You started a business (MNO Co.) in 2021. The following transactions occurred in 2021:

Jan 05; invested the following:

Cash = $150,000.00

Land = $500,000.00

Service supplies = $15,000.00

Furnitures = $35,000.00

5 years useful life

Zero salvage value

Jan 10; purchased 2,500 worth of office supplies on account

Feb 5; Purchased equipment on account:

Cost: $65,000.00

Salvage value: $5,000.00

Useful life: 10 years

Feb 5; received $150,000.00 from DEF Bank

Term: 5 yrs

Rate: 2.5%

Annual interest payable every year (January 31)

Here are the revenue transactions (date these transactions as end of each month):Feb – sent an invoice to Jane Doe for $105,500.00

Service coverage (February 2021 to July 2021)

March – serviced ABC ltd’s warehouse for $35,000.00 cash

June – serviced Tsarz Co. building for $35,000.00 on account

July – Sent an invoice to Peter Co. for the following:

Amount: $240,000

Service coverage (July 01, 2021 to June 30, 2022)

August – collected Jane Doe’s accounts receivable

November – collected Tsarz Co’s account in full

December – Received another $105,500.00 cash from Jane Doe for another contract:

Service coverage (February 2022 to July 2022)

Expense paid (date these transactions as Dec 31^st):

Building rental: $2,000 paid cash monthly for 12 months

Property tax: $6,500 paid in December cash

Utilities: paid a total of $18,000 for the whole year in cash

Wages: 2 employees

Employee A: $4,000 monthly

Employee B: $1,500 bi-weekly

Year-end notes:

Based on industry standards, at least 2% of customer accounts aren’t collectible.

You’ve provided a small service to a client in September for $1,500 cash. This transaction isn’t recorded since there was no receipt provided and you forgot about it.

Equipment purchase in February has been fully paid but not yet recorded.

Based on your physical supply count, your service supplies during the year end are worth $2,500. You’ve decided to replenish your inventory in January 2022.

Requirement:

Record/journalize all transactions (1^st step)

Itemize all accounts (2^nd step)

Prepare the trial balance (3^rd step)

Prepare all necessary year-end adjustments to trial balance and accrual entries (3^rd step)

Prepare the financial statements for 2021 (3^rd step)