Ted Miller was born and raised in Baltimore, MD where he spent most of his youth involved in music. From playing the trumpet in his school jazz band to playing the drums in a neighborhood rock band, Ted was always performing on some musical stage. At the age of 18 while a freshman and the University of Maryland-Baltimore, Ted recalls going to a campus party where he heard an especially talented DJ scratch and mix beats together in such a way that he worked the crowd to a fever pitch. It was in that moment that Ted knew he wanted to do the same thing. Within 6 months, he purchased some used DJ turntables and some vinyl records. Also a charmer, Ted was able to bribe his mom into buying him headphones, and soon began practicing everyday after class. By the following fall, Ted found himself back at the same venue, but this time He was in the DJ booth. Throughout his college years, Ted (aka DJ Teddy) gained popularity on campus and before long was playing for a packed house nearly 5 days a week. Whether it was in the basement of a fraternity house or in an uptown nightclub, his services were in great demand and, as a consequence, he was able to hone his DJ skills while at the same time pay for his music production degree. During his senior year, Ted began to distribute demo tapes to anyone who would listen. One of the tapes reached the hands of a fellow student whose uncle owned many of Baltimore's most popular nightclubs. Soon thereafter, Ted was hired as the lead DJ at one of the biggest night clubs in Baltimore- The Metro. After graduating from college, Ted began working at The Metro 5 days a week. Within two years, he won the Baltimore Post's prestigious "beat" award after if its readers voted him the best nightclub DJ in the city. Winning this award had always been a dream of his, and the local recognition served him well. His services were in such high demand, he could literally name his own price. However, after 15 years of playing the club circuit, Ted was ready for a change. The change came in late October of 2018 when Ted heard that the successful, local business Music Express (ME) was closing its doors. Owners Joe and Donna Lowery had started Music Express 24 years earlier, and it was considered by many to be one of the community's premier music providers. Music Express provided DJ services at hundreds of events per year and maintained a loyal customer base in the metro area. Despite Music Express's success, Joe and Donna had begun to find Baltimore's harsh winters unbearable and wished to move to a warmer climate. With no other choices available to them, the Lowerys planned to auction off the assets and simply close ME's doors forever. For quite a while, Ted had been pondering the idea of leaving the nightclub scene in order to exclusively service private parties and weddings. He had grown tired of working 5-6 nights per week, and more importantly he no longer wanted to work for someone else. The idea of servicing a different sector of the community appealed to him as did the ability to be selective of the parties at which he played. Further, since getting in the business he had witnessed a significant increase in the popularity of nightclub DJs working private parties. The modern wedding couple now wanted their reception to have the look of elegance and the feel of a party, and they were willing to spend premium dollars for this experience. This in turn, meant well-know DJs could often pick and choose at what events they would play and live quite comfortably off only a few events per month, leaving plenty of time for other interests. When Ted contacted the Lowerys, they relished the idea that their brainchild Music Express would continue to exist and provide music to the Baltimore community for years to come. Negotiations moved swiftly and in early December 2018, Ted purchased the business. Requirements: Using the following Chart of Accounts (last page) and Business transaction information to create: 1. A journal entry for each business transaction (a separate journal entry should be made for each transaction ...if required) 2. Post each journal entry to the general ledger 3. Create an unadjusted trial balance at December 31, 2018 Business Transactions Date 11/15/18 11/30/18 12/1/ 12/1/ 12/2 12/5 12/6 12/7 12/8 Potential Transaction Ted met with his banker and was preapproved for a $25,000 loan. Ted met with his attorney and filed paperwork to be recognized as a corporation in the state of Maryland. Ted deposited $25,000 of his personal savings into a newly opened business checking account and received 100% of the corporate stock of the company. The start up loan of the company was finalized and $25,000 was deposited into the business checking account. Ted paid the Lowerys $40,000 for the following: $35,000 Music Equipment and $5,000 for digitized music library. ME paid the local radio station $4,500, and in return received 90 days of radio advertising. The advertising spots will begin on 12/15 and run on a daily basis through 3/14/2019 ME got off to a great start by performing at a local chamber of commerce holiday function. Before leaving the event Ted collected a check for $600 ME mailed an invoice to the Chamber for the event on 12/6 for the remaining balance owed of $700. Ted served as a DJ at an afternoon event at a local church. Before leaving he collected $300 Ted met with an insurance agent and paid $2,730 total for the following - 12 month liability policy effected 12/1/18 to 12/1/19 ME Paid $2,200 for the December rent. ME Received a deposit of $2,800 from a customer for an upcoming DJ event. ME Received a $1,300 bill from the attorney for his December services. Ted hired 3 part time employees to DJ parties. ME purchased office supplies of $800 (stationery and business cards) on account One of the new part time employees played the event that ME received the $2,800 deposit (12/11). ME's total bill for the event was $8,000 Ted decided to treat himself to a vacation and wrote a check for $1,696 from the business checking account to himself. ME played at 3 separate events. The total revenue from the events was $7,000 of which $3,000 was collected at the events. ME purchased a Chevy van for $25,000. He put 10% down and signed a loan for the remaining balance. ME Received the remaining balance from customers who had events on 12/24. ME played at 2 back to back gigs. Total charges for the events $6,500 of which $3,000 was received in cash at the events. 12/9 12/10 12/11 12/12 12/13 12/14 12/15 12/21 12/24 12/27 12/29 12/31 Given the following information and examining the information from December above: 1. Create any required adjusting journal entries at December 31, 2018 2. Post the adjusting journal entries to the general ledger 3. Create an adjusted trial balance at December 31, 2018 4. Create the income statement, statement of stockholder's equity and balance sheet at December 31, 2018 5. Create the closing journal entries at December 31, 2018 6. Post the closing journal entries to the general ledger 7. Create the post-closing trial balance at December 31, 2018 Additional Data January 1, 2019 Ted made the first payment on the $25,000 start-up loan of $477.53. $114.58 interest accrued during December and $362.95 was principal payment. Office supplies remaining in the supply closet at December 31 $200 Employees receive $30 per hour. The following employees were paid in January 2019 for the following work Employee 2 Employee 3 Date 12/15/18 12/24/18 12/31/18 5 hours Employee 1 5 hours 3 hours 2 hours 4 hours 3 hours 2 hours 3 hours 6 hours 1/1/19 4 hours 1/5/19 1/7/19 3 hours 4 hours Received December's utility bill on January 10 $325 Received December's phone bill on January 11 $400 ME will depreciate the Music Equipment over 36 months, the Music Library over 24 months and the Vehicle over 5 years. Straight-line depreciation will be used and there is no salvage value for any of the assets. Ted realized on January 10th. That he forgot to charge a customer for an event that was held on December 29th. He sent a bill to the customer for $3,500. Chart of Accounts Accounts Payable Accounts Receivable Accumulated Depreciation Advertising Expense Amortization Expense Cash Common Stock Deferred Revenue Depreciation expense Dividends Insurance Expense Interest Expense Interest Payable Interest Receivable Interest Revenue Miscellaneous Expense Music Equipment Music Library Note Payable Office Equipment Prepaid Advertising Prepaid Insurance Prepaid Rent Professional Fees Revenue Rent Expense Retained Earnings Salaries Expense Salaries Payable Supplies Supplies Expense Utilities Expense Vehicles Ted Miller was born and raised in Baltimore, MD where he spent most of his youth involved in music. From playing the trumpet in his school jazz band to playing the drums in a neighborhood rock band, Ted was always performing on some musical stage. At the age of 18 while a freshman and the University of Maryland-Baltimore, Ted recalls going to a campus party where he heard an especially talented DJ scratch and mix beats together in such a way that he worked the crowd to a fever pitch. It was in that moment that Ted knew he wanted to do the same thing. Within 6 months, he purchased some used DJ turntables and some vinyl records. Also a charmer, Ted was able to bribe his mom into buying him headphones, and soon began practicing everyday after class. By the following fall, Ted found himself back at the same venue, but this time He was in the DJ booth. Throughout his college years, Ted (aka DJ Teddy) gained popularity on campus and before long was playing for a packed house nearly 5 days a week. Whether it was in the basement of a fraternity house or in an uptown nightclub, his services were in great demand and, as a consequence, he was able to hone his DJ skills while at the same time pay for his music production degree. During his senior year, Ted began to distribute demo tapes to anyone who would listen. One of the tapes reached the hands of a fellow student whose uncle owned many of Baltimore's most popular nightclubs. Soon thereafter, Ted was hired as the lead DJ at one of the biggest night clubs in Baltimore- The Metro. After graduating from college, Ted began working at The Metro 5 days a week. Within two years, he won the Baltimore Post's prestigious "beat" award after if its readers voted him the best nightclub DJ in the city. Winning this award had always been a dream of his, and the local recognition served him well. His services were in such high demand, he could literally name his own price. However, after 15 years of playing the club circuit, Ted was ready for a change. The change came in late October of 2018 when Ted heard that the successful, local business Music Express (ME) was closing its doors. Owners Joe and Donna Lowery had started Music Express 24 years earlier, and it was considered by many to be one of the community's premier music providers. Music Express provided DJ services at hundreds of events per year and maintained a loyal customer base in the metro area. Despite Music Express's success, Joe and Donna had begun to find Baltimore's harsh winters unbearable and wished to move to a warmer climate. With no other choices available to them, the Lowerys planned to auction off the assets and simply close ME's doors forever. For quite a while, Ted had been pondering the idea of leaving the nightclub scene in order to exclusively service private parties and weddings. He had grown tired of working 5-6 nights per week, and more importantly he no longer wanted to work for someone else. The idea of servicing a different sector of the community appealed to him as did the ability to be selective of the parties at which he played. Further, since getting in the business he had witnessed a significant increase in the popularity of nightclub DJs working private parties. The modern wedding couple now wanted their reception to have the look of elegance and the feel of a party, and they were willing to spend premium dollars for this experience. This in turn, meant well-know DJs could often pick and choose at what events they would play and live quite comfortably off only a few events per month, leaving plenty of time for other interests. When Ted contacted the Lowerys, they relished the idea that their brainchild Music Express would continue to exist and provide music to the Baltimore community for years to come. Negotiations moved swiftly and in early December 2018, Ted purchased the business. Requirements: Using the following Chart of Accounts (last page) and Business transaction information to create: 1. A journal entry for each business transaction (a separate journal entry should be made for each transaction ...if required) 2. Post each journal entry to the general ledger 3. Create an unadjusted trial balance at December 31, 2018 Business Transactions Date 11/15/18 11/30/18 12/1/ 12/1/ 12/2 12/5 12/6 12/7 12/8 Potential Transaction Ted met with his banker and was preapproved for a $25,000 loan. Ted met with his attorney and filed paperwork to be recognized as a corporation in the state of Maryland. Ted deposited $25,000 of his personal savings into a newly opened business checking account and received 100% of the corporate stock of the company. The start up loan of the company was finalized and $25,000 was deposited into the business checking account. Ted paid the Lowerys $40,000 for the following: $35,000 Music Equipment and $5,000 for digitized music library. ME paid the local radio station $4,500, and in return received 90 days of radio advertising. The advertising spots will begin on 12/15 and run on a daily basis through 3/14/2019 ME got off to a great start by performing at a local chamber of commerce holiday function. Before leaving the event Ted collected a check for $600 ME mailed an invoice to the Chamber for the event on 12/6 for the remaining balance owed of $700. Ted served as a DJ at an afternoon event at a local church. Before leaving he collected $300 Ted met with an insurance agent and paid $2,730 total for the following - 12 month liability policy effected 12/1/18 to 12/1/19 ME Paid $2,200 for the December rent. ME Received a deposit of $2,800 from a customer for an upcoming DJ event. ME Received a $1,300 bill from the attorney for his December services. Ted hired 3 part time employees to DJ parties. ME purchased office supplies of $800 (stationery and business cards) on account One of the new part time employees played the event that ME received the $2,800 deposit (12/11). ME's total bill for the event was $8,000 Ted decided to treat himself to a vacation and wrote a check for $1,696 from the business checking account to himself. ME played at 3 separate events. The total revenue from the events was $7,000 of which $3,000 was collected at the events. ME purchased a Chevy van for $25,000. He put 10% down and signed a loan for the remaining balance. ME Received the remaining balance from customers who had events on 12/24. ME played at 2 back to back gigs. Total charges for the events $6,500 of which $3,000 was received in cash at the events. 12/9 12/10 12/11 12/12 12/13 12/14 12/15 12/21 12/24 12/27 12/29 12/31 Given the following information and examining the information from December above: 1. Create any required adjusting journal entries at December 31, 2018 2. Post the adjusting journal entries to the general ledger 3. Create an adjusted trial balance at December 31, 2018 4. Create the income statement, statement of stockholder's equity and balance sheet at December 31, 2018 5. Create the closing journal entries at December 31, 2018 6. Post the closing journal entries to the general ledger 7. Create the post-closing trial balance at December 31, 2018 Additional Data January 1, 2019 Ted made the first payment on the $25,000 start-up loan of $477.53. $114.58 interest accrued during December and $362.95 was principal payment. Office supplies remaining in the supply closet at December 31 $200 Employees receive $30 per hour. The following employees were paid in January 2019 for the following work Employee 2 Employee 3 Date 12/15/18 12/24/18 12/31/18 5 hours Employee 1 5 hours 3 hours 2 hours 4 hours 3 hours 2 hours 3 hours 6 hours 1/1/19 4 hours 1/5/19 1/7/19 3 hours 4 hours Received December's utility bill on January 10 $325 Received December's phone bill on January 11 $400 ME will depreciate the Music Equipment over 36 months, the Music Library over 24 months and the Vehicle over 5 years. Straight-line depreciation will be used and there is no salvage value for any of the assets. Ted realized on January 10th. That he forgot to charge a customer for an event that was held on December 29th. He sent a bill to the customer for $3,500. Chart of Accounts Accounts Payable Accounts Receivable Accumulated Depreciation Advertising Expense Amortization Expense Cash Common Stock Deferred Revenue Depreciation expense Dividends Insurance Expense Interest Expense Interest Payable Interest Receivable Interest Revenue Miscellaneous Expense Music Equipment Music Library Note Payable Office Equipment Prepaid Advertising Prepaid Insurance Prepaid Rent Professional Fees Revenue Rent Expense Retained Earnings Salaries Expense Salaries Payable Supplies Supplies Expense Utilities Expense Vehicles