ACCT 2001 Chapter : Ch 01 In Class Excercises
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Accounting 2001: categorize the following activities as financing, investing, or operating: ______ issued (sold) shares of your company"s common stock. ______ paid dividend: state the accounting equation, show the effects of the following on the missing part of the accounting equation, liabilities increase by ,000 and stockholders" equity increases by. The change in total assets:______________________: assets increase by ,000 and liabilities stay the same the change in. Stockholders" equity is:______________________________: liabilities increase by ,000 and stockholders" equity decreases by. Accounting 2001: expanded accounting equation, financial statement preparation, classify account as asset, liabilities, revenue, expense, stockholders". Equity: identify financial statement, prepare financial statements in this order, income statement, statement of retained earnings, balance sheet, statement of cash flow (not for our class) She has come to you for help in preparing financial statements for the year ended december 31, 2012. Use the following information to prepare an income statement, statement of retained earnings, and balance sheet.
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PREPARE THE JOURNAL ENRTRIES FOR THE FOLLOWING (0NLY FROM TRANSACTON 28 TO 45
| During July 2017, the following transactions, prepared by Maddie's Cleaning Service, were completed: | ||
| Transaction | Date | Description |
| 1 | July 1 | Began her business by contributing a computer valued at $500 and rug cleaner at $6,200 and depositing $2X,XXX (XXXX- represents the last 4 digits of your Bronc's identification number) in a checking account in the name of the corporation in exchange for 6,000 shares, $1 par value shares of capital stock. |
| 2 | 1 | Received $10,000 proceeds from an unsecured, 11%, 5 year, interest only bank loan, due July 1, 2017. The proceeds will be used to pay daily operations of the company. Interest will be paid monthly on the fifth of each month; next payment day is June 5th August 5. |
| 1 | Purchased 30 shares of Facebook stock for market rate as of July 1, 2017. MCS paid $12.00 brokerage fee. Use the Short-term Investment (Available For Sale) account. | |
| 3 | 2 | Paid $1,500 for 3 floor waxer/buffer machines. |
| 4 | 2 | Purchased a used truck for $18,000 in exchange for a 3 year zero-interest bearing $25,000 note to Jim's Auto Sales. |
| 5 | 3 | Purchased cleaning supplies for $6,500. These supplies will not be resoldâuse the Cleaning Supplies Inventory account, 2%/15, net 30. The company uses the period inventory method. |
| 6 | 3 | Paid cash for an exclusive 3 yr right to sell cleaning products from Brite Nâ Clean Supply company, $8,900. |
| 7 | 3 | Purchased 350 cans of cleaning product, XB4, on account, for resale purposes only, from Brite Nâ Clean. Each can costs $8.00. Total shipping costs were $15.00, also included in the amount owedâuse the Merchandise Inventory Account. |
| 8 | 4 | Signed a two year lease agreement for storge and office location. Paid 3 months of rent in advance, $3,000, plus security deposit of $1,000, total $4,000 |
| 9 | 5 | Paid $4,800 on a one-year insurance policy, effective July 1. |
| 10 | 7 | Hired 5 workers at $15.50 per hour. |
| 11 | 8 | Jim Bob Grocery Store paid Maddie's $5,900 in advance for cleaning services to be performed monthly. |
| 12 | 12 | Billed customers $22,300 for cleaning services. |
| 13 | 15 | Paid gas and oil for the month on the truck, $600. |
| 14 | 18 | Paid amount owed on cleaning supplies purchased on July 3rd. |
| 15 | 18 | Billed customers $16,500 for cleaning services. |
| 16 | 18 | Purchased 40 cans of cleaning product, XB4, $400, for resale purposes only on account. The costs include total shipping costs of $30.00. |
| 17 | 18 | Paid $5,000 to employees, with withholding of $960 for federal income taxes, $150 for state income taxes, $310 for social security, $725 for Medicare tax, and $100 for city income tax. Use Employee Tax Withheld account for all withholding. |
| 18 | 18 | Accrue employer tax (related to July 18th payroll) of $1,352. These taxes include employer portion of FICA and Medicare tax and state and federal unemployment tax. Use Employer Tax Payable account. |
| 19 | 21 | Collected $25,400 from customers billed on July 12. |
| 20 | 22 | Sold 200 cans of cleaning product, XB4, to T. Jones Cleaning on account for $30.00 each. Maddie'sâs Cleaning Services, Inc. uses a perpetual inventory method for its merchandise inventory sales and determines costs using LIFO in-first out (LIFO) costing method. Shipping costs were 5%. Costs were charged to T. Jones Cleaning. |
| 21 | 24 | Using Ms. Colbertâs credit card, purchased a used cleaning cart used to carry cleaning supplies to each office, $400. |
| 22 | 25 | Purchased a computer to support office activities, $2,000. |
| 23 | 30 | Bank returned a check for $125 from Tang Juice Company for services paid on July 21st. The bank charges Maddie'sâs Cleaning Services $5.00 service fee for the NSF check. |
| 24 | 30 | Paid withholding tax for July 18th payroll, including employer tax. |
| 25 | 30 | Sold one of the floor polisher purchased on July 1 for $850. Record all depreciation related to equipment. |
| 26 | 31 | Declared and paid a $.25 per share cash dividend. |
| After talking with the client, Ms. Ratcher prepared the following information related to July transactions (use July 31 for the date of transactions): | ||
| 28 | 1 | Earned but unbilled fees at July 31 were $4,245. |
| 29 | 2 | All equipment is depreciated over 5 years, using the straight line method. Depreciate all equipment as if purchased on July 1. |
| 30 | 3 | An inventory count shows $1,700 of cleaning supplies (not for resale) on hand at July 31. |
| 31 | 4 | Record the amortization of the franchise. |
| 32 | 5 | Accrued but unpaid employee salaries were $5,000 with withholding of $880 for federal income taxes. Calculate the payroll using 6.2% FICA tax, 3% for state income taxes, 1.45% Medicare tax, and 2% for city income tax. Record the payroll, using Employee Tax Withheld account for all withholding taxes. |
| 33 | 6 | Accrued employer payroll tax of $800.00 |
| 34 | 7 | Record the rent expiration for the month. |
| 35 | 8 | Record the interest incurred on the note for the month. |
| 36 | 9 | Record amortization of the zero-interest bearing note. |
| 37 | 10 | MCS charged Jim Bob's Grocery $2,800 for services rendered during the month. (See earlier transaction). |
| 39 | 11 | Calculate the change in value of Facebook stock based on market prices as of July 31, 2017. |
| 40 | 12 | One-twelfth of the insurance expired. |
| 41 | 13 | Accrue income taxes for the period. The company expects to pay income taxes at a 18% rate. Note: you must calculate income before you can determine the amount for this adjusting entry. |
| 42 | 14 | Based on an aging of the accounts receivables, Ms. Colbert estimates that 5.5% of outstanding accounts receivables will be uncollectible. |
| 43 | Based on the bank reconciliation performed by John, the other new staff member at Daniel and Jacob, LLC, the following adjusting entries should be made: | |
| 44 | --- A check from Elton Inc. was returned for non sufficient funds (NSF) for $1,000. The check was included in the deposit made on July 21st . | |
| 45 | --- The deposit made on July 21st for cash receipts was recorded $24,400, but bank correctly counted the deposit to be $25,400. | |
| I need assistance with these journal entries Seq. No. | Date | Transaction Description | ||
| 1 | Nov. 1 | Company issues common stock 35,000 shares at $10 per share with par value of $1 per share. | ||
| 2 | Nov. 1 | Takes a six-month short-term loan $30,000 from the bank with the interest rate 5%, with the principal and interest paid at maturity | ||
| 3 | Nov. 1 | Purchases a property as office space at $115,000 , in which $20,000 is the cost for the land and the remaining is the cost for the building. The estimated useful life of the building is 30 years and the residual value is $5,000 | ||
| 4 | Nov. 1 | Rents a warehouse and prepays the first month's rent $1,000 and security deposit $2,000 | ||
| 5 | Nov. 1 | Purchases a delivery truck for $33,000 by cash, with 5 years of estimated useful life and $3,000 residual value. The truck is estimated to be driven for 100,000 miles. | ||
| 6 | Nov. 2 | Issues 500 preferred stocks of par value $3 for $15 each; The annual dividend is 5%. | ||
| 7 | Nov. 2 | Purchases supplies by cash for $2,000 | ||
| 8 | Nov. 2 | Invests $10,000 in short-term investment | ||
| 9 | Nov. 2 | Pays for the insurance premium $3,000 for six months, starting from the current month | ||
| 10 | Nov. 3 | Receives cash advance $5,000 from customer Alpha for an order to be filled later | ||
| 11 | Nov. 3 | Purchase 1: 4,000 units @ $50 from supplier A (by cash) | ||
| 12 | Nov. 8 | Purchase 2: 1,000 units @ $55 from supplier B (50% paid immediately and the remaining is made on account) | ||
| 13 | Nov. 12 | Sells 2,000 units priced @ $75 (sold to customer Alpha, the remaining amount is paid in full by cash immediately) | ||
| 14 | Nov. 15 | Purchase 3: 1,600 units @ $60 from supplier A (made on account) | ||
| 15 | Nov. 16 | Lends $6,000 to a client by receiving a promissory note issued by the client with interest rate of 6% and maturity of six months. | ||
| 16 | Nov. 20 | Sells 2,400 units priced @ $78 (on account) to customer Beta | ||
| 17 | Nov. 22 | Sells 1,000 units priced @ 80 (by cash) to customer Gamma | ||
| 18 | Nov. 25 | 10 units from the sale on Nov. 22 are returned and customer Gamma gets full refund immediately | ||
| 19 | Nov. 29 | Repurchases 100 shares at $16 each for the purpose of issuing bonus to employees at the end of the year | ||
| 20 | Nov. 30 | Announces cash dividends to common stocks, with $0.10 per share (Ignore the dividends to preferred stocks), to be paid at the beginning of next year | ||
| 21 | Nov. 30 | Receives a bill from the bank for the month service charge $100 | ||
| 22 | Nov. 30 | Selling expense accrued in the month is $2,000 and paid in full | ||
| 23 | Nov. 30 | Administrative expense for the month is $1,500 and paid in full | ||
| 24 | Nov. 30 | Pays the utility bill for current month by cash $500 | ||
| 25 | Nov. 30 | Accrue salary expense $8,000 for the month, which will be paid at the beginning of the next month | ||
| 26 | Nov. 30 | Pays for the bank service charge by cash | ||
| 27 | Nov. 30 | Receives interest in cash from the short-term investment for the month $240 | ||
| 28 | Nov. 30 | Supplies amount to $800 at the end of the month | ||
| Additional Information | Method to estimate bad debt expense: | 3% Net Credit Sale | ||
| Depreciation method for the property: | DDB | |||
| Depreciation method for the delivery truck: | S-L | |||
| Perpetual inventory with: | FIFO | |||
| The income tax rate is 30% | ||||
