Question

Lee Company started the period with cash of $22,000, common stock of $12,000, and retained earnings of $10,000. Lee engaged in the following transactions in 2013:

Transaction During 2013
1. On January 1, 2013, purchased a computer for $7,500 cash. 2.
2. On February 1, paid $6,600 cash for rent for a 12-month period beginning immediately.
3. Purchased $1,100 of supplies for cash.
4. Provided $56,000 of services for cash.
5. Paid $18,000 cash for salaries expense.
6. On May 1, received $9,000 for services that will be performed over the next 12 months.
Information for Adjusting Entries
7. The computer had an estimated life of three years and a $2,400 salvage value.
8. Recognized the expired rent.
9. An inventory of supplies showed $120 of supplies on hand as of December 31.
10. Recognized the revenue associated with Event 6 as of December 31.

Required
a. Record the 10 events in general journal format.
b. Prepare an income statement, balance sheet, and statement of cash flows.



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  • CreatedOctober 12, 2013
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