prepare adjusting entries using previous journal entries

Record Adjusting Entries: Record the following month-end adjusting entries for the month of January. Write the journal entries in the practice set after the original journal entries. Round all answers to the nearest cent. a. $70 of office supplies remained on hand. b. $200 of shipping supplies remained on hand. C. $1,300 of wages for the part-time help from Irene's Temp Services for January should be accrued. Do not worry about payroll taxes; Temp Services Inc. will handle these. d. Make the necessary adjusting entries for one month's depreciation for the Computer Equipment using Straight-Line Depreciation. e. Make the necessary adjusting entry for one month's depreciation for the Bike Racks using Straight-Line Depreciation. f. One month of the prepaid insurance has expired. g. One month of the prepaid rent has expired. h. Record the interest for the loan from Wells Fargo for one month. Make sure you prepare the journal entries and the adjusting entries and write them in Journal Entries: Debit($) Credit($) Sr No Date Acct Code Account Description 1 02-Jan-22 NA No Entry - as this event is not a transaction 2 02-Jan-221 70000 10000 Cash 39003 Common Stock (stocks issued for cash, Deposit#1) 70000 3 03-Jan-22 9000 14000 Prepaid Rent 10000 Cash (rent paid for 6 months - jan22 to June22, Chk#1001) 9000 4 03-Jan-221 4000 14050 Prepaid Insurance 10000 Cash (insurance taken and 4000 iun for year paid, Chk#1002) 5 03-Jan-22 5200 15100 Computer Equipment 27050 Notes Payable-Computer Inc. (computer purchased by issue fo 6% notes, 6 months) 5200 6 05-Jan-22 10000 10000 Cash 27050 Notes Payable-Wells Fargo. (amount borrowed against 12% one year notes, Deposit#2) 10000 7 05-Jan-22 1100 61000 Shipping supplies 10000 Cash (paid for shipping supplies, Chk#1003) 1100 8 06-Jan-22 14000 15000 Bike Racks 10000 Cash (bike racks purchased for cash, chk#1004) 14000 9 06-Jan-22 750 15100 Computer Equipment 10000 Cash (freight paid on computer purchase, Chk#1005) 750 10 08-Jan-22 60900 Office Supplies 10000 Cash (office supplies purchased for cash, Chk#1006) 11 08-Jan-22 8000 12000 Inventory-26" Bike 20000 Accounts Payable (bikes purchased on credit) 8000 12 09-Jan-22 6000 12050 Inventory-20" Bike 20000 Accounts Payable (bikes purchased on credit) 6000 13 31-Jan-22 940 60800 Legal expenses 10000 Cash (legal expenses paid, Chk#1007) 940 14| 14-Jan-22 NA No Entry - as this event is not a transaction 15| 14-Jan-22 12124 924 10000 Cash 23300 Sales Tax Payable 40000 Sales (cash sales FOB destination, Deposit#3) 11200 5600 50000 Cost of Goods Sold 12000 Inventory-26" Bike 4000 15 14-Jan-22 12124 10000 Cash 23300 Sales Tax Payable 40000 Sales (cash sales FOB destination, Deposit#3) 924 11200 5600 4000 50000 Cost of Goods Sold 12000 Inventory-26" Bike 12050 Inventory-20" Bike (cost of bikes sold accounted) 1600 161 16-Jan-22 250 50000 Cost of Goods Sold 10000 Cash (bikes dispatched FOB freight expenses, Chk#1008) 250 17 16-Jan-22 5000 12000 Inventory-26" Bike 20000 Accounts payable (additional 26" bikes purchased in terms 2/15,n/30) 5000 18 20-Jan-22 12557 957 10000 Cash 23300 Sales Tax Payable 40000 Sales (Cash sales, Deposit#4) 11600 5800 5000 50000 Cost of Goods Sold 12000 Inventory-26" Bike 12050 Inventory-20" Bike (cost of bikes sold accounted) 800 19 22-Jan-22 200 60400 Dues and Registration Fees 10000 Cash (El Paso Chamber of Commerce registration cost, Chk#1009) 200 20 23-Jan-22 No Entry - as this event not a transaction 21 23-Jan-22 800 60100 Advertising and Promotion expense 20000 Accounts Payable (convention center fees for promotion) 800 22] 26-Jan-22 800 20000 Accounts Payable 10000 Cash (convention center rental paid, Chk#1010) 800 23 26-Jan-22 6000 20000 Accounts Payable 10000 Cash (paid for 20" bikes purchased on 9th Jan, Chk#1011) 6000 24 27-Jan-22 8227 10000 Cash 23300 Sales Tax Payable 40000 Sales (Cash sales, Deposit#5) 627 7600 3800 50000 Cost of Goods Sold 12000 Inventory-26" Bike 12050 Inventory-20" Bike (cost of bikes sold accounted) 1000 2800 25 27-Jan-22 13000 20000 Accounts payable 10000 Cash (paid for 26" bikes purchased on 8th & 16t Jan, Chk#1012) 13000 261 30-Jan-22 445 61400 Utility expense 23400 Utility Payable (utility bill received but not paid) 445 800 20000 Accounts Payable (convention center fees for promotion) 221 26-Jan-22 800 20000 Accounts Payable 10000 Cash (convention center rental paid, Chk#1010) 800 23 26-Jan-22 6000 20000 Accounts Payable 10000 Cash (paid for 20" bikes purchased on 9th Jan, Chk#1011) 6000 24 27-Jan-22 8227 627 10000 Cash 23300 Sales Tax Payable 40000 Sales (Cash sales, Deposit#5) 7600 3800 50000 Cost of Goods Sold 12000 Inventory-26" Bike 12050 Inventory-20" Bike (cost of bikes sold accounted) 1000 2800 25 27-Jan-22 13000 20000 Accounts payable 10000 Cash (paid for 26" bikes purchased on 8th & 16t Jan, Chk#1012) 13000 261 30-Jan-22 445 61400 Utility expense 23400 Utility Payable (utility bill received but not paid) 445 27 30-Jan-22 43.33 866.67 60700 interest expense 27050 Notes Payable-Computer Inc. 10000 Cash (first installment paid along with interest, Chk#1013) 910 2830-Jan-22 7500 4000 12000 Inventory-26" Bike 12050 Inventory-20" Bike 20000 Accounts payable (15 bikes 26" and 10 bikes 20" purchased on account) 11500 291 30-Jan-22 17320 10000 Cash 23300 Sales Tax Payable 40000 Sales (Cash sales, Deposit#6) 1320 16000 8000 50000 Cost of Goods Sold 12000 Inventory-26" Bike 12050 Inventory-20" Bike (cost of bikes sold accounted) 6000 2000 30 30-Jan-22 650 39007 Dividends 10000 Cash (dividend declared and paid, Chk#1014) 650 31 31-Jan-22 3828 23300 Sales Tax Payable 10000 Cash (sales tax paid to Comptroller, Chk#1015) 3828 into Blackboard. Transactions Description Date Deposit No. Check No. 1. 1/02/2022 2. 1/02/2022 Deposit #1 3. 1/03/2022 Ck #1001 4. 1/03/2022 Ck #1002 Evy Scout met with her lawyer and CPA for advice on starting the business. The lawyer told Ms. Scout to register the company name Evy's Electric Bike Shop with the County of El Paso. In addition, Ms. Scout will get an Employer Identification Number (EIN) from the Internal Revenue Service (IRS) and get a sales tax permit from the state of Texas. Ms. Scout opened a business checking account at Wells Fargo Bank by depositing $70,000. The corporation issued her a stock certificate for 7,000 shares of common stock. Ms. Scout signed a one-year rental. She was required to pay $9,000 for rent for the months of January 1, 2022 June 30, 2022. Arranged for a general business liability insurance policy and paid $4,000 to State Penn Insurance. This premium is for twelve months coverage. Purchased a new computer system that cost $5,200 from Computer Inc. for use in the business. Ms. Scout signed a note payable for the cost of the system which will be repaid in 6 months at 10% interest. The computer system has an estimated useful life of five years, and the residual (salvage) value is $400. Only record the purchase of the computer equipment. 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. Only record the note. Paid $1,100 for shipping supplies. 5 . 5 1/03/2022 6. 1/05/2022 Deposit #2 7. 1/05/2022 Ck #1003 8. 1/06/2022 Ck #1004 9. 1/06/2022 Ck #1005 Ck #1006 10. 1/08/2022 11. 1/08/2022 12. 1/09/2022 13. Ck #1007 14. 1/13/2022 1/14/2022 1/14/2022 15. Deposit #3 Paid $14,000 for Bike Racks. The estimated service life of these assets is 8 years. The residual (salvage) value is $200. These items will be recorded as Bike Racks and depreciated using straight-line depreciation in the adjusting entries. Only record the purchase of the racks. Arranged for Sun City Movers to make the delivery of the computer system and paid the delivery charge of $750. This charge should be added to the cost of the computer equipment purchased and depreciated on the same basis as the computer equipment. Only record the delivery. Purchased $450 of office supplies from Office Supplies Co. using cash. Purchased $8,000 of merchandise inventory (26" bikes) on account. There were no credit terms for prompt payment. Purchased $6,000 of merchandise inventory (20" bikes) on account. There were no credit terms for prompt payment. Ms. Scout received and paid the $940 charge from her lawyer. Evy's Electric Bike Shop, Inc. is now open for business. Sold merchandise for $11,200 cash. The sales tax for $924 was not included in the sale amount. The cost of the 26" bikes is $4,000; the cost of the 20" bikes is $1,600. This sale has to be delivered to the customer. The merchandise will be shipped FOB destination. Paid $250 to ship the merchandise in transaction #15. Purchased additional 26" bikes on account for $5,000. Credit terms were 2/15, n/30 Recorded cash sales that totaled $11,600. Sales tax of $957 was not included in the sale amount. The cost of merchandise sold was $5,800 (26" bikes were $5,000; 20" bikes were $800). Ms. Scout joined the El Paso Chamber of Commerce. She paid the registration fee of $200. Ms. Scout participated in a biking exhibition held at the convention center. She felt this was a good way to publicize her new business. Convention Center charged Ms. Scout $800. She will pay the bill later. She considers this an advertising and promotion expense. Ms. Scout paid the Convention Center rental. Paid for the bikes purchased on 1/09/2022. Ms. Scout recorded cash sales totaling $7,600. Sales tax of $627 was not included in the sale amount. The cost of the merchandise sold was $3,800 (26" bike $1,000; 20" bike $2,800). Paid the balance due for the 26" bikes. There are two invoices. Received but did not pay the utility bill for the month, $445. Ck #1008 16. 1/16/2022 17. 1/16/2022 18. 1/20/2022 Deposit #4 19. 1/22/2022 Ck #1009 20. 1/23/2022 21. 1/23/2022 Ck #1010 22. 1/26/2022 23. 1/26/2022 24. 1/27/2022 Ck #1011 Deposit #5 Ck #1012 25. 1/27/2022 26. 1/30/2022 27. 1/30/2022 Ck #1013 28. 1/30/2022 SOCIETY Paid the first monthly installment on the computer equipment. The payment amount is $910. Of this amount, $43.33 is for interest and $866.67 is for principal. Purchased fifteen 26" bikes for $7,500 and purchased ten 20 bikes for $4,000 on account. Recorded sales made for the last week of the month. Total sales were $16,000 cash. Sales tax of $1,320 was not included in the sale. The cost of the merchandise sold was $8,000 (26" bikes $6,000; 20" bikes $2000). Declared and paid a cash dividend of $650 to Ms. Scout. Paid the Sales Tax to the Comptroller. 29. 1/30/2022 Deposit #6 Ck #1014 30. 1/30/2022 31. 1/31/2022 Ck #1015 of Accounts that will be used in the journal entries. Use the account numbers listed below. ETY Chart of Accounts Current Assets 10000 Cash 11000 Accounts Receivable 12000 Inventory - 26" Bikes 12050 Inventory - 20" Bikes 13000 Office Supplies 13050 Shipping Supplies 14000 Prepaid Rent 14050 Prepaid Insurance Current Liabilities 20000 Accounts Payable 23200 Wages Payable 23250 Interest Payable 23300 Sales Tax Payable 23400 Utility Payable 27000 Note Payable - Wells Fargo Bank 27050 Note Payable - Computer Inc. Stockholders' Equity 39003 Common Stock 39005 Retained Earnings 39007 Dividends Long-Term Assets 15000 Bike Racks 17000 Accumulated Depreciation - Bike Racks 15100 Computer Equipment 17100 Accumulated Depreciation - Computer Equipment Revenue 40000 Sales Expenses 50000 60100 60800 60900 60200 60300 60400 60500 Cost of Goods Sold Advertising and Promotion Expense Bank Service Fee Credit Card Expense Dues & Registration Fees Delivery Expense Insurance Expense Interest Expense 61000 61100 61200 61300 61400 61500 Legal Expense Office Supplies Expense Shipping Supplies Expense Depreciation Expense Rent Expense Wage Expense Utility Expense Gas Expense 60600 60700