Question

YR 0 Income Statement

YR 0 Balence Sheet

Transactions

Transaction Analysis

YR 1 Income Statement

YR 1 Balance Sheet

(In using the transaction analysis sheet, link the beginning balances in the top row to the Year 0 ending balences in the balance sheet. Be sure to calculate balances at the bottom of the sheet. These ending balances will link to the Year 1 balance sheet.)

Part A Adomain is a start-up company that started last year, in Year 0. You are assigned to make the necessary adjustments for Adomain in Year 1. In the following tabs you will be given Adomain's Year 0 Balance Sheet and Income Statement, as well as a list of transactions for Year 1. You are also given a blank transaction analysis sheet where you should record the Year 1 transactions. The transaction analysis page, if used correctly, will help you determine the ending balances in all accounts. The transactions include normal economic events during the course of the year and adjustments that need to be recorded at the end of the year (HINT: There are potential adjusting entries, which are transactions 3, 4, 10 and 11. You will need to consider the facts on your own to determine the adjustments). Hints: Whenever possible, use formulas to reference cells. This not only reduces the likelihood of error, but makes it easier for us to understand why you got the number you did. This applies to all assignments. in using the transaction analysis sheet, link beginning balances in the top row to the Year o ending balances in the balance sheet. Be sure to calculate ending balances at the bottom of the sheet. These ending balances will link to the Year 1 Balance Sheet. AM Adomain Income Statement for Year ended December 31, Year 0 $146,500 Revenues Sales Revenue Expenses Cost of Goods Sold 8 R & D Expense 9 Sales Commissions 1 Marketing Expense 1 1 Rent Expense 1 2 other Operating Expenses 1 3 Income from Operations 1 4 Interest Income 15 Income before Taxes Income Tax Expense 1 7 Net Income (62,500) (9,100) (3,000) (9,000) (5,700) (23,000) $34,200 400 34,600 (8,500) 26,100 Adomain Balance Sheet As of December 31, Year 0 4 Assets 5 Cash 6 Marketable Securities 7 Accounts Receivable 8 Inventory 9 PP&E (net) 1 Intangible Assets 1 1 Other Long-Term Assets 12 Total Assets $80,000 6,700 20,000 25,000 34,700 10,500 15,000 $191,900 13 14 Liabilities & Equity 15 Accounts Payable 16 Notes Payable 17 Unearned Revenue 18 Income Tax Payable 19 Common Stock 2 C Retained Earnings 21 Total Liabilities & Equity $45,000 28,500 50,000 4,300 45,000 19,100 $191,900 -INT E FIEEFFELSEFER January 1 Purchased a patent for $32000 in cash Paid $1,500 cash for long term assets A1 Prepaid $36.000 for rent for the next 12 months and recorded the transaction as an asset issued 1000 common shares to investors for $60,000 Sold inventory on account for $120,000. The cost of the entry was $ 16,000. Also, paid a sales commission on this sale of $ Paid $13,400 in cash for costs related to research and development of new products Received $24,000 in cash in advance for services. The services will be provided over the course of months beginning on Dec 1 Received the cash to settle so 5,000 of the receivables recorded on Apr 1 IPad last year's income tax bilty Purchased inventory for 13,000 0 00 in cash and recorded an Accounts Payable for the temning balance Received $20,000 in cash relating to the Accounts Receivable in transactions Purchased supples for $2.000 The Oranterally recorded the supplies the A S Receivable count October the accountant recorded an adjustment T e ntry made in the count will rect what should have been recorde October 1Purchased market i tes 106 ,000 cash Borrowed $20,000 from a local bank and signed a year note payable promising to pay tonterest per year interest is due and recorded on Dec 31). Employee salaris ed amounted to $14.000 The company paid $4,000 on Dec 1 and the remainderbeun 1 Y 2 Y 00000 vende mundwbedonner Record the appropriate tingent related to transaction 3 Record the appropriate adjusting entry related to transaction 7. 52000 Subs are still on hand on Dec 31 Record the appropriate adjusting entry to reflect the supplies used during the year. Refer to transaction 122) Record the appropriateadusting entry related to the note payable de Bulls biblioted in blast include forslas and an IIIIIIIIII||| IIIIIIIII IIIIIIIIIII IIIIIIIIIII IIIIIII Accounts Transaction Analysis IIIIIIIIIIIIIII LIITTITUTI IIIIIIIIIIIIIIIIII IIIIIIIIIIIIIIII TII IIIIIIII LIITTI Traction 4992 A1 Adomain 1 Adomain Income Statement For the year ended December 31, Year 1 Revenues Expenses GOOGAUNA 14 Income from Operations 15 16 Income before Taxes 1 Net Income 20 A Adomain Balance Sheet As of December 31, Year 1 OOONO AN- 14 Total Assets 15 16 Liabilities & Equity 17 ONNNNNNNNN 00 OKO-OM VOTO 25 Total Liabilities & Equity