2. The following transactions occurred during the first year of operations for ABC Company. ABC uses the perpetual system of inventory, and its year-end is December. 1. Started business by issuing 10,000 shares of common stock for $200,000. 2. Issued a purchase order for $45,000 for inventory. 3. Leased a building for three years at $5000 per year and paid two years rent on January 1. 4. Purchased equipment for $90,000 on June 30, paying $10,000 down and signing a two-year, 10% note for the balance. Depreciation expense is $8000. 5. Purchased $180,000 of inventory on account. 6. Cash sales of $70,000 and credit sales of $150,000 for the first year. Cost of inventory sold was $131,000. 7. Paid salaries and wages, $53,000. 8. Paid $160,000 on account for supplies purchased in item (5). 9. Collected $120,000 of the credit sales in item 6. 10. Salaries and wages of $1050 were earned by employees but not paid during year one. Required. 1. Prepare T-Accounts for the transactions... 2. Record all year end adjusting entries. 3. Calculate ABC's Net Income for year 1.
2. The following transactions occurred during the first year of operations for ABC Company. ABC uses the perpetual system of inventory, and its year-end is December. 1. Started business by issuing 10,000 shares of common stock for $200,000. 2. Issued a purchase order for $45,000 for inventory. 3. Leased a building for three years at $5000 per year and paid two years rent on January 1. 4. Purchased equipment for $90,000 on June 30, paying $10,000 down and signing a two-year, 10% note for the balance. Depreciation expense is $8000. 5. Purchased $180,000 of inventory on account. 6. Cash sales of $70,000 and credit sales of $150,000 for the first year. Cost of inventory sold was $131,000. 7. Paid salaries and wages, $53,000. 8. Paid $160,000 on account for supplies purchased in item (5). 9. Collected $120,000 of the credit sales in item 6. 10. Salaries and wages of $1050 were earned by employees but not paid during year one. Required. 1. Prepare T-Accounts for the transactions... 2. Record all year end adjusting entries. 3. Calculate ABC's Net Income for year 1.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Please don't provide solution in an image based thanku
Transcribed Image Text:2. The following transactions occurred during the first year of operations for ABC
Company. ABC uses the perpetual system of inventory, and its year-end is December.
1. Started business by issuing 10,000 shares of common stock for $200,000.
2. Issued a purchase order for $45,000 for inventory.
3. Leased a building for three years at $5000 per year and paid two years rent on January 1.
4. Purchased equipment for $90,000 on June 30, paying $10,000 down and signing a two-year,
10% note for the balance. Depreciation expense is $8000.
5. Purchased $180,000 of inventory on account.
6. Cash sales of $70,000 and credit sales of $150,000 for the first year. Cost of inventory sold
was $131,000.
7. Paid salaries and wages, $53,000.
8. Paid $160,000 on account for supplies purchased in item (5).
9. Collected $120,000 of the credit sales in item 6.
10. Salaries and wages of $1050 were earned by employees but not paid during year one.
Required:
1. Prepare T-Accounts for the transactions..
2. Record all year end adjusting entries.
3. Calculate ABC's Net Income for year 1.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 5 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education