Question

In: Accounting

Jan. 1: Xenon issued $40,000 of common stock. Jan. 1: Xenon paid $18,000 cash to purchase...

Jan. 1: Xenon issued $40,000 of common stock.
Jan. 1: Xenon paid $18,000 cash to purchase an equipment. The equipment has an estimated useful life of 5 years and an estimated salvage value of $3,000.
Jan. 1: Xenon paid $7,000 cash for two years of insurance coverage starting on Jan. 1, 2020.
March 1:Xenon rented a building and paid $2,400 for one year’s rent (starting 3/1).
April 1: Xenon purchased $5,700 of inventory on account.
June 1: Xenon sold $23,000 of software on account. The cost is $3,500.
Sept. 1: Xenon collected $7,000 cash from its customers for the previous sales on account.
Oct 31: Xenon paid $5,000 cash for employee wages earned during the first ten months (Jan 1 to October 31, $500 per month).
Nov 1: Xenon paid $3,300 cash to suppliers for inventory purchases made on account.
Dec 1: Xenon started an on-line service where customers pay an annual subscription fee when they sign up for a 12-month service plan. On Dec. 1, Xenon received $3,600 of cash from customers for one year of subscription fees (for online services from Dec 1, 2020 to Nov 30, 2021).

Additional Info:

-Xenon uses Straight Line Depreciation

-Two months of employee wages was accrued on Dec. 31, 2020. Xenon plans to pay employees Jan. 1 2021

Questions

Fill out the summary of T-Accounts for

1. Revenue and Expenses (Temporary Income Statement Accounts)

-Includes: Sales and Service Revenue, Costs of Goods sold, Wages Expense, Insurance Expense, Rent Expense, Depreciation Expense.

2. Assets (Permanent Balance Sheet Accounts)

-Includes: Cash, Inventory, accounts receivable, prepaid insurance, equipment, accumulated depreciation, prepaid rent.

3. Liabilities and Equities (Permanent Balance Sheet Accounts)

-Includes: Accounts payable, unearned revenue, wages payable, common stock, retained earnings

4. What are the total Assets?

5. What are the total Liabilities & Shareholder's Equity?

Note: Total assets and Liabilities + Shareholders equity should balance.

Expert Solution

ekkarill92 answered 2 months ago

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