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1.Owners invested $6,000 additional cash in Radloff’s FurnitureCompany.

2.Owners invested an additional $4,000 into the company bycontributing additional store fixtures valued at $4,000.

3.Radloff’s Furniture Company purchased additional furnitureinventory for $3,000 cash.

4.Radloff’s Furniture Company purchased furniture inventory onaccount for $6,000.

5.Radloff’s Furniture Company sold store fixtures for $3,000cash.

6.Radloff’s Furniture Company purchased $6,000 of storefixtures, paying $5,000 cash now and agreeing to pay $1,000later.

7.Radloff’s Furniture Company paid $2,000 on accountspayable.

8.Radloff’s Furniture Company returned $400 of merchandise(furniture inventory) for credit against accounts payable.

9.Owners withdrew $3,000 cash from Radloff’s FurnitureCompany.

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Nestor Rutherford
Nestor RutherfordLv2
28 Sep 2019

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XOS Corporation (XOS) sells accounting-related memorabilia at asmall store. The company was organized and began operations onJanuary 1, 2016.

Events During January,2016:

1. On January 1, the owner invested $100,000 cash in thecompany, receiving 1,000 shares of $2 par value common stock inexchange.

2. On January 1, XOS purchased furniture and fixtures for$30,000. Paid $5,000 cash down, and signed a promissorynote with a 12% annual rate of interest for the balance of thepurchase price. Note plus interest to be paid in 2 years.

3. On January 1, XOS paid two months rent in advance to mallowners for floor space, $6,000.

4. On January 1, XOS paid a one-year premium for liability andcasualty insurance, $1,200.

5. During January, the company purchased merchandise inventoryon account for $25,000.

6. During January, sales totaled $48,000 ($28,000 for cash and$20,000 on credit). The cost of the merchandise sold was$20,000. XOS uses a perpetual inventory system.

7. During January, the company paid wages totaling $3,000.

8. During January, payments on account to suppliers of inventorytotaled $9,000.

9. During January, a customer ordered 100 custom-made t-shirtssaying “SOX ROX!”-for delivery in February, 2016. XOSrequired payment in advance ($1,000) for the entire order.

10. During January, customers paid $10,000 to XOS forsales made on credit

Additional Information:

The furniture and fixtures have an expected useful life of 5years and zero expected salvage value. XOS usesthe straight-line method of depreciation.

At January 31, employees have earned wages of $1,000 that willnot be paid until February.

Utilities charges for January are estimated to be $600. However,the utilities bill will not be received and paid untilmid-February.

Requirements

*2. Prepare any necessary adjusting journal entries atJanuary 31, and post related amounts to the T-Accounts. Thenprepare an adjusted trial balance at January 31.

(Hint: There are 6 AJE’s)

XOS Corporation (XOS) sells accounting-related memorabilia at asmall store. The company was organized and began operations onJanuary 1, 2016.

Events During January, 2016:

1. On January 1, the owner invested $100,000 cash in thecompany, receiving 1,000 shares of $2 par value common stock inexchange.

2. On January 1, XOS purchased furniture and fixtures for$30,000. Paid $5,000 cash down, and signed a promissorynote with a 12% annual rate of interest for the balance of thepurchase price. Note plus interest to be paid in 2 years.

3. On January 1, XOS paid two months rent in advance to mallowners for floor space, $6,000.

4. On January 1, XOS paid a one-year premium for liability andcasualty insurance, $1,200.

5. During January, the company purchased merchandise inventoryon account for $25,000.

6. During January, sales totaled $48,000 ($28,000 for cash and$20,000 on credit). The cost of the merchandise sold was$20,000. XOS uses a perpetual inventory system.

7. During January, the company paid wages totaling $3,000.

8. During January, payments on account to suppliers of inventorytotaled $9,000.

9. During January, a customer ordered 100 custom-made t-shirtssaying “SOX ROX!”-for delivery in February, 2016. XOSrequired payment in advance ($1,000) for the entire order.

10. During January, customers paid $10,000 to XOS forsales made on credit

Additional Information:

The furniture and fixtures have an expected useful life of 5years and zero expected salvage value. XOS usesthe straight-line method of depreciation.

At January 31, employees have earned wages of $1,000 that willnot be paid until February.

Utilities charges for January are estimated to be $600. However,the utilities bill will not be received and paid untilmid-February.

Requirements

*1. Prepare journal entries to record the tentransactions that occurred during January, and, using the attachedpage, post related amounts to XOS’s general ledger (T-Accounts).Then prepare an unadjusted trial balance at January31.

*2. Prepare any necessary adjusting journal entries atJanuary 31, and post related amounts to the T-Accounts. Thenprepare an adjusted trial balance at January 31.

(Hint: There are 6 AJE’s)

Instructions: PLEASE ONLY SELECT THE CORRECT LETTER CHOICE AT THE END.

Use the following balance sheet information from Aggie Health and Fitness Centers’ month-end financial statements dated August 31, 2016 and open t-accounts for each balance sheet line item. Then use the enclosed TRANSACTIONS AND ADDITIONAL INFORMATION to complete the General Journal, Ledger, Worksheet and Financial Statements for the second month of operations. Use the Perpetual Inventory method as discussed in class for all sales of merchandise.

Aggie Health and Fitness Center

Balance Sheet

As of August 31, 2016

Assets: Liabilities:

Cash $4,500 Accounts Payable $2,900

Accounts Receivable 6,500 Salaries Payable 5,600

Inventory – Concessions 1,100 Interest Payable 1,375

Supplies 400 Unearned Revenue 500

Prepaid Insurance 4,400 Note Payable 330,000

Total Current Assets 16,900 Total Current Liabilities 340,375

Land 80,000 Stockholder’s Equity

Building 408,000 Common Stock 245,500

Equipment 67,200 Retained Earnings 3,563

Furniture and Fixtures 20,016 Total Liab. and SHE $589,438

Accumulated Depreciation (2,678)

Total Assets $589,438

Fiscal Year

Aggie Health and Fitness Center was established as a business in August 2016. Aggie Health and Fitness Center follows a fiscal year end of July 31.

Inventories

Inventories consist of concessions available for resale to members. These concessions consist of energy drinks, nutritional supplements, etc. Inventories are valued on a first-in, first-out basis, using the perpetual method. (Note: The Center plans to expand its inventory during September to include logo-based apparel.)

Prepaid Insurance

Aggie Health and Fitness Center carries property insurance through Good Hands Insurance Co. The Center purchased a 12 month policy on August 1, 2016 for $4,800.

Fixed Assets

Property and Equipment are stated on the basis of historical cost.

Land and Building: The Land and Building was a group purchase made on August 1, 2016. The total purchase price amounted to $488,000. On the date of purchase the land was appraised at $80,000 and the building was appraised at $408,000. The Health and Fitness Center paid $158,000 down and signed a $330,000, 12-month, 5% note for the balance. Depreciation on the building is computed using the straight-line basis with no salvage value. The life of the building is estimated to be 20 years.

Equipment and Furniture and Fixtures: All equipment and furniture and fixtures were purchased for cash on August 1, 2016. Both equipment and furniture and fixtures are depreciated using the straight-line method of depreciation. No salvage value is anticipated. The useful life of the equipment is 8 years. The useful life of the furniture and fixtures is 6 years.

The book values of these assets are presented below:

Land $80,000 $80,000

Building 408,000

Less: Accumulated Depr 1,700 406,300

Equipment 67,200

Less: Accumulated Depr 700 66,500

Furniture and Fixtures 20,016

Less: Accumulated Depr 278 19,738

Net Plant, Property, and Equipment $572,538

Unearned Revenue

The balance in the unearned revenue account is due to the sale of gift certificates redeemable for massage therapy.

Revenue Recognition

The Company recognizes service revenue upon providing services for customers. Sales revenue is recognized upon customer receipt of goods. Revenue for gift certificate sales is recognized at redemption. (Note: all memberships sold during the first month of operations were for one month only).

Instructions

Use the following TRANSACTIONS AND ADDITIONAL INFORMATION to complete the General Journal, Ledger, Worksheet and Financial Statements for the second month of operations for Aggie Health & Fitness Center (The Fitness Center). Use the Perpetual Inventory method as discussed in class for all sales of merchandise.

11

Sept 13

The owners of the company invested an additional $18,000 into Aggie Health and Fitness Center in exchange for common stock

12

Sept 14

Gift certificates totaling $300 were redeemed for massage therapy performed

What are the journal entries for Transactions #11 and #12?

A.
Common Stock 18,000
Accounts Receivable 18,000
Unearned Revenue 300
Service Revenue 300
B.
Accounts Receivable 18,000
Common Stock 18,000
Unearned Revenue 300
Sales Revenue 300
C.
Common Stock 18,000
Cash 18,000
Service Revenue 300
Unearned Revenue 300
D.
Cash 18,000
Common Stock 18,000
Unearned Revenue 300

Service Revenue

Please select the correct letter choice.

300

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