1. Prepare journal entries for items 1 - 13.
2. Post this information to T-accounts.

1. April 1, 2006The business would be incorporated, and Mary Jane and John would invest $60.000 in the company in exchange for shares of common stock. 2. April 1, 2006The Campbell National Bank would loan Garden Place. Inc., $32,000 to be repaid in equal principal payments over four years. The interest rate was 13%, and interest was payable at the end of each year when the principal payment was made. 3. April 1, 2006A pickup truck would be purchased for $12,000, of which $10,000 would be financed by the Campbell National Bank. The loan would be repaid over three years at the rate of $336 per month for a total of $12,100. 4. April 1, 2006Display equipment would be purchased for $6,000 cash. 5. April 1, 2006-A Rototiller would be purchased for $400 cash. This case was prepared by Associate Professor Luann J. Lynch and Professor E. Richard Brownlee II and based on an earlier version by C. Ray Smith Professor of Business Administration. It was written as a basis for class discussion rather than to illustrate effective or ineffective handling of an administrative situation. Copyright 2000 by the University of Virginia Darden School Foundation, Charlottesville, VA. All rights reserved. To order copies, send an e- mail to sales@dardenbusinesspublishing.com No part of this publication may be reproduced, stored in a retrieval sistem, used in a spreadsheet, or transmitted in any form or by any means-electronic, mechanical, photocopying, recording, or otherwisewithout the permission of the Darden School Foundation. Rev. 9/07. -2- 6. April 1, 2006A cash register would be purchased for $3,600 cash. 7. April 1, 2006An inventory of plants, trees, and shrubs would be purchased for $60,000 cash 8. The following things were projected to occur between April 1, 2006, and March 31, 2007: Cash sales: $340,000 Sales on account: $60,000 9. Additional purchase of plants, trees, and shrubs: $200.000. Mary Jane planned to price all items to give her a 40% gross margin, which is to say that if an item cost $6, it would be sold for $10. 10. Advertising expenses would be a percentage of sales, or $20,000 for the year. 11. Mary Jane categorized a group of business expenses as ongoing. They were forecast as follows: Rent: $7,200 ($600 per month) Telephone: $1,200 ($100 per month) Utilities: $4.800 (400 per month) Payroll: $112,000 ($40.000 for Mary Jane and $72.000 for three regular and four part-time employees) 12. Monthly payments of $336 would be made on the $10,000 truck loan. 13. A principal payment of $8,000 would be made on the $32,000 bank loan, along with interest of $4,160