Hello, below I am going to posting a question our professor has asked us to complete, I have the answers completed. My request is simply informing me if I have done the journal entries correctly. If not correct you do not have to tell me the correct answer, but informing me which letter I messed up on in the journal entry will be extremely helpful. I can then go back over the answers and rework my solution. Thank you.

 

Archie Smith started and operated a small boat repair service during 2015. He is interested in obtaining a $150,000 loan from your bank to build a dry dock to store boats for customers in the winter months. At the end of the year, he prepared the following statements based in information stored in a large filing cabinet.

 

Archie's Boats

Income Statement 2015

 

 

Service Fees Collected in 2015

 

$55,000

Cash Dividend Received

 

10,000

Total

 

65,000

Expenses for Operations Paid in 2015

$22,000

 

Cash Stolen

500

 

New Tools Purchased in 2015

1,000

 

Supplies purchased

3,200

 

Total

 

26,700

Profit

 

$38,300

 

 

 

Assets Owned at the End of 2015

 

 

Cash in Checking Account

 

$29,300

Building (at current market value)

 

32,000

Tools and Equipment

 

18,000

Land (at current market value)

 

30,000

Stock in X Industrial

 

130,000

Total

 

$239,300

 

The following is a summary of completed transactions:

 

a.      Received the following contributions (at fair value) to the business from the owner when the business was started in exchange for 1,000 shares of $1 par value common stock in the new company:

 

 

Building

$21,000

   Land $20,000

 

 

Tools & Equipment

17,000

   Cash

1,000

 

 

b.      Earned service fees during 2015 of $87,000; of cash collected, $5,000 was for deposits from customers on work to be done by Archie in the next year

c.     Received the cash dividends on shares of X Industrial stock purchased by Archie six years earlier (the stock was not owned by the company).

d.     Incurred expenses during 2015 of $61,000

e.     The amount of supplies on hand (unused) at the end of 2015 is $700

Answer to question 2 worked.

1.     Reconstruct journal entries for a - e above under accrual accounting principles.

Below is the journal entries I worked in Microsoft Word.

Journal Entries