Question

Chapter 3 "BIG" Project Instructions INSTRUCTI ONS AND TRANSACTI ONS FOR THE CHAPTER 3 "BIG" PROJECT WORTH 100 POINTS NOTE: YOU MUST USE THE PROJECT WORKPAPERS (EXCEL FILE) PROVI DED IN D2L CONTENT / CHAPTER 3 FOLDER. NO OTHER FILES WILL BE ACCEPTED. On January 1, 2019, Bruce Wayne created a new Crime Watch agency called Batman's Watchdog Service. The following transactions occurred during the company's first month of operations: Jan 1 To get the business started, Wayne invested $1,000,000 cash, computer equipment worth $150,000, and a patent on new technology worth $850,000 in exchange for Common Stock 2 Rented subteranian office space (Bat cave) by paying $20,000 cash for the first month's rent 3 Purchased $3,000 of office supplies for cash. 3 Paid $120,000 cash for a one-year insurance policy. Coverage began immediately. 14 Paid $6,000 cash for wages to one employee (Robin) 24 Collected $50,000 cash for services provided to customers in January. Wayne took out a bank loan for $10,000,000 with a term of 5 years. 26 28 Paid another $12,000 cash for wages to Robin and new employee, Bat Girl. 29 Paid $3,000 for internest service in cash. 30 Paid $1,500 cash to repair the company's computer after Robin spilled his coffee on the main server. The company's chart of accounts included the following:

Answer 1

Batman's Watchdog Service Journal Enteries Date Particulars 1.1.2019 Cash a/c Dr. Computer Equip. a/c Dr. Patent a/c Dr. To Common Stock (Common Stock issued) Debit in $ Credit in $ 1000000 150000 850000 2000000 Dr. 20000 2.1.2019 Rent expense a/c To Cash (Rent paid) 20000 Dr. 3000 3.1.2019 Office Supplies a/c To Cash (Supplies purchased) 3000 120000 3.1.2019 Prepaid Insurance a/c Dr. To Cash (1 year insurance paid) 120000 Dr. 6000 14.1.2019 Wages Expense a/c To Cash (Wages paid) 6000 50000 24.1.2019 Cash a/c Dr. To Service Revenue (Service provided for cash) 50000 Dr. 10000000 26.1.2019 Cash a/c To Bank Loan (Bank Loan received) 10000000 Dr. 12000 28.1.2019 Wages Expense a/c To Cash (Wages paid) 12000 3000 29.1.2019 Internet expense a/c Dr. To Cash (Internet service purchased) 3000 1500 30.1.2019 Repairs Expense a/c Dr. To Cash (Repairs expense incurred) 1500

Adjusting Enteries Date Particulars 31.1.2019 Insurance expense a/c Dr. To Prepaid Insurance (Insurance expensed) 120000/12 Debit in $ Credit in $ 10000 10000 1000 31.1.2019 Supplies Expense a/c Dr. To Supplies (Supplies expensed) 3000 - 1000 1000 50000 31.1.2019 Depreciation expense a/c Dr. To Accum Depre. - Comp.Equip. (To record depreciation) 50000 6000 31.1.2019 Wages Expense a/c Dr. To Wages Payable (Wages accrued) 6000 Dr. 500000 31.1.2019 Accounts Receivable a/c To Service Revenue (Service provided on account) 500000 30000 31.1.2019 Interest Expense a/c To Interest Payable (Interest accrued) 30000

Worksheet For the period ending 31.1.2019 Particulars Cash Accounts Receivable Office Supplies Prepaid Insurance Computer Equip. Accum Depre. - Comp.Equip. Patent Wages Payable Interest Payable Bank Loan Common Stock Retained Earnings Service Revenue Rent expense Wages Expense Internet expense Repairs Expense Insurance expense Supplies Expense Depreciation expense Interest Expense Totals Unadjusted Adjustments Adjusted Post Closing Debit in $ Credit in $ Debit in $ Credit in $ Debit in $ Credit in $ Debit in $ Credit in $ 10884500 10884500 10884500 500000 500000 500000 3000 1000 2000 2000 120000 10000 110000 110000 150000 150000 150000 50000 50000 50000 850000 850000 850000 6000 6000 6000 30000 30000 30000 10000000 10000000 10000000 2000000 2000000 2000000 410500 50000 500000 550000 20000 20000 18000 6000 24000 3000 3000 1500 1500 10000 10000 1000 1000 50000 50000 30000 30000 12050000 12050000 597000 597000 12636000 12636000 12496500 12496500 550000 Statement of Income For the period ending 31.1.2019 Service Revenue Less: Rent expense Wages Expense Internet expense Repairs Expense Insurance expense Supplies Expense Depreciation expense Interest Expense Net Income 20000 24000 3000 1500 10000 1000 50000 30000 139500 410500 Statement of Retained Earnings For the period ending 31.1.2019 Net Income 410500

Amounts in $ Amounts in $ Balance sheet As at 31.1.2019 Assets Current Assets Cash Accounts Receivable Office Supplies Prepaid Insurance Amounts in $ Amounts in $ Liabilities Current Liabilities 10884500 Wages Payable 500000 Interest Payable 2000 110000 11496500 Non Current Liabilities Bank Loan 6000 30000 36000 10000000 Non Current Assets Tangibles Computer Equip. Accum Depre. - Comp.Equip. Intangibles Patent Total Assets 150000 -50000 100000 Shareholders Equity Common Stock 850000 Retained Earnings 12446500 Total Liabilities & Equity 2000000 410500 2410500 12446500