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The following events occurred in June: 6/2 Amos opens a banks account for Moses's Ground Maintenance, Inc. at State Bank and deposits $100,000 into...
The following events occurred in June:
6/2 Amos opens a banks account for Moses's Ground Maintenance, Inc. at State Bank and deposits $100,000 into his account. Amos invests the money into his business in exchange for 50,000 shares of $1 par value common stock.
6/3 Amos issues Ck # 1000 to Moses's Ground Maintenance to establish the Petty Cash Fund in the amount of $500. Amos will use this account when he needs to make cash purchases.
6/ 4 Amos visits the law firm of Honest Abe for assistance on setting up his business as a corporation.
6/ 4 Amos hires Paula Rivere to design a brochure and a poster to advertise his company and the services and products he has available.
6/ 8 Amos purchases a one-year subscription for $36 (Ch # 1001) to Grass Is Us Quarterly.
6/10 Amos receives an invoice for services rendered by Honest Abe Law Firm in the amount of $2,500 - terms net 20.
6/11 Amos issues check #1002 to Paula Rievere for $3,500 for the design and printing of the brochures and posters. The brochures and posters will be used immediately and therefore, should be expensed immediately.
6/12 Amos purchases a riding lawn mower on account from Better Grounds Wholesale Supply for $5,500. At the same time, Amos purchases a weedwacker for $1,350 by issuing check #1003.
6/15 Amos pays $4,000 (check #1004) to purchase inventory for the business. Amos purchases:
· 100 bags of weed killer at $10/bag
· 150 bags of fertilizer at $20/bag
Amos plans to resell these products at a 50% gross profit.
6/15 Amos has a push lawnmower that he transfers to the business in exchange for 500 shares of common stock. The lawnmower has a fair value of $1,500.
6/16 Amos purchases a new truck and trailer for the business. The truck costs $35,000 and the trailer $10,000. He finances both the truck and the trailer through Pig E Bank at a rate of 8% for 5 years. The first monthly payment is due on July 16.
NOTE: You will need to create loan amortization schedule to determine that amount of the monthly note and interest expense for each month. You can use a website such as www.bankrate.com to create the schedule. When recording your entries, adjust all amounts to the nearest dollar.
6/16 Amos purchases an auto insurance policy in the amount of $900. Check # 1005 is issued to Farm Town Insurance. The policy is for 6 months and covers the period from 6/16 - 12/15. In order to provide Amos with accurate accounting information, expense the policy evenly over each of the six months. (Note: The adjusting entry for insurance expense will be done at the end of the fiscal year).
6/17 Amos purchases, on account, $175 worth of fuel from Git 'n GO. The fuel is being used in the lawn equipment. Expense the purchase.
6/18 Amos gets his first 12-month contract to maintain a lawn. He is going to charge his new customer, Don Notting, $200 per month. The contract will begin on July 1.
6/21 Amos issues check # 1006 to pay the invoice received from the law firm.
6/25 Amos receives a check (#1234) from . Don Notting in the amount of $2,400 in payment of the lawn service contract.
6/29 Amos provides lawn care services for Iphelia Payne and receives $350 cash. Iphelia is pleased with Amos's work and will call when she needs him again.
Note: See the first two events for July before preparing
the trial balance for June. These entries should be recorded
June.
The following events occurred in July:
7/1 Amos receives an invoice from you, his accountant in the amount of $2,000 (terms 3/10, n/30). The accounting expenses should be expensed in the month that it applies - in this case June. Therefore, record the transaction and date it June 30.
7/2 Amos receives bills for the following: telephone - $250; water - $45; electricity - $175; cell phne - $100. The telephone and cell phone bills are payable to TeleCom Telephone Company. The water and utility bills are payable to Max Power Utilities. These expenses also belong to the month of June.
Assignment #1: For the Month of June (4 points)
· In proper General Journal format, record the transactions for the month; include brief descriptions of each transaction with your journal entry.
o You will have to create General Journal document using MicrosoftnExcel to record your transactions. You will use this document to record the journal entries for all assignments.
· In proper General Journal format, record the adjusting entry to accrue the interest expense on the note with Pig E Bank. Your interest expense will be determined by taking the unpaid balance of the note at the beginning of the month * annual interest rate * (# of days lapsed since the last note payment / 365).
· Post the journal entries for the month to the general ledger accounts, use appropriate posting references.
o You will have to create a General Ledger accounts to post your transactions. You will create a ledgers in a Microsoft Excel document. You should have a general ledger for each account.
Prepare trial balance for the month ended.
