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. April 1 Issued common stock in exchange for $250,000 cash. . April 1 Purchased office equipment for $17,500 cash. . April 1 Borrowed $20,000 from Novus Bank and signed a 10% note, interest and principal to be paid in 12 months. April 5 Paid $4,000 rent in advance for the art gallery for the next two months. . April 10 Purchased art supplies from Wacky Art Co. on account for $12.200. April 12 Received $5,300 from a customer who commissioned a piece of custom art to be completed by the end of the year. April 15 Paid miscellaneous office expenses totaling $285 in cash. April 17 Billed customers $3,400 for art classes provided in March. . April 19 Paid $3.600 to Wacky Art Co. . April 25 Received $2,200 from customers on account. . April 30 Recorded $3,800 in salaries for the month of April. Paychecks will be disbursed to employees on May 2nd Using an Excel spreadsheet, prepare the following 1. Using the ACT350 CTTemplate Mod2.xlsx file (in the module folder), enter the transactions shown above in appropriate general ledger accounts (use T-accounts). Use the following ledger accounts: Cash, Accounts Receivable, Supplies on Hand, Prepaid Rent, Office Equipment, Accumulated Depreciation, Accounts Payable, Common Stock, Service Revenue, Rent Expense, Miscellaneous Office Expense, Office Salaries Expense, Supplies Expense, Depreciation Expense, Retained Earnings, Unearned Revenue, Office Salaries Payable, Notes Payable, Interest Payable, and Interest Expense. 2 Prepare an unadjusted trial balance. 3. Record depreciation using a five-year life on the office equipment, the straight-line method, and no salvage value. Round to whole numbers. Also, record an adjustment for art supplies used in the amount of $2,510 and record interest expense for the note 4. Prepare an adjusted trial balance 5. Prepare an income statement, a statement of retained earnings and an unclassified balance sheet. 6. Prepare closing entries.
ASSETS Cash Accounts Receivable Office Equipment 0 Prepaid Rent Supplies 2 4 Accumulated Depreciation
LIABILITIES Accounts Payable Notes Payable Interest Payable Salaries Payable Unearned Revenue
l 00 Conditional Format as →0 | Formatting . Table* | 들들 | 트로圈 $ 1% , la:鼎 Check Cell Explanatory Merge & Center . Alignment Number Styles STOCKHOLDERS EQUITY Retained Eanings Common Stock
ClearFilter Select Styles Cells Editing AB AC AD AE TEMPORARY ACCOUNTS Service Revenue Salaries Expense Supplies Expense Supplies Expense Interest Expense Depreciation Expense Cost of Goods Sold Salaries Expense
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Answer #1

Answer to Question 1 & 3: T-Accounts

Question 1 & 3 (For Question 3 - Those accounts that have been adjusted have been mentioned with adjusted balance) ASSETS Cash Office Equipment Office 01-Apr Common Stock 2,50,00001-Apr Equipment $17,500 01-Apr Note Payable $20,0005-Apr Prepaid Rent 4,000 01-Apr Cash 17,500 30-Apr Balance c/d$ 17,500 Unearned Miscellaneous 12-Apr Revenue 5,30015-Apr office expenses $ 285 Accounts Receivable Accounts Accounts Service 25-Apr Receivable $,20019-Apr Payable $3,600 $2,52,115 17-Apr Revenue 3,400 25-Apr Cash $2,200 30-Apr Balance c/d$1,200 30-Apr Balance c/d

Answer to Question 1 & 3: T-accounts

Prepaid Rent Supplies Accounts 05-Apr Cash $ 2,000 30-Apr Balance c/d2,000 10-Apr Payable 12,20030-Apr Balance e/d 12,200 Supplies 30-Apr expense$2,510 Balancc c/d (adjusted Accumulated Depreciation 30-Apr balance) 9,690 (12,200 2,510) Depreciation 30-Apr expense 292 Balance e/d (adjusted 30-Apr balance)292

Answer to Question 1 & 3: T- accounts

Accounts Payable S 3,600 19-Apr Cash 30-Apr Balance c/d$8,600 10-Apr Supplies 12,200 Notes Payable $ 20,000 30-Apr Balance c/d 20,000 01-Apr Cash Interest Payable Balance c/d (adjusted Interest 30-Apr balance) 16730Apr expense 167 Salaries Payable Balance Salaries 30-Apr c/ $3,800 30-Apr expense 3,800 Unearned Revenue 30-Apr Balance c/d$ 5,30012-Apr Cash 5,300

Answer to Question 1 & 3: T- accounts

Stockholders Equity Common Stock 30-Apr Balance c/d$ 2,50,00001-Apr Cash $ 2,50,000 Retained Earnings Temporary Accounts Service Revenue Accounts 30-Apr Balance c/d$3,4017-Apr Receivable 3,400 Interest Expense Balance c/d (adjusted 30-Apr Interest payable $ 167 30-Apr balance) 167 Salaries expense 30-Apr Salaries payable $ 3,800 30-Apr Balance c/d$ 3,800

Answer to Question 1 & 3: T- accounts

Rent expense 05-Apr Cash 2,000 30-Apr Balance c/d$ 2,000 Depreciation expense Balance c/d (adjusted Accumulated 30-Apr Depreciation $ 292 30-Apr balance) 292 Supplies expense Balance c/d (adjusted 30-Apr Supplies 2,510 30-Apr balance) 2,510 Miscellaneous office expenses 15-Apr Cash 285 30-Apr Balance c/d $ 285

Answer to Question 2: Unadjusted Trial Balance

Question 2 Unadjusted Trial Balance April 30, 20XX Debit Credit S 2,52,115 $ 1,200 $ 12,200 $ 2,000 $ 17,500 Cash Accounts Receivable Supplies Prepaid Insurance Office equipment Notes Payable Accounts Payable Unearned Revenue Salaries payable Common Stock Service Revenue Rent expense Salary expense Miscellaneous expense $285 Totals $ 20,000 $ 8,600 $ 5,300 $ 3,800 $ 2,50,000 $ 3,400 $ 2,000 $3,800 $ 2,91,10o $ 2.91.100

Answer to Question 4: Adjusted Trial Balance

Adjusted Trial Balance April 30, 20XX Debit Credit $2,52,115 $ 1,200 $ 9,690 $ 2,000 $ 17,500 Cash Accounts Receivable Supplies Prepaid Insurance Office equipment Accumulated Depreciation Notes Payable Accounts Payable Unearned Revenue Salaries payable Interest payable Common Stock Service Revenue 292 20,000 8,600 5,300 3,800 167 2,50,000 3,400

Answer to Question 4: Adjusted Trial Balance

Rent expense Salary expense Miscellaneous expense Depreciation expense Interest expense Supplies expense Totals $ 2,000 $ 3,800 $ 285 $292 167 $ 2,510 $2,91,559 $ 2,91,559

For Better Student Understanding of debits and credits in T-accounts, journal entries have been provided in the images below:

For Students better understanding of T-accounts debit and credits ournal Entries Date Account Debit Credit 01-Apr Cash $ 2,50,000 Common Stock $ 2,50,000 (To record issue of common stock for cash) $ 17,500 (To record purchase of office equipment on account) $ 20,000 01-Apr Office Equipment Cash 17,500 01-Apr Cash Note Payable 20,000 (To record amount borrowed by issuing note at the rate of 10%) $ 2,000 S2,000 05-Apr Prepaid Rent Rent expense Cash 4,000 To record rent paid for the current month and prepaid for the next month)

10-Apr Supplies $ 12,200 Accounts Payable 12,200 To record for purchase of supplies on account) 12-Apr Cash $ 5,300 5,300 To record cash received in advance for a service to be performed later) Unearned Revenue Miscellaneous office 15-Apr expenses 285 Cash 285 (To record payment of expenses) 17-Apr Accounts Receivable $ 3,400 Service Revenue 3,400 To record revenue for services provided in March on account) 19-Apr Accounts Payable $ 3,600 Cash 3,600 To record part payment for supplies bought on account)

25-Apr Cash $ 2,200 Accounts Receivable 2,200 To record receipt of cash from customers on account) $ 3,800 30-Apr Salaries expense Salaries payable 3,800 To record salaries expense for the current month) ADJUSTING ENTRIES Debit Credit Entry 1 Apr Depreciation on Office Equipment: Depreciation expense 292 Accumulated Depreciation 292 To record depreciation for the current month) Calculation: Depreciation (Cost Salvage Value)/Useful life Calculation: Depreciation (17,500 0)/5 Calculation: Depreciation for the year $ 3,500 Calculation: Depreciation for the month $ 3,500/12 months Calculation: Depreciation for the month $292

Entry 2 30-Apr Art Supplies on hand: $ 2,510 Supplies expense Supplies 2,510 To record supplies expense for the month) Entry 3 30-Apr Interest expense 167 Interest payable 167 (To record interest on the note payable issued) Interest = Principal X Rate X Time Interest-$ 20,000*10%*1/12 Interest - $167

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