PROBLEM #1 JOURNAL ENTRIES

Dave and Tink started a Company Shade Store, Inc.. They sell Bedframes to the public and also teach courses related to the Bedding Industry. They prepare their financials on a monthly basis. They also use a perpetual inventory system.

1/1 Dave Contributed $9,000 in exchange for company stock in Shade Store Inc.

1/2 Tink contributed $5,000 of Equipment and $4,000 in cash in exchange for company stock in Shade Store Inc.

1/3 - Shade Store paid $3,600 for a 1 year insurance policy from Farmers Insurance. The policy effective start date is 1/1/X1.

1/4 Shade Store purchases 15 units of Bed Frame Inventory from Haines Bedding on credit with the terms 2/10, N30, $1,500

1/5 Shade Store purchases $1,700 of supplies on account from Amazon.com

1/6 Shade Store return 3 units of inventory back to Haines Bedding that were defective. Haines Bedding issued Shade Store a credit.

1/7 Shade Store went to Home Depot and Purchased $20,000 worth of Equipment. They had to put 20% cash down and financed the remainder of the purchase price with a 5 year Note.

1/8 Shade Store received $24,000 from Client #1 for 12 months of consulting classes that take place the last day of each month. The first class will start on 1/31/X1.

1/9 Shade Store sold 6 bedframes to Client #2 on account with the terms, 1/10, N30, $3,000

1/10 Shade Store pays $425 to Advertise in Black Brand Publication.

1/11 Shade Store pays GG Property Solutions $375 for repair services (fixing plumbing and electrical issues).

1/12 Shade Store pays $1,450 for Office Rent.

1/13 Shade Store sent the payment that was due to Haines Bedding for the bedframe inventory purchased on 1/4

1/14 - Shade Store received the full payment from Client #2 relating to the transaction on 1/9.

1/15 - Shade Store pays $675 towards the balance they owe to Amazon.com

1/16 Shade Store sells to 3 bedframes to Client #3 for a total of $1,800 cash.

1/17 - Tink and Dave each receive $500 dividend from Shade Store ($1,000 total). Tink and Dave will use these funds for their personal use.

1/18 Client #3 returns 1 of the bedframes they purchased on 1/16 back to Shade Store. Shade Store gave them a cash refund.

PROBLEM #2 ADJUSTING ENTRIES. (Based on the transactions above for Shade Store, Inc.)

• At the end of the month, Shade Store had $625 worth of supplies on hand.

• All Equipment Shade Store has is depreciated on a 5 year Straight Line (60 month) basis. Please do the necessary Depreciation entries for the period. (If an asset is acquired in the month, assume it has a start date the 1^st of that month for depreciation purposes)

• Provide necessary adjustments for any unearned revenue accounts.

• Provide necessary adjustments for any prepaid expense accounts

• The utility bill for January did not arrive at the Shade Store Inc office. Utilities are typically $325 per month.

Problem #3. Prepare Adjusted Trial Balance. - Shade Store, Inc..

Problem #4. Prepare Closing Entries - Shade Store, Inc..

Problem #5. Prepare Income Statement & Balance Sheet Shade Store, Inc..