On January 1st, 2022, Mr. Pane starts Pane in the Glass Window Company by issuing 1,000 shares of $4 par common stock for $100 per share. The same day, the company purchased a delivery truck in exchange for signing a 5-year, 6% annual interest rate note payable with a face value of $50000. Interest is payable on the last day of every calendar year. The truck is valued at $50000 and has an estimated useful life of 10 years.

On January 2nd the company purchased 510 windows from the manufacturer for $200 each and paid in cash. On January 3rd the window manufacturer contacted Pane in the Glass and offered an additional 60 windows for $180 each.

During 2022, the company sold 320 windows on account for $360 each. The company uses LIFO inventory valuation and warranties its windows for 2 years. It expects that 10% of the windows will have a problem and that on average each window would cost $90 to fix. The company records bad debt expenses equal to 5% of credit sales.

The company collects $92160 cash from credit sales. The company also learns Big Al who purchased 2 of the windows has declared bankruptcy and will not pay for his windows so Mr. Pane decides to write off the accounts receivable related to these two windows.

On November 1st Lovers' Lanes, Bowling Alley requests that 19 of their new windows be repaired. The repairs were covered under warranty and the repairs cost $75 for each window.

On the last day of the year Pane in the Glass pays interest on the note payable, and records depreciation expense using double declining balance depreciation.

Requirements

a. Make journal entries and adjusting entries

b.Post journal entries to T accounts

c. Make adjusted trial balance (test if it balances)

d.Make income statement

e.Statement of retained earnings

f. Make balance sheet

Answer the following questions:

1.Net Income

2. Gross Margin

3. Cash

4. Total assets

5. Cash from operations

Answer rating: 100% (QA)

a Journal Entries January 1st Dr Common Stock 1000 shares x 100 100000 Cr Cash 100000 Dr Note Payable 50000 Cr Delivery Truck 50000 January 2nd Dr Inv... View the full answer