Question

ACC Interdite Aretiel Examinati il - Tokelme Component Spring 2030 ACC Company, Inc Balance Sheet 11/11/19 Assets Current Assets Cash Accounts Receivable Prepaid Expenses Total Current Assets 3.000 1.250 1001 Non-Current Assets Property. Plant, and Equipment Land Buildings Equipment Accumulated Depreciation Total Property. Plant, and Equipment 10 25.000 - 12.000 Lates Current Liabilities Accounts Payable Accrued Expense Salary and Wages Payable Notes Payable Uneared Revenue Total Liabilities Shareholder's Equity Common Stock . Si par (See Note Below) Retained Earnings Total Equity Total Liabilities and Equity Transactions during January 2020 1. On January 2, 2020, ACC executed a 3 month-6% promissory note for 10.000 in favor of bank, Cheatem Trust Company, Inc. for working capital purposes 2. An invoice was received from ACC Insurance provider on January 15, 2020 forca insurance covers the amount of $2.400.00 for the period Jury through December 31, 20 3. Employees and salary and wages in mary of 56500.00 which was paid on February 2010 4. The insurance pre described in transactice 2 was pardonnay 31, 2020 5. Office expense of $1.500 for the month of January was paid in cash on 01/30/20 6. Insurance expense for the month of January was recorded on 01/31/20 7. Depreciation expense for the month of January was $1,000.00 8. January service revenue for the Company is $21.000.00. All revenues are recorded as an account 9. ACC reviewed its work product for January and determined that it had performed S500 00 of the services required that were being accounted for as uncanned revenue in addition to revenues described in transaction 10. ACC recorded interest expense associated with the Note Payable described in transaction 1. NOTE: Other events possibly having an effect on the company: • At the end of January, the Board of Directors voted to shut down and liquidate a component of the company's operations. This represents a strategic shift in their operations. The component experienced a 2.100 loss during January. This was partially offset by S1,200 pain on the disposition of the acts Both of these transactions are set of tax and have already been appropriately wlected in the Retained Earning balance shown on the December 31, 2019 Balance Sheet Note 14 of ACC's financial statements for the year ended 12/31/19 indicates the company's effective tax rate to be 25% • The company's comm o ck account includes 100.000 shares with 1.000 shares i d

Required:

On separate sheets of paper, please:

* Prepare the appropriate journal entries associated with the above transactions. It is not necessary to

prepare journal entries associated with the discontinued component.

* Prepare a "T" account depiction of the Company's General Ledger activity for the

month of January 2020.

* Prepare ACC's Income Statement for the month ending January 31, 2020

* Prepare ACC's Balance Sheet at January 31, 2020.

Answer 1

Journal for the month Jan 2020
Date	Particulars			LF	Debit Amt	Credit Amt
2020
02-Jan	Bank A/c		Dr.		10,000
		To Notes Payable A/c				10,000
	(Being Promissory note accepted in favour of Cheatem Trust Company Inc.)
31-Jan	Insurance Premium A/c		Dr.		200
	Prepaid insurance A/c		Dr.		2,200
		To Insurance Payable A/c				2,400
	(Being invoice received for casualty insurance coverage)
30-Jan	Salaries and wages A/c		Dr.		6,500
		To Salaries and wages payable A/c				6,500
	(Being salaries and wages due)
31-Jan	Insurance Payable A/c		Dr.		2,400
		To Bank A/c				2,400
	(Being insurance premium paid)
30-Jan	Office expenses A/c		Dr.		1,500
		To Cash A/c				1,500
	(Being office expenses paid in cash)
31-Jan	Depreciation A/c		Dr.		1,000
		To Accumulated Depreciation A/c				1,000
	(Being Depreciation expenses recorded)
31-Jan	Accounts Receivable A/c		Dr.		21,000
		To Revenue A/c				21,000
	(Being Revenue generated for January month)
31-Jan	Unearned revenue A/c		Dr.		500
		To Revenue A/c				500
	(Being unearned revenue recorded)
31-Jan	Interest expenses A/c		Dr.		50
		To Interest payable				50
	(Being interest expenses on promissory note recorded)

Income Statement
Particulars	Amount	Particulars	Amount
To Insurance	200	By Revenue	21,500
To Salaries and wages	6,500
To Office expenses	1,500
To Depreciation	1,000
To Interest	50
To Profit	12,250
	21,500		21,500