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Prepare the balance sheet and income statement

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Reference no: EM132706191

Question - WORKSHEET AND FINANCIAL STATEMENTS

Entity A started operations on November 1, 20x1. The following were the transactions during the period: Nov. Transactions:

1. Provided 100,000 cash as initial investment to the business.

2. Acquired equipment for 72,000 cash. The equipment has a useful life of 4 years. Entity A records depreciation expense only at year-end.

3. Paid a one-year insurance premium of 24,000. (Use 'asset method') Nov.12 Purchased inventory costing 30,000 for cash. (Use periodic inventory system) 14. Sold goods for 30,000 cash.

Dec. Transactions: 1 Sold goods with sale price of 24,000 in exchange for a 24,000, 10%, one-year note receivable. Principal and interest are due at maturity.

Dec. 5. Purchased inventory for 4,000 on account. 26. Sold goods for 34,000 on account.

Dec. 27. Paid 2,000 account payable.

Dec. 29. Collected 20,000 account receivable.

Additional information: There is no beginning inventory. The ending inventory per physical count is 21,000. Entity A determines at year-end that accounts receivable of 2,000 is doubtful of collection. Salaries earned by employees during the period but were not yet paid amounted to 20,000.

Requirements -

Provide the journal entries for the transactions.

Post the entries to the ledger using Ledger accounts.

Prepare the unadjusted trial balance using a worksheet.

Prepare the adjusting entries.

Complete the worksheet.

Prepare the closing entries.

Prepare the balance sheet and income statement.

Prepare the reversing entries to be recorded in the next accounting period compared with adjusting Entries.

Prepare Cash flow Indirect method.

Reference no: EM132706191

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