Kyoto Japanese Restaurant

Part I. Consider the following transactions which occur in the month of January, 2015 for Kyoto Japanese Restaurant:

(1) Jan 1, Caleb Young invested $55,000 in exchange for common shares of Kyoto Japanese Restaurant (KJR).

(2) Jan 1, KJR paid three months office rent in advance, totaling $6,000.

(3) Jan 2, KJR paid $30,000 for a vehicle.

(4) Jan 2, purchased kitchen equipment for cash, $20,000.

(5) Jan 3, purchased office supplies, $600, and kitchen equipment, $3,500, on account.

(6) Jan 5, paid $1,500 of the amount owed for the kitchen equipment (Transaction #5)

(7) Jan 15, provided catering service and billed the customer $12,000.

(8) Jan 15, paid the chef's salary for the first two weeks of the month, $1,000.

(9) Jan 20, collected the $6,000 from the customer (Transaction #7)

(10) Jan 31, paid a $200 dividend to Caleb as the sole shareholder.

(11) Jan 31, paid the monthly telephone bill, $70.

(12) Jan 31, paid for gas and oil used in the vehicle, $250.

Required:

1. Prepare the journal entries for January 2015 transactions.

2. Prepare the unadjusted Trial Balance at Jan 31, 2015

Part II. By the end of Jan 31, 2015, the accountant needs to make some adjustment based on following information:

(1) The rent for January of $2,000 has yet to be recorded.

(2) The accountant estimates that vehicle purchased has a useful life of 10 years, with no residual value by the end of its useful life. The restaurant uses the straight-line method to assign depreciation expense.

(3) The accountant estimates that Equipment has a useful life of 15 years, with a residual value of $5,000.

(4) On Jan 31, KJR signed a contract to provide catering service for an upcoming event. The customer paid $7,500 upon signing the contract. But the service will not be provided until the next month.

(5) $1,000 wages for the second half of January has been earned by the chef. But the next pay day is on Feb 5^th.

(6) On Jan 31, the supplies on hand are $260.

Required:

1. Prepare the adjusting entries for the month ending Jan 31^st. The company adjusts its accounts monthly.

2. Prepare the Adjusted Trial Balance at Jan 31, 2015

3. Prepare the financial statements: Classified Balance Sheet, Single-step Income Statement, and Statement of Changes in Equity.