Reference no: EM133154526

Question - The Warsaw Corporation began business operations on December 1, Year One. The company had the following transactions during the time when it was starting:

An employee was hired on December 1, for $4,000 per month with the first payment to be made on January 1.

The company made an $18,000 payment on December 1, to rent a building for the following six months.

Supplies were bought on account for $10,000 on December 1. Supplies are counted at the end of the year and $3,600 is still on hand.

The company receives $9,000 for a service that it had expected to provide immediately. However, a problem arises because of a series of delays and the parties agree that the service will be performed on January 9.

A job was completed near the end of the year, and the customer will pay Warsaw all $8,000 early in the following year. Because of the late date, no entry was made at that time.

Required -

Prepare the initial journal entries for each of these transactions.

Prepare the year-end adjustment (if needed) related to each transaction.

What is the total amount of revenue reported for the period?

What is the total amount of expenses reported for the period?

What is the net income reported for the project?

What is the balance in the prepaid rent account at the end of the period?