Reference no: EM132554890

Question 1: prepare: Trial balance

1. Issued stock to investors for $135,000 cash

2. Purchased office furniture for $30,800, agree to pay the entire amount in next 6 installments,Starting from Feb 1..

3. Purchased computers for the office for $2,200 cash.

4. Acquired equipment costing $52,000, paid cash.

5. Paid for rent for the next 3 months, $9,900.

6. Purchased office supplies for $399 cash.

7. Purchased inventory , $55,000 on account.

8. Paid $11,000 to the supplier for the inventory.

9. Hired an assistant who will begin work from third week of January. Company will pay $ 5,200 per week.

10. Borrowed $10,000 from the bank to be repaid in 6 month at 10% interest annually. .

11. sold all inventory on account for $77,400.

12. Declared dividend $ 12,000

13. Received a $960 utility bill for this month.

14. Paid $700 for janitorial service.

15. Collected $67,400 owed from customers.and also received $ 50,000 as advance payment.

Question 2: Provide adjusting entries at the end of month for the following events. Post them in to ledgers and Prepare adjusted trial balance.

Adjustments:

1. One month rent has expired.

2. Wages are due for assistant's work.

3. One month interest is due on Note.

4. Provide depreciation on furniture @ 10% and on equipment @ 8% annually.

5. Estimated tax liability is $ 5,200

6. Office supplies on hand at the end of month is $90

7. Company has provided service of $ 35,000 against advance receipt.

Question 3: After completing Question 2, prepare Income statement and balance sheet from the adjusted trial balance prepared in assignment 3.