I am lost on how the debits and credits work for our homework problem. This is Intermediate Accounting I (ACCT 3310). Can someone please help?!
Chapter 3 P&K Inc. Instructions: 1. Fill out the worksheet for the transactions listed for P&K Inc. 2. Post the transactions to the ledger/t-accounts. 3. Prepare an unadjusted trial balance. (Check Figures: Dr./Cr. Balances = $572,000) 3. Prepare adjusting entries related to transaction #'s 2,3,4,5 & 8. $500 of supplies remained on hand on January 3 4. Prepare adjusting entries related to the following information: The company owed employees $6,000 for wages for the 2nd half of January. The company prepared provided $7,500 of services on account for the last 2 days of January for which billings have not yet been prepared. 5. Post the adjusting entries to the T-Accounts. 6. Prepare an adjusted trial balance. (Check figures: Dr./Cr. Balances = $586,725) 7. Prepare the income statement. (Check figure: Net Income = $21,575) 8. Prepare the statement of retained earnings. (Check figure: Ending RE balance = $19,575) 9. Prepare the balance sheet. (Check figure: Assets = $568,175 ) 10. Prepare the closing entries. 11. Prepare the closing trial balance. (Check figure: Dr./Cr. Balance accounts =$568,800) Date Accounts affected Element Increase Decrease Debit Credit Date Journal Entry Dr. Cr. Transactions Example only: Do not include in exercise XYZ Co. purchased $3,000 of inventory on account. Nov. 30 X Nov. 30 Inventory Accounts Payable $3,000 Asset Liability Inventory Accts Payable $ 3,000 $3,000 Jan. 1 Transactions for P&K Inc. 1) P&K inc. issued 25,000 shares of $2 par capital stock for $16 per share. Jan. 1 2) P&K Inc. issued a $120,000 6% 5 year Note Payable for cash. Interest is due the beginning of each month starting Feb. 1. $5,000 of principal is due annually on Dec. 31. Jan. 1 3) The company purchased a $750,000 building with cash. It has an estimated useful life of 30 years and a $25,000 salvage value Jan. 1 4) P&K Inc. prepaid $6,000 for a 12 month Insurance policy for the period of January 1 - December 31 Jan. 1 5) P&K Inc. purchased $1,200 of supplies on account from Supplies 'R Us. The supplies are expected to last several months. Jan. 15 6) The company paid $5,000 of wages to employees for services rendered from Jan. 1 - Jan. 15. Date Transactions Accounts affected Element Increase Decrease Debit Credit Date Journal Entry Dr. Cr. Jan. 15 7) P&K Inc. billed ABC Co. $20,000 for legal services provided Jan. 3-15. Jan. 15 8) The company paid $2,500 for advertising airing in Jan. Jan. 16 9) Customers paid $9,000 for services to be rendered equally over the 3 month period of January - March. Jan. 18 10) P&K Inc. received $7,000 from customers for services rendered in the first half of the month. Payment was received at the time of service. Jan. 20 11) The company paid the amount owed o Supplies in Us. See #5. Jan. 28 12) The company collected $9.000 account from customers. Jan. 31 13) P&K Inc. purchased $20,000 of equipment by paying $4,000 cash with the remaining cost on account. Jan. 31 14) The Company declared and paida $2,000 dividend ash Accts Receivable Supplies Prepaid Insurance Equioment Accum. Depr. TT TT TT Accounts Payable Notes Payable Uneamed Revenue Interest Payable Wagas Payable Capital Stock Dividends Felained Earnings Fee Revenue Wages Expense Advertising a Interest Exaca Depreciation - Supplies Expense Insurance Exp
