Question

Jan The owners, Brad & Jennifer, each put up $250,000 cash as an initial investment into the company. 2 Purchased a pizza oven for $22,000. 3 Purchased inventory from Sysco Company on account for $21,000. 4 Hired five employees to begin work on Feb 15; the salaries for each employee will be set at $12/hour and they are each expected to work 20 hours per week. 5 Took out a loan with TD Bank for $50,000 payable in 90 days. Purchased land adjacent to the restaurant for customer parking at a cost of $10,000; the company paid $5,000 cash and signed a note for the balance due December 31, 2018. 7 Brad purchased a garage behind the restaurant to store personal items for $15,000 cash. 8Purchased a trademark for the company's pizza logo for $21,000 cash. 9 Ashley, Jennifer's sister, decided to join the partnership, and put up $250,000 as an initial investment. 10 Returned spoiled inventory purchased on Jan 3 for a credit equal to $11,000; no sales had occurred at this time. 11 Paid the Sysco Company account balance in-full. 12 Purchased short term investments equal to $5,000 cash. 13 Took out a bank loan with CIBC Bank for $1,000 payable in 10 years. 14 Purchased inventory from HSJ Foods for $10,000: 50% paid cash and the rest on account. 15 Provided a cash loan to a local supplier equal to $15,000; the loan must be repaid within 30 days. 16 Paid insurance on the store front in-advance for $1,500 cash; the coverage begins Feb 1. 19 Declared a dividend of $2,000 for each of the owners. 31 Depreciation on the pizza oven for January was calculated as $1,000. 31 Paid the dividend in-full declared on Jan 19. 31 Income tax payable for the month was calculated as $1,700. 31 The ending balance of the short term investments at January 31 was $2,000. 31 Sales for the month of January totalled $80,000 of which $1,000 was owed on account. 31 | Cost of goods sold for the month of January was $19,000

Prepare T-accounts with ending balances for all necessary accounts.

Answer 1

Be causs, Financial historical Accounting is Cost Concept. based on Transaction dated 7 January, has not been taken ino account since it is personal nature of activity and this is nothing to do business of the owner. The this transaction is out of scope of business transactions. Hence, these Dansactions are not consider.

CO. art Sales Balance $50 000 $80000 e $68,000 $ 80 Ooo lebtor accounts Receivale) ez v $ 1000 Balance $1000 $1.000 Balance $1000 ort Income-tad $1,700 Crt Balance $1,700 $1,700 $ 1,700 Income-tax payable Drid Co.t Balence $1,700 $ 1,700 $1,7001 $1,700 - 2 Notes to the students :- Transaction dated Jan 4, has not been taken into account for preparation of T-accounts, since these transactions are future transaction and future bansactions has not any place in the beaks of so accounts.

HSJ er a s Foods Foods cr. 1 $ SOOO Balance $5000 $5ooo! $5000 Loans & Advances (supplier) $ 15,000 Balance $15000 $ 15000 $15000 Prepaid Insurance to $ 1,500 co.t $ за По и да $ 1,550 $ 2150 Dividend DOT $ 8,000 Balance $8000 I $8000 Repreciation (Pizza oven) OX, $ 1000 $1000 Balance Belante $100 $1000

7) land for oot parking Dr1 cow $10,000 $10,000 - Balance $10,000 $10,000 Notes Payable co.t $ 5000 Dy Balance $5000 $5000 $5000 Trademark (Pizza logo) Dr1 $2,000 Balance $21000 cord $21000 $21000 Dr. Short team Investment Cr. $5,000 $3000 L Balance $2000

Dr. Pizza oven $ 22000 $ 1000 Balance $21000 $ 2,000 $22000 Don Inventory $ 21000 $ 10,000 $ 11,000 $19000 Balance $31000 $1000 $31000 Sysco Company Qy art $ 21,000 $ 11,000 $ 70,000 $21,000 $ 21,000 cat 2 loan with a bank pra $ 50,000 Balance $30000 $ 15,000 $ 30,000 $ 30,000

Preparation of T- Alcount For with necessary Accounts For the month of January, 2018 Eauity Stockholders Dy Gr.1 $750,000 (25000083) Balance $1,000,00 $250,000 $ 1,000,000 $1,000,000 Cash arit $ 750,000 $ 50,000 $ $ 250,000 $15,000 $3000 $79000 $22,000 $ 5,000 $ 244000 & 10,000 $5,000 $5,000 $ 15,000 600 $1,500 $ 8000 Balane & 1054,500 $1,147,000 51147000
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