Question

Required Information [The folowing information applies to the questions displayed below.] Colton Enterprises experienced the following events for Year 1, the first year of operation 1. Acquired $42.000 cash from the issue of common stock 2 Paid $12.700 cash in advance for rent. The payment was for the period April 1. Year 1 to March 31, Year 2 3. Performed services for customers on account for $95.000. 4. Incurred operating expenses on account of $38.500. 5. Collected $66.000 cash from accounts receivable. 6. Pald $28.000 cash for salary expense 7. Pald $30,000 cash as a partial payment on accounts payable. Adjusting Entries 8. Made the adjusting entry for the expired rent. (See Event 2 9. Recorded $3.800 of accrued salaries at the end of Year 1. Events for Year 2 1. Pald $3,800 cash for the salaries accrued at the end of the prior accounting period. 2. Performed services for cash of $35,000. 3. Purchased $3.500 of supples on account 4. Pald $12.600 cash in advance for rent. The payment was for one year beginning April 1 Year 2 5. Performed services for customers on account for $102,000. 6. Incurred operating expenses on account of $49.500. 7. Collected $96.000 cash from accounts receivable 8. Pald $46.000 cash as a partial payment on accounts payable. 9. Pald $32. 200 cash for salary expense 10. Paid a $10,000 cash dividend to stockholders. Adjusting Entries 11. Made the adjusting entry for the expired rent. (Hint: Part of the rent was paid In Year 1.) 12. Recorded suppiles expense. A physical count showed that $800 of supples were still on hand D. Post the Year 1 events to T-accounts. Cach Acoounts Receivable Beg Bal Beg Bal End Bal End. Bal Prepaid Rent Acoounts Payable Beg Bal Beg Bal End Bal End, Bal Salates Payable Common took Beg Bal Bog. Bal. End Bal End, Bal Bervice Revenue Operating Expenses Beg Bal Beg Bal End. Bal End. Bal. Rent Exponce Salaries Expence BoBa Bog. Bal End. Bal End. Bal.

Answer 1

Requirement b:

Cash					Accounts receivable
Beg. Bal.					Beg. Bal.
1	$ 42,000	$ 12,700	2		3	$ 96,000	$ 66,000	5
5	$ 66,000	$ 28,000	6
		$ 30,800	7
End. Bal.	$ 36,500				End. Bal.	$ 30,000
Prepaid rent					Accounts payable
Beg. Bal.					Beg. Bal.
2	$ 12,700	$ 9,525	8		7	$ 30,800	$ 38,500	4
End. Bal.	$ 3,175				End. Bal.		$ 7,700
Salaries payable					Common stock
Beg. Bal.					Beg. Bal.
		$ 3,800	9				$ 42,000	1
End. Bal.		$ 3,800			End. Bal.		$ 42,000
Service revenue					Operating expenses
Beg. Bal.					Beg. Bal.
		$ 96,000	3		4	$ 38,500
End. Bal.		$ 96,000			End. Bal.	$ 38,500
Rent expense					Salaries expense
Beg. Bal.					Beg. Bal.
8	$ 9,525				6	$ 28,000
					9	$ 3,800
End. Bal.	$ 9,525				End. Bal.	$ 31,800