Given Information Service Price per hour $96 00 Sales Price per Hour $84 Cost per Unit Sold 38 75 Part 2 General Journal (LO3 2) Post the following journal entries to the general journal Trans Date Description 1 Dec 1 Sell 45,000 shares of no par value common stock for $130,000 to obtain the funds necessary to start your business 2 Dec 1 Borrow $30,000 from the local bank and sign a one year note Interest and principal to be paid at maturity The interest rate is 6 3 Dec 1 Purchase equipment necessary for business operations for $25,000 cash The equipment has a five year life with a residual value of $4,000 4 Dec 1 Pay one year of rent in advance, $24,000 ($2,000 per month) 5 Dec 1 Purchased vehicle for $40,000 It has a 4 year useful life with residual value of $4,000 6 Dec 3 Purchase supplies on account, $1,000 7 Dec 3 Purchase 300 units of inventory with cash 8 Dec 6 Provide 25 hours of services t o customers for cash (calculate using your hourly service rate) no terms specified 9 Dec 10 Sell 200 units of inventory on account (Perpetual method 2 entries) 10 Dec 12 Sell 50 units of inventory to a customer on account with a sales discount of 2 10, n 30 (Perpetual method 2 entries) 11 Dec 15 Purchase an additional 300 units of inventory on account with terms 4 10 net 30 12 Dec 20 The customer who purchased product on December 12th pays the amount due (within discount period) 13 Dec 23 Receive cash in advance for 25 hours of services to be completed in the future 14 Dec 25 Company pays invoice for inventory purchased on December 15 th within discount terms 15 Dec 31 Sell 200 units of inventory to a customer who signs a 6 month promissory note at 10 interest for the balance due (end of month so no interest would be accrued) perpetual method 2 entries 16 Dec 31 Pay employee salaries, $4,000 17 Dec 31 Pay cash dividends to shareholders, $1,000 18 Dec 31 Vehicle did not meet expectations sold back to dealership for $38,000 (Record depreciation at date of sale and then record sale) Part 3 General Ledger (LO3 2) Post the information from the journal entries into the general ledger an calculate balances Part 4 Trial Balance (LO3 2) Prepare a trial balance from the information in the general ledger Part 5 Adjusting journal Entries (LO3 3) Post the following adjusting entries to the general journal Adj 1 Dec 31 Record the portion of the Prepaid Rent used in December Adj 2 Dec 31 The company has $400 of supplies left at month end Adj 3 Dec 31 Record one month of depreciation for the equipment purchased on December 1st The equipment has a useful life of 5 years and a $4,000 residual value Adj 4 Dec 31 Provide 10 hours of services that were paid in advance on December 23 rd Adj 5 Dec 31 Record the receipt of a December $300 utility bill to be paid on January 5 th Adj 6 Dec 31 Record accrued interest on the $30,000 1 year note payable The annual interest rate is 6 Interest is paid on note maturity Adj 7 Dec 31 Employees earned $1,000 the last week in December that will be paid on January 10 th of next year Adj 8 Dec 31 Estimate that 3 of the accounts receivable at the end of the year will not be collected and record bad debt adjustment Adj 9 Dec 31 Record Income Tax at a 21 rate to be paid next year Part 6 General Ledger Post the adjusting entries to the General Ledger Part 7 Adjusted Trial Balance (LO3 3) Post the ending balances in each account from the General Ledger to the Adjusted Trial Balance Debits should equal credits if you have done the prior steps correctly Part 8 Prepare the end of the year Income Statement (LO3 4) Part 9 Prepare the end of the year Retained Earnings Statement (LO3 4) Part 10 Prepare the end of the year Balance Sheet (LO3 4)

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Feb 03, 2024

Given Information Service Price per hour: $96.00 Sales Price per Hour: $84 Cost per Unit Sold: 38.75 Part 2 General Journal (LO3-2) Post

Given Information

Service Price per hour: $96.00

Sales Price per Hour: $84

Cost per Unit Sold: 38.75

Part 2 – General Journal (LO3-2) – Post the following journal entries to the general journal.

Trans.	Date	Description
1	Dec. 1	Sell 45,000 shares of no-par value common stock for $130,000 to obtain the funds necessary to start your business.
2	Dec. 1	Borrow $30,000 from the local bank and sign a one-year note. Interest and principal to be paid at maturity. The interest rate is 6%.
3	Dec. 1	Purchase equipment necessary for business operations for $25,000 cash. The equipment has a five-year life with a residual value of $4,000.
4	Dec. 1	Pay one year of rent in advance, $24,000 ($2,000 per month).
5	Dec. 1	Purchased vehicle for $40,000. It has a 4-year useful life with residual value of $4,000.
6	Dec. 3	Purchase supplies on account, $1,000.
7	Dec. 3	Purchase 300 units of inventory with cash.
8	Dec. 6	Provide 25 hours of services to customers for cash (calculate using your hourly service rate) no terms specified.
9	Dec. 10	Sell 200 units of inventory on account. (Perpetual method = 2 entries)
10	Dec. 12	Sell 50 units of inventory to a customer on account with a sales discount of 2/10, n/30. (Perpetual method= 2 entries)
11	Dec. 15	Purchase an additional 300 units of inventory on account with terms 4/10 net 30.
12	Dec. 20	The customer who purchased product on December 12th pays the amount due (within discount period).
13	Dec. 23	Receive cash in advance for 25 hours of services to be completed in the future.
14	Dec. 25	Company pays invoice for inventory purchased on December 15^th within discount terms.
15	Dec. 31	Sell 200 units of inventory to a customer who signs a 6-month promissory note at 10% interest for the balance due. (end of month so no interest would be accrued) perpetual method = 2 entries
16	Dec. 31	Pay employee salaries, $4,000.
17	Dec. 31	Pay cash dividends to shareholders, $1,000.
18	Dec. 31	Vehicle did not meet expectations sold back to dealership for $38,000. (Record depreciation at date of sale and then record sale).

Part 3 – General Ledger (LO3-2) – Post the information from the journal entries into the general ledger an calculate balances.

Part 4 – Trial Balance (LO3-2) – Prepare a trial balance from the information in the general ledger.

Part 5 – Adjusting journal Entries – (LO3-3) – Post the following adjusting entries to the general journal

Adj-1	Dec. 31	Record the portion of the Prepaid Rent used in December.
Adj-2	Dec. 31	The company has $400 of supplies left at month end.
Adj-3	Dec. 31	Record one month of depreciation for the equipment purchased on December 1st. The equipment has a useful life of 5 years and a $4,000 residual value.
Adj-4	Dec. 31	Provide 10 hours of services that were paid in advance on December 23^rd.
Adj-5	Dec. 31	Record the receipt of a December $300 utility bill to be paid on January 5^th.
Adj-6	Dec. 31	Record accrued interest on the $30,000 – 1 year note payable. The annual interest rate is 6%. Interest is paid on note maturity.
Adj-7	Dec. 31	Employees earned $1,000 the last week in December that will be paid on January 10^th of next year.
Adj-8	Dec. 31	Estimate that 3% of the accounts receivable at the end of the year will not be collected and record bad debt adjustment.
Adj-9	Dec. 31	Record Income Tax at a 21% rate to be paid next year.

Part 6 – General Ledger - Post the adjusting entries to the General Ledger.

Part 7 – Adjusted Trial Balance (LO3-3) – Post the ending balances in each account from the General Ledger to the Adjusted Trial Balance. Debits should equal credits if you have done the prior steps correctly.

Part 8– Prepare the end of the year Income Statement (LO3-4).

Part 9 – Prepare the end of the year Retained Earnings Statement (LO3-4).

Part 10 – Prepare the end of the year Balance Sheet (LO3-4).