Question

1. 3. 4. The Hughes Tools Company started business on October 1, 2019. Its fiscal year runs through to September 30 the following year. The following transactions occurred in the fiscal year that started on October 1, 2019, and ended on September 30, 2020. On October 1, 2019, Jill Hughes invested $179.000 to start the business. Hughes is the only owner. She was issued 10,000 common shares. 2. On October 1, Hughes Tools borrowed $228,000 from a venture capitalist (alender who specializes in start-up companies) and signed a note payable. On October 1, the company rented a building. The rental agreement was a two-year contract requiring quarterly rental payments (every three months) of $12,000, payable in advance. The first payment was made on October 1, 2019 (covering the period from October 1 to December 31). Thereafter, payments were due on December 31, March 31, June 30, and September 30 for each three-month period that followed. All the rental payments were made as specified in the agreement On October 1, the company purchased equipment costing $325,600 for cash. Initial inventory was purchased for $94,500 cash. 6. Additional purchases of inventol during the year totalled $573,500, all on account. 7. Sales during the year totalled $931,000, of which $837,900 were on account. 8. Collections from customers on account totalled $651,000. Payments to suppliers on account totalled $515,000. 10. The cost of the inventory that was sold during the year was $559,500. Selling and administrative expenses totalled $84,300 for the year. Of this amount. $5,000 was unpaid at year end. Interest on the note payable from the venture capitalist was paid at year end (September 30, 2020). The interest rate on the note is 10%. In addition, $28,200 of the note principal was repaid at that time. 13 The equipment was depreciated based on an estimated useful life of 10 years and a residual value of $29,600. 14. The company declared and paid a dividend of $6,300. 5. 9. 11. 12.

Answer 1

	Assets	Liabilities
Trans.	Cash	Accounts Receivable	Prepaid Rent	Inventory	Equipment	Accounts Payable	Notes Payable	Common Shares	Retained Earnings	Revenue/Expense/Dividend Declared
1.	179000							179000		Not Applicable
2.	228000						228000			Not Applicable
3.	-12000		12000							Expense
4.	-325600				325600					Not Applicable
5.	-94500			94500						Not Applicable
6.				573500		573500				Not Applicable
7.	93100	837900							931000	Revenue
8.	651000	-651000								Not Applicable
9.	-515000					-515000				Not Applicable
10.				-559500					-559500	Expense
11.	-79300					5000			-84300	Expense
12.	No entry									Not Applicable
13.					-29600				-29600	Expense
14.	-6300								-6300	Dividend declared
Totals	118400	186900	12000	108500	296000	63500	228000	179000	251300

working:

depreciation =325600-29600/10 = 29600