Three accounting quizzes
Rachelmay22
Quiz2Elijahswidgetssummer20211.docxQuiz 2 Elijah’s Widget Shop-Merchandising
|
Assets |
Amount |
Liabilities & Equity |
Amount |
|
Cash |
$30,000 |
Accounts Payable |
$10,000 |
|
Accounts Receivable |
10,000 |
Notes Payable Short term |
16,000 |
|
Supplies |
1,000 |
Long Term Notes Payable |
25,000 |
|
Inventory |
20,000 |
Common Stock |
10,000 |
|
Equipment |
50,000 |
Retained Earnings |
40,000 |
|
Accumulated Depreciation |
(20,000) |
|
|
|
Land |
10,000 |
|
|
|
Total Assets |
$101,000 |
Total Liabilities & Equity |
$101,000 |
|
|
|
|
|
Elijah Watts operates a widget shop. The shop specializes in a selection of various widget products. You have been hired as manager. Your duties include maintaining the store’s financial records. The following transactions occurred during January, of this year.
a. Received cash contributions totaling $40,000 cash for common stock.
b. Paid three months’ rent for the store at $1,500 per month (two months are prepaid).
c. Purchased and received inventory for $50,000 on account (2/10 and n/30 days.)
d. Purchased supplies for $5,600 cash.
e. Made sales on account for $35,000 with the costs of $18,000 at 2/10, n/30.
f. Negotiated and signed a two-year $24,000 loan at the bank, receiving cash at the time.
g. Used the money from (f) to purchase several computers for $7,750; then used the balance for equipment for the shop.
h. Received payment for sales in (e) within the discount period.
i. Paid expenses: advertising expense of $1,500 and salaries of $5,500.
j. Made sales for cash totaling $25,000 with a costs of $11,000.
k. Made a payment on inventory accounts payable balance of $40,000 from transaction c above within the discount period.
l. Collected accounts receivable of $8,000 from customers after discount period.
m. Made a repair to equipment $1,700 cash.
n. Recorded Deprecation: for the computers of $750 and for the equipment of $1,800.
o. Received a cash payment for widgets in advance of $5,000. Will deliver it next month.
p. Office supplies on hand at the end of month were $2,000.
Required
1. Record journal entries for each of the transactions.
2. Prepare a trial balance.
3. Prepare an income statement at the end of the first month of operations ended January 31.
4. Prepare a statement of retained earnings for the period ended January 31.
5. Prepare a balance sheet as of January 31.
6. Write a memo to Elijah offering your opinion on the results of operations during the first month of business.
7. After three years in business the following data was computed. Based on this information provide a report to Elijah on the performance of the shop. (Don’t forget to include ratios.)
|
Year |
2016 |
2017 |
2018 |
|
Total Assets |
$152,500 |
$158,500 |
$166,000 |
|
Total Liabilities |
78,500 |
82,000 |
87,500 |
|
Total Equity |
74,000 |
76,500 |
78,500 |
|
Sales Revenue |
255,000 |
282,500 |
293,500 |
|
Net Income |
24,400 |
51,000 |
22,000 |
