Prepare and post the closing journal entries if no entry is

Assignment Help Accounting Basics

Reference no: EM13586432

1.Alison and Chuck Renny began operations of their furniture repair shop (Lazy Sofa Furniture, Inc.) on January 1, 2011. The annual reporting period ends December 31. The trial balance on January 1, 2012, appears on the following page (amounts are rounded to thousands of dollars to simplify):

Account Titles	Debit		Credit
Cash	$	5
Accounts Receivable		4
Supplies		3
Equipment		6
Accumulated Depreciation			$	0
Other Noncurrent Assets		9
Accounts Payable				7
Notes Payable				0
Wages Payable				0
Interest Payable				0
Income Tax Payable				0
Unearned Revenue				0
Contributed Capital				16
Retained Earnings				4
Dividends Declared		0
Service Revenue				0
Depreciation Expense		0
Income Tax Expense		0
Interest Expense		0
Operating Expenses		0

Totals	$	27	$	27

Transactions during 2012 (summarized in thousands of dollars) follow:
a.	Borrowed $15 cash on July 1, 2012, signing a six-month note payable.
b.	Purchased equipment for $17 cash on July 1, 2012.
c.	Issued additional shares of stock for $4.
d.	Earned revenues for 2012 in the amount of $58, including $8 on credit and $50 received in cash.
e.	Recognized operating expenses for 2012, $28, including $6 on credit and $22 in cash.
f.	Purchased additional equipment, $4 cash.
g.	Collected accounts receivable, $7.
h.	Paid accounts payable, $10.
i.	Purchased on account supplies for future use, $9.
j.	Received a $4 deposit on work to start January 15, 2013.
k.	Declared and paid a cash dividend, $15.

Data for adjusting journal entries:

l.	Supplies of $5 were counted on December 31, 2012.
m.	Depreciation for 2012, $1.
n.	Accrued interest on notes payable of $1.
o.	Wages earned since the December 24 payroll not yet paid, $2.
p.	Income tax for 2012 was $3, and will be paid in 2013.

Required:
1.	Set up T-accounts for the accounts on the trial balance and enter beginning balances. (Enter your answers in thousands of dollars.)

Record journal entries for transactions (a) through (k). Note that Lazy Sofa classifies the cost of its wages and supplies used-up as "operating expenses." (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in thousands of dollars.)

3.	Prepare an unadjusted trial balance. (Enter your answers in thousands of dollars.)

4.	Record and post the adjusting journal entries (l) through (p).(If no entry is required for atransaction/event, select "No journal entry required" in the first account field. Enter your answers in thousands of dollars.)

5.	Prepare an adjusted trial balance. (Enter your answers in thousands of dollars.)

6.	Prepare an income statement, statement of retained earnings, and balance sheet. (Enter your answers in thousands of dollars. Amounts to be deducted should be indicated by a minus sign.)

7.	Prepare and post the closing journal entries. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in thousands of dollars.)

8.	Prepare a post-closing trial balance. (Enter your answers in thousands of dollars.)

9-a.	How much net income did Lazy Sofa Furniture, Inc., generate during 2012? (Enter your answer in thousands of dollars.)

9-b.

Is the company financed primarily by liabilities or stockholders' equity?

	Liabilities
	Stockholders' Equity

Reference no: EM13586432

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