Question: Sally opened a tropical fish store as a corporation and

Sally opened a tropical fish store as a corporation and called it, selling only via the Internet. During 2011, the first year of business, Sally’s company had the following transactions:
a. The business was started with Sally’s contribution of $16,500 in exchange for common stock on January 1.
b. The company borrowed $10,000 from First American Bank at 7.5% for 12 months on January 1.
c. The company purchased $6,000 in inventory for cash on February 15.
d. The company paid $3,600 of rent to a Webmaster on June 30 for use of a maintained Web site for two years starting July 1.
e. The company had cash sales of $11,100 for 2011 with cost of goods sold of $2,500.
f. The company paid $1,050 in advertising fees.
1. Post the preceding transactions to T-accounts to determine the balance of each account on December 31, 2011; include any adjusting entries necessary.
2. Prepare the adjusted trial balance at December 31, 2011, the income statement, statement of changes in shareholders’ equity, and a statement of cash flows for the year ended December 31, 2011, and the balance sheet at December 31, 2011.
3. Prepare the closing entries and the postclosing trial balance at December 31, 2011.

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  • CreatedSeptember 01, 2014
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