Reference no: EM132942809
NC operates a business closes its accounts and prepares financial statements at the end of each month. During the month of June entered into the following transactions:
June 1 Owner deposited $ 150000 cash in a bank account .
June 2 Purchased $ 240000 equipment, paid $ 100000 cash and issued a 9 percent note for the balance.
June 3 Paid $ 10,000 four months advance rent.
June 4 Received $12000 cash as advance payment on equipment from xyz company.
June 5 Purchased office supplies on account from ABC $ 1850 payment due in 30 days.
June 9 Purchased on account from F.P. distributor $ 290 parts needed to repair a rental tractor. Payment is due in ten days.( HINT: USE MAINTENANCE EXPENSE)
June 10 Paid salaries for $ 3200.
June 15 Equipment rental fees earned amount $ 8900 ,of which $ 7200 was received in cash.
June 18 Paid the accounts payable to F.P. distributor.
June 19 Collected $ 800 of the accounts receivable.
June 23 Rented an equipment to M.L. company at a price $ 110 per day to be paid when returned back. This equipment is expected to remain with M.L company two to three weeks.
June 25 Paid salaries $ 3200.
June 28 Owner withdrew $ 3000 cash from the business for personal use.
June 30 Equipment rent fees earned and received in cash amounted $ 7850.
June 30 Received a bill from WAPDA for the month of June $ 340. Payment is due in 15 days.
Other data:
a. During June, the company earned $ 3210 of rental fees paid in advance on June 3.
b. Office supplies on hand at June 30, are estimated at $ 1160.
c. The rental equipment is being is being deprecated over a period of 10 years.
d. The advance payment of rent on June 3 covered a period of four months.
e. As of June 30 seven days rent on equipment rented to M.L .COMPANY has earned.
f. As of June 30, interest accrued on note payable amounted to $ 1050.
g. Salaries earned by employees amounted to $ 960.
Required:
Problem A. Prepare four closing entries from work sheet
Problem B. Prepare income statement, a statement of equity and a Balance sheet.