Newman, Inc. was formed on January 1, 2016. The following transactions took
Question # 00147693
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Updated on: 12/07/2015 10:18 PM Due on: 01/06/2016
- Newman, Inc. was formed on January 1, 2016. The following transactions took place during the first month.
- Transactions on January 1, 2016:
- John Newman invested $60,000 for 1,000 shares of the company’s no-par common stock.
- Signed a $30,000 note payable due in one year with an interest rate of 12%.
- Purchased equipment costing $36,000. Equipment has a 10 year life and no salvage value. The company will use the straight line method.
- Paid $10,800 cash for a one-year insurance policy.
- Transactions during the remainder of the month:
- Purchased office supplies for $9,000 on account.
- Total revenues earned were $30,000. The amount of $6,000 was received in cash and remaining $24,000 was on account.
- Paid $2,400 of the amount owed for the supplies purchased on account in transaction 5.
- Received $18,000 from customers in partial payment of the accounts receivable created in transaction 6.
- Declared and paid a dividend of $3,000.
- Prepare journal entries to record each of the events listed above.
- Post the journal entries to T accounts
- Prepare a trial balance. Additional information for adjusting entries:
- Supplies on hand at end of the month were $1,800.
- Prepare required adjusting journal entries.
- Post the adjusting journal entries to T accounts
- Prepare an adjusted trial balance.
- Prepare Income Statement
- Prepare Statement of Retained Earnings
- Prepare a Classified Balance Sheet
- Prepare and post Closing entries
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Rating:
/5
Solution: Newman, Inc. was formed on January 1, 2016. The following transactions took