Reference no: EM132532837

Preparing Accrual Basis Journal Entries and Reporting Financial Statements

Andy's Autobody shop has the following balances at the beginning of September:

Cash, $10,000;

Accounts Receivable, $1,450;

equipment, $40,000;

Accounts Payable, $2,000;

Common Stock, $20,000; and

retained earrings, $29,450.

Question 2: Prepare journal entries for the following transactions, which occurred during September; update the account balances for the journal entries; and then display the information onto a income statement, statement of retained earnings, and classified balance sheet as of and for the month ended September 30. (These financial statement would be considered "preliminary because they use unadjusted balances.)

A) Signed a long-term noted and received a $150,000 loan from a local bank

B) Billed a customer $2,000 for repair services just completed. Payment is expected in 45 days.

C) Wrote a check for $600.00 of rent for the current month.

D) Received $450.00 cash on account from a customer for work done last month.

E) They company incurred $400.00 in advertising costs for the current month and is planning to pay these costs next month.