How do I do the balance sheet, income statement, and what are the closing entries for the following transactions (The startup uses straight line when depreciating long-term assets and a perpetual inventory system. It has an estimated tax rate of 35%.) Jan 1st, issued 500 shares of common stock ($0.10 par value) for $50,000. Feb 1st, paid $25,000 to purchase equipment (estimated useful life 10 years; salvage value = 1,540). Feb 28th, issued 100 shares of common stock ($0.10 par value) for $20,000. June 30th, paid $175,000 for a land by signing a 5 year Note Payable, promising to pay 5% interest on June 30th of each of those 5 years. July 1st, purchased 500 units of inventory at $15 each. $2,000 was paid in cash, the rest was on account. July 30th, sold 220 units of inventory for $63 each on account. The inventory came with a 1 year warranty. The company expects that providing the warranty will cost 1% of the sales made. Aug 2nd, incurred $450 of wages expense. Aug 5th, collected $2500 of accounts receivable. Aug 31st, paid $450 of wages payable. Sept 4th, paid $1600 of accounts payable. Dec 31st, incurred and paid $2,000 of utilities expense. Dec 31st, Purchased a copyright for $10,000. The copyright has a 20-year useful life and no residual value. Dec 31st, Purchased a second piece of equipment for $4,100 (estimated useful life 12 years, salvage value 2,000). The company relies on the percentage of credit sales method, and expects that 2% of credit sales will be uncollectible.
How do I do the balance sheet, income statement, and what are the closing entries for the following transactions (The startup uses straight line when depreciating long-term assets and a perpetual inventory system. It has an estimated tax rate of 35%.) Jan 1st, issued 500 shares of common stock ($0.10 par value) for $50,000. Feb 1st, paid $25,000 to purchase equipment (estimated useful life 10 years; salvage value = 1,540). Feb 28th, issued 100 shares of common stock ($0.10 par value) for $20,000. June 30th, paid $175,000 for a land by signing a 5 year Note Payable, promising to pay 5% interest on June 30th of each of those 5 years. July 1st, purchased 500 units of inventory at $15 each. $2,000 was paid in cash, the rest was on account. July 30th, sold 220 units of inventory for $63 each on account. The inventory came with a 1 year warranty. The company expects that providing the warranty will cost 1% of the sales made. Aug 2nd, incurred $450 of wages expense. Aug 5th, collected $2500 of accounts receivable. Aug 31st, paid $450 of wages payable. Sept 4th, paid $1600 of accounts payable. Dec 31st, incurred and paid $2,000 of utilities expense. Dec 31st, Purchased a copyright for $10,000. The copyright has a 20-year useful life and no residual value. Dec 31st, Purchased a second piece of equipment for $4,100 (estimated useful life 12 years, salvage value 2,000). The company relies on the percentage of credit sales method, and expects that 2% of credit sales will be uncollectible.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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How do I do the balance sheet, income statement, and what are the closing entries for the following transactions
(The startup uses straight line when
- Jan 1st, issued 500 shares of common stock ($0.10 par value) for $50,000.
- Feb 1st, paid $25,000 to purchase equipment (estimated useful life 10 years; salvage value = 1,540).
- Feb 28th, issued 100 shares of common stock ($0.10 par value) for $20,000.
- June 30th, paid $175,000 for a land by signing a 5 year Note Payable, promising to pay 5% interest on June 30th of each of those 5 years.
- July 1st, purchased 500 units of inventory at $15 each. $2,000 was paid in cash, the rest was on account.
- July 30th, sold 220 units of inventory for $63 each on account. The inventory came with a 1 year warranty. The company expects that providing the warranty will cost 1% of the sales made.
- Aug 2nd, incurred $450 of wages expense.
- Aug 5th, collected $2500 of
accounts receivable . - Aug 31st, paid $450 of wages payable.
- Sept 4th, paid $1600 of accounts payable.
- Dec 31st, incurred and paid $2,000 of utilities expense.
- Dec 31st, Purchased a copyright for $10,000. The copyright has a 20-year useful life and no residual value.
- Dec 31st, Purchased a second piece of equipment for $4,100 (estimated useful life 12 years, salvage value 2,000).
- The company relies on the percentage of credit sales method, and expects that 2% of credit sales will be uncollectible.
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