Through january 2003 mohawk sold merchandise for 16000 7000

Reference no: EM13589454

Mohawk retailers began operations on 1/1/03. The following transactions occurred during Jan. 2003:

a) On 1/1/03, Mohawk's owners contributed $80,000 in cash to the business.

b) On 1/1/03, Mohawk paid $12,000 rent for the full year (2003) for a store.

c) On 1/1/03 Mohawk purchased store fixtures for $36,000. These fixtures have a life of 3 years and no salvage value thereafter.

d) On 1/5/03 Mohawk purchased merchandise inventory for $10,000 ($8,000 cash, $2,000 on credit)

e) On 1/7/03 Mohawk received an advance of $3,000 from a customer for goods to be delivered later.

f) Through January 2003, Mohawk sold merchandise for $16,000 ($7,000 cash, $9,000 on credit). The merchandise had been carried on Mohawk's books for $7,000.

g) On 1/15/03, Mohawk delivered one-half of the order from (e) above. The merchandise had been carried on Mohawk's books for $1,000.

h) On 1/15/03 Mohawk lent $20,000 to one of its owners on a 2-year, 12% note, with interest to be paid monthly beginning on 2/15/03.

i) On 1/25/03 signed a one-year lease for a warehouse (with occupancy beginning Feb. 1st 2003) for an annual rent of $6,000 payable on the first day of occupancy.

j) Employee salaries for the month of January 2003 were $5,000. Of these $3,800 were paid in January and $1,200 are payable in February.

k) On 1/31/03 Mohawk declared a dividend of $2,000 of which it immediately paid out $1,300.

REQUIRED:

1. Using a Balance sheet equation worksheet, record the above transactions. Record any additional adjusting entries that are needed on 1/31/03

2. Report in good form the balance sheet as on 1/31/03, and the income statement, cash flow statement, and statement of changes in Owner's Equity for January 2003.

Reference no: EM13589454

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