JANUARY 2022 TRANSACTIONS 1 Donald and Joe each invested $30,000 ($60,000 total) cash into the business in exchange for stock. Each of them received 100 shares of stock (200 shares total). 2 Realizing that they would need a truck to pick-up and drop-off the scooters, they purchased a used truck for $11,000. The purchase was made with cash. 3 Although the rental part of the business is going to be successful. They also wanted to acquire a building that could be used as a showroom (for new scooter sales) and for repairs and recharging. Realizing the business does not have enough money on hand to purchase a building they went to a local bank and obtained a loan in the amount of $70,000. The funds were deposited into the business bank account. The terms of the loan are $105 per month in interest will be paid (no later then the 1st of the subsequent month) AND $350 in principal each month for the next 15 years. 4 The perfect building (located on a piece of land) was found. The parcel was purchased for $70,000. For accounting purposes, the purchase price was allocated $50,000 to the building and $20,000 to the land. 5 Wanting to have a physical premise on the UWW campus, the business rented a small storage container that could be placed near the dorms. The rental of the storage container is month-to-month and will help keep scooters close to campus in the event a scooter needs to be swapped out. The rent was paid in cash for the month of January. Total rent fee for the month was $300. 6 Purchased a twelve-month insurance policy that covers the period of January 1st of the current year to September 30th of next year. The total amount paid was $4,200 cash.

7 Having the building and storage container secured, the business makes an initial purchase of 20 scooters. Each scooter was purchased for $1,200. The vendor trusted them and gave them terms of n/30. Thus, no payment has been made at this point in time. Related to the scooter purchase ten of the scooters are going to be placed in the inventory with the plan to sell the other scooters to customers. The other ten will be put in the rental fleet and used on the UWW campus (students can rent). 8 Did some advertising in the Royal Purple in the amount of $500 to try and gain some business for the month. The amount was immediately paid (in full) with cash. 9 A customer came into the showroom and purchased one scooter. The customer paid $1,890 in cash which included the sale price of $1,800 and the sales tax of $90. The sales tax is collected by the business and owed to the state of Wisconsin. 10 As there is no retailer outside of the United States D & J received a phone call from a customer in Canada. The customer purchased two scooters for a total price of $4,000. As the sale was out of state/country no sales tax was charged. The customers paid the business with cash (U.S. dollars) and the goods have been deemed to be provided. The scooters shipped out via FOB Shipping point by a service paid for direct by the customer. 11 Sold another scooter to a customer in the amount of $2,095 plus tax of 5%. Remember that sales tax is collected by the business and owed to the state government. The total amount is billed to the customer as they are a good friend of Donald and Joe. Terms included on the invoice are 2/10 n/30. 12 Some of the scooters that are placed on the UW-W campus for rental require repair. D & J hired a local repair person to do the work since they do not currently have an employee that is capable of this. The repair person charged $1,000 for the work that was completed. Being the first time they did business together, D & J had to pay immediately. 13 Purchased $200 of office supplies for the month of January. All supplies will be used by the end of January. The purchase was made on the businesss credit card (not on account). 14 Paid the telephone bill for the month of January with cash. The telephone bill was $250. 15 Paid $10,000 in cash towards the outstanding balance related to the scooters purchased in #7 above. 16Received a report and payment from the app that processes payments for the scooter rental. The report shows that $5,000 in scooter rental occurred during the first 15 days of the month. $4,500 was deposited into the bank account of D & J. The difference between $4,500 and $5,000 represents the processing and technology fee that the app charges. 17 The customer from #11 paid their balance in full with cash. If eligible, discounts were taken. 18 Received a bill for the electricity for the month of January. The total bill was $350. 19 The business discovered another company had a very similar name (E & J Scooters, Inc.). To prevent confusion, the business used $2,000 cash to purchase the other companys trademark on the business name. 20 Paid the remaining balance from the scooter purchase on January 7th. 21February is anticipated to be a busy month. The business is concerned they may not have enough inventory for resale. Therefore, ten more scooters were purchased from their supplier at a price of $1,600 per scooter (COVID and related supply chain issues caused prices to continue to rise). The purchase was made on their account with the scooter supplier. Terms of the purchase were 5/30 n/60. 22 Wanting to stay on good terms with the bike supplier, The business pays the invoice from the January 21st bike purchase. If eligible, they claim any applicable discounts. 23Sold another scooter to a customer that lived in Illinois. No sales tax was charged. The customer did not have his/her wallet, so you sent them a bill. The total amount of the sale was $4,000. Terms of 2/10 n/30 were offered up to try and insure prompt payment.

24 Made a payment of $104 towards the credit card purchase from #13 above. The payment included $4 of interest. $100 went towards the outstanding credit card balance. 25 Made the first loan payment in the amount of $455. The loan payment included $105 of interest and $350 towards the outstanding loan principal balance. 26 Sold two more scooters to a local family. The total sales price was $5,000 plus tax of 5%. The customers paid in full, with cash (sale price plus tax). 27 D & J each take out wages. They each receive $4,000 for the work they performed this month. No taxes are taken out and they each receive $4,000 in cash ($8,000 total). 28The business decided/declared a dividend of .20 per share of stock outstanding. The dividend needs to be recorded as it has been declared. The plan is to pay it in February. As of today's date the dividend is owed (nothing has been paid). 29 Received a bill for supplies purchased during the month that were used to keep the rental scooters operational. The total amount of the bill was $316. The plan is to pay the bill in May. 30A customer comes in wants to purchase scooter that you do not have in inventory (it is a VERY fast scooter that you didnt think many people would be willing to purchase). The store agrees to custom order the bike for the customer. To start this process, The business requires the customer pay $3,000 as a deposit towards the bike. The customer agrees to this and pays $3,000 cash. 31a Record depreciation in the amount of $200 related to the truck. 31b Record depreciation in the amount of $115 related to the building. 31c Record depreciation in the amount of $200 related to the scooters. 31dReceived a report from the app that processes payments for the scooter rental. The report shows that $8,000 in scooter rental occurred from the 16th through the 31st. The 10% fee for the usage of the technology has occurred. The net funds will be deposited into D & Js bank account on the 1st of February. 31e If needed, record any adjusting entries needed related to the insurance policy purchased on January 8th. 31fThe business received a bill from the repair person that they have on contract for fixing scooters. The total amount due for repairs completed during the second half of the month is $1,400. The plan is to pay the bill next week. NOTE: Before doing 30g (below) make sure all other January entries are properly reflected. 31g The business Electric Bikes is subject to federal and state income tax of 21%. Accrue the amount of income tax that will be due for the month of January. TIP: Calculate what the net income before taxes would be prior to 30f. After you obtain that number multiply it by 21% and accrue that amount of income tax. STEP 2 Prepare a trial balance for January. You can select one or two-column format. Based on what we have done in class, my recommendation is to probably go with a two-column format. Remember, the trial balance must balance and if using a two-column format all numbers should be positive.

STEP 3 Prepare Financial Statements for January, including: A multi-step income statement A statement of equity (see video on Canvas on how this differs from retained earnings) A classified balance sheet. NOTE: Please put each financial statement on its own page. STEP 4 - Perform Vertical Analysis on the Income Statement and Balance Sheet (see video on Canvas) DELIVERABLES (UPLOADED TO CANVAS) - Excel File that contains: o Your grid o Trial balance o Financials (one workbook page for each) - The trial balance and financials should be print-ready. Do not worry about the print preview of the grid. This means you need to confirm (and correct if needed) the print preview of your worksheets prior to saving the Excel file. What you see in the print-preview window is what I will see. Items that present poorly will not receive max points. - Scoring: