Question

Balance Sheet 12/31/19 1,500.00 1,250.00 100.00 2,850.00 Assets: Current Assets: Cash Accounts Receivable Prepaid Expenses Total Current Assets Long-Term Assets: Property, Plant, and Equipment Land Buildings Equipment Accumulated Depreciation Total Property, plant, and Equipment Total Assets $ 10,000.00 25,000.00 15,000.00 (12,000.00) $ $ $ 38,000.00 40,850.00 100.00 150.00 $ Liabilities: Current Liabilities Accounts Payable Accrued Expense Salary and Wages Payable Total Liabilities Shareholder's Equity Common Stock - $1 par Retained Earnings Total Equity Total Liabilities and Equity 250.00 $ $ 15,000.00 25,600.00 $ $ 40,600.00 40,850.00 Transactions during January 2020: 1. On January 1, 2020, the owner of ACC invested $10,000.00 cash in the company. 2. An invoice was received from ACC's insurance provider on January 15, 2020, for casualty insurance coverage in the amount of $2,400.00 for the period January 1, through December 31, 2020. 3. Employees earned salary and wages in January of $6,500.00 which was paid on February 1, 2020. 4. The insurance premium described in transaction 2 was paid on January 31, 2020. 5. Office expense for the month of January paid in cash was $1,500.00 6. Record insurance expense for the month of January. 7. January service revenue for the Company is $21,000.00. All revenues are recorded as "on account." Required: On separate sheets of paper, please: * Prepare the appropriate journal entries associated with the above transactions. Prepare a "T" account depiction of the Company's General Ledger activity for the month of January 2020. * Prepare ACC's Income Statement for the month ending January 31, 2020 • Prepare ACC's Balance Sheet at January 31, 2020.

Answer 1

Books Of ACC
Journal
For the month of January,2020
Date	Particulars	LF	Debit $	Credit $
01-01-20	Salary O/S A/c         -------------                      DR		150
	To Cash A/c			150
	( Being Salary O/s in the last month paid on 1 january,2020)
01-01-20	Cash A/c -----------------                                   DR		10000
	To Common Stock			10000
	( Being invested in the company in shares of the company of $ 1 per share)
15-01-20	Casualty Insurance premium A/c --------   DR		2400
	To Insurance Payable A/c			2400
	( Being Insurance was taken for the year 2020)
31-01-20	Salary Expenses A/c -------------                  DR		6500
	To Salary O/s A/c			6500
	( Being Salary due for the month of January 2020, will be payable on 1 Feb 2020)
31-01-20	Insurance payable A/c -----------                 DR		2400
	To Cash A/c			2400
	( Being Insurance premium paid)
31-01-20	Office expenses A/c   ------------------        DR		1500
	To Cash A/c			1500
	( Being office expenses for the month of January paid in cash)
31-01-20	Insurance Expenses A/c (P&L A/c) ---------Dr		200
	To Casualty Insurance Premium A/c			200
	( Being Insurance expenses for the month have been recorded & transferred to P& L A/c)
31-01-20	Debtors A/c ---------                                         DR		21000
	To Sales A/c			210000
	( Being Sales made )

Income Statement for the month of January,2020
Sr no	Particulars		Amount	Amount
I)	Revenue from operations
1	Revnue			21000
2	Other Income			0
	Total	A		21000
II)	Expenses
1	Staff welfare expenses			6500
2	Insurance			200
3	Office Expenses			1500
	Total	B		8200
III)	Profit for the period	A-B		12800
BALANCE SHEET AS AT JANUARY,2020
Sr no	Particulars		Amount	Amount
I)	Equity & Liabilities
1)	Shareholder's funds
a	Share Cap			25000
b	Retained earnings			38400
2)	Non current Liab
	Accounts payable			100
	O/s Salary			6500
	Total	A		70000
II)	Assets
1)	Non current Assets
a	Tangible Fixed Assets
	Land		10000
	Buildings		25000
	Equipment		15000
	Less: Acc. Dep		-12000	38000
2)	Current assets
a	Accounts Receivable			22250
b	Prepaid Expenses
	Other		100
	Insurance		2200	2300
	Cash			7450
	Total	B		70000

Note:Depriciation for the month is not charged as depriciation rates are not stated. The O/s Salary of last month has been paid this month because it seems that company pays salary on 1st of every successive month.