XYZ Corporation January, 2015 Transactions 

1. January 1 - Cash was contributed by the sole shareholder in the amount of $50,000, in exchange for 1,000 shares of common stock.

2. January 5 – A $100,000, 5 year, 12% annual operating loan was obtained from the bank. Principal is due at the end of the term of the loan. Principal is paid on December 31 annually.

3. January 7 - Equipment to operate the business was purchased, on credit, for $15,000.

4. January 9 – Inventory was purchased for $20,000, payable in 10 days.

5. January 9 – A building lease was signed for a 1 year time period. A $5,000 security deposit was paid, along with rent of $5,000 for January and $5,000 for February.

6. January 14 – Half of the inventory purchased on 1/9 was sold for $15,000 on credit.

7. January 15 – Wages were paid of $2,000. Ignore payroll taxes

8. January 18 – Additional inventory was purchased for $40,000 on credit.

9. January 19 – The inventory purchased on 1/9 was paid.

10. January 21 – Utilities of $1,000 were paid in cash.

11. January 22 - The other half of the inventory purchased on 1/9 was sold for $20,000 on credit.

12. January 23 – A payment was received for the sale made on 1/14.

13. January 25 – The equipment that was purchased on 1/7 was paid for.

14. January 31 – One-months worth of depreciation was recorded on the equipment that was purchased. The equipment has a five-year life.

15. Ones months’ worth of interest is accrued on the loan from the bank.

16. Estimated income taxes of $650 were paid for the month.

Required: please answer the below:

3. Prepare a trial balance.

4. Prepare an income statement

5. Prepare closing entry.

6. Post-closing entry to the general ledger accounts.

7. Prepare a balance sheet.

8. Prepare the statement of changes in shareholders' equity.

9. Prepare a statement of cash flow.

Answer rating: 100% (QA)

To answer your questions we will go through each of the required financial statements and entries step by step Please note that Ill provide a simplified version and some details like taxes and interes... View the full answer