This is the ENTIRE problem. I only need help with numbers 6-8!

Top Quality ApplianceLong Beach has just purchased a franchise from Top Quality Appliance (TQA). TQA is a manufacturer of kitchen appliances. TQA markets its products via retail stores that are operated as franchises. As a TQA franchisee, Top Quality ApplianceLong Beach will receive many benefits, including having the exclusive right to sell TQA brand appliances in Long Beach. TQA appliances have an excellent reputation and the TQA name and logo are readily recognized by consumers. TQA also manages national television advertising campaigns that benefit the franchisees. In exchange for these benefits, Top Quality ApplianceLong Beach will pay an annual franchise fee to TQA based on a percentage of sales. The annual franchise fee is a separate cost and in addition to the purchase of the franchise.

In addition to purchasing the franchise, Top Quality ApplianceLong Beach will also purchase land with an existing building to use for its retail store, store fixtures, and office equipment. The business will purchase appliances from TQA and resell them in its store, primarily to local building contractors for installation in new homes.

Following is the chart of accounts for Top Quality ApplianceLong Beach. As a new business, all beginning balances are $0.

Top Quality ApplianceLong Beach completed the following transactions during 2018, its first year of operations:

Requirements

1. Record the transactions in the general journal. Omit explanations.

2. Post to the general ledger.

3. It is a common business practice to reconcile the bank accounts on a monthly basis. However, in this problem, the reconciliation of the companys checking account will be done at the end of the year, based on an annual summary.

   Reconcile the bank account by comparing the following annual summary statement from Long Beach National Bank to the Cash account in the general ledger. Record journal entries as needed and post to the general ledger. Use transaction z as the posting reference.

4. In preparation for preparing the adjusting entries, complete depreciation schedules for the first five years for the depreciable plant assets, assuming the assets were purchased on January 2, 2018:

   1. Building, straight-line, 30 years, $50,000 residual value.

   2. Store Fixtures, straight-line, 15 years, no residual value.

   3. Office Equipment, double-declining-balance, 5 years, $5,000 residual value.

5. Record adjusting entries for the year ended December 31, 2018:

   1. One year of the prepaid insurance has expired.

   2. Management estimates that 5% of Accounts Receivable will be uncollectible.

   3. An inventory of office supplies indicates $475 of supplies have been used.

   4. Calculate the interest earned on the outstanding Leard Contracting note receivable. Assume the note was received on October 31. Round to the nearest dollar.

   5. Record depreciation expense for the year.

   6. Record amortization expense for the year on the franchise, which has a 10-year life.

   7. Calculate the interest owed on the note payable. Assume the note was issued on January 1.

6. Post adjusting entries and prepare an adjusted trial balance.

7. Prepare a multi-step income statement and statement of retained earnings for the year ended December 31, 2018. Prepare a classified balance sheet as of December 31, 2018. Assume Interest Receivable is a current asset and Interest Payable is a current liability.

8. Evaluate the companys success for the first year of operations by calculating the following ratios. Round to two decimal places. Comment on the results.

   1. Liquidity:

      1. Current ratio

      2. Acid-test ratio

      3. Cash ratio

   2. Efficiency:

      1. Accounts receivable turnover

      2. Days sales in receivables

      3. Asset turnover

      4. Rate of return on total assets

Top Quality Appliance- Long Beach Chart of Accounts Cash Common Stock Retained Earnings Dividends Petty Cash Accounts Receivable Allowance for Bad Debts Sales Revenue Merchandise Inventory Office Supplies Prepaid Insurance Interest Receivable Interest Revenue Cost of Goods Sold Franchise Fee Expense Salaries Expense Utilities Expense Insurance Expense Supplies Expense Bad Debt Expense Bank Expense Notes Receivable Land Building Accumulated Depreciation-Building Store Fixtures Accumulated Depreciation-Store Fixtures Credit Card Expense Office Equipment Accumulated Depreciation-Office Depreciation Expense-Building Depreciation Expense-Store Fixtures Equipment Franchise Depreciation Expense-Office Equipment Accounts Payable Amortization Expense-Franchise Interest Payable Interest Expense Notes Payable Cash Short and Over a. Received $500,000 cash and issued common stock, Opened a new checking account at Long Beach National Bank and deposited the cash received from the b. Paid $50,000 cash for a TOA franchise. | Paid $200,000 cash and issued a $400,000, 10-year, 5% notes payable for land c. with an existing building. The assets had the folowing market values: Land, $100,000; Building, $500,000. d. Paid $75,000 for store foxtures. e. Paid $45,000 for office equipment f. Paid $800 for office supplies g. Paid $3,600 for a two-year insurance policy. h. Purchased appliances from TOA (merchandise inventory) on account for $425,000 Established a petty cash fund for $150. Sold appliances on account to B&B Contractors for $215,000, tems nv30 (oost, $86,000) k. Sold appliances to Davis Contracting for $150,000 (cost, $65,000), receiving a6- month, 8% note. L | Rocorded credit card sales of $80,000!cost,35,000. nat af processor fee of 2%. m Received payment in full from B&B Contractors. n. Purchased appliances from TOA on account for $850,000. o. Made payment on account to TQA, $300,000. p. | Sold appliances for cash to LB Home Buiders for $350,000!cost, $175,000. q. Received payment in full on the maturity date from Davis Contracting for the note. Sold appliances to Leard Contracting for $265,000 (cost, $130,00 receiving a9 month, 8% note. s. Made payment on account to TQA, $500,000. t Sold appliances on account to various businesses for $985,000, tems n/30 (cost $395,000) u. Collected $715,000 cash on account. Paid cash for expenses: Salaries, $180,000; Uilities, $12,860 w. Replenished the petty cash fund when the fund had $62 in cash and pety cash tickets for $85 for office supplies. x. Paid dividends, $5,000 | Paid the franchise fee to TA of 5% of total sales of $2,045,000. y. Beginning Balance, January 1, 2018 0 Deposits and other credits: 500,000 78,400 215,000 350,000 715,000 Interest Revenue 1,565 1,859,965 Checks and other debits: 125 EFT to Bank CheckS(1) Checks: 50,000 200,000 45,000 75,000 150 3,600 600 300,000 500,000 192,650 (1369,465) Bank service charge 2,340 $490,500 Ending balance, December 31, 2018 Bank Checks is a company that prints business checks (considered a bank expense) for Top Quality Appliance-Long Beach Top Quality Appliance- Long Beach Chart of Accounts Cash Common Stock Retained Earnings Dividends Petty Cash Accounts Receivable Allowance for Bad Debts Sales Revenue Merchandise Inventory Office Supplies Prepaid Insurance Interest Receivable Interest Revenue Cost of Goods Sold Franchise Fee Expense Salaries Expense Utilities Expense Insurance Expense Supplies Expense Bad Debt Expense Bank Expense Notes Receivable Land Building Accumulated Depreciation-Building Store Fixtures Accumulated Depreciation-Store Fixtures Credit Card Expense Office Equipment Accumulated Depreciation-Office Depreciation Expense-Building Depreciation Expense-Store Fixtures Equipment Franchise Depreciation Expense-Office Equipment Accounts Payable Amortization Expense-Franchise Interest Payable Interest Expense Notes Payable Cash Short and Over a. Received $500,000 cash and issued common stock, Opened a new checking account at Long Beach National Bank and deposited the cash received from the b. Paid $50,000 cash for a TOA franchise. | Paid $200,000 cash and issued a $400,000, 10-year, 5% notes payable for land c. with an existing building. The assets had the folowing market values: Land, $100,000; Building, $500,000. d. Paid $75,000 for store foxtures. e. Paid $45,000 for office equipment f. Paid $800 for office supplies g. Paid $3,600 for a two-year insurance policy. h. Purchased appliances from TOA (merchandise inventory) on account for $425,000 Established a petty cash fund for $150. Sold appliances on account to B&B Contractors for $215,000, tems nv30 (oost, $86,000) k. Sold appliances to Davis Contracting for $150,000 (cost, $65,000), receiving a6- month, 8% note. L | Rocorded credit card sales of $80,000!cost,35,000. nat af processor fee of 2%. m Received payment in full from B&B Contractors. n. Purchased appliances from TOA on account for $850,000. o. Made payment on account to TQA, $300,000. p. | Sold appliances for cash to LB Home Buiders for $350,000!cost, $175,000. q. Received payment in full on the maturity date from Davis Contracting for the note. Sold appliances to Leard Contracting for $265,000 (cost, $130,00 receiving a9 month, 8% note. s. Made payment on account to TQA, $500,000. t Sold appliances on account to various businesses for $985,000, tems n/30 (cost $395,000) u. Collected $715,000 cash on account. Paid cash for expenses: Salaries, $180,000; Uilities, $12,860 w. Replenished the petty cash fund when the fund had $62 in cash and pety cash tickets for $85 for office supplies. x. Paid dividends, $5,000 | Paid the franchise fee to TA of 5% of total sales of $2,045,000. y. Beginning Balance, January 1, 2018 0 Deposits and other credits: 500,000 78,400 215,000 350,000 715,000 Interest Revenue 1,565 1,859,965 Checks and other debits: 125 EFT to Bank CheckS(1) Checks: 50,000 200,000 45,000 75,000 150 3,600 600 300,000 500,000 192,650 (1369,465) Bank service charge 2,340 $490,500 Ending balance, December 31, 2018 Bank Checks is a company that prints business checks (considered a bank expense) for Top Quality Appliance-Long Beach