Problem 3.3 Mechanical Engineers, Inc. is a newly formed corporation, with a December 31 fiscal year end, which incorporated on January 1, 20X1 and use the following Chart of Accounts: Chart.of Accounts for Mechanical Engineers. In Cash Accounts receivable Prepaid insurance Prepaid rent Office supplies Equipment Accumulated depreciation equipment Land Accounts payable Dividends payable Interest payable Income tax payable Uneamed client service revenue Notes payable Common stock Retained earnings Dividends Client service revenue Travel expense Office supplies expense Advertising expense Salary expense Utility expense Deprecintion expense: equipment Interest expense Insurance expense Rent expense Income tax expense Income summary 25,000 84 Problem 3.3 (continued) The company makes adjusting entries monthly and had the following after cloning trial balance as of December 31, 20X1 Mechanical Engineers, Inc. After Closing Trial Balance December 31, 20X1 Dahit Cash 100,100 Accounts receivable 19,400 Prepaid insurance 2,400 Prepaid rent Office supplies 4.000 Equipment 100,000 Accumulated depreciation equipment 1,000 Land 90,000 Accounts payable 1,500 Dividends payable 10,000 Interest payable 400 Income tax payable 16,000 Unerned client service revenue 18.000 Notes payable 80,000 Common stock 200,000 Retained earnings 14.000 Total 340.000 3-10.000 Thered profesional Baby name was purchased for $1.211 on December 1, 201, rd providence from December 20x1, dwugh March 31, 2002 *Prepaid rent wat paid on December 1, 2011 in the route to the month period December 1, 2011 through May,200 ***Equipment was puthased on December 1, 2011. for $300.000 which is being deprecated in bed on an estimated to the estimated salvape vale of the is $4.000 and straight line depreciations et On December 1, 201..000 was borrowed and recorded a long term to pavabile interest rate of intervis de very three months beim February 21, 2002 On December 1, 201, 20.000 shares of common stock were laudat 10 persone Problem 3.3 (continued) The following transactions occurred during January of 202 Janury 2: Shareholders bought 5,000 additional shares of Mechanical Engineers, Inc. common stock at $10 per share January 2: Purchased land for $30,000, paying $10,000 down and signing a 6 (annual rate) note payable for the balance. The principal will be paid on January 2, 20X4. Interest will be paid monthly on the first of each month beginning February 1, 20X2 January 5: Purchased the supplies on account for $10,000 January 6: Paid utility bill for $1,500 previously accrued in December 20X1 as accounts payable. January 7: Paid travel expense of $1,900. January 9. Collected $47,000 for professional services performed for clients during the first week of January that had not been previously billed or accrued. January 10: Paid advertising expenses of 84,000. January 16: Paid semi-monthly salaries of $26,000 in cash January 16: Paid dividends of $10,000 that had been declared on December 31, 20X1. January 16: Received payment in advance of $21,000 from clients for mechanical engineering services to be performed inter in the January or in early February 20x2. January 24: Billed clients $24,000 for services performed during January (collection expected in early February 20X2) January 26: Collected $28,000 on account from clients. January 27: Collected $48,000 for professional services performed for clients during January that had not been previously billed or accrued January 28: Paid advertising expenses of $6,000 January 29: Paid travel expense of $2,600 January 31: Pald semi-monthly salaries of $28,000 in cash January 31: Received involce for gas and electric utility service during January for $1,900 (which was not paid until February 8, 20x2). January 31: Declared dividends of 8.00 per share payable to shareholders on February 15, 20x2. Note: As of January 31, 20x2, there were 25,000 shares of stock issued and outstanding (based on 20,000 shares issued in prior year plus 5,000 shares issued on January 2, 20X2) Problem 3.3 Mechanical Engineers, Inc. is a newly formed corporation, with a December 31 fiscal year end, which incorporated on January 1, 20X1 and use the following Chart of Accounts: Chart.of Accounts for Mechanical Engineers. In Cash Accounts receivable Prepaid insurance Prepaid rent Office supplies Equipment Accumulated depreciation equipment Land Accounts payable Dividends payable Interest payable Income tax payable Uneamed client service revenue Notes payable Common stock Retained earnings Dividends Client service revenue Travel expense Office supplies expense Advertising expense Salary expense Utility expense Deprecintion expense: equipment Interest expense Insurance expense Rent expense Income tax expense Income summary 25,000 84 Problem 3.3 (continued) The company makes adjusting entries monthly and had the following after cloning trial balance as of December 31, 20X1 Mechanical Engineers, Inc. After Closing Trial Balance December 31, 20X1 Dahit Cash 100,100 Accounts receivable 19,400 Prepaid insurance 2,400 Prepaid rent Office supplies 4.000 Equipment 100,000 Accumulated depreciation equipment 1,000 Land 90,000 Accounts payable 1,500 Dividends payable 10,000 Interest payable 400 Income tax payable 16,000 Unerned client service revenue 18.000 Notes payable 80,000 Common stock 200,000 Retained earnings 14.000 Total 340.000 3-10.000 Thered profesional Baby name was purchased for $1.211 on December 1, 201, rd providence from December 20x1, dwugh March 31, 2002 *Prepaid rent wat paid on December 1, 2011 in the route to the month period December 1, 2011 through May,200 ***Equipment was puthased on December 1, 2011. for $300.000 which is being deprecated in bed on an estimated to the estimated salvape vale of the is $4.000 and straight line depreciations et On December 1, 201..000 was borrowed and recorded a long term to pavabile interest rate of intervis de very three months beim February 21, 2002 On December 1, 201, 20.000 shares of common stock were laudat 10 persone Problem 3.3 (continued) The following transactions occurred during January of 202 Janury 2: Shareholders bought 5,000 additional shares of Mechanical Engineers, Inc. common stock at $10 per share January 2: Purchased land for $30,000, paying $10,000 down and signing a 6 (annual rate) note payable for the balance. The principal will be paid on January 2, 20X4. Interest will be paid monthly on the first of each month beginning February 1, 20X2 January 5: Purchased the supplies on account for $10,000 January 6: Paid utility bill for $1,500 previously accrued in December 20X1 as accounts payable. January 7: Paid travel expense of $1,900. January 9. Collected $47,000 for professional services performed for clients during the first week of January that had not been previously billed or accrued. January 10: Paid advertising expenses of 84,000. January 16: Paid semi-monthly salaries of $26,000 in cash January 16: Paid dividends of $10,000 that had been declared on December 31, 20X1. January 16: Received payment in advance of $21,000 from clients for mechanical engineering services to be performed inter in the January or in early February 20x2. January 24: Billed clients $24,000 for services performed during January (collection expected in early February 20X2) January 26: Collected $28,000 on account from clients. January 27: Collected $48,000 for professional services performed for clients during January that had not been previously billed or accrued January 28: Paid advertising expenses of $6,000 January 29: Paid travel expense of $2,600 January 31: Pald semi-monthly salaries of $28,000 in cash January 31: Received involce for gas and electric utility service during January for $1,900 (which was not paid until February 8, 20x2). January 31: Declared dividends of 8.00 per share payable to shareholders on February 15, 20x2. Note: As of January 31, 20x2, there were 25,000 shares of stock issued and outstanding (based on 20,000 shares issued in prior year plus 5,000 shares issued on January 2, 20X2)