Part One, Two, and Three Instructions Record the September 2019 transactions in the general journal (last section of this practice set) using the following events. Skip a line between each entry and number the entries to match the number of transactions. In the general journal record the transaction number, the date, and the account numbers After all journal entries are entered into the practice set, enter the adjusting entries. Next, create a T- Account for each account that is used in the Chart of Accounts and record the transactions and end with an ending balance on the normal side of the account. All ending balances should be on the normal side even if the account has a zero balance. After entering the balances into Blackboard, staple the T-Account spreadsheet to the inside back cover of the practice set. If there is a number that is uneven round to the nearest cent. You will need the ending balance in the cash account for the bank reconciliation. All instructions for Blackboard start on page 7. Transactions Date 1. 9/02/19 Deposit No. Description / Check No. April Morales met with her lawyer and CPA for advice on starting the business. They decided that Ms. Morales would organize the business as a corporation. The lawyer told Ms. Morales to register the company name, AHH Boots, with the County of El Paso. In addition, Ms. Morales will get an employer identification number (EIN) from the Internal Revenue Service and get a sales tax permit from the Comptroller of Public Accounts. The lawyer agreed to prepare the Articles of Incorporation to be filed with the Secretary of State of Texas. The CPA has agreed to help Ms. Morales set up her accounting system. Deposit #1 Ms. Morales opened a business checking account at Wells Fargo Bank by depositing $40,000. The corporation issued her a stock certificate for 5,000 shares of common stock with no par value. Ck #1001 Ms. Morales signed a one-year rental agreement with RIA Realtors for warehouse space. She was required to pay $8,100 for rent for the months of September 1, 2019 - December 31, 2019. Ck #1002 Arranged for a general business liability insurance policy and paid $7,200 to State Farm Insurance. This premium is for twelve months coverage. 2. 9/02/19 3. 9/03/19 4. 9/03/19 5. 9/03/19 9/05/19 Deposit #2 7. 9/05/19 Ck #1003 8. 9/06/19 Ck #1004 Purchased a new computer system that cost $4,500 from Office Mart for use in the business. Ms. Morales saned a 6 month note 12% installment note payable for the cost of the system. The computer system has an estimated useful life of 5 years and the residual (salvage) value is $300. This will be recorded as Computer Equipment, and depreciated using the Straight-Une Depreciation method accordingly. Only record the transaction at this time Depreciation will be recorded as an adjusting entry. Signed a note payable to borrow $10,000 from Wells Fargo Bank Interest is 12% annually and the note is to be repaid with interest in twelve months. Interest will be an adjusting journal entry at the end of the month.. Paid $12,000 for furniture and fixtures. The estimated service life of these assets is 7 years. The residual (salvage) value is $200. These items will be recorded as Furniture and Fixtures and depreciated accordingly. Depreciation will be an adjusting entry at the end of the month. Arranged for Sun City Motors to make the delivery and installation of the computer system and paid the invoice of $600. This charge should be added to the cost of the computer equipment purchased and depreciated on the same basis as the computer equipment. Paid $700 for business cards, flyers, and posters. This will be recorded as prepaid advertising Purchased $10,000 of inventory-BN boots from Betty's Boots on account. The vendor extended credit terms of 2/15, n/30. Purchased $11,000 of inventory-BLK boots from Sassy Shoes on account. The vendor extended credit terms are 2/15 n/30. Ms. Morales received and paid the $900 charge from her lawyer. AHH Boots is now open for business. Sales will be both retail and wholesale. Retail customers will purchase online and at the shop and will be charged an 8.25% sales tax. Ms. Morales will allow major customers to charge their purchases on account. Purchased $500 of office supplies on account. Purchased shipping supplies of $500 for cash. Sold boots to Carly's Crazy Shoes for $8,600 and the sales tax collected is $710. The cost of the brown boots are $2,250 and the cost of the black boots are $2,400. They bought it on account and we will bill them. 9. 9/06/19 Ck #1005 10. 9/08/19 11. 9/08/19 Ck #1006 12. 13. 9/13/19 9/14/19 14. 15. 16. 9/14/19 9/14/19 9/14/19 Ck #1007 17. 9/16/19 18. 9/20/19 Deposit #3 19. 9/22/19 Ck #1008 20. 9/23/19 Purchased additional brown boots on account for $3,500 from Betty's Boots. Credit terms are 2/15, n/30. Recorded internet sales for the first five days of operation Sales totaled $10,000. The sales tax collected totaled $825. The $10,825 was deposited in the bank. The cost of merchandise sold was $3,900 (brown boots cost $3,500; black boots cost $400). Received and paid the $500 invoice for supplies purchased on 9/14/19. Ms. Morales donated two pairs of boots to ChildFund a national children's charity for a fundraiser. She felt that this was a good way to advertise her new business. Her business was listed as a sponsor and a large ad was put in the fund raiser program. Cost of the brown boots were $250 and the black boots were $200. Ms. Morales considers this an advertising expense. Received payment in full from Carly's Crazy Shoes. The payment was deposited in the bank. 21. 9/23/19 Deposit #4 22. 9/23/19 Ck #1009 23. 24. 9/23/19 9/23/19 Ck #1010 Deposit #5 25. 9/23/19 Ck #1011 SERRUM 26. 9/25/19 Deposit #6 Ms. Morales paid her credit card bill for the month. The total was $520 which was for incidentals for the office. Paid for the boots purchased from Sassy Shoes on 9/08/19. Internet and retail sales totaled $12,000 and sales taxes of $990 was collected. The cost of the merchandise sold was $5,700 (Brown boots $4,500; black boots $1,200). The money was deposited in the bank Paid the balance due to Betty's Boots. There are two invoices; one on 9/8/19 and the other on 9/16/19. Sales of $5,000 was deposited from online customers and $413 of sales tax was collected. The cost of the merchandise was $500 for brown boots and $2,000 for black boots. Received but did not pay the electric bill for the month, $265. Paid the first monthly installment on the computer equipment. The payment amount is $420. Of this amount, $45 is for interest and $375 is for principal. Make the check payable to Office Mart. Recorded internet sales for the last week of the month. Sales of $4,500 were deposited. The cost of the merchandise sold was $2,250 (Brown boots $250; Black boots $2,000). Sales tax collected is $371 Paid all sales tax owed for September to the Comptroller of Public Accounts. 27. 28. 9/28/19 9/30/19 Ck #1012 29. 9/30/19 Deposit #17 30. 9/30/19Ck #1013 31. 9/30/19 Ck #1014 Declared and paid a cash dividend of $250 to April Morales. a halow Part One, Two, and Three Instructions Record the September 2019 transactions in the general journal (last section of this practice set) using the following events. Skip a line between each entry and number the entries to match the number of transactions. In the general journal record the transaction number, the date, and the account numbers After all journal entries are entered into the practice set, enter the adjusting entries. Next, create a T- Account for each account that is used in the Chart of Accounts and record the transactions and end with an ending balance on the normal side of the account. All ending balances should be on the normal side even if the account has a zero balance. After entering the balances into Blackboard, staple the T-Account spreadsheet to the inside back cover of the practice set. If there is a number that is uneven round to the nearest cent. You will need the ending balance in the cash account for the bank reconciliation. All instructions for Blackboard start on page 7. Transactions Date 1. 9/02/19 Deposit No. Description / Check No. April Morales met with her lawyer and CPA for advice on starting the business. They decided that Ms. Morales would organize the business as a corporation. The lawyer told Ms. Morales to register the company name, AHH Boots, with the County of El Paso. In addition, Ms. Morales will get an employer identification number (EIN) from the Internal Revenue Service and get a sales tax permit from the Comptroller of Public Accounts. The lawyer agreed to prepare the Articles of Incorporation to be filed with the Secretary of State of Texas. The CPA has agreed to help Ms. Morales set up her accounting system. Deposit #1 Ms. Morales opened a business checking account at Wells Fargo Bank by depositing $40,000. The corporation issued her a stock certificate for 5,000 shares of common stock with no par value. Ck #1001 Ms. Morales signed a one-year rental agreement with RIA Realtors for warehouse space. She was required to pay $8,100 for rent for the months of September 1, 2019 - December 31, 2019. Ck #1002 Arranged for a general business liability insurance policy and paid $7,200 to State Farm Insurance. This premium is for twelve months coverage. 2. 9/02/19 3. 9/03/19 4. 9/03/19 5. 9/03/19 9/05/19 Deposit #2 7. 9/05/19 Ck #1003 8. 9/06/19 Ck #1004 Purchased a new computer system that cost $4,500 from Office Mart for use in the business. Ms. Morales saned a 6 month note 12% installment note payable for the cost of the system. The computer system has an estimated useful life of 5 years and the residual (salvage) value is $300. This will be recorded as Computer Equipment, and depreciated using the Straight-Une Depreciation method accordingly. Only record the transaction at this time Depreciation will be recorded as an adjusting entry. Signed a note payable to borrow $10,000 from Wells Fargo Bank Interest is 12% annually and the note is to be repaid with interest in twelve months. Interest will be an adjusting journal entry at the end of the month.. Paid $12,000 for furniture and fixtures. The estimated service life of these assets is 7 years. The residual (salvage) value is $200. These items will be recorded as Furniture and Fixtures and depreciated accordingly. Depreciation will be an adjusting entry at the end of the month. Arranged for Sun City Motors to make the delivery and installation of the computer system and paid the invoice of $600. This charge should be added to the cost of the computer equipment purchased and depreciated on the same basis as the computer equipment. Paid $700 for business cards, flyers, and posters. This will be recorded as prepaid advertising Purchased $10,000 of inventory-BN boots from Betty's Boots on account. The vendor extended credit terms of 2/15, n/30. Purchased $11,000 of inventory-BLK boots from Sassy Shoes on account. The vendor extended credit terms are 2/15 n/30. Ms. Morales received and paid the $900 charge from her lawyer. AHH Boots is now open for business. Sales will be both retail and wholesale. Retail customers will purchase online and at the shop and will be charged an 8.25% sales tax. Ms. Morales will allow major customers to charge their purchases on account. Purchased $500 of office supplies on account. Purchased shipping supplies of $500 for cash. Sold boots to Carly's Crazy Shoes for $8,600 and the sales tax collected is $710. The cost of the brown boots are $2,250 and the cost of the black boots are $2,400. They bought it on account and we will bill them. 9. 9/06/19 Ck #1005 10. 9/08/19 11. 9/08/19 Ck #1006 12. 13. 9/13/19 9/14/19 14. 15. 16. 9/14/19 9/14/19 9/14/19 Ck #1007 17. 9/16/19 18. 9/20/19 Deposit #3 19. 9/22/19 Ck #1008 20. 9/23/19 Purchased additional brown boots on account for $3,500 from Betty's Boots. Credit terms are 2/15, n/30. Recorded internet sales for the first five days of operation Sales totaled $10,000. The sales tax collected totaled $825. The $10,825 was deposited in the bank. The cost of merchandise sold was $3,900 (brown boots cost $3,500; black boots cost $400). Received and paid the $500 invoice for supplies purchased on 9/14/19. Ms. Morales donated two pairs of boots to ChildFund a national children's charity for a fundraiser. She felt that this was a good way to advertise her new business. Her business was listed as a sponsor and a large ad was put in the fund raiser program. Cost of the brown boots were $250 and the black boots were $200. Ms. Morales considers this an advertising expense. Received payment in full from Carly's Crazy Shoes. The payment was deposited in the bank. 21. 9/23/19 Deposit #4 22. 9/23/19 Ck #1009 23. 24. 9/23/19 9/23/19 Ck #1010 Deposit #5 25. 9/23/19 Ck #1011 SERRUM 26. 9/25/19 Deposit #6 Ms. Morales paid her credit card bill for the month. The total was $520 which was for incidentals for the office. Paid for the boots purchased from Sassy Shoes on 9/08/19. Internet and retail sales totaled $12,000 and sales taxes of $990 was collected. The cost of the merchandise sold was $5,700 (Brown boots $4,500; black boots $1,200). The money was deposited in the bank Paid the balance due to Betty's Boots. There are two invoices; one on 9/8/19 and the other on 9/16/19. Sales of $5,000 was deposited from online customers and $413 of sales tax was collected. The cost of the merchandise was $500 for brown boots and $2,000 for black boots. Received but did not pay the electric bill for the month, $265. Paid the first monthly installment on the computer equipment. The payment amount is $420. Of this amount, $45 is for interest and $375 is for principal. Make the check payable to Office Mart. Recorded internet sales for the last week of the month. Sales of $4,500 were deposited. The cost of the merchandise sold was $2,250 (Brown boots $250; Black boots $2,000). Sales tax collected is $371 Paid all sales tax owed for September to the Comptroller of Public Accounts. 27. 28. 9/28/19 9/30/19 Ck #1012 29. 9/30/19 Deposit #17 30. 9/30/19Ck #1013 31. 9/30/19 Ck #1014 Declared and paid a cash dividend of $250 to April Morales. a halow