Jose's Computer Shop

Jose has decided to start his own computer business. He will sell, service and consult in the computer field.

He starts his business on January 1, 2010 and the transactions that have occurred for the year are as follows:

1. Jose invests $200,000 from his personal saving account and opens a business checking account.

He received 10,000 shares of common stock.

2. He purchases $80,000 of initial inventory.

3. He purchases $25,000 worth of equipment with an estimated useful life of 5 years, no salvage value.

4. He rents some office space for $12,000 during the year.

5. He hires a receptionist/sales clerk for $35,000 per year.

6. During the year, utilities totaling $10,000 were purchased.

7. Jose sold 60% of his initial inventory for $95,000.

8. He obtains an bank loan for $150,000 during the year.

9. He purchases more inventory on credit for $85,000.

10. He sells additional inventory for $110,000, cost of $50,000.

11. Jose did some consulting at the end of the year and billed the clients a total of $60,000.

12.

Record first year depreciation. Based on a straight-line method the amount would be $5,000.

Cash

Accounts Receivables

Inventory

Equipment

Accumulated Depreciation

Accounts Payable

Bank Loan

Common Stock

Sales

Consulting Income

Cost of Goods Sold

Wages

Depreciation Expense

Rent

Utilities