Full Cycle

On January 1, x1, Woo Jang-choon Inc. (WJC) began operations selling $150,000 worth of shares to investors and signing a $40,000

promissory note to a bank. On that same day. WJC Inc. used some of this capital to buy equipment worth $82,000, which has a useful life of 6 years and a salvage value of $10,000. WJC also purchased $800 worth of supplies and prepaid for I year's worth of an online network server, which costs $3.600 on I-Jan.

Throughout the month, WJC's employee wages were $2,800 per week, getting paid bi-weekly on 14-Jan and 28-Jan (they DO work for the three days after their Jan 28th payment). WJC earns revenue by providing services to their clients which for are also paid bi-weekly on 14-Jan and 28-jan (they also work for their clients 29-Jan thru 31-Jan). The revenue earned is a consisten $6,300 per weck. On 31-fan, it was determined that 75% of the supplies had been used; consequently, they replaced their supplies by purchasing another $600 worth on account.

The final transaction for the month is a $1,000 dividend paid to shareholders.

1. Please record the appropriate journal entryies) on January 1, x1. Ensure each economic event receives its own journal entry.

2. Please record the appropriate journal entry(ies) on January 14, xl.

3. Please record the appropriate journal entry(ies) on January 28, xl.

4. Please record the appropriate ADJUSTING journal entryies) for the month of January.

5. Please record any journal entryies) on January 31, x1 that are neither adjusting nor closing.

6. Please record the closing journal entryfies) for the month of January. Please use the Income Summary account and disregard memos.

7. Calculate Net Income Percentage, Return on Equity, Working Capital, and Current Ratio.

Please refer to the Star Inc. linancial statements on the following page to answer questions 8-11.

The Acid-Test Ratio (aka Quick Ratio) formula is: (Current Assets - Inventory) / Current Liabilities

8. One of Star Inc.'s competitors, Flower Inc, who is about the same size company as Star Inc., was found to be less liquid than Star Inc. in 2xx3. Given this information, which of the following can we know must be true about Flower Inc.?

1. Current ratio: 3.45
2. Current ratio: 3.78
3. Acid-test ratio: 1.44
4. Acid-test ratio: 2.36

9. One of Star Inc.'s competitors, Flower Inc., who is about the same size company as Star Inc., was found to be more liquid than Star Inc. in 2xx3. Given this information, which of the following can we know must be true about Flower Inc.?

a. Current ratio: 3.53

b. Current ratio: 2.57

c. Acid-test ratio: 0.35

d. Acid-test ratio: 1.57

10. One of Star Inc.'s competitors, Flower Inc., who is about the same size company as Star Inc., was found to be more profitable for sharcholders than Star Inc. in 2x3. Given this information, which of the following can we know must be true about Flower Inc.?

a. Return on Equity: 0.09

b. Reiurn on Equity: 0.13

c. Net Income Percentage: 3.87%

d. Net Income Percentage: 4.12%

11. Which of these correctly reports Star's Return on Equity:

a. 2xxl: 0.18

b. There is insufficient information available to answer this question.

c. 2xx2: 0.11

d. 2xx3: 10.12

1. Please record the appropriate ADJUSIING journal entry(ies) for the month of January. 7. Calculate Net Income Percentage, Return on Equity, Working Capital, and Currem Ratio, 2xx\$, Civen this information. which of the following can we know mus be trove about Flower Ine? a. Cimcht ration 5.45 b. Current ratio: 3.78 c. Acil-4es ratio: 1.44 d. Acid-tent ratio: 2.36 2xx.3. Given this information, which of the following can ne know mus be true about Flower Ince? a. Cument ratio: 3.59 b. Current ratio: 2.57 c. Acid-teat ratio: 0.35 d. Acid-test ratio: 1,57 sharcholders than Star Ine, in 2xxs. Given this information, which of the following can we know must be true about Flower Ine.? a. Return on Equity: 0.09 b. Return on Equity: 0.13 c. Net Income Percentage: 3.87% d. Net Income Percentage: 4.12% 11. Which of these correctly reports Star's Return on Equity: a. 2xx:0.18 b. There is insufticient information available to ansuer this question. c. 2x2:0.11 d. 2x:3:10.12 billcose which coms 3 , 2. Mease record the appropriate joturnal entry(ies) on january 14,1