MM Inc. had the following account balances as at December 3 1 , 2 0 2 2
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MM Inc. had the following account balances as at December :
Cash $; Accounts Receivable $; Prepaid Rent $; Desks & Chairs $; Desks &
Chairs Accumulated Depreciation $; MacBooks $; MacBooks Accumulated Depreciation
$; Accounts Payable $; Wages Payable $; Deferred Revenue $; Common Shares
$; Revenue $; Rent Expense $; Utilities Expense $; Salaries Expense $;
Depreciation Expense $; Supplies Expense $ & Advertising Expense $
Following is the information that pertains to January to March :
MM Incs fiscal year runs from April st to March st
$ in wages payable at December st were paid on January th
Salaries expense is $ per month. January and February salaries were fully paid before
March Marchs full amount ie $ will be paid on April th
$ in accounts payable as of Dec st was paid on January th
January and February total utility bill was $ and was paid on March th March utility bill
which was received on April nd is $ and has not been paid yet.
$ in AR balance on Dec st was owed from a customer for which work was completed in
December. As at March st $ is still owed from that customer.
Annual rent is $ and rent for April to March was paid upfront.
Desks & Chairs were purchased on cash on April for $ and have a useful life of
years with no residual value.
MacBooks were also purchased on cash on April for $ and have a useful life of
years and then they will become obsolete.
Deferred revenue of $ as of Dec st was for work to be done from January to
February That work has been completed as of March
Company hired outside legal counsel on January st to review some of the contracts that it was
entering. As at March no amount had yet been paid to the legal counsel. However, the
legal counsels charge rate is $ per hour and as at March st they had spent hours
reviewing different contracts and providing their advice to MM Inc.
On January th MM Inc. purchased $ worth of supplies on cash. A supplies count on March
st revealed only $ worth of supplies were on hand.
Bank loaned $ to MM Inc. on February st at annual rate of Loan is to be paid
back in full on January
On February st company purchased a car on cash. It cost MM Inc. $ and the useful life of
car is years
On March st MM Inc. paid $ in cash to purchase general insurance for oneyear. It
will expire on February
From January st to March st MM Inc. earned an additional $ in sales from various
other contracts. All work is complete and full services have been delivered as at March st
$ has been collected but $ remain outstanding as at March st
On March st MM Inc. entered into a contract with a municipality in Okanagan region to
deliver a software solution over the course of next year ie from April st to March
Contract value is $ and the municipality transferred $ into MM Inc. account
on March th Amount showed up in MM Incs account the same day.
On March st MM Inc. paid $ in dividends.
Required:
a Provide all necessary journal entries covering period January st to March st
b Prepare a Statement of Operations for the yearended March
c Prepare a Statement of Retained Earnings for the yearended March
d Prepare a Statement of Financial Position as at March
Related Book For
Fundamentals of Financial Accounting
ISBN: 978-0078025914
5th edition
Authors: Fred Phillips, Robert Libby, Patricia Libby
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