TRANSACTIONS Drum, Inc. is a computer software consulting firm. The company also sells popular business computer software to its clients. the month of May, the following transactions occured. Paid in advance to Sug Realty $1,600 for 4 months rent. Borrowed $10,000 from Bank of America. The note has an interest rate Of 12% and a 10 month term. Rendered S8000 in consulting services for Harper, Inc. Received a 12% note with a term of 30 days Purchased on credit $500 in office supplies from Apex Corp. Purchased office equipment from Hunter, Inc. for $2,000. The company paid $500 down and will pay the balance in the future. Performed $5 500 in consulting services for Atkins Enterprise, receiving $1,500 and billed the company for the balance. Paid Tre Twiggs, your employee, $800 for one week of services. Issued 2,000 shares of $3 par common stock for $9 per share. Received $1,200 in advance from Drum, Inc. for consulting services to be rendered during the month of June. Received $1,000 from Atkins Enterprise as payment on its account. Paid the balance due to Hunter, Inc. May 1 May 1 May 1 May 2 May 3 May 5 May 5 May 7 May 8 May 10 Paid Tallahassee Democrat $200 for an ad that appeared in the local newspaper. May 10Declared cash dividends of $3,000 May 10Sold office equipment that cost $8,000 (accumulated depreciation $5,000) The company received S1 ,000 from the sale of the equipment. May11 Purchased from Johnson software packages (inventory) for $15,000 cash. May 12 Some of the merchandise purchased from Johnson was damaged & S1 500 of its money was refunded Wrote off $4 000 in customer accounts. The company uses the allowance method. May 13 Purchased computer software from Drum for $20,000, terms 3/10, net/30. May 13 May 18 May 19 May 20 May 21 May 21 Paid the balance due to Drum within 10 days Sold software to Lowe for $4,000, terms 2/10, net 30. Cost of software, $2.,000. Lowe returned $1 000 of software costing $500 Lowe paid its account balance within the discount period. Reinstated a customer 's $3,000 account balance that had been written off as uncollectible. The customer paid the $3,000 amount. May 22 Paid freight charges to ship the goods sold to Lowe, $300. May 22 Paid the cash dividend declared on May 10. May 23 Sold computer software for $50 000 cash. Cost of merchandise, $22,000. May 24 Granted $1,000 in sales allowance for damaged goods, refunding the customer its money May 31 Collected the May I note received from Harper, Inc., including interest TO THE LEDGER. B. POST THE TRANSACTIONS C. PREPARE A TRIAL BALANCE AS OF MAY 31,2013. D. PREPARE THE JOURNAL ENTRIES TO ADJUST THE ACCOUNTS. E. POST ADJUSTING ENTRIES TO THE LEDGER. F. PREPARE AN ADJUSTED TRIAL BALANCE G. PREPARE THE FINANCIAL STATEMENT. H. CLOSE THE APPROPRIATE ACCOUNTS ON THE TRIAL BALANCE. Trial Balance 1-May-14 Balance Account Title Debit Credit 78,000 50,000 CASH ACCOUNTS RECEIVABLE NOTES RECEIVABLE ALLOWANCE FOR UNCOLLECTIBLE NVENTORY OFFICE SUPPLIES PREPAID R ACCOUNTS 10,000 1400 56,000 OFFICE BQ ACCUMULATED DEPRE ACCOUNTS PAYABLE DIVIDENDS PAYABLE INTEREST PAYABLE UNEARNED CONSULTING REVENUES NOTES PAYABLE COMMON STOCK,$3 PAR 25,000 11,000 5,000 9,000 20,000 45,000 PAID IN CAPITAL IN EXCESS OF PAR RETAINED EARNINGS DIVIDENDS CONSULTING FEES REVENUE SALES REVENTE INTEREST REVENUE SALES DISCOUNT SALES RETURNS&ALLOWANCE 86,000 35,000 LOSS ON SALI OF EQUINENT COST OF GOODS SOLD SALARIES EXPENSE ADVERTISING |EXPENSE DELIVERY EXPENSE UNCOLLECTIBLE ACCOUNTS EXPENSE INTEREST EXHENSE 2,600 246,000 246,000
