Chapter B, Problem 4E

One complete accounting cycle

The following events apply to Paradise Vacation’s first year of operations:

1. 1. Acquired $20,000 cash from the issue of common stock on January 1, 2018.
2. 2. Purchased $800 of supplies on account.
3. 3. Paid $4,200 cash in advance for a one-year lease on office space.
4. 4. Earned $28,000 of revenue on account.
5. 5. Incurred $12,500 of other operating expenses on account.
6. 6. Collected $24,000 cash from accounts receivable.
7. 7. Paid $9,000 cash on accounts payable.
8. 8. Paid a $3,000 cash dividend to the stockholders.

   Information for Adjusting Entries

9. 9. There was $150 of supplies on hand at the end of the accounting period.
10. 10. The lease on the office space covered a one-year period beginning November 1.
11. 11. There was $3,600 of accrued salaries at the end of the period.

Required

1. a. Record these transactions in general journal form.
2. b. Post the transaction data from the journal to ledger T-accounts.
3. c. Prepare a trial balance.
4. d. Prepare an income statement, statement of changes in stockholders’ equity, a balance sheet, and a statement of cash flows.