Question

Moira and Johnny graduate from college in May 2020 and begin developing their new business. They begin by offering clinics fo
Sep. 1 To provide better storage of equipment and costumes, the company rents a storage unit, purchasing a one-year rental po
REQUIREMENTS: 1. Record each of the transactions listed above in the General Journal tab, including the adjusting entries (

Please answer this problem to the best of your ability. It is for Managerial Accounting.
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Answer #1

Journal Entries for each transaction:

Crowening Inc. General Journal Date Particulars L.F. Dr. Cr. 1 $20,000.00 01-Jul-20 Cash Dr. To Common Stock (at par) 2 $20,0

Income Statement Revenue Income from Acting Clinics Income from Dividends Profit on Sale of Lighting Equipment $ 135,000 $ 12

In the given case a large amount had been raised on 7th July amounting to over $ 3 Million. It is not clear whether this amount is used for cost of Studio Building. If that is the case, only the assets will interchange between cash and Building.

The Balance Sheet has been attached for reference.

Balance Sheet Rs. Rs. $ 335,800 Equity & Liabilities Common Stock Paid In Capital Retained Earnings Treasury Stock Repurchase

It is clearly evident that there is an excess cash & cash equivalents balance available. If the cash was used for purchase of Studio Building, the Balance Sheet, Cash Flow Statement and Acid test ratio will thus change accordingly.

Please also refer the Trial Balance which serves as the basis of the above financials (refer L.F.)

Trial Balance $ 4,742,989 $4,742,989 L.F. No. Debit Credit $ 3,727,378 $376,000 $ 2,040 $4,840 $ 800 $ 32,000 $ 3,721,000 $ 3

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