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Year 1 Transactions for Adomain Transaction # Date Event 1 January 1 Purchased a patent for $32,000 in cash 2 March 15 Paid $18,500 in
Year 1 Transactions for Adomain | ||||
Transaction # | Date | Event | ||
1 | January 1 | Purchased a patent for $32,000 in cash | ||
2 | March 15 | Paid $18,500 in cash for long-term assets | ||
3 | April 1 | Prepaid $36,000 for rent for the next 12 months and recorded the transaction as an asset. | ||
4 | April 1 | Issued 1000 common shares to investors for $60,000 | ||
5 | April 1 | Sold inventory on account for $120,000 (a). The cost of the inventory was $16,000 (b). Also, paid a sales commission on this sale of $10,000 (c). | ||
6 | April 5 | Paid $13,400 in cash for costs related to research and development of new products. | ||
7 | May 1 | Received $24,000 in cash in advance for services. The services will be provided over the course of 6 months beginning on Dec 1 of this year. | ||
8 | May 1 | Received the cash to settle $65,000 of the receivables recorded on April 1. | ||
9 | June 30 | Paid last year's income tax liability. | ||
10 | July 31 | Purchased inventory for $15,000. Paid $3,000 in cash and recorded an Accounts Payable for the remaining balance. | ||
11 | July 31 | Received $20,000 in cash relating to the Accounts Receivable in transaction 5. | ||
12a | Sept 30 | Purchased supplies for $7,000 in cash. The accountant accidentally recorded the supplies in the Accounts Receivable account. | ||
12b | October 1 | The accountant recorded an adjustment to correct the entry made in 12a (so that the accounts will reflect what should have been recorded ). | ||
13 | October 1 | Purchased marketable securities for $6,000 in cash. | ||
14 | October 1 | 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). | ||
15 | Dec 1 | Employee salaries earned amounted to $34,000. The company paid $4,000 on Dec 1 and the remainder will be paid on Jan 1, Year 2. | ||
16 | Dec 31 | Income Tax for Year 1 is $5,500. $3,500 is paid this year and the remainder will be paid on June 30 of Year 2. | ||
17 | Dec 31 | Record the appropriate adjusting entry related to transaction 3. | ||
18 | Dec 31 | Record the appropriate adjusting entry related to transaction 7. | ||
19 | Dec 31 | $2000 of supplies are still on hand on Dec 31. Record the appropriate adjusting entry to reflect the supplies used during the year. (Refer to transaction 12.) | ||
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). | ||
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