Transaction #
Date
Year 1 Transactions for Andover
Event
January 1
Paid $14,750 cash for supplies.
2
February 28
Acquired land in exchange for $26,250 cash.
3
April 1
Issued 7,000 shares of common stock for $6 per share.
4
April 1
Paid $12,000 cash for an "other long term asset".
5
April 1
Prepaid $36,000 cash for a rental that will be used over the next 12 months.
6
May 1
Received $49,200 cash in advance for services that will be provided equally over 6 months beginning on November 1st of Year 1.
7
June 1
Sold inventory on account for $165,000 (a). The cost of the inventory was $15,500 (b). Also, paid a sales commission of $13,300 cash (c).
8
June 15
Purchased inventory for $24,000 by paying $4,000 cash and recording an Accounts Payable for the remaining balance.
9
June 30
Paid the Year 0 income tax liability.
10
July 31
Received $42,000 cash from customers with outstanding Accounts Receivable balances.
11
July 31
Paid the Accounts Payable from the June 15th transaction.
12
Sept 30
Paid $22,000 cash for expenses related to a new product. Of this, $15,300 was for Research and Development (a) and $6,700 was for marketing (b).
13a
October 1
Purchased inventory for $10,700 cash. The accountant accidently increased the Supplies account instead of the appropriate account.
13b
October 1
The accountant recorded an adjustment for the error made in 13a so that the accounts reflect what should have been recorded.
14
October 1
Borrowed $72,000 from a bank for a 4-year, 10% note. Interest is recorded on Dec. 31st and will be paid in the subsequent year.
15
Dec 15
Salaries for employees were $46,000 for the year. Half were paid on Dec. 15th, and the other half will be paid in January of Year 2.
16
Dec 31
Income tax expense for the year was $15,200, of which $6,500 was paid on Dec. 31st. The rest will be paid in April of Year 2.
17
Dec 31
Record the appropriate adjusting entry related to the note payable described in Transaction #14 (assuming interest will be paid in Year 2).
18
Dec 31
Record the appropriate adjusting entry to adjust the rent account from Transaction #5.
19
Dec 31
Record the appropriate entry to adjust unearned revenue from Transaction #6
20
Dec 31
At the end of the year, there are $1,400 of supplies left on hand. Record the appropriate adjusting entry to reflect the supplies used during Year 1.
