The accounting records for Beta Company contained the following balances as of December 31, 2008 -

The accounting records for Beta Company contained the following balances as of December 31, 2008: Assets Liabilities and Shareholders’ Equity Cash $50,000 Accounts Payable $17,500 Accounts Receivable 26,500 Prepaid Rent 3,600 Common Stock 48,600 Land 10,500 Retained Earnings 24,500 Totals $90,600 $90,600 The following accounting events apply to Beta’s 2009 fiscal year: a. Jan. 1 Beta purchased a computer that cost $18,000 for cash. There is no estimated salvage value, and its economic useful life is three years. b. Mar. 1 The company borrowed $20,000 by issuing a two-year note at 12%. c. May 1 The company paid $6,000 cash in advance for a six-month lease starting on July 1 for office space. d. June 1 The company paid dividends of $2,000 to the owners. e. July 1 The company purchased land that cost $15,000 cash. f. Aug. 1 Cash payments on accounts payable amounted to $5,500. g. Aug. 1 Beta received $13,200 cash in advance for 12 months of service to be performed monthly for the next year, beginning on receipt of payment. h. Sept. 1 Beta sold a parcel of land for $13,000, which was the amount it originally paid for that portion of the land. i. Oct. 1 Beta purchased $1,300 of supplies on account. j. Nov. 1 Beta purchased short-term investments for $10,000. The investments earn 5% per year. k. Dec. 31 The company earned service revenue on account during the year that amounted to $50,000. l. Dec. 31 Cash collections from accounts receivable amounted to $46,000. m. Dec. 31 The company incurred other operating expenses on account during the year that amounted to $5,850. Accounting 321, Spring 2010 Exam #1 – Take Home Portion Due February 15, 2010 at the beginning of the class period The following additional information is available at December 31, 2009: 1. Salaries that had been earned by the sales staff but not yet paid amounted to $2,300. 2. Supplies on hand at the end of the period totaled $200. 3. The beginning balance of $3,600 in Prepaid Rent was completely used up by the end of the year. Required: A. Open T-accounts and record the account balances as of December 31, 2008. (2 points) B. Prepare the journal entries to record the transactions that occurred during 2009 and the necessary adjusting entries at year-end. (21 points) C. Post the journal entries to the T-accounts. (Hint: some new accounts must be opened.) (3 points) D. Prepare an adjusted trial balance. (3 points) E. Prepare all four financial statements for the year ended December 31, 2009. (16 points – 4 points per financial statement) F. Prepare the closing entries. (3 points) G. Post the closing entries to the T-accounts. (2 points)

Click here for the SOLUTION

This entry was posted in Homework Help. Bookmark the permalink.

Comments are closed.