Colton Enterprises experienced the following events for Year 1, the first year of operation: Acquired $41,000
Question:
Colton Enterprises experienced the following events for Year 1, the first year of operation:
Acquired $41,000 cash from the issue of common stock.
Paid $12,600 cash in advance for rent. The payment was for the period April 1, Year 1, to March 31, Year 2.
Performed services for customers on account for $84,000.
Incurred operating expenses on account of $38,000.
Collected $64,500 cash from accounts receivable.
Paid $27,000 cash for salary expense.
Paid $30,400 cash as a partial payment on accounts payable.
Adjusting Entries
Made the adjusting entry for the expired rent. (See Event 2.)
Recorded $3,600 of accrued salaries at the end of Year 1.
Events for Year 2
Paid $3,600 cash for the salaries accrued at the end of the prior accounting period.
Performed services for cash of $33,000.
Purchased $3,400 of supplies on account.
Paid $12,300 cash in advance for rent. The payment was for one year beginning April 1, Year 2.
Performed services for customers on account for $100,000.
Incurred operating expenses on account of $47,500.
Collected $95,000 cash from accounts receivable.
Paid $45,000 cash as a partial payment on accounts payable.
Paid $32,100 cash for salary expense.
Paid a $15,000 cash dividend to stockholders.
Adjusting Entries
Made the adjusting entry for the expired rent. (Hint: Part of the rent was paid in Year 1.)
Recorded supplies expense. A physical count showed that $750 of supplies were still on hand.
Introductory Financial Accounting for Business
ISBN: 978-1260299441
1st edition
Authors: Thomas Edmonds, Christopher Edmonds