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ACC Company, Inc. 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

ACC Company, Inc. Journal entries No. Date Account 1 1-Jan Cash Common Stock Credit Calculation Debit $ 10,000 $ 10,000 2 15-Jan No entry 3 $ 6,500 31-Jan Salaries and Wages expense Salaries and Wages Payable $ 6,500 4 $ 2,400 31-Jan Prepaid Expenses Cash $ 2,400 5 $ 1,500 31-Jan Office expense Cash $ 1,500 6 $ 200 =2,400/12 31-Jan Insurance expense Prepaid Expenses $ 200 7 $ 21,000 31-Jan Accounts Receivable Service Revenue $ 21,000

Date Credit ACC Company, Inc. T Accounts Date Debit Date Credit Cash Op bal $1,500 31-Jan $ 2,400 1-Jan $10,000 31-Jan $ 1,500 Date Debit Date Credit Accounts Receivable Op bal $ 1,250 31-Jan $ 21,000 Date Debit Date Credit Prepaid Expenses Op bal $ 100 31-Jan $ 2,400 31-Jan $ 200 Debit Date Land $10,000 Op bal Bal. Bal. Bal. Bal. $ 7,600 Building $ 25,000 $ 22,250 Equipment $15,000 $ 2,300 Accumulated Depreciation Op bal $ 12,000 $ 10,000 Accounts Payable Op bal Op bal Op bal $ 100 Bal. Bal. $ 100 $ 25,000 Accrued Expenses Op bal $ 15,000 Salaries and Wages Payable Op bal $ . 31-Jan $ 6,500 Bal. $ 12,000 Common Stock Op bal $15,000 1-Jan $ 10,000 Bal. Retained Earnings Op bal 150 $ $25,600 $ 25,000 $ 25,600 Bal. $ 150 Service Revenue 31-Jan $ 21,000 Bal. $ 6,500 Salaries and Wages expense 31-Jan $ 6,500 Bal. Insurance expense 31-Jan $ 200 Bal. Office expense 31-Jan $ 1,500 Bal. $ 21,000 Bal. $ 6,500 Bal. $ 200 Bal. $ 1,500

ACC Company, Inc. Account Names Cash Accounts Receivable Prepaid Expenses Land Buildings Equipment Accumulated Depreciation Accounts Payable Accrued Expenses Salaries and Wages Payable Common Stock Retained Earnings Service Revenue Salaries and Wages expense Insurance expense Office expense Totals Adjusted TB Debit Credit 7,600 22,250 2,300 10,000 25,000 15,000 12,000 100 150 6,500 25,000 25,600 21,000 6,500 200 1,500 90,350 90,350

21,000 ACC Company, Inc. Income Statement For the Month Ended January 31, 2020 Revenues Service Revenue Expenses Salaries and Wages expense Insurance expense Office expense Total Expenses Net Income 6,500 200 1,500 8,200 12,800 Statement of Retained Earnings For the Month Ended January 31, 2020 Opening balance Net Income Less Dividends Ending Balance 25,600 12,800 38,400

ACC Company, Inc. Balance Sheet As of January 31, 2020 Assets Current Assets Cash Accounts Receivable Prepaid Expenses Total Current Assets Liabilities & Stockholders Equity Liabilities 7,600 Accounts Payable 22,250 Accrued Expenses 2,300 Salaries and Wages Payable 32,150 Total Liabilties 100 150 6,500 6,750 Property, Plant & Equipment Land Buildings Equipment Accumulated Depreciation Total Property, Plant & Equipment 10,000 Stockholders Equity 25,000 Common Stock 15,000 Retained earnings (12,000) 38,000 Total Stockholders Equity 25,000 38,400 63,400 Total Assets 70,150 Total Liabilities & Stockholders Equity 70,150