Reference no: EM132131659

Question - Sanchez Consulting Company

Mark Sanchez established Sanchez Consulting Company on September 1, 2018, as a backup plan since he is now a free agent and has been suspended for the first four games of the season. Being cut from the Bears, Cowboys, Eagles and Jets has made him a little worried about his career as a quarterback. It has been in the NFL for 10 years. Since he was a good student at USC he thought he would put his college education to work.

The company had the following transactions during September.

a) Sept. 1 - The company sold shares of common stock for $30,000 cash.

b) Sept. 1 - The company purchased a one-year insurance policy for $300 in cash.

c) Sept. 1 - The company purchased office equipment costing $8,000 by signing a 6% note. The Equipment has a 5 year life and no salvage value. The note requires monthly principal payments of $225 beginning on October 1st until the balance is paid.

d) Sept. 10 - The company purchased $735 of office supplies for cash.

e) Sept. 15 - The company paid legal and registration fees to register their trademark which is his nickname "Sanchize." The fees incurred totaled $4,000, which were paid in cash.

f) Sept. 29 - The company billed customers $5,500 for consulting services performed.

g) Sept. 30 - The company paid $1,450 for employee's salary.

h) Sept. 30 - Since the company had a good month so Sanchez declared a $1,000 dividend to be paid on October 10th.

Additional Information -

i) On September 30th, the company took an inventory of the supplies and found that they had $500 of supplies on hand.

ii) Equipment purchased before the 15th of the month are depreciated for a whole month using the straight-line method.

iii) On October 3rd received the September utilities bill for $188.

Required - Prepare the closing entries.