Transactions during 2020 follow: a. Borrowed $20,000 cash on July 1, 2020, signing a one-year, 10 percent
Question:
Transactions during 2020 follow:
a. Borrowed $20,000 cash on July 1, 2020, signing a one-year, 10 percent note payable.
b. Purchased equipment for $18,000 cash on July 1, 2020.
c. Sold 10,000 additional shares of capital stock for cash at $0.50 market value per share at the beginning of the year.
d. Earned $70,000 in revenues for 2020, including $14,000 on credit and the rest in cash.
e. Incurred $27,000 in wages expense and $8,000 in miscellaneous expenses for 2020, with $7,000 on credit and the rest paid with cash. Note: Wages are paid in cash.
f. Purchased additional small tools, $3,000 cash.
g. Collected accounts receivable, $8,000. h. Paid accounts payable, $11,000. i. Purchased $10,000 of supplies on account.
j. Received a $3,000 deposit on work to start January 15, 2021.
k. Declared a cash dividend on December 1, $10,000; paid on December 31. Data for adjusting entries:
l. Supplies of $4,000 and small tools of $8,000 were counted on December 31, 2020 (debit Miscellaneous Expenses).
m. Depreciation for 2020, $2,000.
n. Interest accrued on notes payable (to be computed).
o. Wages earned since the December 24 payroll but not yet paid, $3,000.
p. Income tax expense was $4,000, payable in 2021.
REQUIRED: Post the journal entries for transactions (a) through (k) and adjusting entries for transactions (l) through (p) to the respective T-Accounts.
Cash | Accounts Receivable | |||||||
Beg. bal. | Beg. bal. | |||||||
End. bal. | 0 | |||||||
End. bal. | 0 | |||||||
Supplies | Small Tools | |||||||
Beg. bal. | Beg. bal. | |||||||
End. bal. | 0 | End. bal. | 0 | |||||
Equipment | Accumulated Depreciation | |||||||
Beg. bal. | Beg. bal. | |||||||
End. bal. | 0 | End. bal. | 0 | |||||
Other Assets | Accounts Payable | |||||||
Beg. bal. | Beg. bal. | |||||||
End. bal. | 0 | End. bal. | 0 | |||||
Notes Payable | Dividends Payable | |||||||
Beg. bal. | Beg. bal. | |||||||
End. bal. | 0 | End. bal. | 0 | |||||
Wages Payable | Interest Payable | |||||||
Beg. bal. | Beg. bal. | |||||||
End. bal. | 0 | End. bal. | 0 | |||||
Income Taxes Payable | Unearned Revenue | |||||||
Beg. bal. | Beg. bal. | |||||||
End. bal. | 0 | End. bal. | 0 | |||||
Common Stock | Additional Paid-in Capital | |||||||
Beg. bal. | Beg. bal. | |||||||
End. bal. | 0 | End. bal. | 0 | |||||
Retained Earnings | Service Revenue | |||||||
Beg. bal. | Beg. bal. | |||||||
End. bal. | 0 | End. bal. | 0 | |||||
Income Tax Expense | Interest Expense | |||||||
Beg. bal. | Beg. bal. | |||||||
End. bal. | 0 | End. bal. | 0 | |||||
Depreciation Expense | Wages Expense | |||||||
Beg. bal. | Beg. bal. | |||||||
End. bal. | 0 | End. bal. | 0 | |||||
Miscellaneous expenses | ||||||||
Beg. bal. | ||||||||
End. bal. | 0 |