ALL ANSWERS MUST BE SHOWN USING EXCEL AND ALL FORMULAS USED MUST BE SHOWN.

You have completed the first year of your grocery delivery business, No Shopping 4 Me, Inc. (NS4M). The following is the trial balance for NS4M as of January 1, 2016:

No Shopping 4 Me, Inc. Trial Balance January 1, 2016

Account

Cash 49,711 Accounts receivable 18,000 Allowance for doubtful accounts 1,500

Inventory 2,385 Supplies inventory 12,000 Prepaid expenses 1,800 Equipment 35,000 Accumulated depreciation 7,000 Accounts payable 35,000 Payroll taxes payable 506 Interest payable 1,200 Income tax payable 1,950 Sales tax payable 240 Dividend payable - Deferred revenue 1,500 Notes payable - long-term 20,000

Common stock (5,000 SH @ $10 par) 50,000

Additional paid-in capital 2,000 Retained earnings 13,000 Treasury stock 15,000 Delivery revenue - Dog food sales- Cost of goods sold- Salaries expense - Payroll tax expense - Rent expense - Bad debt expense - Supplies expense - Depreciation expense - Income tax expense - Interest expense -

Note: although all accounts are shown with a positive balance, they have the normal debit or credit balance that accounts in their account type have (e.g. - assets have a debit balance, liabilities have a credit balance).

The following information pertains to January 2016:

NS4M has decided to stock and sell certain dog foods. The dog food is sold at $40 per 30 pound bag, plus sales tax of 6%. Inventory at January 1 consisted of 75 bags at a total cost of $2,385.

# of Units 25, 30, 20 Total =75

Unit Cost $ 32.00, $31.50, $32

Total Cost $ 800, $945, $640 Total $2,385

No Shopping 4 Me, Inc. Inventory (FIFO)

As of December 31, 2015

NS4M uses the FIFO method and records inventory using a perpetual inventory system.

The $1,800 in prepaid expenses at January 1, 2016 relates to a payment made in December

2015 for January March 2016 rent.

The equipment balance at January 1, 2016 represents a van purchased on January 1, 2015. The

van has no residual value, is being depreciated using the straight-line method, and has an

expected useful life of 5 years.

Salaries are paid on the last day of each month for that months work. Monthly wages vary.

Payroll taxes include: FICA which is comprised of Social Security taxes of 6.2% imposed on both the employee and the employer and Medicare taxes of 1.45% imposed on both the employee and employer and Federal withholding taxes of $200 per pay. Payroll taxes are paid on the 5th day of the month following the pay date.

Deferred revenue at January 1, 2016 is from one customer who paid in December for January & February 2016 deliveries ($750 per month).

Notes payable at January 1, 2016 represents the five-year note for the van purchase on January 1, 2015. Interest is accrued at 6% per year and is due annually on the first of the year.

The par value on the common stock is $10 per share.

Treasury stock represents 1,000 shares repurchased at $15 per share.

January 2016 Transactions:

(a) On January 1, paid annual interest payment on long-term note payable.

(b) On January 1, purchased office equipment for $2,300. The office equipment will be depreciated

using the straight-line method, will have an expected useful life of 5 years, and will have a

residual value of $800.

(c) On January 5, paid payroll taxes owed from last month.

(d) On January 7, declared a $1.00 dividend per share for all shareholders on record as of January 1,

2016. The dividend is to be paid on February 3, 2016.

(e) On January 8, invoiced $3,000 for weekly grocery deliveries. $750 was collected in December,

the remaining amount is to be collected. No sales tax is owed on grocery deliveries.

(f) On January 12, collected $19,000 for previously billed grocery deliveries.

(g) On January 14, wrote-off a $500 customer account as uncollectible.

(h) On January 15, invoiced $3,500 for weekly grocery deliveries and $1,200 in dog food plus sales

tax on the dog food sales.

(i) On January 17, re-sold 500 shares treasury stock for $12 per share.

(j) On January 18, paid sales tax collected on December 2015 sales.

(k) On January 20, paid $35,000 in accounts payable.

(l) On January 22, invoiced $3,250 for weekly grocery deliveries and $1,400 in dog food plus sales tax on the dog food sales.

(m) January 25, purchased 40 bags of dog food at $30 per bag.

(n) On January 31, paid salaries of $2,100 for January. Employee and Employer payroll taxes are

recorded but not paid until February.

The following adjusting journal entries were recorded on January 31:

(o) Record rent expense for January 2016.

(p) Adjust the allowance for doubtful accounts. NS4M uses the percentage of credit sales method

to record bad debt expense. It is estimated that 2% of credit sales are uncollectible.

(q) RecordJanuarydepreciationexpense.

(r) The value of supplies inventory on hand per a physical count at January 31, 2016, $6,400.

(s) Record accrued interest for January 2016.

(t) Record estimated income tax payable of 15% of pretax income for January 2016.

Required:

1) Record the above transactions. In lieu of recording the entries with the actual dates, please

reference each entry with the letter of the transaction as shown above. Report all transactions in whole dollars (do not include cents). Your general journal should be set up as follows:

Event # Account Title Debit Credit

2) Post the transactions to T-accounts. Be sure to include all calculations for any amounts requiring additional calculations (including interest on notes payable, depreciation, accounts receivable, and cost of goods sold). These calculations can be shown on a separate tab in excel.

3) Prepare a trial balance using the T-accounts from requirement (2).

4) Prepare an income statement, statement of stockholders equity, and balance sheet.