Alcorn Service Company was formed on January 1, Year 1. Events Affecting the Year 1 Accounting Period 1. Acquired $67,000 cash from the issue of common stock. 2. Purchased $2,600 of supplies on account. 3. Purchased land that cost $32,000 cash. 4. Paid $2,600 cash to settle accounts payable created in Event 2. 5. Recognized revenue on account of $56,000. 6. Paid $28,000 cash for other operating expenses. 7. Collected $45,000 cash from accounts receivable. Information for Year 1 Adjusting Entries 8. Recognized accrued salaries of $3,900 on December 31, Year 1. 9. Had $900 of supplies on hand at the end of the accounting period. Events Affecting the Year 2 Accounting Period 1. Acquired $27,000 cash from the issue of common stock. 2. Paid $3,900 cash to settle the salaries payable obligation. 3. Paid $5,700 cash in advance to lease office space. 4. Sold the land that cost $32,000 for $32,000 cash. 5. Received $6,900 cash in advance for services to be performed in the future. 6. Purchased $1,700 of supplies on account during the year. 7. Provided services on account of $39,000. 8. Collected $40,000 cash from accounts receivable. 9. Paid a cash dividend of $6,000 to the stockholders. 10. Paid other operating expenses of $26,500. Information for Year 2 Adjusting Entries 11. The advance payment for rental of the office space (see Event 3) was made on March 1 for a one-year term. 12. The cash advance for services to be provided in the future waS collected on October 1 (see Event 5). The one-vear contract started
Alcorn Service Company was formed on January 1, Year 1. Events Affecting the Year 1 Accounting Period 1. Acquired $67,000 cash from the issue of common stock. 2. Purchased $2,600 of supplies on account. 3. Purchased land that cost $32,000 cash. 4. Paid $2,600 cash to settle accounts payable created in Event 2. 5. Recognized revenue on account of $56,000. 6. Paid $28,000 cash for other operating expenses. 7. Collected $45,000 cash from accounts receivable. Information for Year 1 Adjusting Entries 8. Recognized accrued salaries of $3,900 on December 31, Year 1. 9. Had $900 of supplies on hand at the end of the accounting period. Events Affecting the Year 2 Accounting Period 1. Acquired $27,000 cash from the issue of common stock. 2. Paid $3,900 cash to settle the salaries payable obligation. 3. Paid $5,700 cash in advance to lease office space. 4. Sold the land that cost $32,000 for $32,000 cash. 5. Received $6,900 cash in advance for services to be performed in the future. 6. Purchased $1,700 of supplies on account during the year. 7. Provided services on account of $39,000. 8. Collected $40,000 cash from accounts receivable. 9. Paid a cash dividend of $6,000 to the stockholders. 10. Paid other operating expenses of $26,500. Information for Year 2 Adjusting Entries 11. The advance payment for rental of the office space (see Event 3) was made on March 1 for a one-year term. 12. The cash advance for services to be provided in the future waS collected on October 1 (see Event 5). The one-vear contract started
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter21: Corporations: Taxes, Earnings, Distributions, And The Statement Of Retained Earnings
Section: Chapter Questions
Problem 10SPB
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