Davis Uniform Corporation operates a store that sells uniforms.The following are the transactions that occurred during the firstquarter of operation- Jan. 1 to Mar. 31, 2019.

Jan.     1   Davis issues 20,000shares of $1 par value common stock with an issuing price of$10

per share.

Jan.     2   Purchased furnitureand fixtures from Acme Furniture for $14,400 cash.

Jan.     4   Purchased $1,600 ofoffice supplies for cash.

Jan.   15   Paid $36,000 in advance for oneyear’s rent on the store building. The rent begins with

               Jan 15. The company counts January for half a month.

Jan.   31   Paid salaries to employees forthe first month, $3,600.

Feb.    1    Purchased $62,400 ofuniforms inventory on account from the BirdwellUniforms

                ManufacturingCompany.

Feb.    1    Borrowed $66,000 froma local bank and signed two notes. The first noteof                  

               $21,000 requires payment of principal in six months with annualinterest rate at 4%.

               The second note of $45,000 requires the payment of principal in twoyears and annual

interest payment with annual interest rate at 5%.

Feb.    6    Sold uniforms onaccount to St. Jude’s School for $7,200. Cost of the uniformssold

is $4,800.

Feb.    9   Paid Birdwell UniformsManufacturing Company $50,000 for the purchase on Feb. 1.

Feb. 20    Sold uniforms to a chemical factoryfor $79,200 cash. Cost of the uniforms sold is

                $47,520.

Feb. 23    Purchased $10,000 of uniformsinventory on account from the Birdwell Uniforms

                Manufacturing Company.

Feb. 28    Paid salaries to employees for themonth of February, $4,200.

Mar.   1   Sold uniforms to the footballteam of Robert Lee High School, and accepted a $12,000,

three-month, note receivablewith annual interest rate at 5%.Cost of the uniforms

sold is $9,600.

Mar.   1   Subleased a portion of thebuilding to a jewelry store. Received $3,000 in advance

for three months’ rent beginning on Mar. 1.

Mar.   3   Some uniforms were returned bythe chemical factory which made a purchase on

               Feb. 20. The selling price and cost of the returned uniforms is$7,200 and 4,320,

respectively. Cash of $7,200 is refunded to the customer.

Mar. 23   Paid Birdwell Uniforms Manufacturing Company$14,400 for the purchases in Feb.

Mar. 25   Received $5,800 cash from St. Jude’sSchool.

Mar. 30   The corporation announced and paid itsshareholders cash dividends of $2,500.

Requirements:

1. Analyze the transactions and record journal entries inGeneral Journal.

2. Open accounts in General Ledger and post from the GeneralJournal to the general ledger accounts.

3. Record adjusting entries in General Journal and post to thegeneral ledger accounts.

Additional information:

1. At the end of March, $900 of supplies remained.

2. The furniture and fixtures have a useful life of six years andwill be worthless at the end of their useful life.

3.    Salaries for the month of March are $4,600,and will be paid in April.

4.    The company’s management estimated that ofthe $1,400 remaining on account from St.

Jude’s School, $200 would be uncollectible.

5. Income tax rate applied to the company is21%.

4. Prepare a worksheet as of Mar 31, 2019.

5. For Davis Uniform Corporation as of Mar 31, 2019, prepare thefinancial statements

including Income Statement (multiple-step with EPS section),Classified Balance Sheet,

andStatement of Stockholders’ Equity. Statement of CashFlows is not required.

6. Prepare closing entries to close the temporary accounts andpost to the general ledger accounts.

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