The following transactions apply to Walnut Enterprises for Year 1, its first year of operations: 1....
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The following transactions apply to Walnut Enterprises for Year 1, its first year of operations: 1. Received $42,500 cash from the issue of a short-term note with a 6 percent interest rate and a one-year maturity. The note was made on April 1, Year 1. 2. Received $119,000 cash plus applicable sales tax from performing services. The services are subject to a sales tax rate of 6 percent. 3. Paid $72,500 cash for other operating expenses during the year. 4. Paid the sales tax due on $99,000 of the service revenue for the year. Sales tax on the balance of the revenue is not due until Year 2. 5. Recognized the accrued interest at December 31, Year 1. The following transactions apply to Walnut Enterprises for Year 2: 1. Paid the balance of the sales tax due for Year 1. 2. Received $144,000 cash plus applicable sales tax from performing services. The services are subject to a sales tax rate of 6 percent. 3. Repaid the principal of the note and applicable interest on April 1, Year 2. 4. Paid $85,500 of other operating expenses during the year. 5. Paid the sales tax due on $119,000 of the service revenue. The sales tax on the balance of the revenue is not due until Year 3. (For all requirements, round your intermediate and final answers to the nearest whole dollar amount.) b. Post the transactions to T-accounts. Cash Beginning Balance Sales Tax Payable Beginning Balance Balance Before Closing Balance Before Closing Interest Payable Notes Payable Beginning Balance Beginning Balance Balance Before Closing Balance Before Closing Service Revenue Operating Expenses Beginning Balance Beginning Balance Balance Before Closing Balance Before Closing Interest Expense Beginning Balance Balance Before Closing The following transactions apply to Walnut Enterprises for Year 1, its first year of operations: 1. Received $42,500 cash from the issue of a short-term note with a 6 percent interest rate and a one-year maturity. The note was made on April 1, Year 1. 2. Received $119,000 cash plus applicable sales tax from performing services. The services are subject to a sales tax rate of 6 percent. 3. Paid $72,500 cash for other operating expenses during the year. 4. Paid the sales tax due on $99,000 of the service revenue for the year. Sales tax on the balance of the revenue is not due until Year 2. 5. Recognized the accrued interest at December 31, Year 1. The following transactions apply to Walnut Enterprises for Year 2: 1. Paid the balance of the sales tax due for Year 1. 2. Received $144,000 cash plus applicable sales tax from performing services. The services are subject to a sales tax rate of 6 percent. 3. Repaid the principal of the note and applicable interest on April 1, Year 2. 4. Paid $85,500 of other operating expenses during the year. 5. Paid the sales tax due on $119,000 of the service revenue. The sales tax on the balance of the revenue is not due until Year 3. (For all requirements, round your intermediate and final answers to the nearest whole dollar amount.) b. Post the transactions to T-accounts. Cash Beginning Balance Sales Tax Payable Beginning Balance Balance Before Closing Balance Before Closing Interest Payable Notes Payable Beginning Balance Beginning Balance Balance Before Closing Balance Before Closing Service Revenue Operating Expenses Beginning Balance Beginning Balance Balance Before Closing Balance Before Closing Interest Expense Beginning Balance Balance Before Closing
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Year 1 Transactions Received 42500 cash from the issuance of a shortterm note on April 1 Year 1 Debi... View the full answer
Related Book For
Introductory Financial Accounting for Business
ISBN: 978-1260299441
1st edition
Authors: Thomas Edmonds, Christopher Edmonds
Posted Date:
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