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Facts: Stackhouse, Connelly, and Teagarden Enterprises (SCT E During the first month of operation, the following transactions occurred: nterprises) was formed in December 2014. Dec 1 Issued common stock in exchange for $1,000,000 cash. urchased inventory on account for $80,000 (the perpetual inventory system is used) Purchased $300,000 in equipment for cash. Paid the company's landlord S12,000 for rent for twelve months, debiting Prepaid Rent Expense. Sold merchandise on account for $120,000. The cost of the merchandise was $75,000. Borrowed $50,000 from a local bank and signed a note. Principal and interest of 10% to be repaid in one year. Paid employees $15,000 wages for the first half of the month. Paid $50,000 to suppliers for the merchandise purchased on December 2. Collected $60,000 on account from customers. Paid various utility bills of $1,500 for the month of December. Paid $8,000 in insurance for the period January 1, 2015 to March 1, 2015. Received payment of $5,000 for an order to be delivered January 20. The cost of the merchandise for the order will be $3,500. 3 4 10 15 20 24 26 28 31 31 Required (round all computations to the nearest whole dollar): 1. Prepare journal entries to record the above transactions and post these entries to their 2. 3. corresponding T-accounts (ledger) Prepare an unadjusted trial balance. Prepare adjusting entries for December, considering: a. Depreciation on the equipment is $36,000 per year. b. Rent expense for the month. c. Interest expense for the month. d. Wages for the second half of the month; assume employees earned wages evenly throughout the month. 4. 5. Prepare an adjusted trial balance. Prepare a basic income statement, a statement of stockholders' equity, and a balance sheet for the year ending December 31, 2014. Prepare closing entries. Prepare a post-closing trial balance. 6. 7

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