Question

Yonatan Company was established on Jan 1st 2014 by issuing 1,000 shares ($1 par value) in return to $4,000 in cash. As of Dec 31st 2014, the company had the following items on its balance sheet: Cash $25,000, Accounts Receivable, net $23,750, Inventory $10,000, Accrued Expenses $100, Long Term Liabilities $15,000, Common stock (??), Paid in Capital (??), Retained Earnings (??). Also, the allowance for doubtful accounts for Dec 31st 2014 is $1,250. During 2015 the company had the following transactions: On Jan 1st 2015 the company acquired 2 vehicles for $100,000. The vehicles have a useful life of 5 years and no salvage value. . The vehicles are depreciated using the Straight Line method. On July 1st 2015 one of the vehicle was sold for $48,000. On Dec 31st 2015 the company acquired a machine for $20,000, half of it was paid in cash and the rest will be paid on Jan 2nd 2016. On Feb 1st 2015 the company sold all its inventory for $30,000 in cash. On Aug 1st 2015 the company purchased a $50,000 worth of inventory. On Nov 11th 2015 half of this inventory was sold for $64,000, 75% was paid in cash and the rest on credit. On March 1st 2015 the company issued 500 shares ($1 par value) for $2,500 in cash On Sep 1st 2015 the company purchased an insurance for $54,000. The insurance is valid from Sep 1st 2015 until Aug 31st 2016. On Oct 1st 2015 the company declares a dividend in the amount of 20% out of the common stock par value which was paid in cash on that same day. On Feb 1st 2015 $10,500 out of the company's account receivable was collected. Also, according to information about a missing customer (for which there is an allowance) the company recognized a write off of $500. (Journal entry for allowance of doubtful accounts - 3 bonus points). On Jan 1st 2015 the company received a $120,000 loan from the bank. The loan carries a 2% annual interest rate to be paid once a year starting from Dec 31st 2015. The loan is due back in one payment on Jan 1st 2018. Additionally, during 2015 the company paid back $3,000 out of its previous year's liabilities (LT). On Jun 1st 2015 the company launches a marketing campaign that will last for two months .The campaign costs $1,500 which were paid in advance The company consumes electricity and water in a monthly cost of $100. The company pays the electricity and water bills on the following month of its consumption. (This section - 2 bonus points). On Feb 1st 2015 the company purchased 2,000 shares of Shani Company for $5,000 and classified them as a trading security. On Dec 31st 2015 the fair value of Shani Company's share was $4. (This section - 3 bonus points). Additional information: • The company uses the percent of total accounts receivable method for doubtful accounts, with constant rate of 5%. The company uses a perpetual inventory method. •

No handwritten work please

Answer 1

In the books of Yonatan Company:

Date	Account Titles	Debit	Credit
2015		$	$
Jan 1	Vehicles	100,000
	Cash		100,000
Jan 1	Cash	120,000
	Long Term Liabilities		120,000
Feb 1	Cash	30,000
	Sales		30,000
Feb 1	Cost of Goods Sold	10,000
	Inventory		10,000
Feb 1	Trading Investments	5,000
	Cash		5,000
Feb 1	Cash	10,500
	Accounts Receivable		10,500
Feb 1	Allowance for Doubtful Accounts	500
	Accounts Receivable		500
Mar 1	Cash	2,500
	Common Stock		500
	Paid-in Capital in Excess of Par: Common Stock		2,000
June 1	Prepaid Advertising	1,500
	Cash		1,500
July 1	Depreciation Expense	5,000
	Accumulated Depreciation : Vehicle		5,000
July 1	Cash	48,000
	Accumulated Depreciation	5,000
	Vehicle		50,000
	Gain on Sale of Vehicle		3,000
July 31	Advertising Expense	1,500
	Prepaid Advertising		1,500
Aug 1	Inventory	50,000
	Cash		50,000
Sep 1	Prepaid Insurance	54,000
	Cash		54,000
Oct 1	Dividends	300
	Cash		300
Nov 11	Cash	48,000
	Accounts Receivable	16,000
	Sales		64,000
Nov 11	Cost of Goods Sold	25,000
	Inventory		25,000
Dec 31	Machine	20,000
	Cash		10,000
	Accounts Payable		10,000
Dec 31	Utilities Expense	1,200
	Accrued Expenses	100
	Cash		1,200
	Accrued Expenses		100
Dec 31	Interest Expense	2,400
	Cash		2,400
Dec 31	Bad Debt Expense	687.50
	Allowance for Doubtful Accounts		687.50
Dec 31	Long Term Liabilities	3,000
	Cash		3,000
Dec 31	Depreciation Expense	10,000
	Accumulated Depreciation : Vehicles		10,000
Dec 31	Insurance Expense	18,000
	Prepaid Insurance		18,000
Dec 31	Income Tax Expense	6,553
	Income Taxes Payable		6,553
Dec 31	Trading Investment	3,000
	Unrealized Gain on Trading Investments		3,000