Complete an Income Statement
Acquired cash of $225,000 from the issue of common stock.
Borrowed $175,000 cash from the bank on April 1, 2018.
Paid $285,000 cash to purchase fixed assets - land that cost$65,000
and a building that cost $220,000.
Earned and recognized consulting revenue on account for$345,000
Collected $200,000 on the accounts receivable during theyear
Incurred $150,000 of consulting expenses on account during theyear.
Paid $125,000 on the accounts payable during the year.
Paid $92,500 cash for other operating expenses during theyear.
Paid the company owners $5,300 of dividends.
Received $21,750 cash for services to be performed in thefuture.
On June 1, paid $10,500 cash in advance for a one-year lease torent office space.
Paid $9,450 cash for salaries expense.
Information for December 31, 2018
ADJUSTING ENTRIES:
Completed $11,350 of services performed described in Transaction10.
Adjust Prepaid Rent account for rent used up during the year.(7
months)
Use the straight-line method to depreciate the buildingpurchased in
Transaction 3. Management estimated that it had a useful life of20
years. Record the building depreciation.
Recognized that $3,647 of Salary Expense has been incurredon
December 31. The employees are owed this for the services theyprovided in December but will not be paid to them until January.Record the year end accrual for salary expense.
Accrued interest expense for loan in # 2. Terms: interest rate10%, in one year. (Loan was outstanding 9 months during 2018).
