Problem: 3-36B (Comprehensive problem including depreciation) Vox Company starte

Question

Problem: 3-36B (Comprehensive problem including depreciation)

Vox Company started the period with cash of $22,000, common stock of $12,000, and retained earnings of $10,000. Vox engaged the following transactions in 2016:

Transactions in 2016:

1. On January 1, 2016, purchased a computer for $7,500 cash. 2. On Febuary 1, paid $6,600 cash for rent for a 12-month period beginning immeadiately. 3. Purchased $1,100 of supplies for cash. 4. Provided $56,000 of services for cash. 5. Paid $18,000 cash for salaries exspense. 6. On May 1, recieved $9,000 for services that will be performed over the next 12 months.

Information for adjusting entries:

7. The computer had an estimated life of three years and a $2,400 salvage value. 8. Recognized the expired rent. 9. An inventory of supplies showed $120 of supplies on hand as of December 31. 10. Recognized the revenue associated with Event 6 as of December 21

Required:

a. Record the 10 events in the general journal format.

b. Prepare an income statement, balance sheet, and statement of cash flows.

Vox Company started the period with cash of $22,000, common stock of $12,000, and retained earnings of $10, 000. Vox engaged the following transactions in 2016: Transactions in 2016: 1. On January 1, 2016, purchased a computer for $7,500 cash. 2. On February 1, paid $6,600 cash for rent for a 12-month period beginning immediately. 3. Purchased $1,100 of supplies for cash. 4. Provided $56,000 of services for cash. 5. Paid $18,000 cash for salaries expense. 6. On May 1, received $9,000 for services that will be performed over the next 12 months. Information for adjusting entries: 7. The computer had an estimated life of three years and a $2,400 salvage value. 8. Recognized the expired rent. 9. An inventory of supplies showed $120 of supplies on hand as of December 31. 10. Recognized the revenue associated with Event 6 as of December 21 Required: a. Record the 10 events in the general journal format. b. Prepare an income statement, balance sheet, and statement of ca

Explanation / Answer

a  

1 computer Dr.$7500

   To cash 7500

2. prepaid rent Dr.$6600

  To cash 6600

3. supplies Dr.$1100

To cash 1100

4. cash Dr.$56000

To service revenue $56000

5. salary expense Dr.$18000

To cash 18000

6 cash Dr.$9000

To unearned service revenue $9000

7. Depreciation Dr.$ 1700

To accumulated Depreciation 1700

Note:-     Depreciaiton for the year = 7500 - 2400 / 3 years

   = 1700

8. rent Dr.$6600   

   To prepaid rent $6600

9 supplies expense [1100 - 120 ] Dr $980

To supplies $980

10 unearned service revenue Dr.$9000

   To service revenue $9000

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