You just opened a small computer and game shop called New City Computers near EIU. Your shop sells computer accessories and makes computer repairs and the periodic inventory system has been implemented for your merchandising inventories and all taxes are ignored. The following transactions occurred in the period of May, 2021:

a. Received $15,000 cash from your parents and issued capital stock to them.

b. Signed and paid a 1-year rental contract in advance for the shop totaled $9,200 in cash.

c. Signed a 1-year loan with a bank to raise additional money totaled at $8,000.

d. Purchased all repair tools, equipment and furniture for $10,000 and paid all in cash. e. Bought repair supplies totaled at $2,000 on account from suppliers.

f. Bought merchandise inventories totaled at $4,000 in cash from suppliers.

g. Sold all merchandise inventories for $6,000 in cash.

h. Provided repair and upgrade services for customers totaled at $1,500 on account. i. Collected $500 in cash from customers from transaction (h) above.

j. Paid $600 in cash for employee wages expense.

k. Paid $100 in cash for utilities expense.

l. Paid suppliers $2,000 in cash for repair supplies purchased in (e).

Required:

1. For each transaction a-l, perform transactions analysis and indicate the account, amount, and effects (+ for increase, for decrease or NE for no effect) on the

accounting equation A = L + SE. (12 marks)

2. Prepare journal entries for each transaction into the general journal using the simplified format (no need to write explanations). (24 marks)

3. Prepare an unadjusted trial balance at 31 May 2021. (13 marks)

4. Assume that you are required to prepare and post adjusting journal entries for the following transactions: (no need to write explanations) (10 marks)

m. One months rent has now expired leaving 11 months of prepaid rent left at 31 May 2021.

n. Interest on loan from transaction (c) for May, 2021 was $100 which will be paid in June 2021 at an annual interest rate of 10%.

o. The amount of depreciation expense for repair tools, equipment and furniture is $300 each month.

p. $300 of repair supplies has been used in operations leaving $1,700 in the shop at 31 May 2021.

q. The ending merchandise inventories amount at 31 May 2021 was $0. 5. Prepare an adjusted trial balance at 31 May 2021. (13 marks)

6. Prepare an Income Statement for the period of May, 2021. (assume no income tax) (14 marks)

7. Prepare the Balance Sheet at 31 May 2021. (14 marks)

Bonus Questions:

8. Prepare closing journal entries for transactions in May, 2021 but you do not have to summarize or post to the general ledger (no need to write explanations). (5 bonus marks) 9. Prepare a post-closing trial balance at May 31, 2021. (5 bonus marks)