XYZ Inc.’s fiscal year end is December 31 and the company uses the periodic inventory method.

2019 Transactions

1. On October 28, 2019, XYZ Inc. was incorporated to begin operating a new retail business.

2. On November 3, 2019, four new owners transferred $40,000 cash to the corporation for 4,000 shares (1,000 shares each owner).

3. A building was purchased for $28,000 on December 14, 2019, for use beginning in 2020. It is expected to have a 20-year life with $5,000 salvage.

4. Equipment costing $6,000 was purchased December 16, 2019, for use beginning in 2020. It is expected to last 5 years with $1,000 salvage value.

5. The firm arranged to borrow $10,000 from the bank by signing a Note paying 7% interest and effective December 31, 2019 due December 31, 2021.

Required for 2019

1. Write journal entries for each transaction.

2. Post each transaction to a general ledger (T-account or spreadsheet format) and prepare the trial balance.

3. Prepare the basic financial statements for the year.

Answer rating: 100% (QA)

2019 1 Date General Journal Debit Credit 2019 Oct 28 No journal entry required 0 0 Nov 3 Cash 40000 Common Shares 40000 Dec 14 Building 28000 Cash 280... View the full answer