Use the following balance sheet information from The Health and Fitness Centers' month-end financial statements dated...

      
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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Use the following balance sheet information from The Health and Fitness Centers' month-end financial statements dated January 31, 2022 and open t-accounts for each balance sheet line item. Then use the enclosed TRANSACTIONS AND ADDITIONAL INFORMATION to complete the General Journal, Ledger, Trial Balance Worksheet and Financial Statements for the second month of operations during fiscal year 2022. Use the Perpetual Inventory method as discussed in class for all sales of merchandise. Assets: Cash Accounts Receivable Inventory - Concessions Supplies Prepaid Insurance Total Current Assets Land Building Equipment Furniture and Fixtures Accumulated Depreciation Total Assets The Heath and Fitness Center Balance Sheet As of January 31, 2022 $7,500 2,800 500 100 4,125 15,025 100,000 300,000 43,200 23,760 (2,070) $479,915 Liabilities: Accounts Payable Salaries Payable Interest Payable Unearned Revenue Note Payable Total Current Liabilities Stockholder's Equity Common Stock_ Retained Earnings Total Liab. and SHE $4,100 3,650 1,875 850 250,000 260,475 200.000 19,440 $479,915 Notes to Financial Statements: The Health and Fitness Center, a Texas corporation, is principally engaged in providing a fitness facility available to "club" members. The Heath and Fitness Center offers all of the latest equipment and services including group exercise, personal training, cardiovascular equipment, Pilates and yoga, and weight lifting. The Center also provides massage services. Fiscal Year The Heath and Fitness Center was established as a business in January 2022. The Heath and Fitness Center follows a fiscal year end of December 31. Inventories Inventories consist of concessions available for resale to members. These concessions include water bottles, energy drinks, and nutritional supplements. Inventories are valued on a first-in, first-out basis, using the perpetual method. (Note: The Center plans to expand its inventory during February to include logo-based apparel.) Prepaid Insurance The Heath and Fitness Center carries property insurance through Good Hands Insurance Co. The Center purchased a 12 month policy on January 1, 2022 for $4,500. Fixed Assets Property and Equipment are stated on the basis of historical cost. Land and Building: The Land and Building was a group purchase made on January 1, 2022. The total purchase price amounted to $400,000. On the date of purchase the land was appraised at $100,000 and the building was appraised at $300,000. The Health and Fitness Center paid $150,000 down and signed a $250,000, 12-month, 9% note for the balance. Depreciation on the building is computed using the straight-line basis with no salvage value. The life of the building is estimated to be 20 years. Equipment and Furniture and Fixtures: All equipment and furniture and fixtures were purchased for cash on January 1, 2022. Both equipment and furniture and fixtures are depreciated using the straight-line method of depreciation. No salvage value is anticipated. The useful life of the equipment is 6 years. The useful life of the furniture and fixtures is 9 years. The book values of these assets are presented below: Land $100,000 300,000 1,250 43,200 600 Building Less: Accumulated Depr Equipment Less: Accumulated Depr wwwm Furniture and Fixtures Less: Accumulated Depr Net Plant, Property, and Equipment 23,760 220 $100,000 298,750 42,600 23,540 $464,890 Unearned Revenue The balance in the unearned revenue account is due to the sale of gift certificates redeemable for massage therapy. Revenue Recognition The Company recognizes service revenue upon providing services for customers. Sales revenue is recognized upon customer receipt of goods. Revenue for gift certificate sales is recognized at redemption. (Note: all memberships sold during the first month of operations were for trial memberships for one month only). Instructions Use the following TRANSACTIONS AND ADDITIONAL INFORMATION to complete the General Journal, Ledger, Trial Balance Worksheet and Financial Statements for the second month of operations for the Health & Fitness Center. Use the Perpetual Inventory method as discussed in class for all sales of merchandise. TRANSACTIONS Feb 1 Feb 1 Feb 1 Feb 3 Feb 5 Feb 6 Feb 7 Feb 9 Feb 10 Purchased office supplies for $325 on an open account from Kelli's Office Supplies. The Fitness Center has 30 days to pay for the supplies. Purchased a 4-month advertising campaign to be broadcast on local radio stations during the months of Feb. through May. Paid $2,200 in advance for this ad campaign. Sold 120, twelve-month memberships to the Fitness Center for $415 each. All membership dues were collected in cash. Paid wages due on January 31. Purchased on account a total of 160 shirts with an embroidered Fitness Center logo from C & C Creations at a price of $11 per shirt. These shirts are available for resale to customers. Purchased concessions for $2,550 on account from Advocare Distributing, Inc. These concessions consist of energy drinks, nutritional supplements, etc., and are available for resale to customers. Provided 45 hours of personal training services to members. Fees are charged at a rate of $38 an hour. The total amount was billed to individual member's accounts. Paid the total amounts due to Kelli's Office Supplies for the Feb. 1st transaction and C&C Creations for the Feb. 5th transaction. Sold thirty five shirts to a corporate member, Allen & Associates for $32 each. Collected $800 in cash and the balance is owed to the Fitness Center on account. Feb 11 Feb 13 Feb 15 Purchased Valentines Day flowers for the reception desk for $80 cash (classified as Miscellaneous Expense). Sold a gift certificate for $100. The gift certificate is valid for one year and is redeemable for a 60 minute massage. The concession stand reported the following sales for the first half of the month. All sales were billed to the members' account. $ Sales Amount $ Cost of Merchandise $3,840 $2,160 Feb 15 Feb 16 Feb 17 Feb 18 Feb 19 Feb 20 Feb 21 Feb 22 Feb 24 Feb 25 Feb 26 Feb 27 Feb 28 For the first half of February, provided 25 hours of massage therapy at a rate of $75/hour. Billed the individual members' accounts for services provided. Paid wages and salaries of $3,195 to Fitness Center employees. Gift certificates totaling $250 were redeemed for massage therapy performed. Received $2,200 for services previously billed to customer's accounts. Purchased with cash additional concessions for $850 from Advocare Distributing. Paid $4,320 on accounts payable. Received $3,250 for services previously billed to customers' accounts. Collected the balance of what was owed on account from Allen & Associates for the Feb.10 transaction. Sold fifty shirts to individual customers for $39 each. Collected 30% in cash, the balance is owed to the Fitness Center on account. The owners of the company invested an additional $15,000 into the Fitness Center in exchange for common stock. Cash sales of shirts: 30 shirts sold at $42 each. The Fitness Center paid a dividend of $2,000 to its shareholders. Received a utility bill that totaled $419 for the month. It is due March 12. Feb 28 Feb 28 Feb 28 Feb 28 Feb 28 Purchased additional equipment for $27,000; paid $17,000 in cash and signed a two year, 8% note for the balance (note: interest will begin accruing March 1). ‒‒‒‒‒‒‒ Fees for massage therapy for the last half of February totaled $3,900. All of these transactions were billed directly to each member's account. Fees for personal training given during February amounted to $5,160. Forty percent of these fees were collected in cash. Credit sales for concessions during the last half of February totaled $1,940. Cash sales for concessions during the last half of February totaled $680. Cost of the concessions sold during the last half of February was $1,195. Paid $1,100 on accounts payable. ADDITIONAL INFORMATION NEEDED TO COMPLETE ADJUSTING ENTRIES: 1. Depreciation expense for the month of February should be calculated using the straight- line method. [You do not need to depreciate the new equipment purchased on 2/28.] 2. At the end of the month, a physical count was taken of the Fitness Center's inventories. It revealed the following information: a. Forty two of the shirts for resale were on hand at February 28. b. Concession merchandise still on hand as of February 28 amounted to $523. 3. Salaries earned by employees but unpaid on February 28th totaled $2,935. 4. Interest accrued as of February 28th is $1,875. 5. Office Supplies still on hand on February 28th totaled $90. Use the following balance sheet information from The Health and Fitness Centers' month-end financial statements dated January 31, 2022 and open t-accounts for each balance sheet line item. Then use the enclosed TRANSACTIONS AND ADDITIONAL INFORMATION to complete the General Journal, Ledger, Trial Balance Worksheet and Financial Statements for the second month of operations during fiscal year 2022. Use the Perpetual Inventory method as discussed in class for all sales of merchandise. Assets: Cash Accounts Receivable Inventory - Concessions Supplies Prepaid Insurance Total Current Assets Land Building Equipment Furniture and Fixtures Accumulated Depreciation Total Assets The Heath and Fitness Center Balance Sheet As of January 31, 2022 $7,500 2,800 500 100 4,125 15,025 100,000 300,000 43,200 23,760 (2,070) $479,915 Liabilities: Accounts Payable Salaries Payable Interest Payable Unearned Revenue Note Payable Total Current Liabilities Stockholder's Equity Common Stock_ Retained Earnings Total Liab. and SHE $4,100 3,650 1,875 850 250,000 260,475 200.000 19,440 $479,915 Notes to Financial Statements: The Health and Fitness Center, a Texas corporation, is principally engaged in providing a fitness facility available to "club" members. The Heath and Fitness Center offers all of the latest equipment and services including group exercise, personal training, cardiovascular equipment, Pilates and yoga, and weight lifting. The Center also provides massage services. Fiscal Year The Heath and Fitness Center was established as a business in January 2022. The Heath and Fitness Center follows a fiscal year end of December 31. Inventories Inventories consist of concessions available for resale to members. These concessions include water bottles, energy drinks, and nutritional supplements. Inventories are valued on a first-in, first-out basis, using the perpetual method. (Note: The Center plans to expand its inventory during February to include logo-based apparel.) Prepaid Insurance The Heath and Fitness Center carries property insurance through Good Hands Insurance Co. The Center purchased a 12 month policy on January 1, 2022 for $4,500. Fixed Assets Property and Equipment are stated on the basis of historical cost. Land and Building: The Land and Building was a group purchase made on January 1, 2022. The total purchase price amounted to $400,000. On the date of purchase the land was appraised at $100,000 and the building was appraised at $300,000. The Health and Fitness Center paid $150,000 down and signed a $250,000, 12-month, 9% note for the balance. Depreciation on the building is computed using the straight-line basis with no salvage value. The life of the building is estimated to be 20 years. Equipment and Furniture and Fixtures: All equipment and furniture and fixtures were purchased for cash on January 1, 2022. Both equipment and furniture and fixtures are depreciated using the straight-line method of depreciation. No salvage value is anticipated. The useful life of the equipment is 6 years. The useful life of the furniture and fixtures is 9 years. The book values of these assets are presented below: Land $100,000 300,000 1,250 43,200 600 Building Less: Accumulated Depr Equipment Less: Accumulated Depr wwwm Furniture and Fixtures Less: Accumulated Depr Net Plant, Property, and Equipment 23,760 220 $100,000 298,750 42,600 23,540 $464,890 Unearned Revenue The balance in the unearned revenue account is due to the sale of gift certificates redeemable for massage therapy. Revenue Recognition The Company recognizes service revenue upon providing services for customers. Sales revenue is recognized upon customer receipt of goods. Revenue for gift certificate sales is recognized at redemption. (Note: all memberships sold during the first month of operations were for trial memberships for one month only). Instructions Use the following TRANSACTIONS AND ADDITIONAL INFORMATION to complete the General Journal, Ledger, Trial Balance Worksheet and Financial Statements for the second month of operations for the Health & Fitness Center. Use the Perpetual Inventory method as discussed in class for all sales of merchandise. TRANSACTIONS Feb 1 Feb 1 Feb 1 Feb 3 Feb 5 Feb 6 Feb 7 Feb 9 Feb 10 Purchased office supplies for $325 on an open account from Kelli's Office Supplies. The Fitness Center has 30 days to pay for the supplies. Purchased a 4-month advertising campaign to be broadcast on local radio stations during the months of Feb. through May. Paid $2,200 in advance for this ad campaign. Sold 120, twelve-month memberships to the Fitness Center for $415 each. All membership dues were collected in cash. Paid wages due on January 31. Purchased on account a total of 160 shirts with an embroidered Fitness Center logo from C & C Creations at a price of $11 per shirt. These shirts are available for resale to customers. Purchased concessions for $2,550 on account from Advocare Distributing, Inc. These concessions consist of energy drinks, nutritional supplements, etc., and are available for resale to customers. Provided 45 hours of personal training services to members. Fees are charged at a rate of $38 an hour. The total amount was billed to individual member's accounts. Paid the total amounts due to Kelli's Office Supplies for the Feb. 1st transaction and C&C Creations for the Feb. 5th transaction. Sold thirty five shirts to a corporate member, Allen & Associates for $32 each. Collected $800 in cash and the balance is owed to the Fitness Center on account. Feb 11 Feb 13 Feb 15 Purchased Valentines Day flowers for the reception desk for $80 cash (classified as Miscellaneous Expense). Sold a gift certificate for $100. The gift certificate is valid for one year and is redeemable for a 60 minute massage. The concession stand reported the following sales for the first half of the month. All sales were billed to the members' account. $ Sales Amount $ Cost of Merchandise $3,840 $2,160 Feb 15 Feb 16 Feb 17 Feb 18 Feb 19 Feb 20 Feb 21 Feb 22 Feb 24 Feb 25 Feb 26 Feb 27 Feb 28 For the first half of February, provided 25 hours of massage therapy at a rate of $75/hour. Billed the individual members' accounts for services provided. Paid wages and salaries of $3,195 to Fitness Center employees. Gift certificates totaling $250 were redeemed for massage therapy performed. Received $2,200 for services previously billed to customer's accounts. Purchased with cash additional concessions for $850 from Advocare Distributing. Paid $4,320 on accounts payable. Received $3,250 for services previously billed to customers' accounts. Collected the balance of what was owed on account from Allen & Associates for the Feb.10 transaction. Sold fifty shirts to individual customers for $39 each. Collected 30% in cash, the balance is owed to the Fitness Center on account. The owners of the company invested an additional $15,000 into the Fitness Center in exchange for common stock. Cash sales of shirts: 30 shirts sold at $42 each. The Fitness Center paid a dividend of $2,000 to its shareholders. Received a utility bill that totaled $419 for the month. It is due March 12. Feb 28 Feb 28 Feb 28 Feb 28 Feb 28 Purchased additional equipment for $27,000; paid $17,000 in cash and signed a two year, 8% note for the balance (note: interest will begin accruing March 1). ‒‒‒‒‒‒‒ Fees for massage therapy for the last half of February totaled $3,900. All of these transactions were billed directly to each member's account. Fees for personal training given during February amounted to $5,160. Forty percent of these fees were collected in cash. Credit sales for concessions during the last half of February totaled $1,940. Cash sales for concessions during the last half of February totaled $680. Cost of the concessions sold during the last half of February was $1,195. Paid $1,100 on accounts payable. ADDITIONAL INFORMATION NEEDED TO COMPLETE ADJUSTING ENTRIES: 1. Depreciation expense for the month of February should be calculated using the straight- line method. [You do not need to depreciate the new equipment purchased on 2/28.] 2. At the end of the month, a physical count was taken of the Fitness Center's inventories. It revealed the following information: a. Forty two of the shirts for resale were on hand at February 28. b. Concession merchandise still on hand as of February 28 amounted to $523. 3. Salaries earned by employees but unpaid on February 28th totaled $2,935. 4. Interest accrued as of February 28th is $1,875. 5. Office Supplies still on hand on February 28th totaled $90.