BUSINESS TRANSACTIONS for the MONTH of January 2020.
Prepare the Trial Balance with month End Balance
1) Jan-1 The JW-Corp Received $120,000 from Investors in Exchange for 6,000 shares of Common Stock.
2) Jan-2 JW-Corp Borrowed $150,000 from SCHWAB BANK and signed a Note Due in 24 months.
3) Jan-3 JW Corp purchased Office Equipment worth $120,000 (5 year life), with a $40,000 Down payment of Cash and the remainder Due on account to Target-Corp within 9 Months.
4) Jan-4 JW Corp purchased an Office Building for $600,000 (25 year life), by making a Down payment of $60,000 and then signed a Note for the remainder Due in 18 Months to CHASE Bank
.5) Jan-5 JW Corp paid $15,000 with a check for Office Rent for the next 3 months
.6) Jan-10 JW Corp paid $4,000 with a check for Business Insurance for this month.
7) Jan-11 JW Corp provided CPA Services to the Gavilan Corp worth $175,000 and Collected $85,000 Cash and Billed them the remainder on Account.
8) Jan-15 JW-Corp received This Month’s Utility Bill from PGE for $3,000 to be paid Later.
9) Jan-16 JW-Corp received This Month’s Telephone Bill from Skype for $200 to be paid Later.
10) Jan-17 JW-Corp received a $10,000 check from Gavilan Corp on Account.
11) Jan-20 JW-Corp received a BILL for $15,000 for Legal Fees used this month to be Paid Later.
12) Jan-23 JW-Corp paid $11,000 with Checks for this Months Salaries expenses.
13) Jan-24 JW-Corp Received a $13,000 check from Gavilan Corp on Account.
14) Jan-25 JW-Corp received a $27,000 check from Garlic-Corp for Services to be Provided Later.
15) Jan-26 JW-Corp Paid Target $33,000 with a Check towards the Equipment from Transaction #3.
16) Jan-27 JW Corp Wrote a Check to Skype for the Full Amount Due on account for the Telephone Bill from #9.
17) Jan-28 JW Corp Paid $4.20 Cents per Share to the Owners of the Business with Checks.
18) Jan-29 JW-Corp paid $9,000 with a Check on the Note Payable from Transaction #2, $2,800 was for Interest Expense, and the remainder reduced the Note Payable
19) Jan-31 JW-Corp recorded one Month of RENT Expense from the Prepaid Account.
20) Jan-31 JW-Corp recorded one Month of Depreciation Expense on The Office Equipment Using the Straight Line Depreciation Method.
21) Jan-31 The JW Corp recorded one Month of Depreciation Expense on the Office Building using the Straight Line Depreciation Method.
22) Jan-31 the JW-Corp Recorded the Income Tax Payable for the Month, which is 34.00% of Net Income.(Ch#4)
Prepare journal entries as follows:
Date | Account Titles | Debit | Credit |
Jan. 01 | Cash | $120,000 | |
Common stock | $120,000 | ||
Jan. 02 | Cash | $150,000 | |
Notes payable | $150,000 | ||
Jan. 03 | Office Equipment | $120,000 | |
Cash | $40,000 | ||
Accounts payable | $80,000 | ||
Jan. 04 | Office Building | $600,000 | |
Cash | $60,000 | ||
Notes payable | $540,000 | ||
Jan. 05 | Prepaid Rent | $15,000 | |
Cash | $15,000 | ||
Jan. 10 | Insurance Expense | $4,000 | |
Cash | $4,000 | ||
Jan. 11 | Cash | $85,000 | |
Accounts receivable | $90,000 | ||
Service revenue | $175,000 | ||
Jan. 15 | Utility Expense | $3,000 | |
Accounts payable | $3,000 | ||
Jan. 16 | Telephone Expense | $200 | |
Accounts payable | $200 | ||
Jan. 17 | Cash | $10,000 | |
Accounts receivable | $10,000 | ||
Jan. 20 | Legal Expense | $15,000 | |
Accounts payable | $15,000 | ||
Jan. 23 | Salaries Expense | $11,000 | |
Cash | $11,000 | ||
Jan. 24 | Cash | $13,000 | |
Accounts receivable | $13,000 | ||
Jan. 25 | Cash | $27,000 | |
Unearned revenue | $27,000 | ||
Jan. 26 | Accounts payable | $33,000 | |
Cash | $33,000 | ||
Jan. 27 | Accounts payable | $200 | |
Cash | $200 | ||
Jan. 28 | Dividends | $25,200 | |
Cash | $25,200 | ||
[6000 * $4.20] | |||
Jan. 29 | Notes payable | $6,200 | |
Interest expense | $2,800 | ||
Cash | $9,000 | ||
Jan. 31 | Rent Expense | $5,000 | |
Prepaid rent | $5,000 | ||
[$15000 / 3] | |||
Jan. 31 | Depreciation expense-office building | $2,000 | |
Accumulated depreciation-office building | $2,000 | ||
[($120000/5 years) * 1/12 | |||
Jan. 31 | Depreciation expense-office equipment | $2,000 | |
Accumulated depreciation-office equipment | $2,000 | ||
[($600000/25 years) * 1/12 | |||
Jan. 31 | Income tax expense | $44,200 | |
Income tax payable [W.N] | $44,200 |
_____________________________________________
Income Statement | ||
Revenue: | ||
Service revenue | $175,000 | |
Expense: | ||
Salaries expense | $11,000 | |
Insurance Expense | $4,000 | |
Utility Expense | $3,000 | |
Telephone Expense | $200 | |
Legal Expense | $15,000 | |
Interest expense | $2,800 | |
Rent Expense | $5,000 | |
Depreciation expense-office building | $2,000 | |
Depreciation expense-office equipment | $2,000 | $45,000 |
Income before tax | $130,000 | |
Income tax expense @ 34% | $44,200.00 | |
Income after tax | $85,800.00 |
_______________________________________________________________
Trial Balance | ||
Debit | Credit | |
Cash | $207,600 | |
Accounts receivable | $67,000 | |
Prepaid rent | $10,000 | |
Office equipment | $120,000 | |
Accumulated depreciation-office equipment | $2,000 | |
Office building | $600,000 | |
Accumulated depreciation-office building | $2,000 | |
Accounts payable | $65,000 | |
Unearned revenue | $27,000 | |
Income tax payable | $44,200 | |
Notes payable [$150000 + $540000 -$6200] | $683,800 | |
Common stock | $120,000 | |
Dividends | $25,200 | |
Service revenue | $175,000 | |
Salaries expense | $11,000 | |
Insurance Expense | $4,000 | |
Utility Expense | $3,000 | |
Telephone Expense | $200 | |
Legal Expense | $15,000 | |
Interest expense | $2,800 | |
Rent Expense | $5,000 | |
Depreciation expense-office building | $2,000 | |
Depreciation expense-office equipment | $2,000 | |
Income tax expense | $44,200 | |
1119000 | 1119000 |
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