Practice Test for Test #1 For each of the following scenarios record the transactions in the journal format using dcbits and credits. Remember the rules of revenue and expense recognition!!! Once you record the journal entry, post the entry to the ledger (in the form of accounts). After all transactions have been posted, total cach account balance in the ledger. Next, create an ending trial balance from the ending account balances on the ledger. Finally create an income statement, statement of owners' cquity, and balance sheet from the trial balance I 2. (24 points) Lloyd Christmas, Ltd.'s accounting records reflect the following account balances at January 1, 2019 (beginning of the year): Account Debit Credit Equipment S160,000 Inventory S95,000 Accounts Receivable S 20.000 Building S100.000) Cash $ 150,000 Supplies S 12,000 Prepaid Rent S 15.000 Land $100.000 Unearned Revenues ISS0,000 Accounts Payable $60,000 Accumulated Depreciation $30,000 Equipment Accumulated Depreciation - Bldg ISSO.XXO Note Payable $140.000 Owners' Capital S322.000 This company uses the perpetual inventory system (therefore, the company records a decrease to inventory and COGS expense for every sale). There were no owner investments or owner withdrawals for the year. Make the following adjustments for the year ended December 31, 2005: In-class Example: The company made a sale of services on credit (see table below for entry) The Prepaid Rent for Lloyd Christmas Ltd. was paid on December 31, 2018 (the journal entry for the initial prepayment has already been made). The lease was for two years. Make the adjustment for the expired rent at December 31, 2019 (for the whole year). The note payable was taken out last year. The note carries an annual interest rate of 7%. Interest needs to be accrued for the entire year. The interest will be paid February 8, 2020 (next year). Record the adjustment necessary at December 31, 2019. Employee salaries in the amount of $55,000 were incurred for the year. Or that amount, $50,000 had been paid in cash, the remainder was still owed to employees at the end of the year. Record the journal entry necessary at December 31, 2019 to account for both the paid and unpaid portion of salaries. At the end of the year, 55,000 of the supplies remained on hand. Record the adjustment necessary at December 31, 2019. The company paid $20,000 on their accounts payable during the year. Record the entry. The company made sales of merchandise (inventory) to customers for a total $235,000. The sales were made half on credit, and half in cash. The inventory sold had originally cost the company $90,000 (hint: this is your cost of goods sold expense). The company provided the services associated with the Uneamed Revenues balance at the beginning of the year. Record the adjustment necessary for the year 2019. At December 31, the company had earned $35,000 in tax consulting revenue, but had not yet received payment from their customer. Record the adjustment necessary at December 31, 2019. On December 31, received $15,000 in cash representing advance payment for services to be provided in February of 2020. Record the adjustment necessary at December 31. 2019. The building has a useful life of 25 years and no salvage value. The equipment has a useful of 10 years and has a $30,000 salvage value. Record the adjustments necessary at December 31, 2019 (record the entire year's depreciation for both the building and equipment). 11) Taxes for the year totaled $35,000. The taxes will be paid next year. Record the adjustment necessary at December 31, 2019. Required: A. Record the preceding transactions in the journal below. Make sure to indicate each account affected by the transactions Record the transactions from step A. in the ledger (use the accounts provided below.) Prepare an ending trial balance at December 31, 2019. D. Prepare an income statement for Lloyd Christmas for 2019. Prepare a statement of owners' equity for the year ended December 31, 2019. Prepare a balance sheet for Lloyd Christmas at December 31, 2019. Debit Credit Accounts Example: AR Service Rev. XXX XXX 6. 117,500 117,600 a 85.000 Caron Account Recie obles Sales Revenue COGS Expert Insentons 40,00 190.000