Declared and paid cash dividends of $450. During its first month of operation, t

Question

Declared and paid cash dividends of $450.

During its first month of operation, the Quick Tax Corporation, which specializes in tax preparation, completed the following transactions. July 1 Began business by making a deposit in a company bank account of $40,000, in exchange for 4,000 shares of $10 par value common stock. July 3 Paid the current month's rent, $2,500 July 5 Paid the premium on a 1-year insurance policy, $3,600 July 7 Purchased supplies on account from Little Company, $700. July 10 Paid employee salaries, $2,800 July 14 Purchased equipment from Lake Company, $9,500. Paid $1,500 down and the balance was placed on account. Payments will be $500.00 per month for 20 months. The first payment is due 8/1. Note: Use accounts payable for the balance due. July 15 Received cash for preparing tax returns for the first half of July, $6,500 July 19 Made payment on account to Lake Company, $500. July 31 Received cash for preparing tax returns for the last half of July, $8,250 July 31

Declared and paid cash dividends of $450.

Requirement #3: Prepare a trial balance for July in the space below. Quick Tax Corporation Trial Balance July 31 0 0 Requirement #4: Prepare adjusting entries using the following information in the General Journal below. Show your calculations! a) One month's insurance has expired. b) The remaining inventory of supplies is $300. c) The estimated depreciation on equipment is $125. d) The estimated income taxes are $2700. General Journal Date Description (Account Name) Debit Credit Requirement #5: Post the adjusting entries to the General Ledger T-accounts and compute adjusted balances. Just add to the balances that are already listed. Requirement #6: Prepare an adjusted trial balance in the space below. Quick Tax Corporation Adjusted Trial Balance July 31 0 0

Explanation / Answer

Requirement 3) Quick Tax Corporation Trial Balance July 31 Debit Credit Working Notes Cash $43,400.00 40000-2500-3600-2800-1500+6500-500-450+8250 Prepaid Insurance $3,600.00 Supplies $700.00 Equipment $9,500.00 Accounts Payable $8,200.00 8000+700-500 Common Stock $40,000.00 Dividend $450.00 Tax preparation Revenue $14,750.00 6500+8250 Store Rent Expense $2,500.00 Salaries Expense $2,800.00 Total $62,950.00 $62,950.00 Requirement #4: Prepare adjusting entries using the following information in the General Journal below. Show your calculations! a) One month's insurance has expired. b) The remaining inventory of supplies is $300. c) The estimated depreciation on equipment is $125. d) The estimated income taxes are $2700. General Journal Date Description (Account Name) Debit Credit July 31 Insurance Expense $300.00 Prepaid Insurance $300.00 ($3600/12 months) July 31 Supplies Expenses $400.00 Supplies $400.00 ($700 - $300) July 31 Depreciation Expenses-Equipment $125.00 Accumulated Dep.- Equipment $125.00 July 31 Income Tax Expense $2,700.00 Income Tax Payable $2,700.00 Requirement #4 Quick Tax Corporation Trial Balance July 31 Debit Credit Cash $43,400.00 Prepaid Insurance ($3600 - $300) $3,300.00 Insurance Expense $300.00 Supplies ($700-$400) $300.00 Equipment $9,500.00 Accumulated Depreciation - Equipment $125.00 Depreciation Expense - Repair Equipment $125.00 Accounts Payable $7,800.00 Common Stock $40,000.00 Dividend $450.00 Tax preparation Revenue $14,750.00 Store Rent Expense $2,500.00 Salaries Expense $2,800.00 Income Tax $2,700.00 Income Tax payable $2,700.00 Total $65,375.00 $65,375.00

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