C4-4 From Recording Transactions (Including Adjusting Journal Entries) to Prepar

Question

C4-4 From Recording Transactions (Including Adjusting Journal Entries) to Preparing Financial Statements and Closing Journal Entries (Chapters 2, 3, and 4) [LO 2-3, LO 3-3, LO 4-1, LO 4-2, LO 4-3, LO 4-4, LO 4-5, LO 4-6]

[The following information applies to the questions displayed below.]

Alison and Chuck Renny began operations of their furniture repair shop (Lazy Sofa Furniture, Inc.) on January 1, 2017. The annual reporting period ends December 31. The trial balance on January 1, 2018, follows (amounts are rounded to thousands of dollars to simplify).

Transactions during 2018 (summarized in thousands of dollars) follow:

Borrowed $21 cash on July 1, 2018, signing a six-month note payable.

Purchased equipment for $18 cash on July 2.

Issued additional shares of common stock on July 3 for $5.

Purchased additional equipment on August 4, $3 cash.

Purchased, on account, supplies on September 5 for future use, $10.

On December 6, recorded revenues in the amount of $65, including $9 on credit and $56 received in cash.

Paid salaries and wages expenses on December 7, $35.

Collected accounts receivable on December 8, $8.

Paid accounts payable on December 9, $11.

Received a $3 deposit on December 10 for work to start January 15, 2019.

Data for adjusting journal entries on December 31:

Amortization for 2018, $3.

Supplies of $4 were counted on December 31, 2018.

Depreciation for 2018, $2.

Accrued interest on notes payable of $1.

Wages earned but not yet paid, $3.

Income tax for 2018 was $4 and will be paid in 2019.

C4-4 Part 1, 3, 5, and 8

1, 3, 5 and 8. Set up T-accounts for the accounts on the trial balance. Enter beginning balances and post the transactions (a-j), adjusting entries (k-p), and closing entry. (Enter your answers in thousands of dollars.)

Account Titles Debit Credit Cash $ 5 Accounts Receivable 4 Supplies 2 Equipment 6 Accumulated Depreciation $ 0 Software 12 Accumulated Amortization 3 Accounts Payable 7 Notes Payable (long-term) 0 Salaries and Wages Payable 0 Interest Payable 0 Income Tax Payable 0 Deferred Revenue 0 Common Stock 15 Retained Earnings 4 Service Revenue 0 Supplies Expense 0 Depreciation Expense 0 Salaries and Wages Expense 0 Amortization Expense 0 Interest Expense 0 Income Tax Expense 0 Totals $ 29 $ 29

Explanation / Answer

Please hit LIKE button if this helped. For any further explanation, please put your query in comment, will get back to you. Cash Accounts Receivable Debit Credit Debit Credit Beginning $             5 2 July $          18 Beginning $             4 Dec 8 $             8 1 July $          21 4 Aug $             3 Dec 6 $             9 3 July $             5 Dec 7 $          35 Dec 6 $          56 Dec 9 $          11 Ending $             5 Dec 8 $             8 Dec 10 $             3 Ending $          31 Supplies Debit Credit Beginning $             2 Dec 31 $             8 Sep 5 $          10 Equipment Ending $             4 Debit Credit Beginning $             6 Software 2 July $          18 Debit Credit 4 Aug $             3 Beginning $          12 Ending $          27 Acc Dep Ending $          12 Debit Credit Beginning $           -   Acc Amortization Dec 31 $             2 Debit Credit Ending $             2 Beginning $             3 Dec 31 $             3 Accounts Payable Ending $             6 Debit Credit Dec 9 $          11 Beginning $             7 Notes Payable Sep 5 $          10 Debit Credit 1 July $          21 Ending $             6 Ending $          21 Salaries and wages payable Interest Payable Debit Credit Debit Credit Dec 31 $             3 Dec 31 $             1 Ending $             3 Ending $             1 Income Tax Payable Deferred Revenue Debit Credit Debit Credit Dec 31 $             4 Dec 10 $             3 Ending $             4 Ending $             3 Common Stock Retained Earning Debit Credit Debit Credit Beginning $          15 Beginning $             4 3 July $             5 Income Summary $             9 Ending $          20 Ending $          13 Service Revenue Supplies Expense Debit Credit Debit Credit Income Summary $          65 Dec 6 $          56 Dec 31 $             8 Income Summary $             8 Dec 6 $             9 Depreciation Expense Debit Credit Income Summary Dec 31 $             2 Income Summary $             2 Debit Credit Supplies Expense $             8 Sales Revenue $          65 Depreciation Expense $             2 Amortization Exp $             3 Amortization Expense Interest Expense $             1 Debit Credit Income Tax Expense $             4 Dec 31 $             3 Income Summary $             3 Salaries Expense $          38 Retained Earning $             9 Interest Expense Debit Credit Dec 31 $             1 Income Summary $             1 Income Tax Expense Debit Credit Dec 31 $             4 Income Summary $             4 Salaries Expense Debit Credit Dec 31 $          35 Income Summary $          38 Dec 31 $             3

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