HOMEWORK
Meyer Corporation sells computers and provides computer repair services. The balances in the General Ledger accounts as of 4/1/15 are as follow:
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Cash
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$ 30,000
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Notes Payable
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$ 15,500
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Accounts Receivable
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17,000
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Contributed Capital
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63,000
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Inventory
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8,000
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Retained Earnings
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45,700
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Prepaid Advertising
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2,500
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Sales Revenue
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|
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Building
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39,000
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Repair Service Revenue
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|
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Land
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28,000
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Cost of Goods Sold (COGS)
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|
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Equipment
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20,000
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Advertising Expense
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|
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Accounts Payable
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13,000
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Salary Expense
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|
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Unearned Revenue
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$7,300
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|
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The business transactions for April are shown below:
APRIL 2 Meyer invested $80,000 cash into the business and contributed $100,000 worth of equipment in exchange for stock.
4 Land and building were purchased for $185,000. Of this amount, $90,000 applied to the land, and $95,000 to the building. The corporation paid $50,000 in cash and financed the remaining balance with debt by signing a note promising to pay in four years.
7 Purchased $10,000 of computer inventory for the business on account.
10 Sold computers to customers for $20,000 receiving the entire amount in cash. The computers cost $15,000 (Hint: There are four accounts in this journal entry)
14 Received $7,000 from a customer on previously billed repair services
18 Meyers Corporation billed customers $15,000 for repair services rendered. Of this amount, $8,500 was received in cash, and the balance was billed on account.
21 Paid $8,000 of accounts payable that had become due.
24 Paid $7,000 for several television advertisements aired in April
27 Received a check from a customer for $6,000 for repair services to be rendered in May
30 Paid employees $15,500 in salaries to employees for work done during the month.
Submit all your answers to D2L in one Excel document.
1. Prepare journal entries for each transaction (list the date, accounts and amounts debited and credited in good form).
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Accounts
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Debit
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Credit
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April 1
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Cash (+A)
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$500,000
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|
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Contributed Capital (+SE)
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$500,000
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To record purchase of additional shares of stock
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2. Create T- account for each account used with the beginning balance provided. Post each transaction from Question 1 to the appropriate T account and determine the ending balance as of April 30.
3. Prepare a trial balance dated April 30, 2015 (see page 64 in textbook). Use the "Sum" function in Excel to add up your debit and credit columns.
4. Prepare an income statement for the period ended April 30, 2015. Does April appear to be a profitable month for Meyer Corporation? What is one suggestion you would make to increase the profitability of the business?
5. Prepare a balance sheet as of April 30, 2015. Use the "Sum" function in Excel for your totals. (Remember:Ending Retained Earnings = Beginning Retained Earnings + Net Income - Dividends)