Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

On January 1, 20X7, Jacqueline Fernandez formed a corporation to purchase wheat harvesting equipment and provide contract support services to farmers throughout the Midwest. Information

image text in transcribed
On January 1, 20X7, Jacqueline Fernandez formed a corporation to purchase wheat harvesting equipment and provide contract support services to farmers throughout the Midwest. Information about the first year of operation follows: Jan. 1 Investors provided $2, 500,000 of cash in exchange for stock of Fernandez Corporation Jan, 1 Purchased combines and trucks in exchange for $1,000,000 cash and a $3,000,000 note payable Feb, 7 Purchased $40,000 of supplies on account that will be needed during the upcoming harvest Mar, 3 Paid wages of $65, 400 Apr, 1 Billed customers for services in the amount of $230,000 Apr, 11 Paid $30,000 toward the purchase of February 7 May 1 Purchased a $24,000 insurance policy June 6 Collected $210,000 on accounts receivable June 9 Paid wages of $130, 600 June 15 Paid $30, 200 for fuel costs June 20 Paid $12, 500 for lodging costs incurred by crew June 30 Paid $120,000 of interest and $80,000 to reduce the balance of the note payable Aug, 1 Billed customers for services provided in the amount of $812,000 Sept, 3 Collected $715,000 on accounts receivable Sept, 16 Purchased $25,000 of supplies on account Sept, 25 Paid $61, 200 for fuel costs Oct, 20 Paid $8, 100 for lodging costs incurred by crew Nov, 3 Paid wages of $125, 900 Dec, 15 Collected $100,000 as deposits from customers who contracted for 20X8 harvesting services Dec, 31 Declared and paid a $25,000 dividend to shareholders Required: (a) Journalize the listed transactions. (b) Post the transactions to the appropriate general ledger accounts. (c) Prepare a trial balance as of December 31. (d) Journalize and post adjusting entries based on the following additional information. The equipment had 25-year life, with no salvage value. Supplies on hand at year end amount to $20,000. At year end, $115,000 of additional interest is due on the note payable. -The insurance policy covered a 12-month period commencing on May 1. At year end, Fernandez had provided $30,000 of unbilled services to customers. These services will be billed in early 20X8. (e) Prepare an adjusted trial balance as of December 31. (f) Prepare an income statement and statement of retained earnings for 20X7, and a classified balance sheet as the end of the year. (g) Journalize and post-closing entries. (h) Prepare a post-closing trial balance as of December 31

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Skills For Accounting And Auditing Research

Authors: Shelby Collins

2nd Edition

1618530747, 9781618530745

More Books

Students also viewed these Accounting questions