Tony formed a business called Tone's Big Big Screen TV Emporium Inc. during the month of September. Doors will open for business on October 1. The following events occurred during September:

1. Tony invested the following in the business inn exchange for equity:

-Tony personally borrowed $250,000 from the bank at 6%. Tony then invested the fund in the business.

-Used computer equipment worth $18k with original cost of $30k. Estimates 3 years of service remain.

-Office equip worth $12k with original cost of $24k. Estimates 8 years of service remain.

2. Purchased a small office building and land for $400k by paying $80k down payment and borrowing the balance at 6%. The land was valued at $160k and the office building at $240k. The building is estimated to be used for 20 years.

3. Hired Brendan Construction Co. to make $120k in improvements and upgrades to the newly acquired building:

Cost	Capitalized/Category	Useful For
$28,000	Walls, new wiring, outlets-building	Same as building
$26,000	Warehouse inventory racks-equipment	8 years
$30,000	Integrated Bluetooth and Wireless systems-computer/IT equipment	3 years
$36,000	Environmental controls-computer/IT equipment	3 years

4. Ordered 100 big screen TVs from Sony at a cost of $800 each. Payment is due 30 days after receipt.

5. Hired 2 salespeople with salaries of $5000 a month plus 5% sales commissions. Salespersons begin work on October 1.

6. Brendan construction finished work o 9/20 and billed Tone's-due in 30 days.

7. Tone received 100 big screen TVs ordered from Sony on 9/22.

8. Hired Jordy's Digital Ads Consulting to develop a digital advertising campaign for $10,000. Jordy will develop and stream multiple digital ads on various social media platforms. The ads will run on October 1.

9. Purchased new warehouse equipment for $80,000 in cash. The equipment will be useful for 8 years.

The following events occurred during the month of October:

1. Borrowed $200,000 from the bank at 12%

2. Paid Brendan Construction for work on the building

3. Sold 50 TVs at $950 each for a $47.5k total. The cash was collected immediately.

4. Paid Sony for the TVs ordered and received inn September. Ordered 200 more TVs at a cost of $800.

5. Sold 40 TVs at $1150 each- $46k total. The customer will pay for the TVs inn November.

6. Paid salesman his salary of $2500 on 10/15. Balance of salary and commissions will be paid on 11/1.

7. Customer signed sales contract for 10 TVs at $1,200/TV. Made $400 advance payment. TVs to be delivered inn Nov.

8. Received the 200 TVs ordered from Sony earlier this month.

9. Received the following bills for October services to be paid in November

$1800 for October Utilities

$2000 for wireless services

10. Paid Tone $2,000 in dividends in his capacity as a stockholder/owner.

REQUIRED: 

(1) Record transactions 

(2) Prepare any necessary adjustments

 (3) Prepare financial statements

NOTE: Assume all transactions are on account unless they indicate otherwise.

Part A- Adjustments

a. Worker salary- second half

b. Prepaid rent

c. Depreciation

Part B- Adjustments

a. Worker Salary- second half; Commissions

b. Interest- assume one month of outstanding rates indicated.

c. Advertising

d. Depreciation:

-Building- 20 years

-Office Equipment- 8 years

-Computer Equipment- 3 years

-Warehouse Equipment- 8 years.

Answer rating: 100% (QA)

Part A Adjustments a Worker salary second half There are no specific details provided regarding worker salary for the second half Assuming the total monthly salary for the two salespeople is 5000 each ... View the full answer