|Prepaid Expenses||$ 100.00|
|Total Current Assets||$ 4,350.00|
|Property, Plant, and Equipment|
|Accumulated Depreciation||$ (12,000.00)|
|Total Property, Plant, and Equipment||$ 38,000.00|
|Total Assets||$ 42,350.00|
|Accounts Payable||$ 100.00|
|Salary and Wages Payable||-|
|Unearned Revenue||$ 1,500.00|
|Total Liabilities||$ 1,750.00|
|Common Stock - $1 par (See Note Below)||$ 15,000.00|
|Retained Earnings||$ 25,600.00|
|Total Equity||$ 40,600.00|
|Total Liabilities and Equity||$ 42,350.00|
transactions during January 2020:
1. On January 2, 2020, ACC executed a 3 month- 6% promissory
note for $10,000.00 in favor of its
bank, Cheatem Trust Company, Inc. for working capital purposes.
2. An invoice was received from ACC's insurance provider on January 15, 2020, for casualty
insurance coverage in the amount of $2,400.00 for the period January 1, through December 31, 2020.
3. Employees earned salary and wages in January of $6,500.00 which was paid on February 1, 2020.
4. The insurance premium described in transaction 2 was paid on January 31, 2020.
5. Office expense of $1,500 for the month of January was paid in cash on 01/30/20.
6. Insurance expense for the month of January was recorded on 01/31/20.
7. Depreciation expense for the month of January was $1,000.00
8. January service revenue for the Company is $21,000.00. All revenues are recorded as "on account."
9. ACC reviewed its work product for January and determined that it had performed $500.00 of the
services required that were being accounted for as unearned revenue in addition to revenues
described in transaction 8.
10. ACC recorded interest expense associated with the Note
Payable described in transaction 1.
NOTE: Other events possibly
-At the end of January, the Board of Directors voted to shut down and liquidate a component of the
company's operations. This represents a strategic shift in their operations. The component experienced
a 2,100 loss during January. This was partially offset by a $1,200 gain on the disposition of the assets.
Both of these transactions are net of tax and have already been appropriately reflected in the
Retained Earnings balance shown on the December 31, 2019 Balance Sheet.
-Note 14 of ACC's financial statements for the year ended 12/31/19 indicates the company's
effective tax rate to be 25%.
-The company's common stock account includes 100,000
shares authorized, 1,000 shares issued
2.Prepare ACC's Income Statement for the month ending January
3. Prepare ACC's Balance Sheet at January 31, 2020.
|Salaries and wages||$6500|
|ACC COMPANY, INC BALANCE SHEET|
|Accounts payable||100||Cash (3000+10000-2400-1500)||9100|
|Accrued expense||150||Prepaid expense (100+2400-200)||2300|
|Salaries and wages||6500||Accounts Recievable (1250+21000)||22250|
|Common Stock (15000+10000)||25000||Land||10000|
|unearned revenue 1500+500||2000||Equipment 15000|
|notes payable intrest||50||less: Acc. Depr -12000||3000|
|TOTAL LIABILITIES||71650||TOTAL ASSETS||71650|
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