Susans Shoe Shop opened on January 1. The following transactions took place during the first month: 1.

Fantastic news! We've Found the answer you've been seeking!

Question:

Susan’s Shoe Shop opened on January 1. The following transactions took place during the first month:
1. Deposited $30,000 in the firm’s checking account.
2. Purchased shoes, boots, socks, and other inventory for $45,000 on account.
3. Purchased display shelving, chairs, and other fixtures for $10,000 cash and
$40,000 on account. Assume a useful life of five years.
4. Obtained a three-year, $20,000 bank loan at eight percent annual interest.
5. Paid $10,000 to two different creditors.
6. Signed an application for a one-year insurance policy and paid the year’s premium of $2,400.
7. Paid three employees a monthly salary of $2,000 each.
8. Collected $35,000 from customers on account.

Required
a. Prepare the journal entries to record these transactions.
b. Prepare any necessary adjusting entries.
c. Post all journal entries to T-accounts.
d. Prepare a trial balance.
e. Prepare an income statement and balance sheet for Susan’s Shoe Shop on January 31.