Recording Business Transactions according to US GAAP.

 

Unadjusted trial balance Feb 28

Cash= 20700

Accounts receivable =3000

Land =20000

Building= 40000

Furniture= 6000

Computer = 2400

Note payable = 55000

Accounts payable = 5000

Cap stock = 30000

Revenue = 4600

Electricity expense= 500

Salary expense= 2000

TOTAL

94600

94600

At December 31, the company has to record the following transactions

Revenues obtained during the las 10 months: $250,000.00 all paid in cash

All expenses of the company during the last 10 months for $58,000

The $55,000 note payable has been issued on January 1 and  bears 10% interest rate. Interests are paid every 1st of January. No repayment of the principal has been made

The building has a useful life of 30 years, an estimated salvage value of $5,000

Students are requested to:

  1. Prepare the last entries of the year on the journal (revenues and expenses, adjusting entries)
  2. Prepare the closing entries.
  3. The balance sheet of the company closed at December 31.

 

Formalities:

  • Format: An Excel document

 

This task assesses the following learning outcomes:

  • Recording business transactions according to US GAAP
  • Assessing the Journal.
  • Assessing the Balance sheet.
  • Assessing the firm’s result.

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