Question

Facts: Dec 1 2 3 4 10 15 20 24 26 28 31 31 Issued common stock in exchange for $1,000,000 cash. Purchased inventory on account for $80,000 (the perpetual inventory system is used). Purchased $500,000 in equipment for cash. Paid the company’s landlord $12,000 for rent for twelve months, debiting Prepaid Rent Expense. Sold merchandise on account for $130,000. The cost of the merchandise was $75,000. Borrowed $60,000 from a local bank and signed a note. Principal and interest of 10% to be repaid in one year. Paid employees $20,000 wages for the first half of the month. Paid $60,000 to suppliers for the merchandise purchased on December 2. Collected $50,000 on account from customers. Paid various utility bills of $3,500 for the month of December. Paid $8,000 in insurance for the period January 1, 2015 to March 1, 2015. Received payment of $5,000 for an order to be delivered January 20. The cost of the merchandise for the order will be $3,500. Accounting Cycle Review Stackhouse, Connelly, and Teagarden Enterprises (SCT Enterprises) was formed in December 2014. During the first month of operation, the following transactions occurred: Required (round all computations to the nearest whole dollar):

1. Prepare journal entries to record the above transactions and post these entries to their corresponding T-accounts (ledger). 2. Prepare an unadjusted trial balance. 3. Prepare adjusting entries for December, considering: a. Depreciation on the equipment is $42,000 per year. b. Rent expense for the month. c. Interest expense for the month. d. Wages for the second half of the month; assume employees earned wages evenly throughout the month. 4. Prepare an adjusted trial balance. 5. Prepare a basic income statement, a statement of stockholders’ equity, and a balance sheet for the year ending December 31, 2014. 6. Prepare closing entries. 7. Prepare a post-closing trial balance.

I only need the last 4 steps and asap!

Thanks!

Answer 1

4.

Adjusted Trial Balance December 31, 2014
Account Titles	Debit	Credit
	$	$
Cash	511,500
Accounts Receivable	80,000
Inventory	5,000
Prepaid Rent Expense	11,000
Prepaid Insurance	8,000
Equipment	500,000
Accumulated Depreciation		3,500
Accounts Payable		20,000
Wages Payable		20,000
Interest Payable		500
Unearned Revenue		5,000
Notes Payable		60,000
Common Stock		1,000,000
Sales Revenue		130,000
Cost of Goods Sold	75,000
Wages Expense	40,000
Rent Expense	1,000
Utilities Expense	3,500
Depreciation Expense	3,500
Interest Expense	500
Totals	$ 1,239,000	$ 1,239,000

5. a.

SCT Enterprises Income Statement For the month ended December 31, 2014
Revenue	$	$
Sales Revenue		130,000
Expenses
Cost of Goods Sold	75,000
Wages Expense	40,000
Rent Expense	1,000
Utilities Expense	3,500
Depreciation Expense	3,500
Interest Expense	500
Total Expenses		123,500
Net Income		6,500

b.

SCT Enterprises Statement of Stockholders Equity For the month ended December 31, 2014
Balance, December 1	$ 0
Add: Capital introduced	1,000,000
Add: Net income earned	6,500
Less: Dividends	0
Balance, December 31	1,006,500

c.

SCT Enterprises Balance Sheet December 31, 2014
Assets		Liabilities
Cash	$ 511,500	Accounts Payable	$ 20,000
Accounts Receivable	80,000	Wages Payable	20,000
Inventory	5,000	Interest Payable	500
Prepaid Rent	11,000	Unearned Revenue	5,000
Prepaid Insurance	8,000	Notes Payable	60,000
Total Current Assets	$ 615,500	Total Liabilities	$ 105,500
Property, Plant and Equipment, net	496,500	Stockholders Equity
		Common Stock	1,000,000
		Retained Earnings	6,500
		Total Stockholders Equity	1,006,500
Total Assets	$ 1,112,000	Total Liabilities and Stockholders Equity	$ 1,112,000

6. In the books of SCT Enterprises:

Closing Entries:

Date	Account Titles and Explanations	Debit	Credit
		$	$
Dec 31, 2014	Sales Revenue	130,000
	Income Summary		130,000
	To close revenue account
Dec 31, 2014	Income Summary	123,500
	Cost of Goods Sold		75,000
	Wages Expense		40,000
	Rent Expense		1,000
	Utilities Expense		3,500
	Depreciation Expense		3,500
	Interest Expense		500
	To close expense accounts
Dec 31, 2014	Income Summary	6,500
	Retained Earnings		6,500
	To close income summary for the month

7.

SCT Enterprises Post Closing Trial Balance December 31, 2014
Account Titles	Debit	Credit
	$	$
Cash	511,500
Accounts Receivable	80,000
Inventory	5,000
Prepaid Rent Expense	11,000
Prepaid Insurance	8,000
Equipment	500,000
Accumulated Depreciation		3,500
Accounts Payable		20,000
Wages Payable		20,000
Interest Payable		500
Unearned Revenue		5,000
Notes Payable		60,000
Common Stock		1,000,000
Retained Earnings		6,500
Totals	$ 1,115,500	$ 1,115,500