Baker City Well Drilling, Inc. of Baker City, Oregon started in business June 1, 2018. The...

 

  

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Baker City Well Drilling, Inc. of Baker City, Oregon started in business June 1, 2018. The company sold common stock, purchased a shop, high tech drilling equipment, various supplies, and immediately started advertising their well drilling services. The business of drilling wells took off fast due in part due to the company's adverting and also because there was very little competition in Eastern Oregon. After "two" months had passed by, the company CFO hired your team to provide accounting services for their first "two" months of business operations. The accounting services you're to provlde are as follows: 1. Prepare journal entries for all transactions (omit explanations). 2. Post all entries to ledger accounts using "T" accounts. 3. Prepare a Trial Balance as of July 31, 2018. 4. Make adjusting entries (omit explanations). 5. Post adjusting entries to the ledger accounts you have adjusted. 6. Prepare an "Adjusted Trial Balance" as of July 31, 2018. 7. Prepare the following reports with proper headings and dates: a. Income Statement for the 2 months of June through July. b. Retained Earnings Statement for the same 2 month period. c. "Classified" Balance Sheet as of July 31, 2018. 8. Prepare closing journal entries (omit explanations). 9. Post the closing entries to ledger accounts. 9. Prepare a Trial Balance after closing as of July 31, 2018. Details of events and transactions start on the next page. Baker City Well Drilling, Inc. 6/1 Issued Common Stock for cash In the amount of $100,000. 6/2 Purchased a small bullding to be used as a shop. The price was $80,000: $16,000 paid with cash, the remaining balance was a 5 year Note Payable in the amount of $64,000. The purchase price of $80,000 was allocated to land in the amount of $20,000 and the remaining amount of $60,000 to the shop building. Loan payments are made quarterly, the first payment is due on 9/2. 6/3 A Super Heavy Duty Ford Truck was purchased with special "No Money Down" and "No Interest" through Ford Credit Corporation. Purchase price was $45,000 and the first payment is due on 8/3. 6/4 Well Drilling Equipment was purchased for $20,000 cash. 6/4 Prepaid a 12 month insurance policy. The policy was effective as of June 1" and cost $2,400. 6/5 Well Drilling Supplies were purchased on a 30 day credit account in the amount of $3,750. 6/6 Advertised in the weekly Baker City Farm News. Total cost was $1,500 with payment due by July 10th. 6/7 Hired an employee at $3,000 per month. 6/9 A drilling bid of $9,500 was accepted by their first customer for a job to start on 6/12, the contract was signed on 6/9. 6/19 Bid a second job for $14,800 and received a $4,800 cash payment in advance (job to start on 6/25) contract was signed 6/19. Baker City Well Drilling, Inc. of Baker City, Oregon started in business June 1, 2018. The company sold common stock, purchased a shop, high tech drilling equipment, various supplies, and immediately started advertising their well drilling services. The business of drilling wells took off fast due in part due to the company's adverting and also because there was very little competition in Eastern Oregon. After "two" months had passed by, the company CFO hired your team to provide accounting services for their first "two" months of business operations. The accounting services you're to provlde are as follows: 1. Prepare journal entries for all transactions (omit explanations). 2. Post all entries to ledger accounts using "T" accounts. 3. Prepare a Trial Balance as of July 31, 2018. 4. Make adjusting entries (omit explanations). 5. Post adjusting entries to the ledger accounts you have adjusted. 6. Prepare an "Adjusted Trial Balance" as of July 31, 2018. 7. Prepare the following reports with proper headings and dates: a. Income Statement for the 2 months of June through July. b. Retained Earnings Statement for the same 2 month period. c. "Classified" Balance Sheet as of July 31, 2018. 8. Prepare closing journal entries (omit explanations). 9. Post the closing entries to ledger accounts. 9. Prepare a Trial Balance after closing as of July 31, 2018. Details of events and transactions start on the next page. Baker City Well Drilling, Inc. 6/1 Issued Common Stock for cash In the amount of $100,000. 6/2 Purchased a small bullding to be used as a shop. The price was $80,000: $16,000 paid with cash, the remaining balance was a 5 year Note Payable in the amount of $64,000. The purchase price of $80,000 was allocated to land in the amount of $20,000 and the remaining amount of $60,000 to the shop building. Loan payments are made quarterly, the first payment is due on 9/2. 6/3 A Super Heavy Duty Ford Truck was purchased with special "No Money Down" and "No Interest" through Ford Credit Corporation. Purchase price was $45,000 and the first payment is due on 8/3. 6/4 Well Drilling Equipment was purchased for $20,000 cash. 6/4 Prepaid a 12 month insurance policy. The policy was effective as of June 1" and cost $2,400. 6/5 Well Drilling Supplies were purchased on a 30 day credit account in the amount of $3,750. 6/6 Advertised in the weekly Baker City Farm News. Total cost was $1,500 with payment due by July 10th. 6/7 Hired an employee at $3,000 per month. 6/9 A drilling bid of $9,500 was accepted by their first customer for a job to start on 6/12, the contract was signed on 6/9. 6/19 Bid a second job for $14,800 and received a $4,800 cash payment in advance (job to start on 6/25) contract was signed 6/19.

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