H D 1 Company Information & Summary of Significant Account Policies 2 Lawn King Company began operations on November 1, 2024. The main operating goal of the company is to sell high end 3 tractors. Customers may pay using cash or if appropriate, a credit is extended to customers with terms 2/10, 1/30 4 The company uses the perpetual Inventory method and a FIFO cost system. The company follows a calendar year, with all 5 adjusting entries made at the end of the accounting period, December 31. The company uses the straight line depreciation 6 for all depreciable assets. The company has decided to use the Allowance method to account for uncollectible accounts. At 7 the end of the period, based on industry standards, the company believes 1% of the balance in accounts recievable will be a uncollectible. The company purchases tractors for resale only as such they carry them as inventory 9 10 The company has two employees, one is a sales technician, salary of S4000 per month and the other employee is the office 11 manager with a salary of S6000 per month. Payroll is processed on the last day of the month, and paid on the first day of the 12 following month. This means the November 30 payroll with accrue into Salaries Payable and then be paid on Decemember 1 13 14 Required: 1) Lawn King Company engaged in the following transactions for November and December. Record the following transactions on the 15 Daily Transactions tab. Note: Place debits first, credits second but do NOT indent credits. If more than one debitor credit, please list in alphabetical order to 16 receive full credit 17 1-Nov The owner invested $130000 into the company in exchange for 5,000 shares of common stock 1. Nov The company purchased a computer system for $20000 and signed a one year note for the entire balance. The note is due on 18 November 1, 2025 and has an annual rate of interest of 3%. 19 2.Nov Paid for two years rent on the office space, S18000 N.D.chian tractors at a total cost of S1100 Anchs foreach ER Destination Instructions Daily Transactions Adung darsted The incomment Equitatem Eline co 18 10 20 21 22 23 24 A G 3 1. Nov The company purchased a computer system for 520000 and signed a one-year note for the entire balance. The note is due on November 1, 2025 and has an annual rate of interest of 3%. 2 Nov Paid for two years rent on the office space. $18000 3-Now Purchased 10 tractors at a total cost of $1100 each for cash, FOB Destination 4-Now Purchased $1700 of supplies on account, termn/10 15-Nov Purchased 12 tractors at a total cost of $1210 each on account, terms/30, FOB Destination. Shipping of $150 was paid to the shipping company by the appropriate party 17.Nov Paid for the supplies purchased on November 4 18 Nov Paid for a two year insurance policy for the store, $12000. The policy was effective beginning December 1, 2024 20-Nov Sold 17 tractors for $3200 each on account, terms 2/10, 1/30, the company uses RFO to find the cost of goods sold. The printers were shipped FOB Shipping Point. Record the sales revenue first 28 Now Received payment in full on account from the November 20 salt. 29-Nov Paid for November's utilities bill $1700 Prepared payroll for the month of November, the first payroll for the company. Record the Salares Expense entry first. The tax 30-Nov rates are as follows: Federal Income Tax Rate-15% NC State Income Tax Rate - 10% FICA Tax Rate -7.65% Unemployment Tax Rate -6% on the first 57000 of each employees earnings per year. 25 26 27 28 29 30 31 32 33 34 1-Dec Paid the employees the amount due to them from the November 30 payroll, taxes will be paid in January The comparvy borrowed $60000 from Bank of America by signing a 10 year,4% note. The note requires annual payments of 1.Dec 57207 lainnina December 1935 Instructions Daily Transactions Adjusting Entes Ledige Added Titan we Ety Statement ce Sheet 25 M N B D G H 23 34 1-Dec Paid the employees the amount due to them from the November 10 payroll, taxes will be paid in January The company borrowed $60000 from Bank of America by signing a 10 year, 4% note. The note requires annual payments of 1-Dec 35 $7397 beginning December 1, 2025 36 1-Dec Purchased a new delivery truck to save customers on shipping The total cost of the Delivery Truck was $70000 37 4-Dec Paid the amount due from the November 15 purchase. 38 5.Dec Declared and paid $4000 in cash dividends to the stockholders of the company, 39 6-Dec Purchased $1700 of supplies on account, term n/30 40 7-Dec Purchased 20 tractors at a cost of $1331 each on account, ternis 1/30, FOB Destination Sold 18 tractors for $3520 each on account, terms 2/10, 1/30, the company uses FIFO to find the cost of goods sold. Record the 15-Dec 41 sales revenue first 42 18 Dec Paid for an ad in the local newspaper, $1700 43 24-Dec Received S28160 payment for 8 tractors to be shipped on January 8, 2025 31-Dec Prepared payroll for the month of December, the first payroll for the company. Record the Salaries Expense entry first. The tax 44 rates are as follows: 45 Federal Income Tax Rate -15%. 46 NC State Income Tax Rate - 10% 47 FICA Tax Rate -7,65% 48 Unemployment Tax Rate - 6% on the first $7000 of each employees earnings per year. 49 50 2) Post all the Daily Transactions to the Ledger on the Ledger tab. 51 3 As faremher 11.carch.ranslathe followine informatin Baru annara svarstips anties for the war tha sisi Instructions Daily Transactions han Ledger Ang Atuited the balance Inrestent Equity Statement B C 0 F G H M N 50 2) Post all the Daily Transactions to the Ledger on the Ledger tab. Ves Na R$85 al 3 3) As of December 31, a search revealed the following information. Record any necessary adjusting entries for the year on the Adjusting 52 Entries tab. 1. The computer equipment purchased on November 1 has a 5-year life and an expected residual (salvage) value of $2000, 2 Record any interest that has accrued on the note signed on November 1 for the computer system. 3 The rent paid on November 2 is for two years beginning on November 1 4. The insurance policy purchased on November 18 is effective beginning December 1. 5. Supplies on hand as of December 31 totaled $S10. 6. The delivery truck purchased on December 1 has a 10-year life and an expected residual (salvage) value of $2000. 7 Accrue the interest, if needed, on the note signed on December 1. 8 Record any bad debt expense for the year ended December 31, if needed, round to the nearest dollar. 9 Utilites accrued but not yet paid as of December 31 totaled $1500 2 634) Post all the Adjusting Entires to the Ledger on the Ledger tab. 645) Based on the account balances in the ledger, create an adjusted trial balance on the Adjusted Trial Balance tab. 65 6) Based on the adjusted trial balance, prepare a multi-step income statement on the income Statement tab. 66 7) Based on the adjusted trial balance, prepare the statement of stockholders' equity on the Equity Statement tab. 67 8) Based on the adjusted trial balance, prepare the balance sheet on the Balance Sheet tab. 60 9) Prepare the closing entries (DO NOT POST them to the ledger, just produce the entries). When journaling, close the accounts in the ce mash Tennis aurelan Instruction Daly Tradio Adjustings Ledger Aed Trane memes Equity Star Balance sheet Cash 130,000 General de Acm Accounts Receivable Allowance for Uncollectible 54400 54.400 Accounts 63.0 Inventory 14,520 26.6.20 19.070 2 634 7 53.312 63,360 18.000 11,000 1.700 12.000 1,700 6,135 20.000 14.520 4.000 1,700 0 10 Prepaid Rent 16.000 60.000 18 Prepaid Insurance 13.000 12.00 12 13 Supplies 1,700 1,700 2,800 6,290 14 16,500 12,000 28.160 130,717 15 16 Accumulated Depreciation Delivery Truck TT Accumulated Depreciation Computer 00 Computer Equipment 20.000 Delivery Truck 70.000 19 20 20,000 GOO 70,000 525 21 ros Daily Trama Adusting te sed Traine Bad HIR D 21 Interest Payable Deferred Revenue 201GO Accounts Payable 14,520 1.100 1,700 260260 14,520 1.200 500 300 Salaries Payable LS US 4495 27 23 27.960 300 20160 6,495 2 30 Notes Payable 1,500 60.000 20.000 11 Federal Income Tax Payable 1.500 1.100 NC State Income Tax Payable 1.000 1.000 FICA Tax Payable 765 NOS 33 14 35 31.500 3,000 2,000 1510 Rutained Earnings Cath Dividende 1 Unemployment Tax Payable 240 Common Stock 130,000 40 540 180,000 41 mo Day Transactions Arading Ledger Addra B Be the comment Bende 34 Service Revenue Sales Revenue 54,400 Sales Discounts 1.08 43 Cost of Goods Sold 19,470 23,153 45 46 54,400 1.08 42,123 47 Advertising Expense Depreciation Expense 55 Utilities Expense 1.500 1,700 Salaries Expanse 10,000 10,000 20,000 30 525 1,125 31 1,700 1,500 52 53 Bad Debt Expense Rent Expense 1.500 Supplies Expense 2.90 BE 34 Interest Expense 100 200 300 55 2,890 634 56 1,500 57 Payroll Tax Expense Insurance Expense 500 NOTE: Three accounts have check figures. After posting the Daily Transactions, your Cash, Accounts Receivable, and cost of Goods Sold balance will show GREEN if it is correct. 500 3 3 3 Lader Ad The ment ES D B Lawn King Company Multiple-Step lacome Statement For the Year Ended, December 11, 2024 31 5 Gross Profit 11 D 14 6 18 3 Total Operatin Expenses 20 Operating income 23 24 Net Income 25