Question

Α. B co E F G Adomain Balance Sheet As of December 31, Year O 7 $80,000 6,700 20,000 25,000 34,700 10,500 15,000 $191,900 4 Assets 5 Cash 6 Marketable Securities Accounts Receivable 8 Inventory 9 PP&E (net) 10 Intangible Assets 11 Other Long-Term Assets 12 Total Assets 13 14 Liabilities & Equity 15 Accounts Payable 16 Notes Payable 17 Unearned Revenue 18 Income Tax Payable 19 Common Stock 20 Retained Earnings 21 Total Liabilities & Equity $45,000 28,500 50,000 4,300 45,000 19, 100 $191,900 22 23 "Assume these notes represent non-interest-bearing loans from owners, due in 5 years.

Answer 1

Journal

Transaction#	Date	Account Title	$ Debit	$ Credit
1	Jan 1	By Patent A/c	32,000
		To Cash A/c		32,000
2	March 15	By Long Term Assets A/c	18,500
		To Cash A/c		18,500
3	April 1	By Prepaid Rent A/c	36,000
		To Cash A/c		36,000
4	April 1	By Cash A/c	60,000
		To Common Share A/c		60,000
5 (a)	April 1	By Accounts Receivables A/c	120,000
		To Sales A/c		120,000
5 (b)	April 1	By Cost of Inventory A/c	16,000
		To Inventory A/c		16,000
5 (c)	April 1	By Commission Paid A/c	10,000
		To Cash A/c		10,000
6	April 5	By Research and Development A/c	13,400
		To Cash A/c		13,400
7	May 1	By Cash A/c	24,000
		To Advance received for services A/c		24,000
8	May 1	By Cash A/c	65,000
		To Accounts Receivable A/c		65,000
9	June 30	By Income Tax Payable A/c	4,300
		To Cash A/c		4,300
10	July 31	By Purchase A/c	15,000
		To Cash A/c		3,000
		To Account Payable A/c		12,000
11	July 31	By Cash A/c	20,000
		To Accounts Receivables A/c		20,000
12 (a)	Sep 30	By Account Receivable A/c	7,000
		To Supplies A/c		7,000
12 (b)	Oct 1	By Supplies A/c	14,000
		To Account Receivable A/c		7,000
		To Cash A/c		7,000
13	Oct 1	By Marketable Security A/c	6,000
		To Cash A/c		6,000
14	Oct 1	By Cash A/c	20,000
		To Bank Loan		20,000
15	Dec 1	By Salary A/c	34,000
		To Cash A/c		4,000
		To Salary Payable A/c		30,000
16	Dec 31	By Income Tax A/c	5,500
		To Cash A/c		3,500
		To Income Tax Payable A/c		2,000
17	Dec 31	By Rent A/c	27,000
		To Prepaid Rent A/c		27,000
18	Dec 31	By Advance Received for Service A/c	4,000
		To Sale A/c		4,000
19	Dec 31	By Account Receivable A/c	5,000
		To Supplies A/c		5,000
20	Dec 31	By Interest A/c	500
		To Interest Payable A/c		500
21	Dec 31	By Sales A/c	124,000
		To Income Statement A/c		124,000
22	Dec 31	By Income Statement A/c	97,500
		To Purchase A/c		15,000
		To Cost of Inventory A/c		16,000
		To Income Tax A/c		5,500
		To Salary A/c		34,000
		To Rent A/c		27,000

Income Statement

Particulars	Amount ($)
Revenues	124,000
Expenses	(97,500)
Income from Operation	26,500
Income before Tax	26,500
Income Tax	(5,500)
Net Income	21,000