Instructions: 1. Prepare journal entries to record external transactions 2. Post journal entries to general ledger T accounts 3. Prepare journal entries to record adjusting entries 4. Post the adjusting entries to the general ledger T accounts (include a balance on each account) 5. Prepare an adjusted trial balance 6. Prepare, using good form, an income statement, a statement of stockholders' equity, and a classified balance sheet. 7. Prepare closing journal entries 8. Post the closing entries to the general ledger T accounts (include a balance on each account). 9. Prepare a post-closing trial balance 10, Calculate ratios, Company Information: Doodles provides printing services to customers. They began operations on January 1, 2018. In January 2019, they realized the current VP had not created the records in an accounting system, and due to a time issue, the financial information must be recorded by hand to produce GAAP based financials for the year ending 2018. As such, they have hired you as the Accountant to get the manual system completed before implementing software for 2019. The research begins First, you find the company uses straight-line depreciation for all long-term depreciable assets. They also must use the Allowance method to account for uncollectible accounts to be in line with GAAP. The company has decided to use the calendar year, so December 31 is the company's year-end. The company hired two employees on November 1,2018. The employees will receive a salary of $2,000 each. Payroll is processed on the 27th of the month and paid on the last day of each month. The tax rates are 10% for Federal Income Tax, 8% for state income tax, 7.65% for FICA taxes, and 6.2% for federal and state unemployment on the first $7,000 of each employee earnings per year. Upon further investigation, you find the following information related to the company's transactions during 2018. Process the information and produce GAAP based financials for Doodles, Inc for the year ending December 31, 2018 Doodles Inc. engaged in the following transactions in 2018. Jan 1 The owner invested $70,000 into the company in exchange for 5,000 shares of no-par common stock. Purchased a computer system for $32,000 Purchased $1,200 of supplies on account. Invoiced clients for services provided on account, $36,000 Paid rent for two years, $19,200 The company borrowed $50,000 from Bank of America Collected $8,500 on account. Purchase a delivery van to delivery copies to customers, the van had a purchase price of $53,000, taxes on the van were $5,000 and document charges of $1,500 were paid Jan 1 Jan 14 Feb 25 Mar 31 April 1 May 14 June 1 July 31 Paid $800 on account for supplies purchased on January 14 Aug 10 Received cash for services provided, $10,200 Sept1 Paid utilities of $4,000 Oct 1 Received $30,000 in advance for services to be provided in the future Nov 15 Paid for an ad in the local newspaper, $1,500 Nov 27 Processed employee payroll and employer taxes, gross earnings was $4,000 Nov 30 Paid the employee salaries, taxes are not due until January Dec 15 The company declared and paid $6,000 in dividends Dec 30 Invoiced clients for services performed totaling $9,000 Dec 27 Processed employee payroll and employer taxes, gross earnings was $4,000 Dec 30 Paid the employee salaries, taxes are not due until Januay Doodles Inc. Chart of Accounts Account Names Cash Accounts Receivable Allowance for Uncollectible Accounts Supplies Prepaid Rent Equipment-Computer Accumulated Depreciation-Computer Delivery Van Accumulated Depreciation Delivery Van Common Stock Retained Earnings Dividends Service Revenue Advertising Expense Utilities Expense Salaries Expense Depreciation Expense Rent Expense Interest Expense Supplies Expense Bad Debt Expense Payroll Tax Expense Accounts Payable Interest Payable Deferred Revenue Salaries Payable Federal Income Taxes Payable State Income Taxes Payable FICA Taxes Pavable Unemployment Taxes Payable Notes Payable Doodles Inc. Journal General -Credit Doodles Inc. Journal General External Transactions ebit Account Name Credit Date Debit Account Name Date Doodles Inc. T accounts- Post External Transactions' Journal Entries, Adjusting Journal Entries, and Closing Journal Entries Common tock Retained Earnin Dividends Cash Accounts Recevable Service Revenue Salaries Expense Interest Expense Allowance for Uncollectible Accounts Rent tion E De lies Se Accumulated Depreclation- Computer Equipmert Deliv Van - Deli Utlities Expense Rent Expense Bad Debt Expense Accounts Payable Interest Payable Deferred Revenue Payroll Tax E Federal Income Taxes State Income Taxes Payable Salaries Payable Pa Unemployment Taxes FICA Taxes Payable Pa Notes Payable Adjusting Entries The data below was gathered for the accountant to complete December 31 adjusting entries (use the joumal below and post to the ledger (T accounts) on pages 5 and 6). Based on the balance in the ledger (T accounts) on pages 5 and 6, complete an adjusted trial balance. Once the trial balance is complete, produce the financial statements. Doodles Inc Adjusted Trial Balance December 31, 2018 Credit Account Name Debit .At December 31, the Company had S300 of supplies on hand. . The oomputer system purchased on January 1 has a five-year useful life and a $2,000 anticipated sh Accounts Receivable salvage value. Allowance Uncollectible The delivery van purchased on June 1 has a ten-year useful life and a $5,500 anticipated salvage upplies repaid Ren qui value. 1% of the ending balance in the accounts receivable account is estimated to become uncollectible puter uter .The prepaid rent paid on March 31 was for two years beginning April 1. " The $50,000 borrowed from Bank of America on April 1 was a 4 year note with a g% rate of interest. an Accumulated Depreciation - Delivery Accounts Payable Interest Payable Deferred Revenue Principal is due in 4 years, interest is paid annually on April 1 The $30,000 received on October 1 was for services that would be completed equally over 12 months beginning October 1 Doodles Inc. Journal General-Adjus tin ayable Date Account Name Debit redit Taxes Payable Taxes Payable ederal I State l Taxes Payable ployment Taxes Paya mon Dividends Service Revenue Advertising Utilities Expense Salaries Expense preciation Expense rest Expense upplies nse nse otals Doodles Inc Income Statement Year Ended 12-31-2018 Doodles Inc. Classified Balance Sheet 12-31-2018 Doodles Inc Statement of Stockholders Equity For the Year Ended 12-31-2018 Total Stockholders Retalned Common Stock Once the financial statements are complete, prepare the closing entries for Doodles Inc. (use the joumal below and post to the ledger (T accounts) on pages 5 and 6). Once you post to the ledger create a post-closing trial balance poodles Inc. Post-Closing Trial Balance December 31. 2018 Account Name Debit dit ash odles Inc. Journal General Closin unts ccount ate upplies Rent epreciation an epreciation- an Accounts Payable ayable Payable axes Paya State Income Taxes Payable Taxes Payable Unemployment Taxes Payable ayab Retained Eamings Total Doodles Inc, Ratios Calculate the following ratios Current Ratio Current Assets Curent Liabilities Cash ST investmentsReceivables Current Liabilities Net Income Net Sales Total Liabilities Tatal Equity Acid test (quick) ratio Profit margin