Question

On January 1, 2020, Mr. Wild formed a corporation to provide services to clients. Information about the first year of operation follows: Jan. 1 Investors provided $1,500,000 in cash in exchange for stock of The Wild Corporation. Jan. 1 Purchased equipment in exchange for $100,000 cash and a $1,900,000 note payable at an annual rate of 5%, payable every 6 months. Jan. 1 Purchased $45,000 of insurance that will cover the next 3 years. This was recorded as prepaid insurance. Feb. 1 Purchased $5,000 of office supplies on account that will be needed during the upcoming year. Mar. 15 Paid Salaries of $20,000. Mar. 31 Billed customers for services in the amount of $500,000. Apr. 15 Paid the vendor who sold Wild the office supplies on Feb. 1. Apr. 30 Collected $400,000 on accounts receivable. June 15 Paid salaries of $40,000. June 30 Paid $4,000 for employee travel costs. June 30 Paid $10,000 for a company party. June 30 Paid the interest due and $400,000 to reduce the balance of the note payable. July 1 Billed customers for services provided in the amount of $750,000. Aug 1 Collected $200,000 on accounts receivable. Aug. 15 Purchased $15,000 of office supplies on account. Sept. 15 Paid salaries of $40,000. Sept. 30 Paid $25,000 for a customer appreciation event. Sept. 30 Paid $40,000 for employee travel costs incurred by staff. Dec. 1 Collected $300,000 as deposits from customers who contracted for 2021. Dec. 31 Declared and paid a $50,000 dividend to shareholders. The Wild Corporation uses the following accounts in it's Chart of Accounts: Cash Accounts Receivable Office Supplies Prepaid Insurance Equipment Accumulated Depreciation Accounts Payable Interest Payable Unearned Revenue Notes Payable Capital Stock Retained Earnings Dividends Service Revenue Salaries Expense Meals & Entertainment Expense Travel Expense Insurance Expense Office Supplies Expense Interest Expense Depreciation Expense Income Summary

COMPLETE THE FOLLOWING:

(a) Journalize the listed transactions. (b) Post the transactions to the appropriate general ledger accounts. (c) Prepare a trial balance as of December 31. (d) Journalize and post adjusting entries based on the following additional information. There was $6,000 of Office Supplies on hand at year. Purchased $25,000 of supplies on account. The equipment had 20-year life, with $200,000 salvage value. At year end, Wild Corp. had provided $90,000 of unbilled services to customers. These services will be billed in early 2018. Declared and paid a $25,000 dividend to shareholders. (e) Prepare an adjusted trial balance as of December 31. (f) Prepare an income statement and Statement of Retained Earnings for 2016, and a classified Balance Sheet as of December 31. (g) Journalize and post closing entries. (h) Prepare a post-closing trial balance as of December 31.

Answer 1