Blackberry Mountain Inc began business on January 1, 2020. The following transactions occurred during the month...

Blackberry Mountain Inc began business on January 1, 2020. The following transactions occurred during the month of January.
1 Company issued common stock for $21,000
2a Supplies are purchased for $3,000.
2b Insurance is paid for 6 months beginning January 1: $5,400 (record as an asset)
2c Rent is paid for 3 months beginning in January: $4,500 (record as an asset)
3 Blackberry Mountain Inc borrows $45,000 from 1st State Bank (due in the year 2025) at 12%
annual interest.
6 An equipment is purchased for $22,500 cash. It will be used for 3 years and will be depreciated
monthly using straight-line depreciation with no salvage value. A full month of depreciation will
be charged in January.
9 Services are performed for customers on account. Invoices totaling $9,800 are mailed. 10 Services are performed for cash customers: $7,600.
15 Blackberry Mountain Inc borrows $16,000 from 2nd State Bank (due in the year 2030) at 9%
annual interest.
16 Wages for the first half of the month are paid on January 16: $4,200
20 The company receives $3,000 from a customer for an advance order for services to be provided in
January and February.
25 Collections from customers on account (see January 9 transaction): $4,500. 30 A $3,100 utility bill for January arrived. It is due on February 15.
Additional information for the adjusting entries at January 31:
a. The company completed 60% of the deliveries for the customer that paid in advance on January 20th.
b. Interest is accrued for the two bank loans (assume a full month for the 1st State Bank loan and 1⁄2 month for the 2nd State Bank loan).
c. The last 2 weeks wages earned by employees are $4,200 and will be paid on February 3rd. d. Record January depreciation.
e. Adjust the prepaid asset accounts as needed.
f. Supplies of $ 2500 were still available on January 31.
Instructions
1. Prepare journal entries for each event. 2. Prepare the t-accounts
3. Prepare unadjusted Trial Balance.
4. Record Adjusting Entries.
5. Prepare Adjusting Trial Balance.
6. Prepare Income Statement, Balance sheet, and Statement of Retained Earnings.

Solutions

Expert Solution

ekkarill92 answered 1 year ago

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