RIVER COMPANY PROBLEM The following transactions occurred during the period 1/1/X1 through 7/1/X1: Date Number Transaction 1/1/X11 River Company issued and sold 100 shares of $1 par value common stock for $1 each 1/1/X1 2 Purchased building, $50. Building has a 5-year life. Paid $30 cash. Signed a 5% interest bearing note payable for the remainder which is due in 2 years. There is no salvage value on the building. 1/1/X13 Paid for a three-year insurance policy in advance, $3. 1/1/X1 4 Purchased office supplies, $5. Paid cash. 4/1/x 1 5 Hired an assistant. 7/1/X1 Provided service to customer, collected $15 fee immediately. An assistant is immediately paid $1 for work performed. 12/31 Adjustments NOTE: You should complete this section AFTER course coverage of adjusting journal entries. No transactions were recorded during the period 7/2/X1 through 12/30/X1. At 12/31/X1, the following information was available to adjust correct the accounting records prior to the financial statements preparation 6 2 Service provided to a customer on 12/1/X1 had not been billed; payment of $40 had not been collected. The assistant is owed $3 on 12/31, but payroll is not paid until 1/3/X2. Received $7 bill for utilities used during the past 30 days. No payment made. River discovered that an $11 collection on 12/2/X1 from a customer was not recorded. The collection was in advance of services to be performed on 3/1/X2. Two years are remaining on the insurance policy that was paid for on 1/1/X1. There are $3 worth of office supplies remaining at 12/31/X1. Interest of $1 has been incurred, but will not be paid until the note is due. Depreciation on the building of $10 is calculated using the straight-line method. Required for transactions through 7/1/X1: 1. Assess each transaction and record on Transaction Analysis Sheet. 2. Record the journal entries. 3. Post to the T-accounts. 4. Prepare unadjusted columns of the Trial Balance Required for transactions dated 12/31/X1: 1. Record the journal entries. 2. Analyze effect on Transaction Analysis Sheet. 3. Post to the T-accounts. 4. Prepare adjustments and adjusted columns of the Trial Balance 5. Prepare the financial statements