A company named ABC Limited on January 1, 2020, and have operated the business for the three-month period ending March 31, 2020. The column headings in the cash synoptic are to be set up as follows:

• Date

• Description

• Cash followed by each statement of financial position account

• Dividends

• Sales revenue followed by each income statement account

assume that I have only 5 accounts in my business: cash, common shares, retained earnings, service revenue and income taxes. I create a column for each of these accounts listing from left to right, statement of financial position, then statement of changes in equity showing only the retained earnings column and then income statement accounts. I record the following transactions:

Jan 1 sold shares for $100 cash

Jan 2 earned service revenue of $50 cash

Jan 3 paid income taxes of $20

Here is a synoptic (debits are positive and credits are negative).

Date	Description	Cash	Common Shares	Retained Earnings	Service Revenue	Income tax expense
Jan 1	Sold shares	100	(100)
Jan 2	Earned revenue	50			(50)
Jan 3	Paid tax	(20)				20
Total before closing		130	(100)		(50)	20
Closing entry				(30)	50	(20)
Total after closing		130	(100)	(30)	0	0

Please record a closing entry at the bottom of the schedule as shown above. You must then create proper financial statements with the amounts contained therein being referenced from the totals above (income statement account balances would come from the third last row). We will mark the extent to which you have properly referenced these amounts.

 

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Date Transaction 1/1/2020 1/1/2020 1/1/2020 1/2/2020 1/3/2020 1/4/2020 1/7/2020 1/8/2020 1/10/2020 Paid employee wages 1/12/2020 Performed services for Westjet who paid cash for the full amount 1/14/2020 Collected 50% of outstanding receivable from London Drugs 1/18/2020 Paid 100% of outstanding obligation related to the equipment 1/22/2020 Performed services for Chinook Mall who paid cash for the full amount 1/31/2020 Paid employee wages 1/31/2020 Determined that 10% of supplies had been used 1/31/2020 Determined that 3% is the average defaultrate for the commercial cleaning industry (use this rate going forward) 1/31/2020 All other appli cable month-end adjusting entries Isued shares in exchange for cash Received 4-year bankloan at a 5% interest rate (interest only payments made at the end of the year) Purchased fumiture with cash (15 year useful life, $0 residual value, straight-line method) Purchased equipment on account (5 year useful life, $5,000 residual value, double -decli ni ng balance method) Signed five-year lease on office space (rent paid in cash on the first day of the month) Purchased supplies on account Received deposit on 12-month contract from Alberta Health Services starting on February 1, 2015 Performed services on account for London Drugs 27500 137500 68,750 233,750 8250 2,750 165,000 41250 13,750 27500 4125 13,750 Date Transaction 2/1/2020 2/1/2020 2/1/2020 2/4/2020 2/10/2020 Paid employee wages 2/11/2020 Purchased supplies on account 2/18/2020 Paid 75% of outstandi ng payable relating to computer purchase 2/22/2020 Performed services on account for Peter's Drive-In 2/31/2020 Paid employee wages 2/31/2020 2/31/2020 All other appli cable month-end adjusting entries Paid monthly rent in cash Purchased computer on account (3 year useful life, $0 residual value, de clining balance method) Received deposit on 6-momth contract from Brookfield Residential (services performed in equal increments starüng February 8250 4,950 16500 Received 100% of outstanding receivable from the London Drugs 13,750 2,750 68,750 13,750 Determined that 75% of supplies had been used Date Transaction 3/1/2020 3/1/2020 3/2/2020 3/15/2020 Paid employee wages 3/16/2020 Purchased a 12-month insurance package starting on March 1, 2015 3/17/2020 Declared di vidend for common sharehol ders 3/18/2020 Paid 100% of outstanding payable relating to computer purchase 3/19/2020 Purchased supplies on account 3/22/2020 Performed services on account for Husky Incorporated 3/31/2020 Paid employee wages 3/31/2020 3/31/2020 3/31/2020 3/31/2020 3/31/2020 All other appli cable month-end adjusting entries Sold equipment despite the fact that it was working as intended Paid monthly rentin cash Performed services on account for the Ship and Anchor 165000 8250 165,000 13,750 99,000 82500 1375 49500 13,750 Paid outstandi ng balance for supplies Determined that Pe ter's Drive-In was bankrupt and would not be able to pay their outstandi ng receivable Made a principal only bank loan payment Determined that 80% of supplies had been used 13,750 Date Transaction 1/1/2020 1/1/2020 1/1/2020 1/2/2020 1/3/2020 1/4/2020 1/7/2020 1/8/2020 1/10/2020 Paid employee wages 1/12/2020 Performed services for Westjet who paid cash for the full amount 1/14/2020 Collected 50% of outstanding receivable from London Drugs 1/18/2020 Paid 100% of outstanding obligation related to the equipment 1/22/2020 Performed services for Chinook Mall who paid cash for the full amount 1/31/2020 Paid employee wages 1/31/2020 Determined that 10% of supplies had been used 1/31/2020 Determined that 3% is the average defaultrate for the commercial cleaning industry (use this rate going forward) 1/31/2020 All other appli cable month-end adjusting entries Isued shares in exchange for cash Received 4-year bankloan at a 5% interest rate (interest only payments made at the end of the year) Purchased fumiture with cash (15 year useful life, $0 residual value, straight-line method) Purchased equipment on account (5 year useful life, $5,000 residual value, double -decli ni ng balance method) Signed five-year lease on office space (rent paid in cash on the first day of the month) Purchased supplies on account Received deposit on 12-month contract from Alberta Health Services starting on February 1, 2015 Performed services on account for London Drugs 27500 137500 68,750 233,750 8250 2,750 165,000 41250 13,750 27500 4125 13,750 Date Transaction 2/1/2020 2/1/2020 2/1/2020 2/4/2020 2/10/2020 Paid employee wages 2/11/2020 Purchased supplies on account 2/18/2020 Paid 75% of outstandi ng payable relating to computer purchase 2/22/2020 Performed services on account for Peter's Drive-In 2/31/2020 Paid employee wages 2/31/2020 2/31/2020 All other appli cable month-end adjusting entries Paid monthly rent in cash Purchased computer on account (3 year useful life, $0 residual value, de clining balance method) Received deposit on 6-momth contract from Brookfield Residential (services performed in equal increments starüng February 8250 4,950 16500 Received 100% of outstanding receivable from the London Drugs 13,750 2,750 68,750 13,750 Determined that 75% of supplies had been used Date Transaction 3/1/2020 3/1/2020 3/2/2020 3/15/2020 Paid employee wages 3/16/2020 Purchased a 12-month insurance package starting on March 1, 2015 3/17/2020 Declared di vidend for common sharehol ders 3/18/2020 Paid 100% of outstanding payable relating to computer purchase 3/19/2020 Purchased supplies on account 3/22/2020 Performed services on account for Husky Incorporated 3/31/2020 Paid employee wages 3/31/2020 3/31/2020 3/31/2020 3/31/2020 3/31/2020 All other appli cable month-end adjusting entries Sold equipment despite the fact that it was working as intended Paid monthly rentin cash Performed services on account for the Ship and Anchor 165000 8250 165,000 13,750 99,000 82500 1375 49500 13,750 Paid outstandi ng balance for supplies Determined that Pe ter's Drive-In was bankrupt and would not be able to pay their outstandi ng receivable Made a principal only bank loan payment Determined that 80% of supplies had been used 13,750

Answer rating: 100% (QA)

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