1. Create Journal Entry for March transactions.
2. Post each transaction to their respective ledger accounts.
The “xx” (Ex: $1,9xx) just refers to the number as “$1,900”.The “xx” = 00
Excellence Assured Business Executive Coaching and Motivational Speakers, Inc.
Transactions for February 2020
February 1 The business received cash of $22,000. The corporation issued common stock to the stockholders.
February 1 Paid $3,600 for 4 years of insurance.
February 1 Received $2,400 from a client for 3 months of service.
February 2 The company signed a note payable for $26,200 from the bank, due in one year with 12% annual interest.
February 5 Paid $25,000 for equipment.
February 6 Purchased supplies on account, $1,606.
February 15 Paid employee’s salaries $2,206.
Summary transactions for the month of February:
February 29 Received $8,406 from customers for services rendered.
February 29 Performed services for customers on account $4,650.
February 29 Collected cash from customers on account, $1,906.
February 29 Paid $906 of the accounts payable.
February 29 Paid the following cash expenses: (1) Advertising, $606; (2) Rent, $2,706
Excellence Assured Business Executive Coaching and Motivational Speakers, Inc.
Transactions for February 2020
Adjusting entries:
February 29 Received a $606 bill for utilities that will be paid in March (record payable in accounts payable).
February 29 Accrued employee’s salaries $2,206 (to be paid on March 1).
Excellence Assured Business Executive Coaching and Motivational Speakers, Inc.
Transactions for March 2020
March 1 The company purchases a $11,000 short term interest-bearing investment – Notes Receivable (3 month, 5%).
March 1 Sold a Mac for $2,500. This asset was included in the February 5 equipment purchase and had an original purchase price of $3,450, but once in use, the owners quickly realized, it was not adequate for their needs. (Hint: remember one month of depreciation was recorded in February; remember this as you determine the gain or loss.)
March 2 Purchased PCs for $5,000.
March 2 Issue 4-year, 5% bonds payable with a face value of $10,000. The bonds were issued at 93 and pay interest on June 30 and December 31.
March 5 Paid salaries and wages payable ($2,200) and utilities ($600 – recorded as accounts payable) and the remaining accounts payable balance ($200) from purchasing supplies. See opening balances for wages payable above.
March 6 Based on a customer survey, the company decided to sell motivational/self-help books and resources and purchased $8,500 of merchandise on account, with terms 1% 10, net 30. Freight costs were $150, this amount is included in the $8,500, but the discount terms do not apply to freight. If the company elects to pay within the discount period, they will reduce the inventory account by the discounted amount.
March 10 The company returns $600 of the merchandise.
March 15 The company pays the vendor for the merchandise purchased on March 6.
March 15 Paid $3,2xx salaries and wages.
March 17 Purchases supplies on account for $1,9xx.
March 20 Issued 1,000 shares of $1 par value stock for $6,000.
March 25 The company purchased a building and signed a mortgage payable for $75,000 from the bank, due in ten years with 8.5% annual interest.
March 31 Declares dividends of $.10 per share. (Hint: 22,000 shares were issued on February 1; they were issued at par value.)
Summary transactions for the month of March
March 31 Received $14,6xx from customers for services
Excellence Assured Business Executive Coaching and Motivational Speakers, Inc.
Transactions for March 2020
March 31 Performed services for customers on account $6,7xx.
March 31 Collected cash from customers on account, $4,100.
March 31 Sold merchandise that cost $3,600 for $8,000 plus $800 sales tax (which will be paid in September). 60% of the sales were for cash, the remainder on account.
March 31 Paid $900 of the accounts payable.
March 31 Paid the following cash expenses: (1) Advertising, $3,8xx; (2) Rent, $2,4xx.
Adjusting entries:
There is a total of 12 AJEs (if using one depreciation entry), 13 AJEs (if using two depreciation entries), review the above transactions to identify those that will need adjusting entries.
Additional adjusting entries hints:
March 31
The controller realizes they need to establish an uncollectible account policy. Based on her research and after a lengthy discussion, the owners agree that an estimate of 10% of the accounts receivable balance is realistic.
March 31
Received an $8xx bill for utilities that will be paid in April (record payable in accounts payable).
March 31
Accrued employee’s salaries $3,2xx (to be paid on April 1).
March 31Additional adjusting entries hints:
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