Question

INSTRUCTIONS AND TRANSACTIONS FOR THE Chapter 4 “BIG” Project wORTH 100 points

On January 1, 2017, Bruce Wayne created a new Crime Watch agency, Waynes Watchdog Service. The following transactions occurred during the company’s first month of operations:

Jan 1 To get the business started, Wayne invested $1,000,000 cash, computer equipment worth $125,000, and a patent on new technology worth $250,000.  

2 Rented furnished office space by paying $20,000 cash for the first month’s rent (it was a nice office!).

3 Purchased $3,500 of office supplies for cash.

3 Paid $5,000 cash for a one-year insurance policy. Coverage began immediately.

14 Paid $6,000 cash for wages to one employee (Robin)

24 Collected $50,000 cash for services provided to customers in January.

26 Wayne took out a bank loan for $1,000,000 with a term of 5 years.

28 Paid another $6,000 cash for wages.

29 Paid $3,000 for telephone and totally awesome internest service in cash.

30 Paid $1,500 cash to repair the company’s computer.

30 Wayne withdrew $10,000 cash from the business for personal use.

The company’s chart of accounts included the following:

101 Cash 405 Service Fee Revenue

106 Accounts Receivable 612 Depreciation Expense — Computer Equip.

124 Office Supplies 622 Wage Expense

128 Prepaid Insurance 637 Insurance Expense

167 Computer Equipment 640 Rent Expense

168 Accum. Depr. — Computer Equip. 650 Office Supplies Expense

190 Patent 684 Repairs Expense

209 Wages Payable 688 Telephone Expense

212 Interest Payable 690 Interest Expense

220 Notes Payable 901 Income Summary

301 Wayne, Capital

302 Wayne, Withdrawals

Required

1. Use the balance column format to set up each account listed in its chart of accounts. (use sheets provided)

2. Prepare journal entries to record the transactions for January and post them to the general ledger accounts. The company records prepaid and unearned items in balance sheet accounts. The journal pages are pre-numbered. Be sure to use the appropriate number in the posting references in the ledger. I will be checking posting references. Make sure to prepare journal entries in proper format and include transaction descriptions.

3. Prepare an unadjusted trial balance as of 1/31/2017 on the worksheet.

4. Use the following information to journalize and post adjusting entries for the month:

a. One month’s insurance coverage has expired (round to nearest dollar).

b. There are $2,600 of office supplies available at the end of the month.

c. Depreciation on the computer equipment is $3,500.

d. The employees earned $3,500 of unpaid and unrecorded wages.

e. The company earned $500,000 of fees for services provided in January that have not yet been billed.

f. Record monthly interest on bank loan of $3,750, which will not be paid until June 2017.

5. Post your adjusting entries on the worksheet and to the General Ledger. Verify that the account balances in the general ledger after journalizing and posting the adjusting entries match the amounts in the adjusted trial balance on the worksheet. Use journal page 3 for the adjusting entries.  

6. Prepare the income statement and statement of owner’s equity for January.  

7. Prepare a CLASSIFIED balance sheet at 1/31/2017. See your text for proper format.

8. Prepare journal entries to close the temporary accounts and then post these entries to the ledger. Use journal page 4 for the closing entries.

9. Prepare a post-closing trial balance. Be sure to prepare this from the account balances from the general ledger and not from the worksheet or the balance sheet. I will be checking.

10. Complete the Key Results worksheet. Make sure to fill in all answers using information from your workpapers.

Answer 1

Question is about Bruce wyne business for completing accounting cycle wherine journal entries, ledger posting, trial balance, Balance sheet, income statement has been asked.

Resolved first four parts including adjusting trial as HOMEWORKLIB policy. Please post remaining one as a separate question