Based on the journal entries below please prepare a balance sheet, income statement and statement of cash
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Based on the journal entries below please prepare a balance sheet, income statement and statement of cash flow for the year ended December 31, 2017. I'd also like to see the journal entires and/or Transaction table.
- On January 1, John, Paul and Mark form a partnership (“JPM”) and each contributes $10M so that each will be a one third owner JPM.
- On January 5, JPM purchases land for $20M.
- On February 1, JPM hires a contractor to build a commercial office building for $40M.
- On February 15, JPM receives a construction loan from Fast Bank for $30M. The term is for 12 months at 5%.
- On March 1, JPM draws down $10M of the construction loan and pays the contractor.
- On April 1, JPM draws down $10M of the construction loan and pays the contractor.
- On April 1, JPM pays the bank for 1 month of interest.
- On May 1, JPM draws down the $10M of the construction loan and pays the contractor
- On May 1 JPM pays the bank for interest for the draws on March 1 and April 1.
- On June 1, JPM uses $10M of cash to pay the balance to the contractor and the contractor delivers the building. Note, that interest costs on the construction loan are capitalized to the building.
- On June 1, JPM receives $30 of permanent financing and uses the proceeds to pay the construction lender along with accrued interest. The term of the permanent loan is 5 years at 4% interest. The loan is self-amortizing with payments of interest and interest due on December 31.
- On June 1, JPM rents the entire building to one tenant for a 5 year period. The terms are no rent payable for year 1 and the rents for years 2, 3, 4 and 5 are $10,000, $15,000, $20,000 and $25,000 respectively.
- Property taxes are taxes are $1.2 per year prorated.
- Management fees are 1.5% of the value of the property (cost for constructed property).
- On December 31, JPM records current year depreciation.
- On December 31, JPM makes a principal and interest on the permanent loan.
Related Book For
Accounting Principles
ISBN: 978-1118342190
11th Edition
Authors: Jerry Weygandt, Paul Kimmel, Donald Kieso
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