Question
Year 1 Transactions for Adomain Transaction # Date Event 1 January 1 Spent $17,000 in cash for costs related to research and development of new
| Year 1 Transactions for Adomain | ||||
| Transaction # | Date | Event | ||
| 1 | January 1 | Spent $17,000 in cash for costs related to research and development of new products. | ||
| 2 | March 15 | Paid last year's income tax liability. | ||
| 3 | April 1 | Received cash of $22,500 in advance for services. The service will be performed over the course of 5 months beginning on Dec. 1 of this year. | ||
| 4 | April 1 | Prepaid $36,000 in rent for the next 12 months and recorded the transaction as an asset. | ||
| 5 | April 1 | Purchased inventory for $23,000. Paid $1500 in cash and recorded an accounts payable for the rest. | ||
| 6 | April 5 | Paid $16,000 in cash for marketable securities. | ||
| 7 | May 1 | Sold inventory on account for $175,000. The cost of the inventory was $40,000. Also, paid a sales commission on this sale of $10,000. | ||
| 8 | June 30 | Received the cash to settle $75,000 of the receivables recorded on May 1. | ||
| 9 | July 15 | Purchased a patent for $35,000 in cash. | ||
| 10 | July 31 | Purchased supplies for $3000 in cash. The accountant accidently recorded it as an Accounts Receivable. | ||
| 10 | July 31 | Adjust the account to reflect how the accountant should have recorded it. | ||
| 11 | Sept 30 | Borrowed $15,000 from a local bank and signed a 3-year note payable promising to pay 10% interest per year (interest is due on Dec 30). | ||
| 12 | October 1 | Purchased PPE for $29,000 cash. | ||
| 13 | October 1 | Billed a company $80,000 for services performed and completed. | ||
| 14 | October 31 | Received $80,000 in cash relating to the Accounts Receivable in transaction 13. | ||
| 15 | Dec 1 | Salaries of general officers were $18,000. The company paid $7,000 now and the remainder will be paid on Jan 1, Year 2. | ||
| 16 | Dec 31 | Income Tax for Year 1 is $22,000. $19,000 is paid this year and the remainder will be paid on March 15 of Year 2. | ||
| 17 | Dec 31 | Record the appropriate adjusting entry related to unearned revenue described in transaction 3. | ||
| 18 | Dec 31 | Record the appropriate adjusting entry related to the rent described in transaction 4. | ||
| 19 | Dec 31 | $500 of supplies are still on hand on Dec 31. Record the appropriate adjusting entry to reflect the supplies left on hand. (Refer to transaction 10)
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| 20 | Dec 31 | Record the appropriate adjusting entry related to the note payable described in transaction 11.
Create Journal Entries | ||
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The Pricing Strategy Audit
Authors: Kent B. Monroe
1st Edition
1907766006, 978-1907766008
