Reference no: EM132381487

Question

During its first month of operation, the Leonard Landscaping Company, which, specializes in landscaping services, completed the following transactions.

April Transactions Date Transaction Description April 1 Started a landscaping business by making a $50,000 deposit in a company bank account, in exchange for 5,000 shares of $10 par value common stock. April 1 Purchased insurance for the year and paid $3,600 cash. April 1 Paid monthly rental of $2,500 cash on a warehouse to store the landscaping equipment.

April 3 Purchased landscaping equipment from Toro for $15,000, paying a downpayment of $10,000 cash, and $5,000 on account. April 5 Purchased landscaping supplies of $750 on account. i Paid $500 cash for advertising in local newspapers. April 10 Received $12,500 in cash for landscaping services provided. April 12 Paid $2,000 on account for landscaping equipment previously purchased on April 3rd. April 15 Provided landscaping services on account for $1,200. April 20 Received $10,500 in cash for landscaping services provided.

April 28 Received $600 cash on account for landscaping services performed on April 15th. April 30 Received $4,000 cash for landscaping services provided. April 30 Paid a utility bill of $700 cash. April 30 Paid dividends of $3,000 cash April 30 The inventory of landscaping supplies showed a balance of $300 on hand at the end of the month.

Use the following account descriptions for journal entries. Chart of Accounts Account Type Account Number Account Title Normal Balance Assets 111 Cash Debit 115 Accounts Receivable Debit 117 Prepaid Insurance Debit 119 Landscaping Supplies Debit 144 Landscaping Equipment Debit Liabilities 212 Accounts Payable Credit Stockholders Equity 311 Common Stock Credit 313 Dividends Debit Revenue 411 Landscape Services Revenue Credit Expenses 511 Warehouse Rent Expense Debit 512 Advertising Expense Debit 514 Landscaping Supplies Expense Debit 517 Utility Expense Debit

REQUIREMENT #1: Prepare journal entries to record the April transactions in the General Journal

REQUIREMENT #2:Post the April journal entries to the T-Accounts

REQUIREMENT #3: trial balance for March

QUE: 2

Sales are $1.40 million, cost of goods sold is $550,000, depreciation expense is $140,000, other operating expenses is $290,000, addition to retained earnings is $118,000, dividends per share is $1, tax rate is 40 percent, and number of shares of common stock outstanding is 80,000. LaTonya's Flop Shops has no preferred stock outstanding.

Use the above information to calculate the times interest earned ratio for LaTonya's Flop Shops, Inc. (Round your answer to 2 decimal places.)