Transaction # Date Year 1 Transactions for Andover Event 1 January 1 Paid $18,500 in cash for equipment (PP&E). 2 February 28 Paid $23,200 in cash to buy a plot of land for use as a parking lot. 3 April 1 4 April 1 Paid 20,500 for a long term asset in cash 5 April 1 6 May 1 7 June 1 8 June 15 9 June 30 10 July 31 11 12 July 31 Sept 30 13a October 1 13b 14 15 Dec 15 16 Dec 31 October 1 October 1 Issued 3,000 shares of common stock for $9 cash per share. Prepaid $30,600 for insurance for the next 12 months and recorded the transaction as an asset. Received $46,800 in cash in advance for services. The services will be provided over the course of 6 months beginning on Sept. 1 of this year. Sold inventory on account for $148,000 (a). The cost of the inventory was $16,400 (b). Also, paid a sales commission on this sale of $14,600 (c). Purchased inventory for $24,200. Paid $11,000 in cash and recorded an Accounts Payable for the remaining balance. Paid last year's income tax liability. Received $65,000 of payments on past Accounts Receivable |Paid off accounts payable related to the purchase of inventory on June 15th Paid $22,000 in cash for expenses related to new products: $12,500 for research and development of the products (a) and $9,500 for marketing to advertise them (b). |Purchased supplies for $12,000 in cash. The accountant accidently debited Inventory instead of the appropriate account. The accountant recorded an adjustment to correct the entry made in 13a (so that the accounts will reflect what should have been recorded). Borrowed $20,000 from a local bank and signed a 3-year note payable promising to pay 10% interest per year (interest is due and recorded on Dec 31). Salaries of officers were $23,000. The company paid $12,000 now and the remainder will be paid on Jan 1, Year 2. Income Tax for Year 1 is $15,500. $7,500 is paid this year and the remainder will be paid on April 1 of Year 2. 17 Dec 31 Record the appropriate adjusting entry related to the insurance described in transaction 5. 18 Dec 31 Record the appropriate adjusting entry related to unearned revenue from May 1st (Transaction 6). 19 Dec 31 20 Dec 31 Record the appropriate adjusting entry related to the note payable described in transaction 14 (assuming interest will be paid in Year 2). $600 of supplies are still on hand on Dec 31. Record the appropriate adjusting entry to reflect the supplies left on hand. (Refer to transaction 13)