Task: Journal Entries and Statement preparation
1. On January 1, 2005 Frances Corporation started doing business and the owners contributed $200,000 capital in cash.
2. The company paid $24,000 to cover the rent for the office space for the 24 month period from January 1, 2005 to December 31, 2006.
3. On March 1, 2005 MSK Inc. entered into a consulting contact under which Frances Corporation promised to provide consulting to MSK Inc. for the ten month period fro March 1, 2005 to December 31, 2005 In return MSK promised to pay a monthly consulting fee of $15,00 which was to be paid in January 2006th Frances Corporation fulfilled its contractual obligations during 2005.
4. On July 1, 2005 Frances Corporation purchased offer equipment for $100,000 cash. The equipment was immediately placed into use. Francis Corporation uses the straight line method of depreciation. Frances Corporation records depreciation in proportion to the number of months usage.
5. Through November 30, 2005 the company had paid $ 66,000 to its emplolyees for 11 moths of salaries. Accrued salaries December 31, 2005 were $6,000.
6. On December 31, 2005 Norbert Corporation advanced $20,000 to Frances Corporation for consulting services to be provided during 2006.
Q1. Provide journal entries for each transaction.
Q2. Provide adjusting entries at the end of the year.
Q3. Prepare and income statement at the end of the year.
Q4. Prepare a Balance statement at the end of the year.