Top Quality Appliance Long Beach completed the following transactions during 2018, its first year of operations:

1. Received $500,000 cash from owner, T. Baker, in exchange for capital. Opened a new checking account at Long

Beach National Bank and deposited the cash from the owner.

2. Paid $50,000 cash for a TQA franchise

3. Paid $200,000 cash and issued $400,000, 10 year, 5% notes payable for land with an existing building. The

assets had the following market values: Land, $100,000; Building $500,000

4. Paid $75,000 for store fixtures

5. Paid $45,000 for office equipment

6. Paid $600 for office supplies

7. Paid $3,600 for a two year insurance policy

8. Purchased appliances from TQA (merchandise inventory) on account for $425,000

9. Established a petty cash fund for $150

10. Sold appliances on account to B&B Contractors for $215,000, terms n/30 (cost $86,000)

11. Sold appliances to Davis Contracting for $150,000 (cost, $65,000), receiving a 6-month, 8% note

12. Recorded credit card sales of $80,000 (cost, $35,000), net of processor fee of 2%

13. Received payment in full from B&B Contractors

14. Purchased appliances from TQA on account for $650,000

15. Made payment on account to TQA, $300,000

16. Sold appliances for cash to LB Home Builders for $350,000 (cost, $175,000)

17. Received payment in full on the maturity date from Davis Contracting for the note

18. Sold appliances to Leard Contracting for $265,000 (cost, $130,000), receiving a 9-onth, 8% note

19. Made payment on account to TQA, $500,000

20. Sold appliances on account to various businesses for $985,000, terms n/30 (cost, $395,000)

21. Collected $715,000 cash on account

22. Paid cash for expenses: salaries, $180,000; Utilities $12,650

23. Replenished the petty cash fund when the fund had $62 in cash and petty cash ticks for $85 for office supplies

24. Baker withdrew $5,000

25. Paid the franchise fee to TQA of 5% of total sales of $2,045,000

QUESTION:

1. Post to the general ledger.

2.Record adjusting entries for the year ended December 31, 2018:

a.One year of prepaid insurance has expired

b. Management estimates that 5% of Accounts Receivable will be uncollectible

c.An inventory of office supplies indicates that $475 of supplies have been used

d. Calculate the interest earned on the outstanding Leard Contracting note receivable. Assume the note was received on Oct. 31. Round to the nearest dollar.

e. Record depreciation expense for the year.

f.Record amortization expense for the year on the franchise, which has a 10-year life

g.Calculate the interest owed on the note payable. Assume the note as issued on January 1.

2. Trial Balance

3. Prepare a multiple step income statement and a classified balance sheet.