Question

Please take the following transactions and complete the following:

Prepare the Balance Sheet, Income Statement and Statement of Cash Flows as of and for the period ending December 31, 2019.

The following are the transactions for DML, Inc. who opened their manufacturing facility on October 1, 2018.

A) Sold $25,000 of Common Stock to a number of different investors on October 1, 2019.

B) Purchased a 1-year General Liability Insurance Policy on October 2, for $1,500.

C) Paid a total of $6,000 for six months of rent in advance on October 1, 2019.

D) Borrowed $12,000 from TD Bank on 10/2/19. Payment is due on September 30, 2019. The interest rate is 6% compounding annually.

E) Purchased $12,000 in manufacturing Equipment on 10/3/19. The equipment will be depreciated for 10 years.

F) Received $15,000 in advance for material it will deliver to a customer in January, 2020.

G) Paid Utilities of $1,000, $1,200, and $1,100 for Utilities in October, November, and December, respectively.

H) Paid $12,000 in salaries during the quarter.

I) Purchased $10,000 of inventory on account in November.

J) Sold $25,000 of finished goods to customers. $15,000 was received by December 31, 2019. The remainder was still due to DML, Inc. at December 31, 2019.

K) Paid $6,000 towards the inventory purchased by December 31, 2019.

L) A dividend of $500 was paid on December 20, 2019. M) After preparing these entries in A) to L) adjust those accounts that are required

Answer 1

	Journal Entries
A	Cash A/c Dr		25000
	To Common Stock A/c			25000
B	Prepaid Expenses A/c		1500		Insurance Expenses 1500
	To  Insurance Expenses A/c			1500	To cash 1500
C	Rent A/c Dr		3000
	Prepaid Rent A/c Dr		3000
	To cash			6000
D	Loan A/c Dr		12000
	Interest A/c Dr		456
	To Cash A/c			12456
E	Manufactoring Equipment A/c Dr		12000
	To Cash			12000
	(12000/10*10/12)
	Depreciation A/c Dr		1000
	To Equipment			1000
F	Cash A/c Dr		15000
	To Advance from customer			15000
G	Utilities		3300
	To Cash			3300
H	Salaries A/c Dr		12000
	To Cash			12000
I	Purchases A/c Dr		10000
	To Inventory			10000
J	Cash A/c Dr		15000
	Receivable		10000
	To sales			25000
K	Inventory A/c Dr		10000
	To Cash A/c			6000
	To Payable			4000
L	Dividend A/c Dr		500
	To Cash			500
		Income Statement
	Particulars		Aount	Particulars		Amount
	To Purchases		10000	by Sales		25000
	To Gross profit		15000
			25000			25000
	To salaries		12000	By gross profit C/d		15000
	To Rent		3000
	To Insurance		1500
	To Interest		456
	To Depreciation		1000
	To utilities		3300
	To Dividend		500
				By Net Loss		6756
			21756			21756
			Balance Sheet
	Liabilities		Amount	Assets		Amount
	Commom Stock		25000	Equipment	(12000-1000)	11000
				Prepaid Rent		3000
	Advance from Customer		15000	Receivable from DMl		10000
	payable for Inv		4000	Cash	1244	1244
	Net Loss		-6756	Suspence		12000
			37244			37244	0