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Date Transaction 1-Jan-20 Five friends decide to start a computer sales and repair store; start the company by issuing 100,000 shares with a par value
| Date | Transaction |
| 1-Jan-20 | Five friends decide to start a computer sales and repair store; start the company by issuing 100,000 shares with a par value of $1 sold to each friend for $3 each. |
| 1-Jan-20 | Realizing they are going to need more cash to run the business, the company obtained a long term bank loan for $200,000. Payments will not have to be made unitl the following year but interest will accrue at 2% |
| 1-Jan-20 | The new owners already had various transactions they had agreed on for the first day of operations; they are as follows: |
| Equipment to diagnose customer computers was purchased for $122,000 cash. The equipment has a 10 year life and a $2,000 residual value | |
| Inventory to be sold to customers was purchased on credit for $50,000 | |
| Supplies to be used for operations was purchased for cash of $10,000 | |
| In order to get a good discount Store Rent was paid in full for the year; $24,000 cash was paid | |
| A friend of the owners who had another company paid them $6,000 cash upfront for a full year of monthly computer service | |
| Companies typically record adjusting entries at the end of each month. In order to simplify this execise adjusting entries will be recorded on a quarterly basis. | |
| Below please find the regular transactions for the first quarter. Don't forget to book the adjusting entries as well. | |
| Quarter 1 | Service revenue for $30,000 was provided; $20,000 was collected in cash and the remainder is still owed by the custormers |
| Services for the $6,000 advance was also done for the quarter. Book this as an adjusting entry separately. | |
| Inventory at a cost of $10,000 was sold for $15,000 cash | |
| Employees earned $6,000 in wages for the quarter; paychecks for the quarter totalled $5,500 (i.e. the other $500 will be in next quarters first paycheck) | |
| $10,000 related to the inventory purchased on credit was paid to the supplier | |
| Adjusting entries: | |
| Accrue Interest, Depreciation, Prepaid Rent, Unearned Revenues, Supplies audit shows $8,000 remain. | |
I need the journal entries and the financial statements, income, balance sheet, and statement of cash flows
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Managerial Accounting
Authors: Ray Garrison, Eric Noreen, Peter Brewer
15th edition
1259404781, 007802563X, 978-1259404788, 9780078025631, 978-0077522940
