1. Listed below are the transactions that occurred in September 2006. 9/1 The co
ID: 2477493 • Letter: 1
Question
1. Listed below are the transactions that occurred in September 2006.
9/1 The company issued 500 shares of capital stock at $10 per share.
9/2 Jackson Corporation borrowed $10,000 from the bank signing a 3-month note at 12% annual interest.
9/3 $3,000 supplies were purchased on account.
9/4 Office furniture was purchased for $6,000 cash. The furniture is expected to have a ten-year life, with no residual value.
9/15 Wages for the first half of September were paid, $2,000.
9/17 The company billed customers $1,500 for services performed.
9/20 $3,000 was received for services to be provided in September and October.
9/23 $5,000 cash was received for services performed in September.
9/27 The company collected $1,000 on account.
9/30 Declared and paid dividends, $1,000.
4. Record in general journal form any adjusting entries needed at the end of September and post the entries to the ledger. Additional information available at the end of SEptember includes:
k. $2,000 of supplies remains on hand.
l. Fees earned but not yet billed total $3,000.
m. By the end of September, the company had performed one-third of the services related to the 9/20 transaction.
n. At the end of September, employees were owed $2,000.
o. Hint: There are two more adjusting entries required ( 9/2 and 9/4)
7. Prepare financial statements (Income Statement, Statement of Retained Earnings, and Balance Sheet) for Jackson Corporation.
Explanation / Answer
Date Particulars Debit Credit 1-Sep Cash 5000 Common stock 5000 common stock issued as 500 shares at 10 per share 2-Sep Cash 10000 Bank loan 10000 Borrowed loan from bank 3-Sep Supplies 3000 Accounts payable 3000 Supplies purchased on account 4-Sep Furniture 6000.00 Cash 6000.00 Furniture purchased 15-Sep Wages Expense 2000.00 Cash 2000.00 Wage expense paid 17-Sep Accounts receivables 1500.00 Revenue earned 1500 Billed customers for services performed 20-Sep Cash 3000.00 Unearned revenue 3000 These services are to be performed 23-Sep Cash 5000.00 Revenue earned 5000.00 Revenue received in cash 27-Sep Cash 1000.00 Accounts receivables 1000.00 Amount received on account 30-Sep Cash dividend 1000.00 Cash 1000.00 Cash dividend paid 30-Sep Supplies expense 1000.00 Supplies 1000 Supplies were purchased for 3000, and still in hand as 2000 so supply consumed is 1000 30-Sep Accrued Revenue 3000 Revenue earned 3000 Revenue earned but not yet billed 30-Sep Un earned revenue 1000 Revenue earned 1000 Cash received was 3000 , 1/3 service means work worth $ 1000 has been completed so will be transferred to revenue earned 30-Sep Wage expense 2000 Wage expense payable 2000 Accrued wage expense 30-Sep Depreciation expense 500 Accumulated depreciation 500 using straight line method depreciation is calculated as = ( Cost of furniture - residual value) / life of furniture = (6000 - 0) / 10 = 6000 depreciation for september is = 6000/12 , =500 30-Sep Interest expense 100 Interest expense payable 100 Amount due to bank = 10000 interest rate = 12 % interest for year = 1200 interest for september = 1200 / 12 = 100
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