Question

Problem 3-33A Two complete accounting cycles LO 3-1, 3-2, 3-3, 3-4

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Colton Enterprises experienced the following events for 2016, the first year of operation:

1.	Acquired $43,000 cash from the issue of common stock.
2.	Paid $12,800 cash in advance for rent. The payment was for the period April 1, 2016, to March 31, 2017.
3.	Performed services for customers on account for $88,000.
4.	Incurred operating expenses on account of $39,000.
5.	Collected $67,500 cash from accounts receivable.
6.	Paid $29,000 cash for salary expense.
7.	Paid $31,200 cash as a partial payment on accounts payable.

Adjusting Entries

8.	Made the adjusting entry for the expired rent. (See Event 2.)
9.	Recorded $4,000 of accrued salaries at the end of 2016.

Events for 2017

1.	Paid $4,000 cash for the salaries accrued at the end of the prior accounting period.
2.	Performed services for cash of $37,000.
3.	Purchased $3,600 of supplies on account.
4.	Paid $12,900 cash in advance for rent. The payment was for one year beginning April 1, 2017.
5.	Performed services for customers on account for $104,000.
6.	Incurred operating expenses on account of $49,500.
7.	Collected $97,000 cash from accounts receivable.
8.	Paid $47,000 cash as a partial payment on accounts payable.
9.	Paid $32,300 cash for salary expense.
10.	Paid a $11,000 cash dividend to stockholders.

Adjusting Entries

11.

Made the adjusting entry for the expired rent. (Hint: Part of the rent was paid in 2016.)

12.

Recorded supplies expense. A physical count showed that $300 of supplies were still on hand

Required

a.

Record the events and adjusting entries for 2016 in general journal form. (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

b. Post the 2016 events to T-accounts.

c.

Prepare a trial balance for 2016.

d-1.

Prepare an income statement for 2016.

d-2.

Prepare a statement of changes in stockholders’ equity for 2016.

d-3.

Prepare a balance sheet for 2016.

d-4.

Prepare a statement of cash flows for 2016. (Amounts to be deducted should be indicated by a minus sign.)

e.	Record the entries to close the 2016 temporary accounts to Retained Earnings in the general journal and post to the T-accounts. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

f.

Prepare a post-closing trial balance for December 31, 2016.

g.	Repeat parts a through f for 2017. (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Statement of Cash Flows only, items to be deducted must be indicated with a negative amount. )

Answer 1