Week 3 Tutorial Problem
Problem 1
The following events apply to Braxton Personnel Advisory Services Company (BPASC).
1. On January 1, Year 1 issued common stock for $5,000 cash.
2. Paid $1,800 cash to rent office space for one year beginning on February 1, Year 1.
3. Received a $2,400 cash advance as a retainer for services to be provided. Services were to be provided evenly for one year beginning on March 1, Year 1.
4. On December 1, Year 1, paid dividends of $200 to the stockholders.
Required
a. Record the events in ledger T-accounts and prepare an unadjusted trial balance.
b. Record necessary adjusting entries in ledger assignment writers T-accounts and prepare an adjusted trial balance.
c. Use the adjusted trial balance to prepare an income statement, a statement of retained earnings, a balance sheet, and a statement of cash flows.
d. Record the closing entries in ledger T-accounts and prepare a post-closing trial balance.
Problem -2 – General Journal Entries
Required
Record the following transactions in general journal entry form. Record the event number in the date column.
1. Issued common stock for $5,000 cash.
2. Borrowed $4,000 cash from a local bank.
3. Purchased $500 of supplies on account.
4. Recognized revenue of $8,000 for services provided on account.
5. Paid $3,900 cash for salaries expense.
6. Paid $2,400 cash in advance for a one-year lease to rent office space.
7. Purchased $3,500 of office furniture on account.
8. Received $1,800 cash for services to be performed in the future.
9. Collected $3,000 cash from accounts receivable.
10. Paid $1,200 cash for utilities.
11. Paid dividends of $1,000 cash to the stockholders.
12. Invested $2,000 cash in a certificate of deposit.
13. Repaid $1,600 of the bank loan described in Event No. 2.
14. Purchased land for $2,700 cash.
15. Recognized $400 of accrued interest expense.
16. Completed $1,800 of services on contract described in Event No. 8.
17. Counted supplies on hand at the end of the accounting period. Determined that $400 of supplies were used during the accounting period.
18. Recognized accrued salary expense of $2,300.
19. Recognized $150 of accrued interest revenue.
