1)(TCOs E and F) Please prepare the following journal entries. Indicate which account should be debited and which account should be credited, along with the dollar amount of the debit and credit.
(1) Investors invest $500,000 in exchange for 50,000 shares of common stock.
(2) Company purchased equipment for $25,000 on account.
(3) Company paid Rent for $4,000.
(4) Company received $15,000 for services not yet performed.
(5) Employees work Monday through Friday and are paid on Friday. Salary expense is $10,000 per day and this year, December 31 falls on a Wednesday.
2)TCOs B and D) The following items are taken from the financial statements of Lacey Company for 2012:
Advertising Expense
$14,000
Accounts Receivable
12,000
Cost of Goods Sold
65,000
Accumulated Depreciation—Equipment
20,000
Accounts Payable
21,000
Cash
44,000
Depreciation Expense
17,000
Common Stock
100,000
Dividends
25,000
Insurance Expense
5,000
Note Payable (due 2014)
70,000
Rent Expense
4,000
Prepaid Insurance
17,000
Retained Earnings (beginning)
22,000
Salaries Expense
50,000
Salaries Payable
3,500
Net sales
175,000
Supplies
4,000
Supplies Expense
3,000
Equipment
210,000
3)Question 1430 pts
(TCO D) The following items are taken from the financial statements of SRW Company for 2012:
Cash
$375,000
Accounts Receivable
125,000
Prepaid Insurance
100,000
Accounts Payable
88,000
Unearned Service Revenue
15,000
Equipment, net of accumulated depreciation
177,000
Common Stock
125,000
Retained Earnings 12/31/2011
106,000
Long-term debt
336,500
Service revenue
225,000
Cost of Goods Sold
62,500
Rent expense
30,000
Supplies expense
8,000
Insurance expense
18,000
Instructions
(a) Please create a classified Balance Sheet in good form for the year ended 2012. (25 points)
(b) Please calculate the current ratio. (5 points)
