Question

Forms Practice Set Instructions: 1. Prepare journal entries to record external transactions 2. Post journal entries to general ledger T accounts. 3. Prepare journal entries to record adjusting entries 4 Post the adjusting entries to the general ledger T accounts (include a balance on each account) 5. Prepare an adjusted trial balance. 6. Prepare, using good form, an income statement, a statement of stockholders' equity, and a classified balance sheet. 7. Prepare closing journal entries. 8. Post the closing entries to the general ledger T accounts (include a balance on each account). 9. Prepare a post-closing trial balance. -40. Geleulate ratios Company Information: McDoogan provides printing services to customers. They began operations on January 1, 2019. In January 2020, they realized the current VP had not created the records in an accounting system, and due to a time issue, the financial information must be recorded by hand to produce GAAP based financials for the year ending 2019. As such, they have hired you as the Accountant to get the manual system completed before implementing software for 2020. The research begins First, you find the company uses straight-line depreciation for all long-term depreciable assets. They also must use the Allowance method to account for uncollectible accounts to be in line with GAAP. The company has decided to use the calendar year, so December 31 is the company's year-end. Tax RATES The company hired two employees on November 1, 2019. The employees will receive a salary of $2,000 each. Payroll is processed on the 27th of the month creating the employee and the employer taxes and then net pay is paid on the last day of each month. The tax rates are 10% for Federal Income Tax 8% for state income tax, 7.65% for FICA taxes, and 6.2% for federal and state unemployment on the first $7,000 of each employee earnings per year. Upon further investigation, you find the following information related to the company's transactions during 2019. Process the information and produce GAAP based financials for McDoogan, Inc for the year ending December 31, 2019. Page 1 of 12

Answer 1

on Practice ser. Inc. Journal General - External Transaction Mc Doogan Account Name Delito Date. Credit. Jan 1. $70,000 $70,000 Cash Ale od Dr To common stock Ale (Being owner invested $70,000 into the company in exchange for 5,000 shares of no- par Common Stock.) Jan 1. Dor $32,000 $32,000 Computer Pc To cash Alc. 1 (Being purchase of computer system for $33,000)

Jan 14. Dr $1,200 $1,200 Supplies Alca To Accounts Payable Ale (Being purchase of supplies account for $11200).. on Feb 25 091 36,000 $36,000 Account Receivable Ale 11 To service Revenue Alc (Being invoiced to cliene for. services provided on account). Max 31 $19,200. Aps: 1 Rent Alci a Dr. $9.600. Prepaid reut Ale Dr $4,600 - To Cash Ale. (Being rent paid booked as partly I for the current whole year and partly for the next year). Cash Ale ten Dr $50,000 To Bank of America Ale (Being borrowing of $50,000). Cash Ale nu o r $8,500 To Accounts receivable Ale Being cash $8,500 collected on account) $50,000 May 14 $8.500 -Juni. 500 Delivery van pole Dr $59,500 To Cash Ale (Being purchase of delivery vant Van price - $53,000,; Taxes - $5,000; Document charges - $1,500)

Dr $800 Jul 31 $ 800 Accounts Ponable Ale Payable Ale 1 To cash Ale (Being payment for Supplies I purchased on Jan 14) ! Aug. 10 $10,200 $ 10, 200 Cash Ale Do To ale botes Ale (Being cash received for service provided for $ 10, 200). Sep. 1. me Dr $4,000 cruties Expense Ale To Cash Ale. C Being paid for utilities ). $4,000 Octl. $30,000 Accounts Cash Alc o Dr. $30,000 - To Accounts Receivables ale rot a (Being advance receined for services to be provided in future Noris. $1.500 Advertising Expense Ale Dr To cash Ale. (Being paid for ad in newspaper). $1,500

Nov. 2 $4000 $2,726 $ 400 $ 320 306 248 salaries Expense Ac Dr To salaries Payable Alc To Federal Income Tax Payable Ale To state Income Tax Payable ole TO FICA Tax Payable Ale To unemployment Tax Payable Alc. ( Being salaries processed). salaries Payable IC Don - To Cash Ale (Being salaries paid ). Diridends Alle er - To Cash Alc (Being dividends declared and Nov. 30 $2726 $2726 Dec 15 $6,000 $ 6,000 Dec 27 $4000 Salaries Expense All Dr - To salaries Payable Ale To Federal Income Tax Payable Ale To state Income Tax Payable Alc TO FICA Tax Payable Alc . To unemployment Tax Payable le (Being salaries processed $ 2726 $ 400 $320 $306 $248 Dor $2726 Dec. 30 $ 2726 salaries Payable Me To Cash Ale (Being salaries paid).

Dec 30 $9,000 $ 9,000. Accounts Receivable Alco -Dr To service Revenue Ale (Being invoice raised for services performed