Question

Transactions in the month of January Make the daily entries Trial balance, T accounts and prepare financial statements for the first quarter to March 31, 2020
01/01/2020
1. Portes Café Invested 39,000 to start new business.
2. First Month sales were 65,000
3. Purchase new equipment on account by 120,000 in 36 Monthly Payments.
4. Billed 5,000 in bread distributions.
5. Paid 3,000 in salaries
6. Borrowed 85,000 on a note in 65 monthly Payments.
7. Paid Utilities by 2,500
8. Prepaid Insurance to the year is 3,900
9. Paid Prepaid Rent to the year is 4,000
02/01/2020
10. Second Month Sales were 90,000
11. Paid Salaries by 3,600
12. Paid Utilities by 3,150
13. Collected total Amount billed of the month of jannuary.
14. Paid first amount of a note payable.
15. Paid First amount of the accounts payable Equipment
03/01/2020
16. Third Month sales were 150,000
17. Paid Salaries by 10,550
18. Paid Utilities by 4,560
19. Paid Second amount of a note payable
20. Paid Second amount of the accounts payable Equipment
21. Billed to customers 20,000 in bread distributions
22. Paid 8% Income Tax of the total sales
23. Depreciation of the equipment is to 5 years. First quarterly is $6,000
24. Collected 50,000 in unearned sales in bread distributions

Answer 1

Journal Entries

	Date		Dr.	Cr
1	01/01/2020	Cash A/c	39000
		To Capital a/c		39000
		( Being Inveted 39000 to start ne business)
2		Cash A/c	65000
		To sales		65000
3		Equipment a/c	120000
		To accounts payable		120000
		(Eqipment acquired on36 monthly installments, consider installment starting from next month)
4		Debtors a/c	5000
		To Sales		5000
		(assumed that credit sales)
5		Salaries a/c	3000
		To cash		3000
6		Cash a/c	85000
		To borrowings a/c		85000
		( Borrwed on Note on 65 installments)
7		Utilities expenses	2500
		To cash		2500
8		Insurance Exp.	325
		Prepaid Insurance	3575
		To Cash		3900
		(Being Insurance paid for the year, however for 1st month it is charged as expenses)
9		Rent exp	333
		Prepaid Rent	3667
		To cash		4000
		(Being rent prepared for 11 months)
	02/02/2020	Cash	90000
10		To sales		90000
11		Salries	3600
		To Cash		3600
12		Utilities expenses	3150
		To cash		3150
13		Cash ac	5000
		To debtors		5000
		(Collection of billed amount for bread distribution)
14		Accounts payable	3333
		To cash		3333
		(being installment paid for equipment purchase)
15		Notes payable	1308
		To cash		1308
		( being installment for borrowings)
16		Insurance exp	325
		To Prepaid Insurance		325
		(being reversal of prepaid insurance for the month of feb.)
17		Rent expenses	333
		To Prepaid Rent		333
		( being revarsal of prepaid rent)
18	01/03/2020	Cash	150000
		To Sales		150000
19		Salaries	10550
		To cash		10550
20		Utilities exp	4560
		To cash		4560
21		Accounts payable	3333
		To cash		3333
22		Notes payable	1308
		to cash		1308
23		Debtors a/c	20000
		To sales		20000
24		Depreciation	6000
		To equipment		6000
25		Cash	50000
		To advance from customer		50000
		(being collected for unearned sales in bread)
26		Income Tax	26400
		To cash		26400
		(being 8% tax on sales paid)
27		Insurance exp	325
		Prepaid insurance		325
28		Rent exp.	333
		Prepaid rent		333

T accounts

Sales account

		By cash	65000
To bal C/F	330000	by debtors	5000
		cash	90000
		cash	150000
		debtors	20000
	330000	Total	330000

Cash a/c

Capita	39000	insurance	3900
Sales	65000	rent	4000
borrowings	85000	salaries	3000
		utilities	2500
Sales	90000	salaries	3600
Debtors	5000	utilities	3150
cash	150000	accounts payable	3333
cash	50000	notes	1308
		accounts payable	3333
		Salaries	10550
		utilities	4560
		notes	1308
		Income tax	26400
		To cash bal	413058
TOtal	484000		484000

Accounts payable

cash	3333	eqipment	120000
cash	3333
To bal	113334
	120000		120000

Notes Payable

cash	1308	cash	85000
cash	1308
To bal	82384
	85000		85000

Salaries

To cash	3000
cash	3600		17150
cash	10550
	17150		17150

Debtors

sales	5000	cash	5000
sales	20000	by balance	20000
	25000		25000

Utilities exp

cash	2500
cash	3150
cash	4560
	10210		10210

Profit and loss

salaries	17150	sales	330000
Utilities	10210
Rent	999
Insurance	975
Depreciation	6000
To income tax	26400
To Net Profit	268266
	330000	Total	330000

Balance Sheet

Liabilities		Assets
capital	39000	Equipment	114000
net profit	268266	(120000-6000)
Notes payable	82384	Cash	413058
Acounts payable	113334	Prepaid Rent	3001
Advance from customer	50000	Preapid Insurance	2925
		Debtors	20000
	552984		552984