Question

SOLID FOOTING 23 Chapter 2 Homework Bank and some of its cash in Lime Started business. Overpriced Jeans is a nd name overpriced jeans. Over Priced Jeans ant banks t o various specialty stores located in malls, OPJ borrows marks the jeans up in Little Bank Remove and use the forms on Pgs 193 to 190 10 Little Bank OPJ keeps some of its cash in Big wack Label the Nole Payable-Big Bank, Note Payable-Little Bank, and common counts: Cash-Big Bank, Cash-Little Bank. account started business on January 1, 2019 nu a beginning balance of zero in each Problem 2-1 Overpriced Jeanine Starts Busine On January 1, 2019. O d merchandising company that specializes in started businesses O ther OP De m y that species in brand a n d the about 500%. and then sells the jeans to var s ans from various clothing manufac money from two different banks Big Bank complete this problem Requirement 1 has the following General Ledger accounts: Cash- Inventory. Equipment. Note Payable the T accounts using these account names B. Because OPJ started business account. Label these amounts as "Beg. Balance" Requirement 2 w each of the following transactions make the required entries in the General Journal Jan 01 The new owners of OPJ invest $75.000 of cash in the business. $70,000 of the The cash is deposited in Big Bank the rest is deposited in Little Bank. OPJ issues shares of Common Stock to the new owners. Jan 02 Purchase $50,000 of equipment. The cash to pay for the equipment is taken out of Purchase $5 Big Bank Jan 05 OPJ gets a $65.000 loan from Big Bank and signs a note for the loan. The cash OPJ gets from the loan is deposited in Big Bank. The bank will not charge OPJ any interest on the loan for the month of January. Jan 10 OPJ gets a $60.000 loan from Little Bank and signs a note for the loan. The cash from the loan is deposited in Little Bank. The bank will not charge OPJ any interest on the loan for the month of January $85,000 of jean inventory is purchased for cash. $50,000 of the cash to pay for the purchase is taken out of Big Bank; the remainder of the cash is taken out of Little Bank Jan 25 Purchase $10,000 of equipment. The cash to pay for the equipment is taken out of Little Bank. Jan 20 Requirement 3 Post the entries from the General Journal to the General Ledger accounts. Requirement 4 Compute an ending balance for each General Ledger account. Requirement 5 Prepare a Trial Balance, Requirement 6 Prepare OPJ's Balance Sheet as of January 31, 2019.

Answer 1

1) Overprice Jeans, Inc.

	Journal Entries
Date	Accounts	Debit	Credit
Jan-01	Cash Big Bank	$70,000.00
	Cash little bank	$5,000.00
	common stock		$75,000.00
	Issue Common Stock
Jan-02	Equipment	$50,000.00
	Cash-Big Bank		$50,000.00
	Purchase Equipment for cash
Jan-05	Cash-Big Bank	$65,000.00
	Note Payable- Big Bank		$65,000.00
	Borrow from Big Bank on a note
Jan-10	Cash- Little Bank	$60,000.00
	Note Payable - Little Bank		$60,000.00
	Borrow from Little Bank on a note
Jan-20	Inventory	$85,000.00
	Cash- Big Bank		$50,000.00
	Cash- Little Bank		$35,000.00
	Purchase inventory for cash
Jan-25	Equipment	$10,000.00
	Cash- Little Bank		$10,000.00

2) General Ledger Accounts

Cash Big Bank				Note Payable - Big Bank
	Dr.	Cr.			Dr.	Cr.
Beg Balance	0			Beg Balance	0
Jan-01	$70,000.00			Jan-05		$65,000.00
Jan-02		$50,000.00		Ending Balance	0	$65,000.00
Jan-05	$65,000.00
Jan-20		$50,000.00		Note Payable- Little Bank
Ending Balance	35000	0			Dr.	Cr.
				Beg Balance	0
Cash Little Bank				Jan-10		$60,000.00
	Dr.	Cr.		Ending Balance		$60,000.00
Beg Balance	0
Jan-01	$5,000.00			Common stock
Jan-10	$60,000.00				Dr.	Cr.
Jan-20		$35,000.00		Beg Balance	0
Jan-25		$10,000.00		Jan-01		$75,000.00
Ending Balance	$20,000.00	0		Ending Balance		$75,000.00
Inventory
	Dr.	Cr.
Beg Balance	0
Jan-20	$85,000.00
Ending Balance	$85,000.00
Equipment
	Dr.	Cr.
Beg Balance	0
Jan-02	$50,000.00
Jan-25	$10,000.00
Ending Balance	$60,000.00

3) Trial Balance

Trial Balance
Account name	Debit	Credit
Cash Big Bank	$35,000.00
Cash Little Bank	$20,000.00
Inventory	$85,000.00
Equipment	$60,000.00
Note Payable- Big Bank		$65,000.00
Note Payable- Little Bank		$60,000.00
Common Stock		$75,000.00
Total	$200,000.00	$200,000.00

4) Balance Sheet

Balance Sheet
Assets
Cash Big Bank	$35,000.00
Cash Little Bank	$20,000.00
Inventory	$85,000.00
Equipment	$60,000.00
Total Assets	$200,000.00
Liabilities
Note Payable - Big Bank	$65,000.00
Note Payable - Little Bank	$60,000.00
Total Liabilities	$125,000.00
Equity
Common Stock	$75,000.00
Total Equity	$75,000.00
Total Liabilities and Equity	$200,000.00

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