Question

ABC Company Inc. is a new company that began operations on October 5th, 2019. The following are the only events that have occurred since the company’s inception.

REQUIRED:

Prepare the Journal Entries, T accounts, Trial Balance as of 12-31-19, Balance Sheet as of 12-31-19 and the Income Statement for the year ended December 31st for ABC Company Inc. Lastly, please prepare the closing entries and the post closing trial balance.

10-05-19    John Smith, Sole Shareholder of ABC Inc, contributed $80,000 to the company.

10-18-19     ABC Company Inc. paid rent for October 2019 through March of 2020 in the amount of $1200 per month

11-01-19     ABC Company Inc. bought a tractor for $78,000 They made a $15,000 down payment and are financing the rest.

11-08-19     ABC Company Inc. performed $70,000 of Landscaping services and was paid $45,000 immediately and expects to receive the balance at some point in the next 90 days.

11-14-19    ABC Company Inc. received a payment of $80,000 from XYZ Company for work that ABC Company will do over the next few months.

11-16-19     ABC Company Inc. bought office supplies for $1000 and paid Cash.

12-02 19    ABC Company Inc. paid salaries in the amount of $2500 for the pay period of November 15^th to November 30th

12-07-19     ABC Company Inc. received a payment for the work they performed on 11-08-19 in the amount of $5000

12-14-19     ABC Company Inc. made a $12,000 payment on the tractor that they purchased on 11-18-19 ($1,427 of the payment is for interest)

12-17 19     ABC Company Inc. paid salaries in the amount of $2500 for the pay period of December 1st to December 15^th.

12-18-19     ABC Company Inc. bought office supplies for $1200 on account.

12-20-19     ABC Company Inc. paid a utility bill for $600 and made a $150 insurance payment

12-22-19    John Smith, Sole Shareholder of ABC Inc, withdrew $3,000 from ABC Company.

12-23-19    ABC Company did 20% of the work they were paid for on 11-14-19

12-31-19     Prepare the adjusting journal entry to accrue for salaries for the pay period of December 16^th to December 31^st in the amount of $2500

12-31-19     Prepare the adjusting journal entry that reflects that we have $900 of Office Supplies remaining as of 12-31-19

12-31-19     Prepare the adjusting journal entry to record depreciation on the tractor that was purchased on 11-01-2019 (Use Straight Line Depreciation, 5 year life, and $24,000 salvage value)

12-31-19     Prepare the adjusting journal entry to record the adjustment needed for prepaid rent and rent expense.

12-31-19     Prepare the adjusting journal entry to record $127 of interest earned on the company checking account.

12-31-19     Prepare the adjusting journal entry to record $684 of accrued interest owed on the tractor that was purchased on 11-18-19

Answer 1

JOURNAL ENTRIES OF ABC INC.(amount in dollars)

Date	Particulars	debit	credit
10/05/19	cash to capital(john)	80000	80000
10/18/19	rent to cash	1200	1200

11/08/19	cash Cash receivables To landscaping service	45000 25000	70000
11/01/19	tractor To cash To tractors loan	78000	15000 63000
11/14/19	cash in advance to XYZ com	80000	80000
11/16/19	office supplies to cash	1000	1000
11/18/19	rent to cash	1200	1200
12/02/19	salaries to cash	2500	2500
12/07/19	cash to cash receivables	5000	5000
12/14/19	tractor loan Interst on tractor loan To cash	10573 1427	12000
12/17/19	salaries to cash	2500	2500
12/18/19	rent to cash	1200	1200
12/18/19	office supplies to cash	1200	1200
12/20/19	utility bill to cash	600	600
12/20/19	insurance to cash	150	150
12/22/19	drawings to cash	3000	3000
12/23/19	XYZ Com to cash in advance	16000	16000
12/31/19	salaries to salary payable	2500	2500
12/31/19	depreciation to tractor (for 2months of dep on slm basis)	1800	1800
12/31/19	profit and loss A/C to interest on tractor	684	684
12/31/19	interest earned to profit and loss A/C	127	127
12/31/19	thieft/damaged(abnormal loss) to office supplies	1300	1300
12/31/19	prepaid rent to rent	4800	4800

TRIAL BALANCE

Particulars	debit	particulars	credit
Cash	112709	Capital	80000
Drawings	3000	salary payable	2500
Rent	3600	tractor loan	49200
Salaries	5000	XYZ	64000
Tractor	49884	Landscaping service	70000

Cash in advance	64000	interest earned	127
Cash receivables	20000	office supplies	1300
Insurance	150
Utility bill	600
Office supplies	900
Depreciation	1800
Interest accured on tractor	684
Prepaid rent	4800

BALANCE SHEET

ASSETS	AMOUNT	LIABILLITIES	AMOUNT
Tractor	49884	Capital
Cash receivables	20000	Salaries payable	2500
Utility bill	600	XYZ	64000

Cash	112709	Tractor loan	49200
Rent paid in advance	4800	Interest accured on interest	684

PROFIT AND LOSS A/C

Expenses	amount	income	amount
Rent paid	3600	office supplies	900
Depreciation	1800	landscaping service	70000

Salaries	5000	interest earned	127
Insurance	150
Int paid	1427