View Tell me Insert Draw Page Layout Formulas Data Review Arial 9 AAEEE BI V Brava x fx General Paste 19 % , N26 Mason Automotive is an automotive parts company that sells car parts and provides car service to customers. This is Mason's first year of operations and they have hired you as their CPA to prepare the income statement and balance sheet for their company. As such, January 1st. was the first day that Mason was in business. For the month of January, record all the necessary journal entries for transactions that occurred d the month. In addition, please prepare all necessary adjusting journal entries as of the end of the month From the information below, please fill out the "Journal entries tab" for all the necessary journal entries. Furthermore, please complete the "T Accounts" tab for the individual accounts so that the trial balance tab can be updated (automatically). I prepared the first journal entry for you in journal entries tab and T-Accounts tab. Ensure you label the entries similar to how I have shown in Entry #1 Once all entries are recored and the T-Accounts tab is updated, please prepare the financial statements (income statement and balance sheet) for the month of January 6 7 Journal Entry #1 Mason Automotive sells 20,000,000 shares at $1 par for $20 on January 1st, 2019 9 Journal Entry #2 10 Ed Mason, the CEO, hires 4.500 employees, whom will receive a combined salary of $5 Million on a monthly basis. The employees started on Janua 11 1st and will be paid for the month of January on February 4th. Employee's withholdings are as follows: 10% for federal income taxes 5.5% for state 12 Income taxes and 9% for FICA. Record the necessary entry as of January 1st, 2019. 14 Journal Entry #3 15 On January 20th, Mason Automotive decides to purchase 100,000 shares of Treasury stock at $23 per share. 17 Journal Entry 14 18 Mason Automotive issues a bond payable on January 1st, 2019 with a face value of $100 Milion at 97. The bond will have a useful life of 20 years 19 with an interest payment of 6% (Annual Percentage Rate) due at the end of the month. Record the necessary journal entry as of January 1st, 2019 (Note: When considering the amortization of the discount or premium, assume the straight line method is used). 21 Journal Entry #5 22 On January 1st, Mason Automotive receives $50 Million advance payment from a customer, Highland Inc., to manufacture 5.000 cars 25 Journal Entry #6 25 Mason Automotive purchased $253 Million dollars worth of inventory on January 2nd, 2019. $87 Milion was paid with cash with the remaining balance 26 on account. Mason notes that it will use a perpetuinventory system to track Inventory. 28 Journal Entry #7 29 On January 2nd, Mason Automotive shipped an order to Panther Paws Corporation. The shipping terms were FOB shipping point. The sales value of 30 the order was $207 Million and the inventory cost was $157 Milion. Assume that this sale was made on account. 32 Journal Entry 08 33 Mason Automotive pre-pays for Rent Expense for the next year of $15.6 Milion on January 3rd, 2010 35 Journal Entry #9 36 Mason Automotive purchased $5 Million dollars worth of supplies on account on January 2nd, 2019 Information Journal Entries T-Accounts Trial Balance Income Statement B Ready me VIEW Sert Format Tools Data Window Help AutoSave BESU Zaeske Project (Studen Insert Draw Page Layout Formulas Data Review View Tell me Arial 9A A 332 General 8 BI UVB au Av. x V fx Paste 26 poreme Tongwry 2, WAT RUNOTTOLIVE OWUOTO Pane w op p ing www FOB the order was $207 Milion and the inventory cost was $157 Milion. Assume that this sale was made on account Journal Entry Mason Automotive pre-pays for Rent Expense for the next year of $15.6 Milion on January 3rd, 2019 Journal Entry Mason Automotive purchased $5 Milion dollars worth of supplies on account on January 2nd, 2019 3 Journal Entry 10 Mason Automouve buys a patent from Apple for $21 Milion on January 3rd, 2019. The patent has a legal e of 25 years and useful life of 20 years. Record the necessary entry as of January 3rd, 2019. Assume the patent was purchased using cash Journal Entry 011 3 Mason Automotive purchases fixed assets of $170 Milion that will have a useful life of 20 years and a salvage value of $20 million on January 4th 4 2019. $30 million was paid with cash with the remaining balance on account. These assets are depreciated using the straight-ne method 6 Month End Austing Entries 7. There are 10 applicable adjusting entries that need to be made as of the end of the month based on the information provided above. When recording these adjusting entries consider the following facts: 1.) Interest expense will be recorded as a operating expense em on the income statement. 2.) Record the necessary adjusting entries related to pre-paid expense as separate omal entries 3) When reviewing the supply room as of the end of the month Mason Automation noted that it had $3.5 M worth of supplies t on hand 4.) As of the end of the month, 2,500 cars were completed for Mohael Scott Paper Company and the performance obligation had been met on those 2.500 cars. As such, revenue was determined to be eamed on those 2.500 vehicles and it was noted that each vehicle costed $5,300 to manufacture. (These journal entries are considered 2 of the 10 total adjusting entries) 5.) Mason Automation uses the balance sheet approach in estimating the allowance for doubtful accounts of the end of the period Based on industry average, Mason noted that it will use 5.5% of receivables as an estimation Balance Sheet. Extra information 1.) When preparing the balance sheet close out net income to retained earnings 69 Information Journal Entries T-Accounts Trial Balance Income Statement B Ready Arial Custom 11 A A BI V Bravau v fx LIM M KE % x JE. Debit Account Credit Account Credit Amount 15 Debit Amount (5) 400 000 000 20,000,000 380,000,000 additional paid in capital salary expense 5.000.000 salary and PICA payable taxes payable 4 225.000 775,000 I COTTON OR 100.000 2 200,000 2.300.000 97,000,000 3,000,000 SO 000.000 Adjusting Entries Information Journal Entries T-Accounts Trial Balance Income Statement B Ready 19 :XV & L M N O i n #gmSamwwmwgun Information Journal Entries T-Accounts Trial Balance Income Statement Ready Draw Page Layout Formulas Data Review View Tell me! Arial 9 AA General Conditional Formatting Formatas Table Cell Styles x fx Information Journal Entries T. Accounts Trial Balance Income Statement Balance Sheet + Ready Zaeske Project (Student Review View Tell me Data AutoSave E U Home Insert Draw Page Layout Formulas Arial 9 AA BI - Ba.A- 0x v fx EE General Not you have update Ple thifor purposes of creating the financi e rs perty Plart and Equipment od Depreciation der Income Tax Payne sa Income Tax Payable Paya Information Journal Entries T-Accounts Trio Balance Income Statement Ready Edit View Insert Format Tools Data Window Help O AutoSave OFF HESU Zaeske Project (Student Version) me Insert Draw Page Layout Formulas Data Review View Tell me P X Arial v9AA = = 2 Custom BI U vor avau O K % 8-98 Paste 0 x fx Bc NAMENS IN WHITE ARE ITENS THAT COULD BE RILLED INBY YOU JUST CAUSE IT IS W E DOES NOT MEAN THERE HAS TO BE SOMETHING THAT Naan Automation Balance Shelton End 2010131 SET Current Assets ERROR And EL ALL E ntien ELMONDO MERA LALU Dancini Toaler Balance Sheet Classication Property and ELADO Dan T r Balance Sheet Classification GRIL Balance Sheet Classico Lange Assets Tol er Balance Sheet Classification Scars ALLOW