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FA08Quiz4Key - Required Using t-accounts post the above...

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Financial Accounting Quiz 4 Name: Fall 2008 Company N started business on January 1, 2008. For simplicity, assume that all of the following transactions occurred on January 1. Company N: (a) issued common stock for $50 (b) purchased inventory for $30 on account (to be paid in February) (c) sold inventory that cost $20 for $40 on account (to be collected in February) (d) paid cash of $30 for the next 6 months’ rent (January 1 – June 30).
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Unformatted text preview: Required: Using t-accounts, post the above explicit transactions to the relevant t-accounts, using letters (a) – (d). Post any necessary adjusting entries, using the letter (e). Close your revenue and expense accounts to Retained Earnings using the letter (f). Prepare a multi-step income statement for the month of January, 2008 (the only required subtotal for this simple problem is Gross Margin). ....
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