Jessica Brady operates a widget shop. The shop specializes in a selection of various widget products. You have been hired as manager. Your duties include maintaining the store$$s financial records. Here above are the post$-$closing trial balance accounts at the end of the previous year. The following transactions occurred during January of this year.

Journals Entries

A$.$ Received cash of $$40,000$ and $$60,000$ for machinery in exchange for common stock.

Debit to Cash $$40,000$

Debit to Machinery $$60,000$

Credit to Common Stock $$100,000$

B$.$ Paid six months$$ rent for the store at $$5,000$ per month $($five months are prepaid$).$

Debit to Prepaid Rent $$25,000$

Debit to Rent Expense $$5,000$

Credit to Cash $$30,000$

C$.$ Purchased inventory for $$50,000$ on account $(2/10$ and n$/30$ days$).$

Debit to Inventory $$50,000$

Credit to Accounts Payable $$50,000$

d$.$ Purchased supplies for $$7,700$ on account.

Debit to Supplies $$7,700$

Credit to Accounts Payable $$7,700$

E$.$ Made sales on account for $$98,000$ with the costs of $$49,000$ at $2/10,$ n$/30.$

Debit to Accounts Receivable $$98,000$

Credit to Sales Revenue $$98,000$

Debit to Cost of Goods Sold $$49,000$

Credit to Inventory $$49,000$

F$.$ Negotiated and signed a two$-$year $$100,000$ loan at the bank, receiving cash at the time.

Debit to Cash $$100,000$

Credit to Long Term Notes Payable $$100,000$

G$.$ Used the money from $($f$)$ to purchase several computers for $$7,500$; then used the balance for a vehicle$-$$$35,000$ and equipment$-$$$57,500$ for the shop.

Debit to Computers $$7,500$

Debit to Vehicle $$35,000$

Debit to Equipment $$57,500$

Credit to Cash $$100,000$

H$.$ Received payment for sales in $($e$)$ within the discount period.

Debit to Cash $$96,040$

Debit to Sales Discounts $$1,960$

Credit to Accounts Receivable $$98,000$

I. Paid expenses: advertising expense of $$8,000$ and salaries of $$18,500.$

Debit to Advertising Expense $$8,000$

Debit to Salaries Expense $$18,500$

Credit to Cash $$26,500$

J$.$ Made sales for cash totaling $$78,000$ with a cost of $$36,000.$

Debit to Cash $$78,000$

Credit to Sales Revenue $$78,000$

Debit to Cost of Goods Sold $$36,000$

Credit to Inventory $$36,000$

K$.$ Made a payment to inventory accounts payable balance of $$40,000$ from transaction $($c$)$ above within the discount period.

Debit to Accounts Payable $$40,000$

Credit to Cash $$39,200$

Credit to Inventory $$800$

L$.$ Collected accounts receivable of $$28,000$ from customers after discount period.

Debit to Cash $$28,000$

Credit to Accounts Receivable $$28,000$

M$.$ Business is going well so issued more common stock. Sam purchased par value stock of $$10,000$ for $$20,000$ cash.

Debit to Cash $$20,000$

Credit to Common Stock $$10,000$

Credit to Additional Paid in Capital $-$ Common Stock $$10,000$

N$.$ Record Depreciation: All assets have no salvage value. Estimated useful lives: computers$-3$ years; machinery$-7$ years; vehicle$-5$ years; and for the equipment$-15$ years.

Debit to Depreciation Expense

$$ Computers: $$7,500/3=$ $$2,500$

$$ Machinery: $($$$60,000+$ $$200,000)/7=$ $$37,143$

$$ Vehicle: $$35,000/5=$ $$7,000$

$$ Equipment: $($$$57,500+$ $$200,000)/15=$ $$17,167$

Total Depreciation Expense: $$63,810$

Credit to Accumulated Depreciation

$$ Computers: $$2,500$

$$ Machinery: $$37,143$

$$ Vehicle: $$7,000$

$$ Equipment: $$17,167$

O$.$ Received a cash payment for widgets in advance of $$25,000.$ Will deliver it next month.

Debit to Cash $$25,000$

Credit to Unearned Revenue $$25,000$

P$.$ Office supplies on hand at the end of month were $$3,000.$

Debit to Supplies Expense $$4,700(7,700-3,000)$

Credit to Supplies $$4,7003.$ Prepare a trial balance as of January $31$ of the current year. See the trial balance tab in Canvas.

$4.$ Prepare an Income Statement of January $31$ of the current year. See chapter $3$ and list ALL accounts.

$5.$ Prepare a Statement of Retained Earnings as of January $31,$ of the current year. See chapter $3$ and list ALL accounts.

$6.$ Prepare a Balance Sheet as of January $31,$ of the current year. See chapter $3$ and list ALL accounts.

$7.$ Analyze the financial status of the company over this last year. $($Don$$t forget to use at least two to four ratios in your written analysis!$)$ Select two to four ratios and write down the formula. Then fill in with the numbers you need to compute the ratio. Then write $2-4$ sentences to explain your analysis using the ratio. See chapter $4.$ Write a memo to Jessica offering your opinion on the results of operations during the first month of business this year, January $1-31.$

$8.$

After three years in business the following data was computed. Based on this information provide another memo$/$report to Jessica on the performance of the shop for the past $3$ years. $($Don$$t forget to include ratios.$)$

Year $202020212022$

Total Assets $$152,500$ $$208,500$ $$227,000$

Total Liabilities $78,50082,00097,000$

Total Equity $74,000126,500130,000$

Sales Revenue $255,000242,500233,500$

Net Income $24,40015,0009,000$