PROF SocratesHOMEWORK #3
pm
10 points
Meyer Corporation sells computers and provides computer repair services. The balances in the General Ledger accounts as of 4/1/15 are as follow:
Cash | $ 30,000 | Notes Payable | $ 15,500 |
Accounts Receivable | 17,000 | Contributed Capital | 63,000 |
Inventory | 8,000 | Retained Earnings | 45,700 |
Prepaid Advertising | 2,500 | Sales Revenue |
|
Building | 39,000 | Repair Service Revenue |
|
Land | 28,000 | Cost of Goods Sold (COGS) |
|
Equipment | 20,000 | Advertising Expense |
|
Accounts Payable | 13,000 | Salary Expense |
|
Unearned Revenue | $7,300 |
|
|
The business transactions for April are shown below:
APRIL
2 Meyer invested $80,000 cash into the business and contributed $100,000 worth of equipment in exchange for stock.
4 Land and building were purchased for $185,000. Of this amount, $90,000 applied to the land, and $95,000 to the building. The corporation paid $50,000 in cash and financed the remaining balance with debt by signing a note promising to pay in four years.
7 Purchased $10,000 of computer inventory for the business on account.
10 Sold computers to customers for $20,000 receiving the entire amount in cash. The computers cost $15,000 (Hint: There are four accounts in this journal entry)
14 Received $7,000 from a customer on previously billed repair services
18 Meyers Corporation billed customers $15,000 for repair services rendered. Of this amount, $8,500 was received in cash, and the balance was billed on account.
21 Paid $8,000 of accounts payable that had become due.
24 Paid $7,000 for several television advertisements aired in April
27 Received a check from a customer for $6,000 for repair services to be rendered in May
30 Paid employees $15,500 in salaries to employees for work done during the month.
Submit all your answers to D2L in one Excel document.
- Prepare journal entries for each transaction (list the date, accounts and amounts debited and credited in good form).
| Accounts | Debit | Credit |
April 1 | Cash (+A) | $500,000 |
|
| Contributed Capital (+SE)
|
| $500,000 |
To record purchase of additional shares of stock | |||
- Create T- account for each account used with the beginning balance provided. Post each transaction from Question 1 to the appropriate T account and determine the ending balance as of April 30.
- Prepare a trial balance dated April 30, 2015 (see page 64 in textbook). Use the “Sum” function in Excel to add up your debit and credit columns.
- Prepare an income statement for the period ended April 30, 2015. Does April appear to be a profitable month for Meyer Corporation? What is one suggestion you would make to increase the profitability of the business?
- Prepare a balance sheet as of April 30, 2015. Use the “Sum” function in Excel for your totals. (Remember:Ending Retained Earnings = Beginning Retained Earnings + Net Income – Dividends)
10 years ago
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meyer_corporation.xlsx
