accounting problem

Comprehensive Problem – Post Test 2 BADM225 – Fall 2017

One spring, Jake and Chad Driller decided to earn money providing professional athletic coaching and training services.

In October, their fifth month of operation, the following transactions took place:

Oct. 1 Paid the first payment on the equipment loan to Dunham.

4 Received cash of $2,550 for services performed.

4 Paid $1,665 for inventory supplies

5 Paid prior months telephone bill and currents months bill of $350.

6 Collected $2,505 from customer billed in the previous month.

7 Paid for previous month's invoices in the amount of $2,237.

15 Paid cash for labor (employees) $2,500.

15 Payroll taxes for September were paid.

19 Billed customers $4,350 for services performed.

22 Paid $280 as reimbursement for gas purchases.

25 Performed coaching services for the September 30 advance payment.

30 Paid cash for labor (employees) $2,500.

31 Customers paid $5,880 for services performed.

In addition, the following additional facts are collected

a. Another month of rent and insurance have expired.

b. Payroll taxes of 20% for the October 15th and 31st payrolls were paid on November 15, 2017.

c. Supplies inventory balance at October 31 was $925.

d. Another month of depreciation has occurred for the September 5th equipment. In addition, the equipment purchased in August (owned for two months) is expected to have a useful life of 4 years and no salvage value. (calculate depreciation using straight line depreciation)

Required:

1. Record journal entries for all transactions listed above for the month October and Post your journal entries to t-accounts (add these transactions to the Test 2 transactions already posted for October).

2. Prepare a trial balance as of the end of October.

3. Prepare a multi-step income statement for Drillmakers, Inc. for the month ended October 31, 2017.

4. Prepare a balance sheet in classified form for Drillmakers, Inc. at October 31, 2017. LABEL ALL WORK CLEARLY!!