ACC 550 ACC 550 INTERMEDIATE ACCOUNTING I - The following transactions pertain to Ski Training Company for 2015

ACC 550

INTERMEDIATE ACCOUNTING I

PRINCIPLES REVIEW #2

SPRING SEMESTER I 2016

The following transactions pertain to Ski Training Company for 2015:

· Jan 30 Established the business when it acquired $75,000 cash from the issuance of common stock. · Feb 1 Paid rent for office space for two years, $24,000 cash.

· Mar 1 Borrowed $20,000 cash from National Bank. The note issued had a 9% annual rate of interest and matures in one year.

· Apr 10 Purchased $5,300 of supplies on account.

· Jun 1 Paid $27,000 cash for a computer system which had a three-year useful life and no salvage value.

· July 1 Received $50,000 cash in advance for services to be provided over the next year.

· July 20 Paid $1,800 of the accounts payable from April 10.

· Aug 15 Billed a customer $32,000 for services provided during August.

· Sep 15 Completed a job and received $19,000 cash for services rendered.

· Oct 1 Paid employee salaries of $20,000 cash.

· Oct 15 Received $25,000 cash from accounts receivable.

· Nov 16 Billed customers $37,000 for services rendered on account

· Dec 1 Paid a dividend of $6,000 cash to the stockholders.

· Dec 31 Adjusted records to recognize the amount of services provided on contract on July 1 (assume earned ratably).

· Dec 31 Recorded the accrued interest on the note to National Bank (see March 1).

· Dec 31 Recorded depreciation on the computer system used in the business (see June 1).

· Dec 31 Recorded $4,500 of accrued salaries as of December 31.

· Dec 31 Recorded the rent expense for the year (see February 1).

· Dec 31 Physically counted supplies; $480 was on hand at the end of the period.

REQUIRED:

(a) Prepare journal entries for the transactions above. Use good form for the journal entries.

(b) Prepare a trial balance at December 31 based on the journal entries above.

(c) Prepare an income statement for the year.

(d) Prepare a statement of shareholders’ equity for the year.

(e) Prepare a classified balance sheet as of the end of the year.

(f) Prepare closing journal entries for the month.

(g) Prepare a post-closing trial balance after making the closing entries above.