Assume all transactions in cash unless otherwise noted. 50,000 shares of common stock (par 1.00) issued...

 

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Assume all transactions in cash unless otherwise noted. 50,000 shares of common stock (par 1.00) issued at 80/Share. Inventory includes the following: Beginning balance of $0; Purchases Include: 1/1 $50,000 - (2,000 units at $25). $46,000 (1,000 units of inventory on June 1 for $46/unit); and $90,000 (3,000 units on December 1 for $30/unit. 3,500 units were sold for $190/unit on December 20h $450,000 in cash was received and the remaining will be collected in the following year. The rate used for determining uncollectible has been set at 5% of gross credit sales. Both Accounts receivable and the related Allowance have a zero beginning balance. The company uses LIFO. On 1/1 we signed a note on for $1,000,000. We agreed to pay back the note at the end and all interest. The rate of interest is 5%. We will pay back all interest and principal on 1/1/x5 Supplies at the beginning of the year was $0. The amount of supplies purchased was $40,000. End of the year supply count showed that there was a $20,000 balance. Equipment-A was purchased at the beginning of the year for $300,000. $20,000 of salvage/residual value. Declining Balance depreciation is used over a 10 year life. Equipment-B was purchased on 5/1/x1 for $100,000. $20,000 of salvage/residual value. Straight line depreciation is used over a 5 year life. This asset was sold for $90,000 cash on 10/31/x1. Building was purchased at the beginning of the year for $400,000. Salvage/residual value of $20,000. Straight-line is used over a 20 year life. We signed a note requiring interest and principal to both be paid on 1/1X5 We needed funds, so we signed a note on 7/1 for $600,000. We agreed to pay back the note at the end and all interest on 2/28/x2. The rate of interest is 6%. For purposes of the balanced sheet we have authorized 100,000 shares of common stock, but only 50,000 shares of common stock are issued. We have 2 employees. We paid them a total of salary expense $39,000 (gross pay) to date. An end of the year adjustment requires us to accrue a $1,000 more of salary expense this year, which is to be paid next year. FICA is 7.65%. No federal or state income tax is withheld. No FICA tax has been paid to the government. Rent Expense for the year was $24,000. Throughout the year we sold and delivered $500,000 in services. On November 1, we received $144.000 cash for future services. The services will be performed evenly over the next year (12 months). We declared but did not pay dividends of $50,000. The tax rate is 21%. 1. Prepare jourmal entries (including closing) 2. Prepare financial statements Assume all transactions in cash unless otherwise noted. 50,000 shares of common stock (par 1.00) issued at 80/Share. Inventory includes the following: Beginning balance of $0; Purchases Include: 1/1 $50,000 - (2,000 units at $25). $46,000 (1,000 units of inventory on June 1 for $46/unit); and $90,000 (3,000 units on December 1 for $30/unit. 3,500 units were sold for $190/unit on December 20h $450,000 in cash was received and the remaining will be collected in the following year. The rate used for determining uncollectible has been set at 5% of gross credit sales. Both Accounts receivable and the related Allowance have a zero beginning balance. The company uses LIFO. On 1/1 we signed a note on for $1,000,000. We agreed to pay back the note at the end and all interest. The rate of interest is 5%. We will pay back all interest and principal on 1/1/x5 Supplies at the beginning of the year was $0. The amount of supplies purchased was $40,000. End of the year supply count showed that there was a $20,000 balance. Equipment-A was purchased at the beginning of the year for $300,000. $20,000 of salvage/residual value. Declining Balance depreciation is used over a 10 year life. Equipment-B was purchased on 5/1/x1 for $100,000. $20,000 of salvage/residual value. Straight line depreciation is used over a 5 year life. This asset was sold for $90,000 cash on 10/31/x1. Building was purchased at the beginning of the year for $400,000. Salvage/residual value of $20,000. Straight-line is used over a 20 year life. We signed a note requiring interest and principal to both be paid on 1/1X5 We needed funds, so we signed a note on 7/1 for $600,000. We agreed to pay back the note at the end and all interest on 2/28/x2. The rate of interest is 6%. For purposes of the balanced sheet we have authorized 100,000 shares of common stock, but only 50,000 shares of common stock are issued. We have 2 employees. We paid them a total of salary expense $39,000 (gross pay) to date. An end of the year adjustment requires us to accrue a $1,000 more of salary expense this year, which is to be paid next year. FICA is 7.65%. No federal or state income tax is withheld. No FICA tax has been paid to the government. Rent Expense for the year was $24,000. Throughout the year we sold and delivered $500,000 in services. On November 1, we received $144.000 cash for future services. The services will be performed evenly over the next year (12 months). We declared but did not pay dividends of $50,000. The tax rate is 21%. 1. Prepare jourmal entries (including closing) 2. Prepare financial statements

Answer rating: 100% (QA)

1 journal entries Cash ac Dr 4000000 To Common stock ac 50000par value To paid in capital excess stock ac 3950000 Common stock issued Purchase ac Dr 1... View the full answer