I. Juarez Inc. has been operating for three years. At December 31, 2017 the accounting records...

I.
Juarez Inc. has been operating for three years. At December 31, 2017 the accounting records reflected the following:

During the year 2018, the company had the following summarized activities:
a. Purchased short term investment for 18,000 cash.
b. Lent 14,000 to a supplier who signed a 2 years note.
c. Purchased equipment that cost 36,000; paid 12,000 cash and signed a one year not for the balance.
d. Hired a new president at the end of the year. The contract was for 170,000 per year.
e. Issued an additional 2,000 shares of capital stock for 24,000 cash.
f. Borrowed 27,000 cash from a local bank. Payable in 3 Months.
g. Purchased a patent for 6,000 cash.
h. Built an addition to the factory for 50,000; paid 18,000 cash and singed a 3 years note for the rest.
i. Returned defective equipment to the manufacturer and received a cash refund of 2,000.

Instructions:
1. Record the above transactions in the GJ and post them to the GL.
2. Prepare the balance sheet at 31 December, 2018.

II.
The trial balance of JAS manufacturing company shows the following assets at the end of December 2018:
• Cash: $380,000
• Prepaid insurance: $82,000
• Raw materials: $670,000
• Equipment: $2,200,000
• Accounts receivable: $800,000
• Work-in-process (WIP): $400,000
• Finished goods: $150,000
• Patents: $220,000

Instructions:
Prepare current assets section of the balance sheet of JAS Company.

III.

Larson’s Accounting Company has the following account balances: Cash, $10,000; Accounts Receivable, $2,000; Prepaid Rent $1,500; Supplies, $850; Equipment, $6,000; Trucks, $15,000; Accounts Payable, $2,500; Notes payable, $5,000; Common Stock, $20,000; Retained Earnings $7,850. Business transactions during December are presented as follows:
Larson paid the suppliers $500,
Supplies were purchased on account, $650
Larson purchased short term investment for $2,000.
Sold an old computed (listed under equipment’s) for $100 cash.
Sold 4,000 additional shares of stock for 20,000 cash.
Purchased new computers that cost 9,000 for 4,000 cash and the rest on account.

Instructions:
1. Record the above transactions in the GJ and post them to the GL.
2. Prepare the balance sheet.

Expert Solution

ekkarill92 answered 1 year ago

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