Company, the lessor, will be $250 per month. Ferry will prorate this months rent using a November 15 start date. Deal pays November rent. In the future, rent will be due and paid at the first of the month. November 15, 2017 Investor #2 sells 500 shares of Deals Cleaning Service stock to his younger sister for $500. November 15, 2017 Jack hires Ingram Home Improvement Store to quickly outfit the trailer with office furniture and chairs and laptop at a cost of $1800 on account. Deals payment terms are n/eom. The laptop is less than $600 so Jack decides to expense the laptop in accordance with current Section 179 IRS rules instead of capitalizing the asset. November 15, 2017 Jack purchases shirts for himself and company employees from Graphic Designs for $75. November 15, 2017 Deals Cleaning Service applies for credit to Big Sparkle Company. Since this is a brand new business and has no history of operations, Big Sparkle agrees to a $5,000 limit. November 17, 2017 Jack purchases cleaning supplies from Big Sparkle Company totaling $6,200. After reaching the set credit limit, Deal paid cash for the balance of the purchase. Terms are n/eom. Supplies will be a prepaid expense and inventory of supplies taken at June 30 and December 31. November 17, 2017 Jack receives the companys first large corporate cleaning job cleaning the Warhawk Gym for $2,800 after a basketball game. Vic and Emelia provide cleaning that night and Warhawk Gym is billed for the service with terms of 1/10, n/eom. Both Vic and Emelia work 4 hours overtime for this job. November 17, 2017 Jack is contacted to clean up for a local church after a wedding party on November 18, 2017. Since the job was last-minute notice, Deal negotiates a $3000 fee and tells both Emelia and Vic to handle the job the same day. Since Vic needed to polish the floors, Vic works 3 hours and Emelia works 2 hours after the wedding. The church wires Deals Cleaning Corporations bank account $3000 the same day as the job. The church has a floor polishing machine. November 20, 2017 Jack fills up the company truck with gasoline at a cost of $39. Jack is contacted by Lane who will be hosting an Iron Bowl party at his residence on Saturday, November 25, 2017. Lane needs cleaning services on Sunday, November 26, 2017. Jack ACCT 3110 Fall 2021 Smith Practice Case 3 November 20, 2017 negotiates a $750 fee and Lane pays Jack on November 20, 2017. November 23, 2017 Jack gives personnel a paid holiday. Since the company does not have a leave policy in place yet, this holiday will not affect payroll at end of month. November 26, 2017 Vic and Emelia work 3 hours each to clean up after the Iron Bowl party. November 27, 2017 Jack purchases gas for the truck for $46. On the way home, Jack decides he needs to pay his own personal bills so he draws $1200 for personal use from the business. Linda calls Jack to inform him that Warhawk Gym has paid their bill within the discount period. November 29, 2017 Jack negotiates a deep cleaning of a bathtub at the home of the Smith family for that afternoon. He is paid $250 for this service. Jack purchases a special tool to complete this cleaning at Lowes for $2000 and pays cash. Vic completes the service by 5:00 pm. Jack asks one of the store managers their opinion on the useful life of the tool and they give him an estimate of 3 years with $0 residual value. Jack determines that he will use that estimate for depreciation purposes for the tool. November 30, 2017 The office manager completes payroll for Jacks review including the overtime pay for jobs after hours for Vic and Emelia. Jack pays the office manager and cleaning crew for their time work since November 16, 2017. November 30, 2017 The office manager bills weekly and bi-weekly customers for service, pays accounts payable balances due, and completes adjusting and closing end of month journal entries and prepares a trial balance and financial statements for Jacks review. Check figures Retained Earnings balance for balance sheet is equal to $4126 and Total Assets are $107,126

complete journal entries for each month, including adjusting and closing, trial balances, and financial statements consisting of Income Statement, Statement of Retained Earnings, and Balance Sheet in classified format.