Question

BUSINESS TRANSACTIONS for the Month of December.

1) 12-1 The Shark Corp Received $250,000 from SJ Sharkie in exchange for 5,000 shares of Common Stock.

2) 12-2 The Shark Corp Borrowed $50,000 from Wells Fargo Bank and signed a Note.

3) 12-3 The Shark Corp purchased Office Furniture for $100,000(5 year life), on account from IKEA..

4) 12-4 The Shark Corp purchased Computer Equipment for $60,000(5 year life), on account from Office Depot

5) 12-5 The Shark Corp paid $18,000 with Check#101 for Corporate Insurance for the next 12 months.(Dec-Nov)

6) 12-10 The Shark Corp paid $20,000 with Check#102 for December Rent.

7) 12-11 The Shark Corp provided a mascot Seminar for the NIKE Corp and Billed Nike $120,000 on account.

8) 12-15 The Shark Corp received the December Utility Bill from PGE in the amount of $7,000 to be paid in Jan.

9) 12-16 The Shark Corp received the December Telephone Bill from SBC for $4,000 to be paid Later.

10) 12-17 The Shark Corp received a $70,000 Check from Nike Corp on account for services previously provided.

11) 12-20 The Shark Corp paid $12,000 with check #103 to Mark’s Marketing for Professional Fees Expense.

12) 12-25 The Shark Corp paid $45,000 with Check #104 for December Salary expenses.

13) 12-27 The Shark Corp received a $25,000 Check from Buick Corp for services to be provided in January.

14) 12-28 The Shark Corp Paid $100,000 with Check#105 to IKEA Corp for the Office Furniture purchased above.

15) 12-29 The Shark Corp Paid $4,000 with Check #106 to SBC on account for the Telephone Bill.

16) 12-30 The Shark Corp Paid $11,000 with Check#107 to Mr. SJ Sharkie for Dividends to the owner.

17) 12-30 The Shark Corp paid $3,000 with check #108 to WF Bank on the note, $1,000 was for Interest Expense.

18) 12-31 The Shark Corp recorded one Month of Insurance expense from the Prepaid Insurance account.

19) 12-31 The Shark Corp recorded one Month of Depreciation Expense on the Furniture and the Computer Equip.

20) 12-31 The Shark Corp recorded Income Tax Payable and Income Tax Expense for December, which is 40% of Net Income.(Taxes to be discussed in Zoom meeting)

Do the following:

- Prepare the Adjusted Trial Balance with Debits and Credits and Totals

- Prepare the Income Statement for the Month ended 12-31.

- Prepare the Retained Earnings Statement for the Month ended 12-31

- Prepare the Classified Balance Sheet as of 12-31

Answer 1

Prepare entries as follows:

Date	Account Titles	Debit	Credit
Dec. 01	Cash	$250,000
	Common Stock		$250,000
Dec. 02	Cash	$50,000
	Notes payable		$50,000
Dec. 03	Office Furniture	$100,000
	Accounts payable		$100,000
Dec. 04	Computer Equipment	$60,000
	Accounts payable		$60,000
Dec. 05	Prepaid insurance	$18,000
	Cash		$18,000
Dec. 10	Rent Expense	$20,000
	Cash		$20,000
Dec. 11	Accounts receivable	$120,000
	Service revenue		$120,000
Dec. 15	Utility Expense	$7,000
	Accounts payable		$7,000
Dec. 16	Telephone Expense	$4,000
	Accounts payable		$4,000
Dec. 17	Cash	$70,000
	Accounts receivable		$70,000
Dec. 20	Professional fees expense	$12,000
	Cash		$12,000
Dec. 25	Salary Expenses	$25,000
	Cash		$25,000
Dec. 27	Cash	$25,000
	Unearned revenue		$25,000
Dec. 28	Accounts payable	$100,000
	Cash		$100,000
Dec. 29	Accounts payable	$4,000
	Cash		$4,000
Dec. 30	Dividends	$11,000
	Cash		$11,000
Dec. 30	Notes payable	$2,000
	Interest Expense	$1,000
	Cash		$3,000
Dec. 31	Insurance Expense	$1,500
	Prepaid insurance		$1,500
	[$18000/12]
Dec. 31	Depreciation expense-Furniture [($100000/5 yrs) * 1/12]	$1,667
	Depreciation expense-Computer Equip. [($60000/5 yrs) * 1/12]	$1,000
	Accumulated depreciation-Furniture		$1,667
	Accumulated depreciation-Computer Equip.		$1,000
Dec. 31	Income tax expense	$18,733
	Income tax payable (See Income statement)		$18,733

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Shark Corp.
Balance Sheet
As on Dec. 31
Assets
Current assets:
Cash		$202,000
Accounts receivable		$50,000
Prepaid insurance		$16,500
Total current assets			$268,500
Property, Plant & Equipmet:
Office Furniture	$100,000
Accumulated depreciation-Furniture	($1,667)	$98,333
Computer Equip.	$60,000
Less: Accumulated depreciation-computer eqip.	($1,000)	$59,000
Total PPE			$157,333
Total Assets			$425,833
Liabilities and Stockholders' Equity
Liabilities
Current liabilities:
Accounts payable	$67,000
Income tax payable	$18,733
Unearned revenue	$25,000
Total Current liabilities		$110,733
Notes payable		$48,000
Total Liabilities			$158,733
Stockholders' Equity:
Common stock		$250,000
Retained Earnings		$17,100
Total Stockholders' Equity			$267,100
Total Liabilities and Stockholders' Equity			$425,833

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