Accounting financial statements
oorod16
SpringBreak2018121.pptxSpring Break 1
Building $600,000
Cash $100,000
Note Payable $500,000
2
Equipment $500,000
Note Payable $500,000
3
Prepaid Insurance $12,000
Cash $12,000
4
Inventory $80,000
Cash $5,000
Accounts Payable $75,000
5
Cash $6,000,000
Common Stock $3,200,000
Excess of Par $2,800,000
6
Inventory $60,000
Cash $57,600
Purchase Discount $2,400
7
Cash $100,000
Accounts Rec. $300,000
Sales Revenue $400,000
8
Interest Expense $3,333
Note Payable [8%] $6,667
Cash $10,000
9
Utility Expense $12,000
Cash $12,000
10
Wage Expense $16,000
Cash $16,000
11
Sales Return $22,000
Accounts Rec. $22,000
12
Interest Expense $3,289
Note Payable $6,711
Cash $10,000
13
Cash $240,200
Sales Discount $37,800
Accounts Rec. $278,000
14
Accounts Rec. $600,000
Sales Revenue $600,000
15
Income Tax Payable $8,000
Cash $8,000
16
Accounts Pay. $75,000
Discount on Purchases $4,000
Cash $71,000
17
Dividends $1,200,000
Dividends Payable $1,200,000
18
Depreciation Exp. $3,000
Accumulated Depr. $3,000
19
Cash $30,000
Accum. Depr. $23,000
Loss on Sale EQ $7,000
Equipment $60,000
20
Wage Expense $5,000
Cash $5,000
A
Interest Expense [12%] $1,800
Interest payable $1,800
Note Payable from Balance Sheet
$60,000 X 12% X 3/12 = $1,800
B
Interest Expense [8%] $3,244
Interest Payable $3,244
[$500,000* - $6,667 – $6,711] X 8% X 1/12
This equals $3,244
* Per note created in item 1.
C
Depr. Expense {Bldg.} $3,750
Accumulated Depr. $3,750
$600,000*/40 years = $15,000 per year
$15,000 X 3/12 = $3,750
* Bldg. cost $600,000 per item 1
D
Interest Expense [10%] $12,500
Interest Payable $ 12,500
$500,000 X 10% =$50,000
$50,000 X 3/12 = $12,500
This note is from item 2 event
E
Depr. Expense {Equip} $12,500
Accumulated Depr. $12,500
$500,000/10 years = $50,000 per year
$50,000 X 3/12 = $12,500
This event is from item 2
F
Insurance Expense $1,000
Prepaid Insurance $1,000
$12,000 insurance policy /36 months =
$333,33 per month [or $4,000 per year]
Thus 3/12 = ¼ and ¼ of $4,000 = $1,000
Insurance is per item 3
G
Tax Expense ????
Tax Payable ????
The amount for this adjusting entry is derived after net income before taxes
