i 04.05student

I-04.05

Jan. 1

Jan. 1

Feb. 7

Mar. 3 Paid wages of $65,400

Apr. 1 Billed customers for services in the amount of $230,000

Apr. 11 Paid $30,000 toward the purchase of February 7

May 1 Purchased a $24,000 insurance policy, recorded as prepaid insurance

June 6 Collected $210,000 on accounts receivable

June 9 Paid wages of $130,600

June 15 Paid $30,200 for fuel costs

June 20 Paid $12,500 for lodging costs incurred by crew

June 30

Aug. 1 Billed customers for services provided in the amount of $812,000

Sept. 3 Collected $715,000 on accounts receivable

Sept. 16 Purchased $25,000 of supplies on account

Sept. 25 Paid $61,200 for fuel costs

Oct. 20 Paid $8,100 for lodging costs incurred by crew

Nov. 3 Paid wages of $125,900

Dec. 15

Dec. 31 Declared and paid a $25,000 dividend to shareholders

On January 1, 20X7, Jacqueline Fernandez formed a corporation to purchase wheat harvesting equipment and provide contract support services to farmers throughout the Midwest. Information about the first year of operation follows:

Investors provided $2,500,000 of cash in exchange for stock of Fernandez Corporation

Purchased combines and trucks in exchange for $1,000,000 cash and a $3,000,000 note payable

Purchased $40,000 of supplies on account that will be needed during the upcoming harvest

Paid $120,000 of interest and $80,000 to reduce the balance of the note payable

Collected $100,000 as deposits from customers who contracted for 20X8 harvesting services

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Fernandez Corporation uses the following accounts:

Cash Accounts ReceivableSuppliesPrepaid InsuranceEquipment

Accounts PayableInterest PayableUnearned RevenueNotes PayableCapital StockRetained EarningsDividendsRevenuesWage ExpenseFuel ExpenseLodging ExpenseInsurance ExpenseSupplies ExpenseInterest ExpenseDepreciation ExpenseIncome Summary

Journalize the listed transactions.

Post the transactions to the appropriate general ledger accounts.

(c) Prepare a trial balance as of December 31.

Journalize and post adjusting entries based on the following additional information.

The equipment had 25-year life, with no salvage value.

Supplies on hand at year end amount to $20,000.

At year end, $115,000 of additional interest is due on the note payable.

The insurance policy covered a 12-month period commencing on May 1.

Accumulated Depreciation

(a)(b)

(d)

At year end, Fernandez had provided $30,000 of unbilled services to customers. These services will be billed in early 20X8.

I-04.05

Prepare an adjusted trial balance as of December 31.

(f)

Journalize and post closing entries.

Prepare a post-closing trial balance as of December 31.

(e)

Prepare an income statement and statement of retained earnings for 20X7, and a classified balance sheet as of the end of the year.

(g)(h)

Name:

Date: Section: I-04.05(a)

Page 1

Date Accounts Debit Credit

Jan. 1 Cash 2,500,000

Capital Stock 2,500,000

Jan. 1 Equipment 4,000,000

Cash 1,000,000

Notes Payable 3,000,000

Feb. 7 Supplies 40,000

Accounts Payable 40,000

Mar. 3 Wage Expense 65,400

Cash 65,400

Paid wages of $65,400

Apr. 1 Accounts Receivable 230,000

Revenues 230,000

GENERAL JOURNAL

Investors provided $2,500,000 of cash in exchange for stock of Fernandez Corporation

Purchased combines and trucks in exchange for $1,000,000 cash and a $3,000,000 note payable

Purchased $40,000 of supplies on account that will be needed during the upcoming harvest

Billed customers for services in the amount of $230,000

Name:


Page 2


Apr. 11 Accounts Payable 30,000

Cash 30,000

May 1 Prepaid Insurance 24,000

Cash 24,000

June 6 Cash 210,000

Accounts Receivable 210,000

June 9 Wage Expense 130,600

Cash 130,600


June 15 Fuel Expense 30,200

Cash 30,200

Paid $30,200 for fuel costs

GENERAL JOURNAL

Paid $30,000 toward the purchase of February 7

Purchased a $24,000 insurance policy, recorded as prepaid insurance

Collected $210,000 on accounts receivable

Name:


Page 3


June 20 Lodging Expense 12,500

Cash 12,500

June 30 Interest Expense 120,000

Notes Payable 80,000

Cash 200,000

Aug. 1 Accounts Receivable 812,000

Revenues 812,000

Sept. 3 Cash 715,000


Sept. 16 Supplies 25,000


GENERAL JOURNAL

Paid $12,500 for lodging costs incurred by crew

Paid $120,000 of interest and $80,000 to reduce the balance of the note payable

Billed customers for services provided in the amount of $812,000

Collected $715,000 on accounts receivable

Purchased $25,000 of supplies on account

Name:


Page 4


Sept. 25 Fuel Expense 61,200

Cash 61,200

Paid $61,200 for fuel costs

Oct. 20 Lodging Expense 8,100

Cash 8,100

Nov. 3 Wage Expense 125,900

Cash 125,900


Dec. 15 Cash 100,000

Unearned Revenue 100,000

Dec. 31 Dividends 25,000

Cash 25,000

GENERAL JOURNAL

Paid $8,100 for lodging costs incurred by crew

Collected $100,000 as deposits from customers who contracted for 20X8 harvesting services

Declared and paid a $25,000 dividend to shareholders

Name:

Date: Section: I-04.05(b,d,g)

CASH

Date Description Debit Credit Balance

Jan. 1 Balance forward - - -

Jan. 1 Journal Page 1 2,500,000 2,500,000

Jan. 1 Journal Page 1 1,000,000 1,500,000

Mar. 3 Journal Page 1 65,400 1,434,600

Apr. 11 Journal Page 2 30,000 1,404,600

May 1 Journal Page 2 24,000 1,380,600

June 6 Journal Page 2 210,000 1,590,600





Sept. 3 Journal Page 3 715,000 1,932,300

Sept. 25 Journal Page 4 61,200 1,871,100

Oct. 20 Journal Page 4 8,100 1,863,000

Nov. 3 Journal Page 4 125,900 1,737,100

Dec. 15 Journal Page 4 100,000 1,837,100

Dec. 31 Journal Page 4 25,000 1,812,100

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I-04.05(b)(d)(g)

Name:


ACCOUNTS RECEIVABLE



Apr. 1 Journal Page 1 230,000 230,000

June 6 Journal Page 2 210,000 20,000

Aug. 1 Journal Page 3 812,000 832,000

Sept. 3 Journal Page 3 715,000 117,000

SUPPLIES



Feb. 7 Jounrnal Page 1 40,000 40,000

Sept. 16 Jounrnal Page 3 25,000 65,000

PREPAID INSURANCE



May 1 Journal Page 2 24,000 24,000

Name:


EQUIPMENT



Jan. 1 Journal Page 1 400,000 400,000

ACCUMULATED DEPRECIATION



ACCOUNTS PAYABLE



Feb. 7 Journal Page 1 400,000 400,000

Apr. 11 Journal Page 2 30,000 370,000


INTEREST PAYABLE



Name:


UNEARNED REVENUE



Dec. 15 Journal Page 4 100,000 100,000

NOTES PAYABLE



Jan. 1 Journal Page 1 3,000,000 3,000,000


CAPITAL STOCK



Jan. 1 Journal Page 1 2,500,000 2,500,000

RETAINED EARNINGS



Name:


DIVIDENDS


Dec. 31 Journal Page 4 25,000 25,000

REVENUES


Apr. 1 Journal Page 1 230,000 230,000

Aug. 1 Journal Page 3 812,000 1,042,000

WAGE EXPENSE


Mar. 3 Journal Page 1 65,400 65,400


Nov. 3 Journal Page 4 125,900 321,900

FUEL EXPENSE

Name:





LODGING EXPENSE



Oct. 20 Journal Page 4 8,100 20,600

INSURANCE EXPENSE


SUPPLIES EXPENSE


INTEREST EXPENSE



Name:


DEPRECIATION EXPENSE


INCOME SUMMARY


Name:

Date: Section: I-04.05(c)

FERNANDEZ CORPORATION

Trial Balance

December 31, 20X7

Debits Credits

Cash $ 1,812,100


Prepaid Insurance 24,000

Equipment 4,000,000


Unearned Revenue 100,000

Notes Payable 2,920,000

Capital Stock 2,500,000

Dividends 25,000

Revenues 1,042,000

Wage Expense 321,900

Fuel Expense 91,400

Lodging Expense 20,600

Interest Expense 120,000

$ 6,532,000 $ 6,957,000

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I-04.05(c)

Name:

Date: Section: I-04.05(d)

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GENERAL JOURNAL

Name:

Date: Section: I-04.05(e)


Adjusted Trial Balance

December 31, 20X7

Debits Credits

$ - $ -

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I-04.05(e)

Name:

Date: Section: I-04.05(f)


Income Statement

For the Year Ending December 31, 20X7

Revenues

$ -

Expenses

$ -

-

-

-

-

-

- -

Net income $ -


Statement of Retained Earnings

For the Year Ending December 31, 20X7

Beginning retained earnings $ -

Plus: Net income -

$ -

Less: Dividends -

Ending retained earnings $ -

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I-04.05(f)

Name:

Date: Section: I-04.05(f)


Balance Sheet

December 31, 20X7

Assets

Current assets

$ -

-

-

- -

Property, plant & equipment

$ -

- -

Total assets $ -

Liabilities

Current liabilities

$ -

-

- $ -

Long-term liabilities

-

Total liabilities $ -

Stockholders' equity

$ -

-

Total stockholders' equity -

Total liabilities and equity $ -

Name:

Date: Section: I-04.05(g)

Page 6


GENERAL JOURNAL

Name:

Date: Section: I-04.05(h)


Post-Closing Trial Balance

December 31, 20X7

Debits Credits

$ - $ -

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I-04.05(h)

i 04.05student

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