F08_3A_MT1-ALL

F08_3A_MT1-ALL - #30 We are Econ3a Inc We purchase stuff...

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#3 0 We are Econ3a, Inc.. We purchase stuff and sell it for a profit. Here is our trial balance at 1/1/2008: DR/ (CR) Cash 80,000 Accounts receivable 25,000 Inventory 20,000 Prepaid expenses 500 Fixed assets 100,000 Accounts payable (22,000) Accrued payroll - Debt (125,000) Common stock (3,000) Retained earnings (75,500) - (1) (2) Purchased $50,000 of inventory, on credit (3) Sold goods for $70,000 on credit which cost $30,000 (4) Made a $1,300 payment on the debt ($300 for interest and $1,000 for principle) (5) Purchased inventory for $10,000 cash (not on account). (6) Collected $42,000 from customers. (7) Paid $52,000 to vendors against outstanding payables. (8) (9) (10) (11) BASED ON ALL OF THE ABOVE i. II. FOR THE INCOME STATEMENT, CHOOSE FROM THE FOLLOWING ACCOUNT TITLES Revenues Salaries expense Advertising expense Cost of Goods Sold (or COGS) Interest expense Consultant expenses Rent expense We had the following activity during January: Paid $12,000 for payroll. NOTE: ALL OF THE BALANCE SHEET ACCOUNT TITLES YOU MAY NEED ARE LISTED IN THE ABOVE TRIAL BALANCE. FOR EACH NUMBER (1-11) ABOVE, RECORD THE JOURNAL ENTY OR STATE NO ENTRY IF THERE IS NONE. TRACK ACTVITY IN WHATEVER MANNER YOU PREFER, AND SHOW THE BALANCE SHEET AS OF THE END OF THE MONTH AND THE INCOME STATEMENT FOR THE MONTH. Made no new bank borrowings, but the debt already on the trial balance above matures at $1,000/ month. Noticed that there was $1,000 of payroll for the last couple days of the month which has not been paid yet , but for which we have received the benefit from our employees. Paid $2,000 for advertising to be provided at a later date. On the last day of the month, paid $24,000 for consulting services for which we have received the benefit..
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ACCOUNT DEBIT CREDIT (1) NO ENTRY (2) Inventory 50,000 Accounts payable 50,000 (3) Accounts receivable 70,000 Sales 70,000 (3a) COGS 30,000 Inventory 30,000 (4) Debt 1,000 Interest expense 300 Cash 1,300 (5) Inventory 10,000 Cash 10,000 (6) Cash 42,000 Accounts receivable 42,000 (7) Accounts payable 52,000 Cash 52,000 (8) Consultant expenses 24,000 Cash 24,000 (9) Salaries expense 12,000 Cash 12,000 (10) Salaries expense 1,000 Accrued payroll 1,000 (11) Prepaid expenses 2,000 Cash 2,000
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80,000 25,000 20,000 500 100,000 1,300 70,000 50,000 2,000 10,000 42,000 30,000 42,000 10,000 52,000 24,000 12,000 2,000 20,700 53,000 50,000 2,500 100,000 - 22,000 - 125,000 3,000 75,500 50,000 1,000 1,000 2,700 52,000 20,000 1,000 124,000 3,000 78,200 70,000 30,000 300 12,000 1,000 70,000 30,000 300 13,000 NET INCOME 2,700 24,000 - - 24,000 Fixed Assets Prepaid Expenses Rent Expense Advertising Exp. Common Stock Retained Earnings Accounts payable Accrued Payroll Sales Consult. Exp. Debt Salaries expense Cash Accounts Receiv. Inventory COGS Interest exp.
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Assets Sales 70,000 Current assets COGS 30,000 Cash 20,700 Gross Profit 40,000 Accounts receivable 53,000 Inventory 50,000 Interest expense 300 Prepaid expenses 2,500 Consultant expenses 24,000 Total Current assets 126,200 Salaries expense 13,000 Advertising expense - Fixed assets 100,000 Operating expenses 37,300 Total Asstes 226,200 Net income 2,700 Liabilities & Equity Current liabilities Current portion of notes payable 12,000 Accounts payable 20,000 Accrued payroll 1,000 Total current liabilities 33,000 Notes payable, exc. Curr. Portion 112,000 Equity Common stock 3,000 Retained earnings 78,200 Total Liabilities & Equity 226,200 Econ 3a, Inc.
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