Since January $1,2020,$ John and Mary Company provide sales and services for bike riders. It

shows the following balances where all have normal balances:

Cash $ $38500$

Accounts Receivable $$5200$

Copyrights $$6500$

Land $$12000$

Taxes Payables $$1500$

Common Stocks $10000$ shares $$59400$

Retained Earnings $$6700$

Wages Payable $$350$

Inventory $25$ bikes $$5000$

Office Supplies $$750$

$$

During January $2020,$ the following transactions occur:

January $1$ Rented space for one year paid in advance, $$6,000($$$500/$month$).$

Purchase insurance for the business, $$12,000$ for $12$ months

January $10$ Purchase special Equipment on account for $$3600$ with$$300$ installation cost

with life of $6$ years and salvage value of $$600.$ Company uses straight line method.

January $13$ Provide services to customers on account, $$25,500.$ Also sold for $$950$ cash $3$ bikes, costing

$$600$

January $17$ Receive cash in advance from customers for services to be provided in the future, $$9,700.$

January $20$ Paid off Wages Payable, and additional payment of salaries, $$1,500.$

January $22$ Receive cash on accounts receivable, $$3,000.$

January $29$ Pay cash for six month insurance for $$4,000$ starting February of next year.

The following information is available on January $31,2020.$

a$.$ Company lawyer believes it is probable that the company will be responsible for

environmental damages, however, amount can not be determined at this time.

b$.$ Company purchased the nest door property for expansion for $$100,000,$ receiving bank

mortgage. An appraiser value the building for $$60000$ and land $$30000.$

c$.$ Rent insurance for the month of January have expired.

d$.$ Supplies remaining at the end of January is $$800.$

e$.$ By the end of January, $$3,200$ of services has been provided to customers who paid in

advance on January $17..$

f$.$ On January $31,$ the equipment was exchanged in a cash transaction with a new equipment,

the new equipment was $$2,800$

g$.$ Unpaid salaries at the end of January are $$4,400.$

h$.$ If earnings and cash available, pay $$2000$ dividends to stockholders.

i$.$ It was determined that Addy, one of the customers, will not be able to pay his balance of

$$350.$

j$.$ Purchased special supplies for $$400$ FOB Destination that arrived on February $10.$

 

 

Required:

$1-$ Record January $1$st balances followed by recording the above transactions in an

Excel sheet using the Accounting Equation similar to what we practiced in class,

that includes end of period adjusting entries, if any

$2-$ Prepare multi$-$step income statement as of January $31$ similar to what we practiced

in class. Don$$t forget EPS data.

$3-$ Prepare the Statement of Retained Earnings

$4-$ Prepare a classified balance sheet $($e$.$g$.$ current assets and non$-$current$)$ as of

January $31$ similar to what we practiced in class.

$5-$ List $2$ financial ratios that seem to be satisfactory or not satisfactory. $($use text box

for answering this question$)$

This problem will be graded for accuracy $(90\%)$ and presentation $(10\%$