On Dec. 1, 2014, Pete Fiore opened Flore Consulting Services, Inc. He provider marketing seminars guaranteed to increase sales by 5%. The first fiscal (calendar) year will end December 31, 2014. One salaried employee was hired on December 1, 2014. No benefits accrue for six months. Mr. Flore does not take a salary at this time. During the month, he completed the following transactions for the company Dec, 1 Began business by depositing $100,000 in a bank account in the name of the company in exchange for 100,000 shares of $1 par value common stock 1 Paid the rent for his office store for current month, $10,000 1 Paid the premium on a one-year insurance policy, $24,000 1 Purchased computer & office equipment on credit for $41,000 5 Purchased office supplies from DEF Company on credit, $1,765. 8 Paid cash for an advertisement in a local newspaper, $300. 15 Billed consulting revenue for the first half of the month, $25,000. 21 Paid DEF Company on account, $s0o. 31 Billed consulting revenue for the second half of July, $35,000 31 Declared and paid a cash dividend, $10,000. 1 Accrue one (1)month salary for sole employee paid on January 3, 2015-$8,000. 31 Accrue one (1)month payroll taxes for sole employee paid on January 3 31 Industry history indicates 1% of sales must be accrued as provided as expense , 2015-7.65% of Salary Expense. to cover expected warranty costs. The company experienced a clean month in Dec. 2014. Journalize this expense. 31 Mr. Fiore expects that uncollectible account expense will amount to .5% (1/2 of 1%. Journalize. 31 IJCP Inc., a customer declares bankruptcy necessitating writing off the amount owed by them from REQUIRED FOR DECEMBER 2. Open the following accounts: Cash (111): Accounts Receivable (113): Prepaid Insurance (117):Office Supplies (119): Computer& Office Equipment (144): Accumulated Depreclation-Computer & Office Equipment (145) Accounts Payable (212); Income Taxes Payable (213); Salaries Payable (214): Allowance for Uncollectable Accounts (114): Estimated Consulting Warranty Liability (217)-Common Stock (311); Retained Earnings (312) Dividends (313); Income Summary (314); Consulting Revenue (411): Salary Expense (510)Payroll Taxes Payable (216); Rent Expense (511]; Advertising Expense (512): Insurance Expense (513):Office Supplies Expense (514): Depreclation Expense-Computer & Office Equipment (515]: Income Taxes Expense (530): Consulting Warranty Expense (525); Uncollectable Account Expense (526). Payroll Tax Expense (527); Salary Expense (510). Post the DECEMBER entries to the to the general ledger accounts.. (a) one month's insurance has expired; (b) remaining inventory of unused repair supplies, $1,000; (c)The computer & office equipment purchased on Dec. 1 has a useful life of four (4) years and a salvage value of $1,000. You must complete the depreciation schedule and divide the first years calculated by twelve (12). Reord journal entry. Use double decling method. Worksheet supplied. (d) estimated income taxes for the month, $5,000. 4. From the accounts in the ledger, prepare an adjusted trial balance. (Note: Normally a trial balance is prepared before adjustments but is omitted here to save time.] 5. From the adjusted trial balance, prepare an income statement, a statement of retained earnings, and a balance sheet for December. Income Taxes is to be shown as part of total expenses 6. Prepare and post closing entries. Explanations required. 7. Prepare a post-closing trial balance
