Question

1) Prepare Financial Statements for Dec 31, 2018 from transactions listed at bottom of the page, complete with any & all Notes to the Financial Statements. Turn in Journal Entries, Trial Balance, Adjusted Journal Entries, Adjusted Trial Balance, and Post-Closing Trial Balance separately.

Helpful hints-Please double check your work, make sure it balances, make sure accounts are in the correct order

Madoff’s Marijuana Dispensary had the following beginning balances December 1, 2018.

Cash                                                                                         $ 3,000,000

Rent Expense                                                                            22,000

Inventory                                                                                  150,000

Prepaid Rent                                                                             2,000

Equipment                                                                                3,000,000

Accumulated Depreciation                                                        50,000

Accounts Payable                                                                      25,000

Salaries & Wages Payable                                                          10,000

Advertising Expense                                                                  2,500

Notes Payable                                                                           300,000

Supplies                                                                                    500

Retained Earnings                                                                     2,402,500

Preferred Stock, 3% cumulative, $1 par value                             $25,000

Common Stock, $0.01 par value;                                                $100,000

Authorized 32 million shares; Issued 18 million shares

Additional Paid In Capital                                                           500,000

Treasury Stock (8 million shares at cost)                                     40,000

Sales Revenue                                                                           3,000,000

Cost of Goods Sold                                                                    500,000

Loan from Owner                                                                      500,000

Insurance Expense                                                                    11,000

Salaries & Wages Expense                                                         130,000

Utilities Expense                                                                       5,000

Supplies Expense                                                                      3,000

Prepaid Insurance                                                                     13,000

Payroll Tax Expense                                                                   10,000

Repairs & Maintenance Expense                                                3,500

Legal Expense                                                                           15,000

Accounting Expense                                                                  5,000

All Adjustments are made at the end of the year. The following information is relevant:

Truck is expected to last 10 years, and have a residual value of $5,000. Depreciated using the straight-line method.

Owner is to be paid back over 5 years beginning next year.

Had supplies on hand of $200

The following transactions occurred during the month:

Used $1,000 of prepaid insurance for the month of December

Used $2,000 of prepaid rent for the month of December

Dec 2 - Sold $100,000 worth of product for cash (cost us 50,000)

Dec 2- Paid employees all money owed

Dec 31 - Paid employees bonus of $15,000

Owe employees for 3 days of work (Dec 29-31) at $1,000/day

Dec 5 - Fixed windows, cost $5,000. Paid in cash

Dec 31 - Paid Accountant $3,000 for work related to December. Paid in cash.

Dec 1- Bought a new truck for $20,000 paid cash. At the end of the first year the truck had been driven 7,000 miles.

Dec 8 - Sold 1,000 shares of common stock for $10 per share, cash

Dec 10 - Repurchased 3,500 shares of stock at $15 per share

Dec 15 - Reissued 3,000 shares of Treasury stock at $30 per share (bought Dec 10^th)

Jan 2 - Sold $500,000 worth of product (cost us $250,000)

Answer 1