Mini Project: World Series Inc.

World Series Inc. sells inventory and provides services (baseball lessons). The following balance sheet is for World Series Inc. for the fiscal year 2019 ending at 12/31/19:

World Series Inc.

Balance Sheet

At 12/31/19

ASSETS

Cash 200

Accounts Receivable 100

Inventory 300

Total current assets 600

Baseball Equipment, gross 600

Less Accumulated Depreciation -200

Baseball Equipment, net 400

Total Assets 1,000

LIABILITIES & STOCKHOLDERS EQUITY

Accounts Payable 85

Interest Payable 15

Bonds Payable 300

Total Liabilities 400

Common Stock 400

Retained Earnings 200

Total Stockholders Equity 600

Total Liabilities and Stockholders Equity 1,000

The following transactions occurred after the 12/31/19 year-end.

1. On 1/1/20, World Series Inc. issued common stock for $250.
2. On 1/1/20, World Series Inc. paid $10 in advance to cover office rent for the period 1/1/20-12/31/20.
3. On 2/15/20, World Series Inc. purchased $600 of inventory (60% of the purchase was paid in cash).
4. On 7/1/20, World Series Inc. sold inventory for $500 (the cost of the inventory sold is $250); all the sales were on credit. Below, please record separately the sales revenue and the cost of inventory expense that is associated with this transaction (in respective tables).
5. On 8/1/20, the Astros signed up for batting lessons; the monthly fee for lessons is $400. World Series Inc. received $2,400 in cash (in advance from the Astros) for these lessons.
6. On 8/1/20, World Series Inc. paid $36 of interest on the bonds for the period from 8/1/2019 through 7/31/2020 (The $300 of bonds X 12% interest) and bought back $100 of the bonds with no resulting gain or loss on this repurchase. Note that Bonds Payable and Interest Payable are listed in the Balance Sheet.
7. On 12/31/20, the following transactions should be recorded before preparing the annual financial statements:
8. Annual interest rate on the bonds is 12%. In Transaction/Issue #6, on August 1st, World Series Inc. paid interest through 7/31/2020 and changed the value of the outstanding bonds. Make sure to adjust for any interest owed on the bonds.
9. The manager of World Series Inc. earned an annual salary of $80 but has not yet been paid.
10. $100 of depreciation on the baseball equipment needs to be recorded.
11. World Series Inc. provided batting lessons to the Dodgers during November 2020. A bill for $500 was sent but the payment has not arrived yet.
12. World Series Inc. declared $50 cash dividends on 12/31/20 (and created an obligation) but will not pay cash for the dividends until 1/10/21.
13. World Series Inc. used the office space during the year (from transaction 2.).
14. World Series Inc. provided 5 months of services (batting lessons) to the Astros before the year-end (from transaction 5.).