Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Q1. Jesse James graduated from high school in Wawanesa and decided to start his own business doing small building and repair jobs. Jesse knew that

image text in transcribed
image text in transcribed
Q1. Jesse James graduated from high school in Wawanesa and decided to start his own business doing small building and repair jobs. Jesse knew that incorporating a business had many benefits so he set up a corporation with the help of a lawyer. The business was incorporated on July 1, 2019. Jesse had saved $20,000 which he transferred from his personal account into the bank account for Jesse James Home Improvements Ltd. (JJHI) and received shares in return. He then purchased a used Toyota Tundra for $14,000 and tools for $2,500 cash. Shortly, after opening the business Jesse realized there was a large demand for these types of services so he hired an assistant. Journal Entries Pro Player Ltd. completed its first year of operations on December 31, 2019. The owner has completed the attached statement of earnings. You are an independent accountant hired by the company to review its financial statements. You have found the following additional information: a) unpaid wages for the last four days in December amounting to $520 were not recorded. b) Depreciation on vehicles, amounting to $16,000 for 2019, was not recorded. c) Interest on a $35,000, one-year, 8 percent note payable dated October 1, 2019, was not recorded. The full amount of interest is payable on the maturity date of the note. d) The unpaid $350 telephone bill for December 2019 has not been recorded. e) The deferred rental revenue account has a balance of $5,000 as at December 31, 2019, which represents rental revenue for the month of January 2020. f) Maintenance expense includes $750, which is the cost of maintenance supplies still on hand at December 31, 2019. These supplies will be used in 2020. g) The income tax expense is $7,500. Payable of income tax will be made in 2020. Required: For each item (a) through (g), prepare the adjusting entry. If none is required, explain why. Prepare a correct statement of earnings for 2019 in good form, including earnings per share, assuming that 8,000 shares are outstanding

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Routledge Companion To Fair Value In Accounting

Authors: Gilad Livne

1st Edition

0367656132, 9780367656133

More Books

Students also viewed these Accounting questions