Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Transactions Description Date Deposit No. / Check No. 1. 1/02/2022 2. 1/02/2022 Deposit #1 Ck #1001 3. 1/03/2022 Ck #1002 Evy Scout met with her

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
Transactions Description Date Deposit No. / Check No. 1. 1/02/2022 2. 1/02/2022 Deposit #1 Ck #1001 3. 1/03/2022 Ck #1002 Evy Scout met with her lawyer and CPA for advice on starting the business. The lawyer told Ms. Scout to register the company name Evy's Electric Bike Shop with the County of El Paso. In addition, Ms. Scout will get an Employer Identification Number (EIN) from the Internal Revenue Service (IRS) and get a sales tax permit from the state of Texas. Ms. Scout opened a business checking account at Wells Fargo Bank by depositing $70,000. The corporation issued her a stock certificate for 7,000 shares of common stock. Ms. Scout signed a one-year rental. She was required to pay $9,000 for rent for the months of January 1, 2022 - June 30, 2022 Arranged for a general business liability insurance policy and paid $4,000 to State Penn Insurance. This premium is for twelve months coverage. Purchased a new computer system that cost $5,200 from Computer Inc. for use in the business. Ms. Scout signed a note payable for the cost of the system which will be repaid in 6 months at 10% interest. The computer system has an estimated useful life of five years, and the residual (salvage) value is $400. Only record the purchase of the computer equipment. Signed a note payable to borrow $10,000 from Wells Fargo Bank. Interest is 12% annually and the note is to be repaid with interest in twelve months. Only record the note. Paid $1,100 for shipping supplies. 4. 1/03/2022 5. 1/03/2022 Deposit #2 6. 1/05/2022 Ck #1003 7. 1/05/2022 4 | Page 8. 1/06/2022 Ck #1004 Paid $14,000 for Bike Racks. The estimated service life of these assets is B years. The residual (salvage) value is $200. These items will be recorded as Bike Racks and depreciated using straight-line depreciation in the adjusting entries. Only record the purchase of the racks 9. 1/06/2022 Ck 111005 Arranged for Sun City Movers to make the delivery of the computer system and paid the delivery charge of $750. This charge should be added to the cost of the computer equipment purchased and depreciated on the same basis as the computer equipment. Only record the delivery 10. 1/08/2022 Ck #1006 Purchased $450 of office supplies from Office Supplies Cousing cash. 11. 1/08/2022 Purchased $8,000 of merchandise inventory (26" bikes) on account. There were no credit terms for prompt payment. 12.1/09/2022 Purchased $6,000 of merchandise inventory (20" bikes) on account. There were no credit terms for prompt payment. 13. 1/13/2022 Ck #1007 Ms. Scout received and paid the $940 charge from her lawyer. 14. 1/14/2022 Evy's Electric Bike Shop, Inc. is now open for business. 15. 1/14/2022 Deposit #3 Sold merchandise for $11,200 cash. The sales tax for $924 was not included in the sale amount. The cost of the 26" bikes is $4,000; the cost of the 20' bikes is $1,600. This sale has to be delivered to the customer. The merchandise will be shipped FOB destination. 16. 1/16/2022 Ck #1008 Paid $250 to ship the merchandise in transaction #15. 17. 1/16/2022 Purchased additional 26" bikes on account for $5,000. Credit terms were 2/15, n/30. 18. 1/20/2022 Deposit #4 Recorded cash sales that totaled $11,600. Sales tax of 5957 was not included in the sale amount. The cost of merchandise sold was $5,800 (26" bikes were $5,000; 20" bikes were $800). 19. 1/22/2022 Ck #1009 Ms. Scout joined the El Paso Chamber of Commerce. She paid the registration $200 20. 1/23/2022 Ms. Scout participated in a biking exhibition held at the convention center She felt this was a good way to publicize her new business 21. 1/23/2022 Convention Center charged Ms. Scout $800. She will pay the bill later. She considers this an advertising and promotion expense. 22. 1/26/2022 Ck #1010 Ms. Scout paid the Convention Center rental 23. 1/26/2022 Ck #1011 Paid for the bikes purchased on 1/09/2022. 24. 1/27/2022 Deposit #5 Ms. Scout recorded cash sales totaling $7,600. Sales tax of $627 was not included in the sale amount. The cost of the merchandise sold was $3,800 (26" bike $1,000; 20" bike $2,800). 25. 1/27/2022 Ck #1012 Paid the balance due for the 26" bikes. There are two invoices. 26. 1/30/2022 Received but did not pay the utility bill for the month, $445. 51Pane 27. 1/30/2022 Ck #1013 333 28. 1/30/2022 Paid the first monthly installment on the computer equipment. The payment amount is $910. Of this amount, $43.33 is for interest and $866.67 is for principal Purchased fifteen 26" bikes for $7,500 and purchased ten 20" bikes for $4,000 on account Recorded sales made for the last week of the month. Total sales were $16,000 cash. Sales tax of $1,320 was not included in the sale. The cost of the merchandise sold was $8,000 (26" bikes $6,000; 20" bikes $2000). Declared and paid a cash dividend of $650 to Ms. Scout. Paid the Sales Tax to the Comptroller. 29. 1/30/2022 Deposit #6 30. 1/30/2022 31. 1/31/2022 Ck #1014 Ck #1015 Before you prepare the eight adjusting journal entries below in an Excel spreadsheet. please make sure corrections have been made to any previous journal entries. The following are the adjusting journal entries for the month of January. Record all adjusting entries as of January 31, 2021. Record Adjusting Entries: Record the following month-end adjusting entries for the month of January. Write the journal entries in the practice set after the original journal entries. Round all answers to the nearest cent. a. $70 of office supplies remained on hand. b. $200 of shipping supplies remained on hand. C. $1.300 of wages for the part-time help from Irene's Temp Services for January should be accrued. Do not worry about payroll taxes; Temp Services Inc. will handle these. d. Make the necessary adjusting entries for one month's depreciation for the Computer Equipment using Straight-Line Depreciation. e. Make the necessary adjusting entry for one month's depreciation for the Bike Racks using Straight-Line Depreciation. f. One month of the prepaid insurance has expired. g. One month of the prepaid rent has expired. h. Record the interest for the loan from Wells Fargo for one month. Make sure you prepare the journal entries and the adjusting entries and write them in the practice set. Follow the same instructions for the adjusting journal entries that you did in part one. Once the adjusting entries have been completed in the spreadsheet use the spreadsheet to answer the questions in Blackboard then upload the spreadsheet to Blackboard. Follow these instructions. Step 1: Enter the adjusting journal entries in an Excel spreadsheet and print it out. Step 2: Use the Excel spreadsheet to answer the questions in Blackboard in the content folder in the corresponding week. Step 3: Once you complete entering information into Blackboard upload the spreadsheet into Blackboard

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Enterprise Information Systems A Pattern Based Approach

Authors: Cheryl Dunn, J. Owen Cherrington, Anita Hollander

3rd Edition

0072404299, 978-0072404296

More Books

Students also viewed these Accounting questions