1. Journal Entries

The following occurred during January 2023, the first month of business for Perkins, Inc., a merchandising company. Use blank paper for your answer to this problem. Place (a) and (b) on separate sheets of paper. SHOW CALCULATIONS

1/01 Perkins issued 100,000 shares of $4 par common stock for $700,000 cash.

1/01 Paid $12,000 for three months rent.

1/01 Purchased $160,000 furniture and fixtures. Paid $30,000 cash and signed a 9-month 6% note for the balance. The furniture and fixtures are expected to have a useful life of six years and a residual (salvage) value of $16,000.

1/01 Hired an assistant for $3,000 per month. The assistant will be paid on the first of each

month for work performed the prior month.

1/01 Purchased $12,000 of Office Supplies on account.

1/01 Purchased $80,000 merchandise inventory on account. The account is due in 15 days. Perkins uses the periodic inventory method.

1/10 Sold inventory costing $20,000 for $32,000 cash.

1/10 Paid for the Office Supplies purchased on 1/01.

1/15 Paid $3,600 for a one-year insurance policy.

1/16 Asked for an extension to pay for the inventory purchased on 1/01. The supplier accepted a 6-month 9% note in exchange for the amount due on 1/16.

1/18 Received $40,000 in advance for a special order to be delivered in February.

1/30 Received a bill for $800 for January utilities. The bill is due on February 10.

1/31 Placed an order for a $5,000 computer that will be delivered in February. Perkins will pay cash for the computer when it is delivered.

Perkins prepares adjusting journal entries monthly. A count determines that $9,000 of Office

Supplies are on hand on 1/31. Perkins uses the straight-line method of depreciation.

1. Prepare all necessary journal entries to record the above. If no entry is required state NA.
2. Prepare all necessary adjusting entries on 1/31. SHOW CALCULATIONS