Question

1	Dec. 1	Borrow $128,250 from the local bank and signed a five-year installment note with payments of $2,600 at the end of each month beginning December 31. The annual interest rate is 8%. Current portion of the note payable at year end after December payment = $21,875
2	Dec. 1	Purchase a vehicle necessary for business operations for $7,400 cash. The vehicle has a six-year life with a residual value of $200
3	Dec. 1	Issue 15,000 shares of no-par value common stock for $5 per share to obtain the funds necessary to start your business.
4	Dec. 1	Paid $18,000 for one year of insurance in advance.
5	Dec. 1	Purchased a building for $50,000. Paid $2,000 in back taxes; $2,000 in realty fees. It has a 25-year useful life with residual value of $6,000.
6	Dec. 3	Purchase supplies on account, $5,000.
7	Dec. 3	Purchase 300 units of inventory with terms 2/10 net 30.
8	Dec. 6	Provide 28 hours of services to customers for cash (calculate using your hourly service rate) no terms specified.
9	Dec. 10	Sell 150 units of inventory on account. (Perpetual method = 2 entries)
10	Dec. 12	Company pays invoice for inventory purchased on December 3rd within discount terms. (perpetual method)
11	Dec. 15	Sell 50 units of inventory to a customer on account with a sales discount of 4/10, n/30. (Perpetual method= 2 entries)
12	Dec. 20	The customer who purchased product on December 15th pays the amount due (within discount period).
13	Dec. 23	Receive cash in advance for 27 hours of services to be completed in the future.
14	Dec. 25	Purchase an additional 250 units of inventory for cash.
15	Dec. 31	Sell 200 units of inventory to a customer who signs a 6-month promissory note at 12% interest for the balance due. This note originated end of month so no interest would be accrued. (perpetual method = 2 entries)
16	Dec. 31	Pay employee salaries, $5,000.
17	Dec. 31	Pay cash dividends to shareholders of $0.05 per share.
18	Dec. 31	Vehicle did not meet expectations sold back to dealership for $7,000. (Record depreciation at date of sale and then record sale).
19	Dec. 31	Record the $2,600 installment payment on the $128,250 installment note borrowed on December 1st. The annual interest rate is 8%.

Help with any of these parts would be appreciated it doesn't need to be all of it

Part 2– General Journal (LO3-2) – Record the following transactions in the General Journal

Customers are charged $91per hour for services rendered

Customers are charged $65 for each unitpurchased

Inventory can be purchased for $30 per unit

Part 3 – General Ledger (LO3-2) – Post the information from the journal entries into the general ledger and calculate balances.   

Part 4 – Trial Balance (LO3-2) – Complete a trial balance from the information in the General Ledger.

Part 5 – Adjusting journal Entries – (LO3-3) – Record the following adjusting entries in the General Journal.

Adj-1	Dec. 31	The company has $1,200 of supplies left at the end of the month.
Adj-2	Dec. 31	Record the portion of the Prepaid Insurance used in December.
Adj-3	Dec. 31	Record one month of depreciation for the building purchased on December 1st.
Adj-4	Dec. 31	Employees earned $1,000 in salaries the last week in December that will be paid on January 10th of next year.
Adj-5	Dec. 31	Record the receipt of a December $500 Freight bill to send product to customer to be paid on January 6th.
Adj-6	Dec. 31	The company is being sued for $2,000. The company believes is it probable that they will lose and will pay the $2,000 three years from now.
Adj-7	Dec. 31	By the end of the month, 10 hours of the services that were paid for in advance were provided to customers.
Adj-8	Dec. 31	Using the percentage-of-receivables method, record the adjustment of uncollectible accounts. It is estimated that 4% of ending accounts receivable will be uncollectible.
Adj-9	Dec. 31	Income taxes for the year are $520 and will be paid in January.

Part 6 – General Ledger - Post the adjusting entries to the General Ledger.   

Part 7 – Adjusted Trial Balance (LO3-3) – Complete an Adjusted Trial Balance using the information from the General Leger.  Debits should equal credits if you have done the prior steps correctly.

Part 8– Prepare the end of month Income Statement (LO3-4).

Part 9 – Prepare the end of month Retained Earnings Statement (LO3-4).

Part 10– Prepare the end of month Balance Sheet (LO3-4).

Part 11– Closing Entries – Record closing entries in the General Journal and post them to the General Ledger

Part 12– Prepare a Post-Closing Trial Balance.

Answer 1

Part 2)

Date	Account title	Debit	credit
Dec 1	cash	128250
	Note payable		128250
Dec 1	Vehicle	7400
	cash		7400
1	cash	75000
	common stock (15000*5)		75000
1	Prepaid insurance	18000
	cash		18000
1	Building (50000+2000+2000)	54000
	cash		54000
3	supplies	5000
	Accounts payable		5000
3	Inventory (300*30)	9000
	Accounts payable		9000
6	cash	2548
	service revenue (28*91)		2548
10	Accounts receivable	9750
	sales revenue (150*65)		9750
(b)	cost of goods sold	4500
	Inventory (150*30)		4500
12	Accounts payable	9000
	Inventory (9000*2%)		180
	cash		8820
15	Accounts receivable	3250
	sales revenue (50*65)		3250
	cost of goods sold	1500
	Inventory (50*30)		1500
Dec 20	Cash	3120
	sales discount (3250*4%)	130
	Accounts receivable		3250
23	cash	2457
	unearned service revenue (27*91)		2457
25	Inventory (250*30)	7500
	cash		7500
31	Note receivable	13000
	sales revenue (200*65)		13000
	cost of goods sold	6000
	Inventory (200*30)		6000
31	salaries expense	5000
	cash		5000
31	Dividend (15000*.05)	750
	cash		750
31	Depreciation expense	100
	Accumulated depreciation		100
(b)	cash	7000
	Accumulated depreciation	100
	Loss on sale of vehicle	300
	Vehicle		7400
31	Interest expense (128250*.08*1/12)	855
	Note payable	1745
	cash		2600

**Depreciation on vehicle = [cost -residual value ]/useful life

              =[7400 -200]/6

             = 1200 per year

depreciation for a month = 1200 /12 = 100