Question 1: On December 31, 2019, Company A had the following account balances:

Cash	$ 90,000	Accumulated Depreciation, Equipment	$ 90,000
Accounts Receivable	96,000	Accounts Payable	60,000
Inventory	60,000	Wages Payable	8,000
Supplies	2,000	Bank Loan Payable	150,000
Long-Term Investment	80,000	Common Shares	250,000
Equipment	330,000	Retained Earnings	100,000

Prepare journal entries to record each of the above transactions and adjustments.

In 2020, the following transactions occurred:

• 1.Paid $102,000 for wages during the year. At year end, the company owed another $2,000 to the employees for the last week of work in December.
• 2.Depreciated the equipment for the year. The company had bought its equipment at the beginning of 2017, and it was expected to last 10 years and have a residual value of $30,000.

Question 2: Based on the following transactions, calculate the revenues, expenses, and net income that would be reported on (a) the cash basis and (b) the accrual basis:

• i. Inventory costing $70,000 was purchased on account.
• ii. Inventory costing $60,000 was sold for $100,000. Eighty percent of the sales were for cash.
• iii. Cash collected from credit customers (those who bought on account) totalled $20,000.
• iv. A lease was signed at the beginning of the year, requiring monthly payments of $1,000. The rent for the first month was paid when the lease was signed. After that, the $1,000 rent was paid on the last day of each month, to cover the following month.
• v. Supplies costing $5,500 were purchased for cash. At the end of the year, $500 of the supplies were still unused.
• vi. Wages of $37,500 were paid during the year. Also, wages of $500 remained unpaid at year end.