Question 1
The following data is for Jack and Bill, Inc.:
Balance Balance
12/31/07 12/31/08
Cash 30,000 78,100
Accounts Receivable 50,000 90,000
Allowance for Doubtful Accounts 10,000 15,000
Inventory 70,000 50,000
Prepaid Insurance 2,400 3,600
Equipment 200,000 350,000
Accumulated Depreciation 20,000 80,000
Land 100,000
Goodwill 10,000
Accounts Payable 30,000 35,800
Wages Payable 10,000 8,000
Rent Payable 4,000 6,000
Interest Payable 3,750 3,250
Taxes Payable 5,000 10,000
Note Payable 150,000 130,000
Common Stock ($1 each) 60,000 200,000
Retained Earnings 59,650 193,650
Sales 1,400,000
Cost of Goods Sold 719,500
Wage Expense 264,000
Rent Expense 48,000
Office Expenses 41,000
Depreciation Expense 60,000
Bad Debt Expense 30,000
Insurance Expense 3,000
Interest Expense 14,500
Income Tax Expense 66,000
The land was acquired on June 30, 2008 by exchanging 60,000 shares of common stock worth $60,000 and cash for the balance of the purchase price. The additional common stock (other than that issued for the purchase of the land) was sold on September 30, 2008 for $1 per share. The company did not sell any equipment during the year. All equipment purchased during the year was purchased for cash. The retained earnings balance for both years is after all closing entries have been made. The Note Payable requires payments of $20,000 principal plus interest at 10% on September 30th of each year.
Required:
Prepare the income statement and balance sheet for Jack and Bill, Inc for the year ending at 31 December 2008.
Question 2
- The following transactions belong to Mr Roy business from Nov 10th, 20_5 to Nov 30th, 20_5
Enter the following transactions in the Journal and post them into ledger and from the information obtained prepare a Trail Balance.
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Nov 10th
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Mr. Roy started business with 60,000
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11th
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Bought furniture from Modern Furniture for 10,000
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12th
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Purchased goods for cash 15,000
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13th
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Purchased goods from B. Sen & Co for 30,000
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14th
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Opened a bank account by depositing 16,000
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16th
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Sold goods for cash 15,000
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17th
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Purchased stationery for 1000 from Bharat Stationery Mart
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18th
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Sold goods to Zahir Khan for 10,000
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19th
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Bought machinery for 6,000 and payment made by cheque
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20th
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Goods returned by Zahir Khan for 2,000
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21st
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Payment to B.Sen & Co by cheque 5,000
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22nd
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Withdrew from bank for personal use 3,000
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23rd
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Interest paid through cheque 2,000
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24th
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Withdrew from bank for office expenses 10,000
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26th
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Cheque received from Zahir Khan 5,000
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27th
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Paid electricity bill for 100
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29th
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Cash sales for 6,000
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30th
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Commission received by cheque 5,000
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Required:
Enter the above transactions in the Journal.
Post the journal transactions into ledger.
Prepare a Trail Balance.