Acquired $9,600 of merchandise from Bob Hall, the owner, who had acquired the merchandise prior to opening the shop. Issued common stock to Bob in exchange for the merchandise inventory.
Physically counted inventory, which indicated that $28,500 of inventory was on hand at the end of the accounting period.
A. Record each transaction in general journal form using the periodic method: record entry for issuance of common stock, record entry for issuance of common stock in exchange for the merchandise inventory, record entry for inventory purchased on amount, record entry for radio ads paid, record sale of inventory for cash, record entry for salary paid to a part time sales person, record entry cash paid for accounts payable, record adjusting entry for physical counted inventory on hand at the end of the accounting period.
B. Post each of the events to ledger T-accounts.
C. Prepare an income statement of changes in stockholders equity, balance sheet, and statement of cash flows.
D. Prepare the necessary closing entries at the end of 2016, and post them to the appropiate T-accounts.
E. Prepare a post-closing trial balance
The following transactions apply to Bob’s Bike Shop for 2016, its first year of operations: