Requirement: I already finish the Jan January entry, please finish the description, Feb and Mar’s January entry, and these three months’ financial statement. You could make the number for Feb and Mar. Just follow the requirement below:

  1. J Feb; T- accounts for Feb and Mar;
  2. J every Month;
  3. i Feb;
  4. 1~5 Do not need to do for Feb and March.
  5. 9 only Jan
  6. 10 only Mar
  7. A~H every month,
  8. At end of each month, calculate the cash balance.
  9. d,e,f pay bills. (every month)

 
 
 
Assumptions:
You start your business on January 1.

  1. The company issues stock to its shareholders (you and your parents). Determine an appropriate amount of stock issued to capitalize your business.
  2. On January 1, borrow an appropriate sum of money from the bank on a two-year note.
  3. On January 1 pay cash to purchase long term assets for use in the business.
  4. On January 1 pay January, February and March rent.
  5. On January 1 pay for a one-year insurance policy.
  6. On the first day of each month purchase a different amount of supplies to use in the business. Pay for the supplies in the month after purchase.
  7. On the first day of each month purchase a different amount of product inventory. Define the number of units purchased and the cost per unit in your description.  All inventory purchases are paid in full the month after purchase.
  8. Establish your sales price each month and sell some of your product inventory for cash and some of the inventory on account (accounts receivable). You do not need to sell all your inventory in a given month. Assume all accounts receivable is collected the following month.
  9. Sell some gift certificates to customers in January to be used later.
  10. On March 31, the company pays a dividend to its shareholders. You must have positive retained earnings and enough cash to pay the dividend.

Adjustments

  1. Set the interest rate applicable to the two-year loan (from #2 above). Assume interest is accrued monthly.  Calculate the interest adjustment.  You will not pay the interest until the loan is due.
  2. Determine the salvage value and useful life of your long-term assets and calculate the depreciation adjustment.
  3. You determine that 20% of the supplies purchased at the beginning of each month are remaining at month-end. Record the appropriate adjusting journal entries.
  4. At the end of each month, accrue salaries and wages for employee services provided in the current month and then pay them in the following month.
  5. At the end of each month, accrue utilities expense for services received in the current month and then pay this bill in the following month.
  6. Receive a bill for advertising expenses for each month. Pay this bill in the following month.
  7. At the end of each month record the appropriate adjustment for prepaid rent.
  8. At the end of each month record the appropriate adjustment for prepaid insurance.
  9. Assume the gift certificates sold in January are redeemed in February.
  10. Set another interest rate applicable to your cash account balance. At the beginning of each month, record interest income based on the average cash balance for the prior month.  You will debit interest receivable and credit interest income each month.