Hi! I am studying and was given the following question to use as practice. I am currently doing the exercise and would like to make sure I got my answers right! Thank you so much.
On December 31, 2019, Intopic Company had the following account balances. I must enter balances into the ledger account, journalise transactions and post to the ledger, jouralise adjusting entries and post to the ledger, prepare an adjusted trial balance, prepare financial statements, journalise and post the closing entries, then prepare post closing trial balances.
On December, 31 2019, INTOPIC COMPANY, had the following account balances (in $). Cash 43,750 Acc. Depreciation - Equipment 13,750 Account Receivable 18,750 Acc. Depreciation - Building 5,500 Inventory 37,500 Account Payable 66,250 Supplies 12,500 Share Capital-Ordinary 262,500 Equipment 75,000 Retained Earnings 32,000 Building 192,500 TOTAL 380,000 TOTAL 380,000 . . . During January 2020, the company completed the following summary transactions. January 1 Paid $12,000 cash for one-year insurance policy January 2 Purchase new Equipment $6,500 for cash. The equipment has 5 years useful life and $500 residual value January 3 Sold merchandise inventory on account $49.000, terms 3/10, n/30. The cost of the merchandise sold was $27.000 January 4 Paid $1.300 on account payable January 5 Incurred advertising expense of $1,500 for cash January 7 Purchase merchandise on account from XYZ company $15,000, terms 5/10, n/30 10 Sold merchandise inventory for cash $ 20,000. The cost of the merchandise sold was $11,500 January 13 Received cash from customer billed on 3 January in full, less discount. January 18 Paid XYZ Company, in full January 19 Purchase supplies $2,500 on account January 28 Declare and paid a $3,000 cash dividend January 30 Paid salaries to employee $1,800 January 31 Sold old equipment that cost $75,000 when purchased on February 1, 2019 for cash. The equipment had 5 years useful life, no residual value and had been depreciated for $13,750 (until 1 January) was sold for $65,000 1 . . 1 . Adjustment Data: 1. Depreciation for new equipment. 2. Supplies on hand $5,000 3. Company write off uncollectible account for $1,700 (use direct method) 4. Insurance had expired for 1 month 5. Depreciation is recorded on building on a straight line basis based on 30 year life & residual value of $12,500 (Make adjusting entry for 1 month) Instruction: a. Enter the January 1 balances in the ledger account b. Journalize the January transaction and post to the ledger C. Journalize the adjusting entry and post to the ledger d. Prepare Adjusted Trial balance e. Prepare financial statement f. Journalize and post the closing entries g. Prepare Post Closing Trial Balance
