PART A: Prepare journal entries for the following transactions:
1. ABC Company issued 10,000 shares of $1 par value common stock for $5 per share.
2. ABC Company purchased $5,000 of supplies with cash.
3. ABC Company purchased a piece of office equipment of $10,000 on account.
4. ABC Company purchased $2,500 of inventory with cash.
5. ABC Company sold all $2,500 of inventory for $6,000 of cash (two entries needed).
6. ABC Company paid their employees $1,500 of salary expense with cash.
7. ABC Company received a $500 utility bill and recorded it, but it has not yet been paid.
8. ABC Company issued/paid a $2,000 dividend.
PART B: Prepare the Income Statement, Statement of Owner's Equity and Balance Sheet from the following Trial Balance:
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ABC Company
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Adjusted Trial Balance
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For the Year Ended December 31, 2016
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Debits
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Credits
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Cash
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50,400
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Accounts Receivable
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10,800
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Prepaid Insurance
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1,000
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Supplies
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5,000
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Land
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198,000
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Building
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113,330
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Accumulated Depreciation-Building
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115,000
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Accounts Payable
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9,000
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Salaries and Wages Payable
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7,000
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Unearned Revenues
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3,000
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Common Stock
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100,000
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Sales Revenue
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225,000
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Salaries and Wage Expense
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50,000
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Advertising Expense
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2,500
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Utilities Expense
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10,400
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Depreciation Expense - Building
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8,000
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Insurance Expense
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3,000
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Supplies Expense
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2,250
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Miscellaneous Expense
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4,320
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Totals
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459,000
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459,000
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