IV. Applications (40 points) TS Express is a delivery company established on Jan

Question

IV. Applications (40 points) TS Express is a delivery company established on Jan ,2017and operated by Tony Stark. The following transactions took place during November. o On Nov 1". Tony Stark invested $90,000 into TS Express. On Nov TS Express used m000 cash to purchase an insurance covering the coming 4 months o On Nov 7. TS Express sold redeemed VIP cards worth $2,000 in cash. On Nov 1 ". TS Express borrowed S30,000 frorn China Bank. o On Nov 15". TS Express purchased an equipment on credit for $260,000. The equipment was estimated to be used for 10 years and had a residual value of $20,000. On Nov 22, Tony Stark withdrew $10,000 from TS Express for his personal use. Journalize all the entries. (9 points, 1.5 points each) 2. 1. Prepare a trial balance. (5 points, just fill in the spreadsheet) At the end of November, the following adjustments have to be made: o Part of the insurance expired o Accrued employees' salaries were $20,000. They would be paid next month. o The VIP cards were used during the month. o The equipment depreciated for one month. Journalize all the adjustments. (6 points, 1.5 points each) 4. Post the adjustments to the spreadsheet. (5 points) 5. Prepare an adjusted trial balance (5 points,just fill in the spreadsheet) 6. Record all the closing entries. (5 points) 7. Prepare a post-closing trial balance. (5 points, just fill in the spreadsheet) 3.

Explanation / Answer

Date General Journal Debit $ Credit $ Nov 1 Cash $        90,000 T. stark's Capital $        90,000 Nov 3 Prepaid Insurance $        80,000 Cash $        80,000 Nov 7 Cash $          2,000 Unearned Revenue $          2,000 Nov 11 Cash $        30,000 Loan $        30,000 Nov 15 Equipment $     260,000 Accounts Payable $     260,000 Nov 22 T. stark's drawings $        10,000 Cash $        10,000 Adjusting Entries Nov 30 Insurance Expense $        20,000 Prepaid Insurance $        20,000 Salaries Expense $        20,000 Accounts payable $        20,000 Unearned Revenue $          2,000 Revenue earned $          2,000 Depreciation expense $          2,000 Accumulated depreciation $          2,000 closing entries Revenue Earned $          2,000 Income Summary $          2,000 Income Summary $        42,000 Insurance Expense $        20,000 Salaries Expense $        20,000 Depreciation Expense $          2,000 T. stark's Capital $        40,000 Income Summary $        40,000 T. stark's Capital $        10,000 T. stark's drawings $        10,000 TS Express End of period Spreadsheet For the month ended Nov 30th, 2017 Unadjusted Adjustments Adjusted Post Clsoing Trial balance Trial Balance Trial Balance Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Cash        32,000 32000 32000 Prepaid Insurance        80,000 20000 60000 60000 Equipment      260,000 260000 260000 Accumulated Depreciation 2000 2000 2000 Loan        30,000 30000 30000 Unearned Revenue           2,000 2000 Accounts payable      260,000 20000 280000 280000 Revenue earned 2000 2000 Insurance Expense 20000 20000 Salaries Expense 20000 20000 Depreciation Expense 2000 2000 T. stark's capital        90,000 90000 40000 T. stark's drawings        10,000 10000 Total $ 382,000 $ 382,000 $ 44,000 $ 44,000 $ 404,000 $ 404,000 $ 352,000 $ 352,000

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