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The beginning inventory consists of 100 units

The company uses the FIFO perpetual inventory assumption

The transactions for the month were:

Purchase a computer for the company (paid cash) $2700

Paid salary of $1200

Paid cash for utility expense $400

It has been determined that John Smith will not pay what he owes the company. The account balance is $40.

Paid cash for rent expense $1500

Collected cash from customer within 10 days of sale date. Sale was $500. Credit terms were 2/10, n/30

Received cash from customer for work done previously $5,000. Paid after discount period.

Paid $500 for advertising. $100 is for current month the balance to be used in next four months.

Paid accounts payable invoice $600 (put the discount to freight expense), credit terms 1/10, n/30. Paid within 10 days.

Paid accounts payable amounts $2600. Credit terms n/30.

Purchased office supplies on account $200

Purchased inventory on account 300 units $3300

Paid freight on incoming product $300. (Include in cost of units purchased above)

Cash sales were 250 units, $5000

Purchased inventory for cash 350 units $4200

Paid freight to ship goods to customer $200

Credit sales were 400 units $8000

Paid Dividend of $200

Required:

Record the transaction (journal entries)

Post the transactions to the ledger (T accounts)

Prepare trial balance

Record adjusting journal entries for February 28:

The prepaid insurance was paid October 1st for 6 months

Supplies on hand at the end of the month are $300

The note payable was signed December 31st. It bears an interest rate of 6%. The note is due in 18 months.

Record depreciation, the computer has an estimated life of 3 years and no salvage value. The company uses straight line method of depreciation. Assume the computer was purchased on the first day of the month

The company estimates that 1% of accounts receivable will not be collectable

Post the adjusting entries to the ledger (T accounts)

Prepare an adjusted trial balance

Prepare the February 28 financial statements:

Multi Step Income Statement

Statement of retained earnings

Classified Balance Sheet

Cash Flow Statement

Emily Corp Beginning Balances 1-Feb-18 Debit Credit 10000 7000 Cash Accounts Receivable Allowance for doubtful accounts Office Supplies Inventory Prepaid Insurance 60 300 1000 2000 Accounts Payable Interest Payable Note Payable 3000 50 10000 Stock 1000 6190 Retained Earnings 20300 20300

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