On 2 August 2022, Boris Johnson began a new business, called Starbucks Inc., company delivering high quality coffee and beverages. The following transactions were completed by the business during May:

2 Aug Issued to Boris 10,000 shares of capital stock in exchange for his investment of 3,500,000 cash.

3 Aug Purchased a store of 1000 square meters for 3,780,000 paying 780,000 cash and signing a note payable for the balance. The interest rate for the Note payable is 3% on annual terms, and it will be paid at maturity which will be August 3^rd 2025.

4 Aug Purchased machinery for 1,500,000 in order to be prepared to deliver the product to its customers, and paid cash.

5 Aug Purchased Equipment for 500.000, he paid 40% cash and received an invoice stating that the remaining amount would be paid October 5^th 2022.

6 Aug Hired 5 employees with an average annual salary of 16.000, the employees will be paid at the end of every month.

7 Aug Signed an insurance contract for 24.000, and paid cash.

8 Aug Acquired raw materials for an amount of 300.000, the agreed payment terms were on account 30 days.

31 Aug Sold products until raw materials stock was finished for 1.000.000 to different customers, all sales were paid in cash.

The account titles used by Starbucks Inc. are as follows:

Accounts Receivable Cash Building Capital Stock Notes Payable Equipment Machines Accounts Payable Insurance Expense Unexpired insurance Sales Stocks Cost of goods sold

Instructions: (1) Record the journal entries for the above transactions.

(2) Post the journal entries onto the appropriate ledger T accounts.

2. Adjusting entries.

1. Salaries earned by Starbucks employees that have not yet been recorded or paid amount to 6.667.
2. Depreciation of the building is based on an estimated life of 20 years. The straight-line method is used.
3. Depreciation of the machines is based on an estimated life of 10 years. The straight-line method is used.
4. Depreciation of the Equipment is based on an estimated life of 10 years. The straight-line method is used.
5. Unrecorded Income Taxes Expense accrued in August amounts to 60,000. This amount will not be paid until January 15, 2023.
6. No interest expense has been recorded or paid.
7. No insurance expense has been recorded or paid.

Instructions: (1) Record the journal entries for the adjusting entries.

(2) Post the adjusting entries onto the appropriate ledger T accounts. Calculate and show the ending balance for each T account (The same T accounts that you have used in problem 1).

3. Prepare a trial balance