Question

The following are transactions for the account period of 5/1/2020 through 5/31/2020 for the Sandy’s East Coast Kites and Novelties, a sole proprietorship owned by Windy Uberflier. Create a trial balance, Income Statement, Statement of Owners Equity, and Balance Sheet at the end of day on 5/31/20. Don’t forget to adjust accounts.

1. 5/1/20 - Deposited $53,000 into a business bank account for the company.
2. 5/1/20 - Signed a lease for retail and manufacturing space and paid cash for the first six months rent of $4,200. (Hint- When to you count rent as revenue?)
3. 5/1/20 - Bought office supplies to be used immediately from Dewey’s Office and Hunting Supply on account for $600.
4. 5/1/20 - Bought a one-year liability insurance policy from Louie’s Ducky Insurance Company and Nail Salon for $12,000 cash.
5. 5/1/20 - Bought novelty inventory with a wholesale value of $5,000, paying $2,500 in cash and promising to pay the balance on 6/1/20.
6. 5/2/20 - Bought a Chevy truck from Donald’s Truck and Egg Supply with an extended bed and saddle tanks for $23,000 cash.
7. 5/3/20 - Bought a truck shell from Huey’s Truck Accessories and Novelties for $2,500 on account.
8. 5/4/20 - Invested personal computer equipment to the company having a fair market value of $3,400.
9. 5/10/20 - Signs a contracted to perform a Kite Demo in Philadelphia on 6/1/20 and is paid $2,500 cash.
10. 5/11/20 - Paid Huey’s Truck Accessories and Novelties $1,500 cash.
11. 5/11/20 - Purchased an ad in the local newspaper The Righteous Dempublicrat for $200 on account.
12. 5/20/20 - Performed a Kite Demo to the Boy’s and Girl’s Club of Greater Hoboken with a promise to receive $2,500 cash from Scrooge McDuck by 9/1/20.
13. 5/20/20 - Paid $1,000 cash to Huey’s Truck Accessories and Novelties.
14. 5/20/20 - Purchased 45 gallons of gas for truck for $160 cash.
15. 5/22/20 - Paid $200 cash to the local newspaper for ad purchased on 5/11.
16. 5/23/20 - Hired a new employee who will start on 5/26 and will be paid $15 per hour (working 8 hours a day M-F), and instantly paid her a bonus of $1,000 cash. Paydays are the first day of the month.
17. 5/24/20 - Bought a trailer from Huey’s Truck Accessories and Novelties for $2,120 paying $620 cash down and putting the remaining balance on account.
18. 5/25/20 - Received a check from Scrooge McDuck for $850 for partial payment for Kite demo on 5/20.
19. 5/28/20 - Customer purchases an ACME Super Duper Flier and various novelty accessories for $4,220 cash. The wholesale value of the merchandise was $2,110.
20. 5/28/20 - Withdraws $2,500 in cash from the business to quarantine with style.

Answer 1

Please find the attached sheets for detailed calculations,

We have taken salary of 4 days as 26th of may 2020 fall on tuesday,accordingly 4 days work is possible in this month.And rest of the salary has been shown as prepaid expenses.

Please comment for any additional explanation.

Thanks,