Leon Jackson is esctatic! First National Bank just approved a loan for Leon to start a Web
Question:
Leon Jackson is esctatic! First National Bank just approved a loan for Leon to start a Web site design and maintenance business called Webworks. He is now ready to purchase his needed equipment, hire his administrative help, and begin designing sites. During June, his first month of business, the following occurred:
a) Webworks signs a note at the bank and is given $10,000 cash.
b) Leon deposits $2,000 of his own money into Webworks' checking account
c) Webworks purchases a new computer and additional equipment for $3,000
d) Webworks purchases supplies worth $200 on account that should last Webworks 2 months
e) Webworks hires Nancy Po to assist with administrative tasks. She will charge $100 per Website for her assistance.
f) Webworks begins working on his first two websites, one for Juan Sanchez, a friend of his dad's and the other for Pauline Smith, a local businesswoman.
g) Webworks completes the site for Mr. Sanchez and sends him a bill for $600
h) Webworks completes the site for Ms. Smith and sends her a bill for $450
i) Webworks collects $600 in cash from Mr. Sanchez.
j) Webworks pays Nancy $100 for her work on Mr. Sanchez' Web site.
k) Webworks receives $500 in advance to work on a Website for a local resturant. Work on the site will not begin until July.
l) Webworks pay taxes of $200 in cash.
m) Webworks owes Nancy $100 for her work on Ms. Smith's Web site.
n) Leon's parents let him know that Webworks owes $80 toward the electricity bill. Webworks will pay them in July.
o) Webworks only used half of the supplies purchased in (d) above.
i) Prepare journal entries for the above events, if needed (items "a" through "l")
ii) Prepare an unadjusted trial balance for Webworks for June.
iii) Prepare adjusting entries for the following (items "m" through "o")
iv) Prepare an adjusted trial balance for Webworks for June.
v) Prepare a set of financial statements; balance sheet, income statement, statement of cashflows, statement of equity
Horngrens Financial and Managerial Accounting
ISBN: 978-0133866292
5th edition
Authors: Tracie L. Nobles, Brenda L. Mattison, Ella Mae Matsumura