Squeaker Corporation is a publicly traded Canadian Corporation. On September 1, 2018, the Squeaker Corporation's trial...

Transcribed Image Text:

Squeaker Corporation is a publicly traded Canadian Corporation. On September 1, 2018, the Squeaker Corporation's trial balance was as follows (right after the August 31st year end). The company prepares its adjusting entries monthly. Squeaker Corporation Trial Balance September 1, 2018 Debit $ 35,000 23,000 Cash Accounts receivable Allowance for doubtful accounts Supplies Inventory Equipment Accumulated depreciation equipment Accounts payable Salaries payable Payroll deductions payable Unearned revenue Common shares, 10,000 shares outstanding Retained earnings 2,200 50,000 $110,200 Credit $ 1,600 5,000 10,000 2,000 1,400 2,700 20,000 67,500 $110,200 During September, the following transactions took place: Sept. 1 Accepted a three (3) month 10% note in exchange for Natster Inc.'s overdue account receivable of $3,000. 4 Paid employees gross wages of $2,500 for salaries of which $500 was for September earnings and $2,000 for August earnings. Deductions of $100 for CPP, $90 for EI, and $300 for income tax were made from the employees cheques. The company is required to remit CPP equal to 1 times the employee deductions and EI equal to 1.4 times the employee deductions. Remittances are to be made on the 15th day of the following month. 7 Received $2,600 from customers for services to be provided in the future. 11 Received $3,600 cash for services performed in September. 15 Remitted the August payroll deductions payable to Canada Revenue Agency. 17 Purchased supplies inventory on account, $5,000. 18 It was determined that a customer, Ryster Ltd., has gone bankrupt and therefore we will not receive the $2,300 they owe us. 21 Provided services on account, $9,400. 24 Paid September and October rent, $9,200 ($4,600 per month). 25 Paid salaries, $5,000 - all for September earnings. Deductions of $150 for CPP, $115 for EI, and $750 for income tax were made from the employees cheques. The company is required to remit CPP equal to 1 times the employee deductions and EI equal to 1.4 times the employee deductions. Remittances are to be made on the 15th day of the following month. 26 Received $6,500 on account. 27 Paid $2,200 on account. 28 Declared and paid a common share cash dividend of 0.50 per share. 29 Issued 10,000 preferred shares for $10 cash per share. 30 Provided services on account, $900. Additional data for the September month end: 1. Depreciation is calculated to be $500 for the month. 2. Supplies inventory on hand totaled $2,500. 3. Unearned revenue of $1,500 has not yet been earned (i.e. the balance in unearned revenue should be $1,500). 4. Accrued salaries payable (i.e. salaries owing to employees at September 30th) are $1,900. 5. Accrued service revenue (services provided but not yet invoiced) totaled $8,000. 6. An analysis of accounts receivable determined that 5% of the outstanding accounts receivable (after adjusting for any amounts noted previously) was considered doubtful and an allowance should be set up. 7. Interest should be accrued for any notes payable or receivable. Required 1: Prepare T accounts, and enter the opening balances at September 1. Required 2: Prepare journal entries for the September transaction entries. (i.e. Sep 1 to 30 above). Please date and number your entries. No journal entry descriptions are required. Required 3: Post the entries prepared in Required 2 to the T-accounts prepared in Required 1. Please number each posting with the JE number. Required 4: Prepare journal entries for the September adjustments (i.e. Additional data #1 to #7 above). No journal entry descriptions are required. Required 5: Post the adjusting journal entries prepared in Required 4 to the T-accounts. Please number each posting with the JE number. Required 6: Required 7: Prepare an income statement, statement of changes in equity, and statement of financial position for the month in proper form. Squeaker Corporation is a publicly traded Canadian Corporation. On September 1, 2018, the Squeaker Corporation's trial balance was as follows (right after the August 31st year end). The company prepares its adjusting entries monthly. Squeaker Corporation Trial Balance September 1, 2018 Debit $ 35,000 23,000 Cash Accounts receivable Allowance for doubtful accounts Supplies Inventory Equipment Accumulated depreciation equipment Accounts payable Salaries payable Payroll deductions payable Unearned revenue Common shares, 10,000 shares outstanding Retained earnings 2,200 50,000 $110,200 Credit $ 1,600 5,000 10,000 2,000 1,400 2,700 20,000 67,500 $110,200 During September, the following transactions took place: Sept. 1 Accepted a three (3) month 10% note in exchange for Natster Inc.'s overdue account receivable of $3,000. 4 Paid employees gross wages of $2,500 for salaries of which $500 was for September earnings and $2,000 for August earnings. Deductions of $100 for CPP, $90 for EI, and $300 for income tax were made from the employees cheques. The company is required to remit CPP equal to 1 times the employee deductions and EI equal to 1.4 times the employee deductions. Remittances are to be made on the 15th day of the following month. 7 Received $2,600 from customers for services to be provided in the future. 11 Received $3,600 cash for services performed in September. 15 Remitted the August payroll deductions payable to Canada Revenue Agency. 17 Purchased supplies inventory on account, $5,000. 18 It was determined that a customer, Ryster Ltd., has gone bankrupt and therefore we will not receive the $2,300 they owe us. 21 Provided services on account, $9,400. 24 Paid September and October rent, $9,200 ($4,600 per month). 25 Paid salaries, $5,000 - all for September earnings. Deductions of $150 for CPP, $115 for EI, and $750 for income tax were made from the employees cheques. The company is required to remit CPP equal to 1 times the employee deductions and EI equal to 1.4 times the employee deductions. Remittances are to be made on the 15th day of the following month. 26 Received $6,500 on account. 27 Paid $2,200 on account. 28 Declared and paid a common share cash dividend of 0.50 per share. 29 Issued 10,000 preferred shares for $10 cash per share. 30 Provided services on account, $900. Additional data for the September month end: 1. Depreciation is calculated to be $500 for the month. 2. Supplies inventory on hand totaled $2,500. 3. Unearned revenue of $1,500 has not yet been earned (i.e. the balance in unearned revenue should be $1,500). 4. Accrued salaries payable (i.e. salaries owing to employees at September 30th) are $1,900. 5. Accrued service revenue (services provided but not yet invoiced) totaled $8,000. 6. An analysis of accounts receivable determined that 5% of the outstanding accounts receivable (after adjusting for any amounts noted previously) was considered doubtful and an allowance should be set up. 7. Interest should be accrued for any notes payable or receivable. Required 1: Prepare T accounts, and enter the opening balances at September 1. Required 2: Prepare journal entries for the September transaction entries. (i.e. Sep 1 to 30 above). Please date and number your entries. No journal entry descriptions are required. Required 3: Post the entries prepared in Required 2 to the T-accounts prepared in Required 1. Please number each posting with the JE number. Required 4: Prepare journal entries for the September adjustments (i.e. Additional data #1 to #7 above). No journal entry descriptions are required. Required 5: Post the adjusting journal entries prepared in Required 4 to the T-accounts. Please number each posting with the JE number. Required 6: Required 7: Prepare an income statement, statement of changes in equity, and statement of financial position for the month in proper form.