Problem 1 - Prepare financial statements.
You are provided with the following information for Merrell Enterprises, effective as of its April 30, 2012, year-end.
|
Accounts payable
|
$ 834
|
|
Accounts receivable
|
810
|
|
Accumulated depreciation-equipment
|
670
|
|
Cash
|
1,270
|
|
Common stock
|
900
|
|
Cost of goods sold
|
1,060
|
|
Depreciation expense
|
$ 335
|
|
Dividends
|
325
|
|
Equipment
|
2,420
|
|
Income tax expense
|
165
|
|
Income taxes payable
|
135
|
|
Insurance expense
|
210
|
|
Interest expense
|
400
|
|
Inventory
|
967
|
|
Land
|
3,100
|
|
Mortgage payable
|
3,500
|
|
Notes payable
|
61
|
|
Prepaid insurance
|
60
|
|
Retained earnings (beginning)
|
1,600
|
|
Sales revenue
|
5,100
|
|
Short-term investments
|
1,200
|
|
Salaries and wages expense
|
700
|
|
Salaries and wages payable
|
222
|
Instructions -
Prepare an income statement and a retained earnings statement for Merrell Enterprises for the year ended April 30, 2012.
Prepare a classified balance sheet for Merrell Enterprises as of April 30, 2012.
Problem 2 - Journalize transactions, post, and prepare a trial balance.
Town Architects incorporated as licensed architects on April 1, 2012. During the first month of the operation of the business, these events and transactions occurred.
Apr. 1 Stockholders invested $18,000 in cash in exchange for common stock for the corporation
Apr. 1 Hired a secretary-receptionist as a salary of $375 per week, payable monthly
Apr. 2 Paid office rent for the month $900
Apr. 3 Purchased architectural supplies on account from Spring Green Company $1,300
Apr. 10 Completed blueprints on a carport and billed client $1,900 for services
Apr. 11 Received $700 cash advance from J. Madison to design a new home
Apr. 20 Received $2,800 cash for services completed and delivered to M. Svetlana
Apr. 30 Paid secretary-receptionist for the month $1,500
Apr. 30 Paid $300 to Spring Green Company for accounts payable due
The company uses these accounts: Cash, Accounts Receivable, Supplies, Accounts Payable, Unearned Service Revenue, Common Stock, Service Revenue, Salaries and Wages Expense, and Rent Expense.
Instructions
a) Journalize the transactions, including explanations
b) Post to the ledger T accounts.
Prepare a trial balance on April 30, 2012.