On 1 January 2022, Mr. Peter Mauritz decided to start a new company, flowing the economic events that occurred.

1 January: Issued 10000 shares of capital stock in exchange for his investment of €80,000 cash.

1 January: contracted an annual insurance for 5000€, and paid it cash.

2 January: Purchased IT equipment for €60,000, paying cash.

3 January: Acquired merchandise inventory for 15000, paying on account at 60 days.

5 January: The firm pays the supplier of (3) 8000 of the amount due.

6 January: Billed to customers €45000 for products that had a cost of 10000. 25000 are received today in Cash and the outstanding amount will be collected in 30 days.

7 January: paid a commission to a third party, who gave him the contact of the customer of 2000€

31 January: Received an invoice for energy consumption €500, to be paid February 10^th.

The company will depreciate the Equipment in a period of 4 years straight line.

Required

A)Prepare the General journals including adjusting entries 

B) Prepare the T accounts related to the general journals.

C) Trial Balance. ( Using the T accounts from part B) 

D) Prepare an Income Statement. 

E) Prepare the closing entries

E) Prepare a balance Sheet

F) What is the book value of the company?

G) Did the company earned money during the year? 

H) What is the liquidity position of the company? show two ratios. 

Answer rating: 100% (QA)

A General Journals including Adjusting Entries Issuance of Capital Stock Cash 80000 Common Stock 80000 Payment of Annual Insurance Prepaid Insurance 5000 Cash 5000 Purchase of IT Equipment IT Equipmen... View the full answer