2. INSTRUCTIONS: Complete the following steps in the order given. 1. Journalize and post the transactions noted below for Bayou Consultants during the firm's first month of business. Note: Use the account titles and numbers in the chart of accounts provided and round all calculations to the nearest whole dollar. 2. Prepare a 10-column worksheet using your knowledge of what has taken place during January and the supplemental adjusting entry information provided. 3. Journalize and post all indicated adjusting entries. 4. Journalize and post all closing entries. 5. Prepare an income statement, balance sheet, and statement of retained earnings in good form. Note: Blank statements are not provided, use a spreadsheet program to prepare the required statements. 6. Prepare a post-closing trial balance. TRANSACTIONS: Date January 11 January 1 MODULE ONE-BAYOU CONSULTANTS January 3 January 5 January 6 January 7 January 8 January 10 January 15 Transaction Issued 15,000 shares of $10 par value common stock in exchange for an initial investment of $320,000 by the firm's owners, Siam Gato and Scotty Phideaux. Purchased land and an office building for $176,000, of which $70,000 was attributable to the fair market value of the building. A $35,000 cash down payment was made and an 5% five-year note was signed for the balance. Interest and 20% of the principal will be paid annually on this date. (Assume a 360-day year for interest computation purposes.) Issued 2,200 shares of $10 par value common stock for office equipment with a fair market value of $24,870. Purchased office supplies of $2,900 on account from Kilcoyne Office Supplies. Established a petty cash fund of $300. Placed an order in the local newspaper for advertising, which will run during January, February, and March. The advertising, which cost $1,500, was paid for on this date in order to obtain a lower price. Purchased a one-year insurance policy, effective February 1, for $2,400. Completed several consulting jobs, which totaled $36,000. Cash of $12,800 was collected with the balance due in 30 days. Paid the semi-monthly payroll, which totaled $16,000, to the firm's consultants, all of which are classified as independent contractors. January 16 January 19 January 30 January 31 January 31 January 31 January 31 January 31 Declared a cash dividend of $.30 per share on this date payable on February 18, Paid Kilcoyne Office Supply $1,500 on the account balance. Received the January telephone bill for $315. Collected $9,000 of the receivable recorded on January 10. In addition, a client indicated that a $5,000 receivable due to Bayou would not be paid for 6 months. Bayou accepted a 10% 6-month note receivable on this date. Paid the payroll for the second half of January. Received various utility bills for January, which totaled $340. Recorded consulting jobs completed during the last half of January that totaled $41,000 $30,000 was collected in cash with the balance due in 30 days. An audit of the petty cash fund determined the following: Receipts: Postage$ 62 Freight-out Misc. Exp. Currency and Coin 76 38 119 The appropriate entry was recorded from the information above. SUPPLEMENTAL ADJUSTING ENTRY INFORMATION: a. An inventory of office supplies found that $2300 of supplies remained at January 31. b. The building will be depreciated on a straight-line basis over 30 years with no salvage value. c. The equipment will be depreciated on a straight-line basis over 10 years with no salvage value. d. An invoice for a repair of $450 on the office equipment dated January 26 had not yet been recorded. e. Income tax expense of 27% will be recorded on pre-tax accounting income. f. The dividends account will not be closed until the end of the year. 8. Be aware that there might be other adjustments necessary in addition to those indicated in items a through fabove.