PHONE COMPANY Inc Statement of Financial Position December 31, 2020 Assets Liabilities Cash $1,859,000 Notes Payable 14 $600,000 Inventory $61,000 Accounts Payable $40,000 Prepaid Insurance $6,000 Total $640,000 Supplies $8,000 Common Stock $3 par $150,000 Land $600,000 Excess of par $600,000 Building $880,000 Retained earnings $1,944,000 Acc Depr ( $80,000) $800,000 Total $2,694,000 Total Assets $3,334,000 Total Liabilities Equity $3,334,000 You are asked to prepare, in good financial form, a set of financial statements for PHONE COMPANY Inc for the quarter ending 3 31 2021 Jan 1 PHONE COMPANY purchased equipment for $100,000 and signed a note with the seller for the entire cost The interest rate on the note is 7 This loan requires monthly payments of $7,000 Monthly payments include interest and principle Useful life of equipment is 5 years Jan 1 PHONE COMPANY purchased equipment on this date for $1,000,000 Useful life for this machine is 15 years PHONE COMPANY elected to sign a note for the full amount of the purchase price The note has a 10 rate of interest Payment on the note will be yearly and the first payment is due December 31, 2021 Jan 10 Purchased $80,000 of inventory The company paid in full on this date Jan 15 Issued 400,000 shares of common stock of PHONE COMPANY Inc for $9 per share All cash received on this date Jan 20 PHONE COMPANY purchased $50,000 of inventory on account Jan 27 Sales to a customer amounted to $600,000 Received $18,000 in cash on this date Jan 31 PHONE COMPANY made a $7,000 monthly note payment in cash This note was created on January 1, 2021 Feb 15 Salary and wage expense were paid in the amount of $26,000 Feb 16 Customer returned $50,000 of items purchased on Jan 27, 2021 Feb 27 The $7,000 monthly note payment was made This note was entered into Jan 1, 2021 Feb 27 Received payment in full for the sales generated on Jan 27, 2021 Feb 28 Equipment was purchased with cash for $100,000 and a signed 6 note for $300,000 Useful life of the equipment was 5 years Mar 15 PHONE COMPANY paid $9,000 for advertising Mar 18 Dividends declared to shareholders for record owners on March 31, 2021 to be paid on April 15, 2021 The amount of the dividend is 40 cents per share Mar 20 Sales to customer amounted to $350,000 terms This was a cash Mar 30 Salary and wages paid in the amount of $5,000 Mar 31 Supply Ending Inventory was $1,000 Mar 31 Inventory merchandise at March 31, 2021 was $35,000 Mar 31 PHONE COMPANY paid wages of $23,000 this date Mar 31 PHONE COMPANY made a $7,000 payment on the note entered into on January 1, 2021 Mar 31 Assume the tax rate is 15 for PHONE COMPANY Inc Mar 31 ASSUME that the prepaid insurance of $6,000 listed on the balance sheet dated December 31, 2020 is the cost of the insurance policy from January 1, 2020 to December 31, 2021 Building has a useful life of 20 years Remember You need the following Statement of Revenue Expenses Income statement Statement of Retained Earnings Statement of Financial Position Balance Sheet Tee accounts All Journal Entries

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Posted on Sep 17, 2024

PHONE COMPANY Inc.

Statement of Financial Position

December 31, 2020

Assets Liabilities

Cash $1,859,000 Notes Payable 14% $600,000

Inventory $61,000 Accounts Payable $40,000

Prepaid Insurance $6,000 Total $640,000

Supplies $8,000 Common Stock $3 par $150,000

Land $600,000 Excess of par $600,000

Building $880,000 Retained earnings $1,944,000

Acc. Depr. ( $80,000) $800,000 Total $2,694,000

Total Assets $3,334,000 Total Liabilities & Equity $3,334,000

You are asked to prepare, in good financial form, a set of financial statements for PHONE COMPANY Inc. for the quarter ending 3/31/2021.

Jan. 1 PHONE COMPANY purchased equipment for $100,000 and signed a note with the seller for the entire cost. The interest rate on the note is 7%. This loan requires monthly payments of $7,000. Monthly payments include interest and principle. Useful life of equipment is 5 years.

Jan. 1 PHONE COMPANY purchased equipment on this date for $1,000,000. Useful life for this machine is 15 years. PHONE COMPANY elected to sign a note for the full amount of the purchase price. The note has a 10% rate of interest. Payment on the note will be yearly and the first payment is due December 31, 2021.

Jan. 10 Purchased $80,000 of inventory. The company paid in full on this date.

Jan. 15 Issued 400,000 shares of common stock of PHONE COMPANY Inc. for $9 per share. All cash received on this date.

Jan. 27 Sales to a customer amounted to $600,000. Received $18,000 in cash on this date.

Jan. 31 PHONE COMPANY made a $7,000 monthly note payment in cash. This note was created on January 1, 2021.

Feb. 27 The $7,000 monthly note payment was made. This note was entered into Jan. 1, 2021.

Feb. 28 - Equipment was purchased with cash for $100,000 and a signed 6% note for $300,000. Useful life of the equipment was 5 years.

Mar. 18 Dividends declared to shareholders for record owners on March 31, 2021 - to be paid on April 15, 2021. The amount of the dividend is 40 cents per share.

Mar. 31 PHONE COMPANY made a $7,000 payment on the note entered into on January 1, 2021

Mar. 31 ASSUME that the prepaid insurance of $6,000 listed on the balance sheet dated December 31, 2020 is the cost of the insurance policy from January 1, 2020 to December 31, 2021.