question 1 create journal entries for the following january 2016 transactions for su 4305354

question 1 create journal entries for the following january 2016 transactions for su 4305354

Question

1. CREATE JOURNAL ENTRIES FOR THE FOLLOWING JANUARY 2016 TRANSACTIONS FOR SUNFLOWER DESIGNS:

a. On January 1st a laptop was purchased totaling $1,500. This purchase was made on credit.

b. On January 1st, six months of rent was prepaid. Mary is renting a small space in the main office of Vine & Branches; monthly rent is $300.

c. On January 15th, business liability insurance was purchased. There was a substantial discount for a 2 year policy. The cost of this policy is $1,750.

d. On January 16th $75 of supplies were purchased on credit and used in the month of January.

e. Iron Works, a subcontractor, completed several custom pieces Mary ordered for her prepaid contract order. The invoice was received on January 17th in the amount of $3,250. The terms of the invoice are 2/10, net 30.

f. On January 19th a customer purchased one of the custom designed lamps located in the showroom of Sunflower Designs. The selling price was $250, the sale was made on account.

g. On January 20th a check was issued to cover to laptop purchase made on January 1st .

h. On January 25th Sunflower Designs purchased supplies needed to finish the custom contract order that was prepaid in December. The supplies were purchased on credit in the amount of $5,650.

i. On January 30th Sunflower Designs completed and invoiced $25,000 of custom orders that were received in the month of December.

j. On January 31st a new order was received from B. Smith for an interior design layout. The contract will total $15,000 and a 10% deposit on the order was paid with the signing of the contract.

2. CREATE THE JANUARY 31, 2016 UNADJUSTED TRIAL BALANCE

3. CREATE ADJUSTING JOURNAL ENTRIES FOR JANUARY 31, 2016:

k. The laptop should be depreciated using the straight-line method. The depreciation period is 5 years. Record the adjusting entry as of January 31, 2016.

l. Record the adjusting entry for Rent.

m. Record the adjusting entry for Insurance.

4. CREATE THE ADJUSTED TRIAL BALANCE

5. USING THE BEGINNING BALANCES, CREATE THE ENDING BALANCE FOR EACH ACCOUNT. (You may want to create T-accounts to assist you with the account balance changes created by each transaction)

6. CREATE THE JANUARY 31, 2016 INCOME STATEMENT AND BALANCE SHEET

 

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