Enter Net Appliance- Martha's Vineyard has just purchased a franchise from Enter Net Appliance (ENA).

Following is the chart of accounts for Enter Net Appliance- Martha's Vineyard. As a new business, all beginning balances are $0.

Enter Net Appliance- Martha's Vineyard completed the following transactions during 2018, its first year of operations:

Complete the following requirements:

i More Info Enter Net Appliance-Martha's Vineyard Chart of Accounts Baen, Capital Cash Petty Cash Baen, Withdrawals Accounts Receivable Sales Revenue Allowance for Bad Debts Interest Revenue Merchandise Inventory Cost of Goods Sold Office Supplies Franchise Fee Expense Prepaid Insurance Salaries Expense Interest Receivable Utilities Expense Notes Receivable Insurance Expense Land Supplies Expense Building Bad Debt Expense Accumulated Depreciation-Building Bank Expense Credit Card Expense Store Fixtures Accumulated Depreciation-Store Fixtures Depreciation Expense-Building Depreciation Expense Store Fixtures Office Equipment Accumulated Depreciation-Office Equipment Depreciation Expense Office Equipment Franchise Amortization Expense-Franchise Accounts Payable Interest Expense Interest Payable Cash Short and Over Notes Payable Print Done iMore Info Received $550,000 cash from owner, K. Baen, in exchange for capital. Opened a new checking account at Martha's Vineyard National Bank and deposited the cash received from the owner a. Paid $49,000 cash for a ENA franchise. b. Paid $480,000 cash and issued a $450,000, 10-year, 4% notes payable for land with an existing building. The assets had the following market values: Land, $90,000; Building, $840,000 C. d. Paid $82,500 for store fixtures. Paid $70,000 for office equipment e. Paid $500 for office supplies. f. Paid $2,800 for a two-year insurance policy. g. h. Purchased appliances from ENA (merchandise inventory) on account for $415,000. Established a petty cash fund for $300. j. Sold appliances on account to TUV Contractors for $250,000, terms n/30 (cost, $75,000). k. Sold appliances to Harris Contracting for $110,000 (cost, $38,000), receiving a 6-month, 10% note I. Recorded credit card sales of $45,000 (cost, $16,500), net of processor fee of 2%. Received payment in full from TUV Contractors. Purchased appliances from ENA on account for $680,000 Made payment on account to ENA, $340,000 Sold appliances for cash to BB Home Builders for $380,000 (cost, $149,000) m. n. O. p. Received payment in full on the maturity date from Harris Contracting for the note. q. EEo Sold appliances to Keard Contracting for $240,000 (cost, $96,000), receiving a 9-month 10% note. r. Made payment on account to ENA, $480,000. Sold appliances on account to various businesses for $990,000, terms n/30 (cost $297,000) S. t. Collected $730,000 cash on account. u. Paid cash for expenses: Salaries, $210,000; Utilities, $13,000 V. Replenished the petty cash fund when the fund had $33 in cash and petty cash tickets for $256 for office supplies W. Baen withdrew $3,000. X. Paid the franchise fee to ENA of 7% of total sales of $2,015,000 y. Done Print Requirements 1. Record the transactions in the general journal. Omit explanations 2. Post to the general ledger 3. It is a common business practice to reconcile the bank accounts on a monthly basis However, in this problem, the reconciliation of the company's checking account will be done at the end of the year, based on an annual summary Reconcile the bank account by comparing the following annual summary statement from Martha's Vineyard National Bank to the Cash account in the general ledger. Record journal entries as needed and post to the general ledger. Use transaction z as the posting reference 7 Beginning Balance, January 1, 2018 C Deposits and other credits: 550,000 44,100 250,000 380,000 730,000 1,150 Interest Revenue 1,955,250 Checks and other debits: EFT to Bank Checks $ 130 EFT to Bank Checks 130 Checks: 49,000 480,000 70,000 82,500 300 2,800 500 340,000 480,000 223,000 1,500 (1,729,730) Bank service charge 225,520 Ending balance, December 31, 2018 "Bank Checks is a company that prints business checks (considered a bank expense) for Enter Net Appliance-Martha's Vineyard 4. In preparation for preparing the adjusting entries, complete depreciation schedules for the first five years for the depreciable plant assets, assuming the assets were purchased on January 2, 2018: A Building, straight-line, 30 years, $60,000 residual value. a. residual value b. Store Fixtures, straight-line, 15 years, no Office Equipment, double-declining-balance, 5 years, $3,000 residual value. C. 5. Record adjusting entries for the year ended December 31, 2018: One year of the prepaid insurance has expired. a. b. Management estimates that 6% of Accounts Receivable will be uncollectible. An inventory of office supplies indicates $606 of supplies have been used C. d. Calculate the interest earned on the outstanding Keard Contracting note receivable. Assume the note was received on October 31. Round to the nearest dollar Record depreciation expense for the year e. f. Record amortization expense for the year on the franchise, which has a 10-year life. Calculate the interest owed on the note payable. Assume the note was issued on January 1 g. 6. Post adjusting entries and prepare an adjusted trial balance. Prepare a multi-step income statement and statement of owner's equity for the year ended December 31, 2018. Prepare a classified balance sheet as of December 31, 2018. Assume Interest Receivable is a current asset and Interest Payable is a current liability. 7. 8. Evaluate the company's success for the first year of operations by calculating the following ratios. Round to two decimal places. Comment on the results. Liquidity: a. i. Current ratio . Acid-test ratio ii. Cash ratio b. Efficiency: . Accounts receivable turnover ii. Day's sales in receivables iii. Asset turnover iv. Rate of return on total assets Print Done