Group Project -- Year 2 The following list summarizes the transactions that took place during a start up's second year of operations. Using the information below (and assuming FIFO for inventory), prepare a list of the appropriate journal entries, including any necessary adjusting entries, and create a balance sheet and income statement. Once you have created the financial statements, provide the appropriate closing entries. Recall that there were 200 itory left at the end of Year One. Also calculate what the LIFO reserve adjustment would be in Year Two, Transactions and information for the year: a. Jan 2", ordered and received 200 units of inventory purchased on account for $14 each b. Jan 15th paid $3,400 of accounts payable. C. Feb 3", ordered and received 100 units of inventory purchased on account for si6 each d. Feb 22nd, sold 250 units of inventory at $55 each on account. e. March 1", incurred s900 of wages expense f. Mar 30th, collected $5000 of accounts receivable g. April 18, paid $700 of wages payable h. May 2nd, Paid $1000 of accounts payable i. June 18, Paid $196 of taxes payable j. June 30th, made first interest payment on Note Payable. k. Oct 12th, sold 100 units of inventory at $56 each. 1. Dec 318", spent $5000 at end of year to repair PPE ($1500) and to improve PPE ($3500). Revised useful life is 5 more years. Since the improvements occurred at the end of Year Two, the revised depreciation scheme will only apply to Year Three. m. Estimated that 5% of Year 2 sales would not be collected. n. Estimated tax rate is 35% Group Project -- Year 2 The following list summarizes the transactions that took place during a start up's second year of operations. Using the information below (and assuming FIFO for inventory), prepare a list of the appropriate journal entries, including any necessary adjusting entries, and create a balance sheet and income statement. Once you have created the financial statements, provide the appropriate closing entries. Recall that there were 200 itory left at the end of Year One. Also calculate what the LIFO reserve adjustment would be in Year Two, Transactions and information for the year: a. Jan 2", ordered and received 200 units of inventory purchased on account for $14 each b. Jan 15th paid $3,400 of accounts payable. C. Feb 3", ordered and received 100 units of inventory purchased on account for si6 each d. Feb 22nd, sold 250 units of inventory at $55 each on account. e. March 1", incurred s900 of wages expense f. Mar 30th, collected $5000 of accounts receivable g. April 18, paid $700 of wages payable h. May 2nd, Paid $1000 of accounts payable i. June 18, Paid $196 of taxes payable j. June 30th, made first interest payment on Note Payable. k. Oct 12th, sold 100 units of inventory at $56 each. 1. Dec 318", spent $5000 at end of year to repair PPE ($1500) and to improve PPE ($3500). Revised useful life is 5 more years. Since the improvements occurred at the end of Year Two, the revised depreciation scheme will only apply to Year Three. m. Estimated that 5% of Year 2 sales would not be collected. n. Estimated tax rate is 35%
