Smallville Company was organized on January 1, 2020. It is authorized to issue 109000 shares of $110 par value common stock. At the beginning of April, the ledger of Smallville Company carried the following balances to their respective accounts. Cash-$58000, Merchandise Inventory- $75200, Prepaid Insurance-$4800, 10% Notes Payable-$25400, Equipment-$138000, Accumulated Depreciation: Equipment-$3800, Common Stock-$131000, Paid in capital in excess of par value: Common Stock-$24000, and Retained Earnings-$91800. The following transactions took place in Smallville Company during April of the current year (2020). April 1 - Issued 2500 new shares of common stock for $343000 April 3 - Purchased merchandise of $7600 on account from Prescott Co., terms FOB destination, 2/10, n/30. The appropriate party paid the freight charge of $250. April 4 - Sold merchandise for cash, $89100. The cost of the merchandise sold was $47000. April 5 - Purchased merchandise on account from Stafford Co., $23000, terms FOB shipping point, 2/10, n/30. The appropriate paid the freight charge of $610. April 6 - Returned $570 of merchandise purchased on April 3 from Prescott Co. April 13 - Paid Prescott Co. on account for purchase of April 3. April 15 - Paid Stafford Co. on account for purchase of April 5. April 17 - Purchased merchandise for cash $1500. April 20 - Received refund for poor quality merchandise from supplier on cash purchase $170. Additional Information on Smallville Company: A review of the ledger of Smallville Company at April 30, 2020, produces the following data pertaining to the preparation of monthly adjusting entries. (a) Notes Payable $25400. This balance consists of a note for 6 months at an annual interest rate of 15%, dated January 1, 2020. (b) There are five workers in Smallville Company who are paid wages weekly. The five workers are paid $800 each for a 5-day work week (Monday to Friday). April 30 is a Tuesday and workers are paid on Fridays. (c) Annual depreciation is $12100 on equipment. (d) Physical check reveals inventory actually on hand on April 30, 2020 is $57069.4. (1) Journalize the adjusting entries at April 30, 2020.
Smallville Company was organized on January 1, 2020. It is authorized to issue 109000 shares of $110 par value common stock. At the beginning of April, the ledger of Smallville Company carried the following balances to their respective accounts.
Cash-$58000, Merchandise Inventory- $75200, Prepaid Insurance-$4800, 10% Notes Payable-$25400, Equipment-$138000, Accumulated
The following transactions took place in Smallville Company during April of the current year (2020).
April 1 - Issued 2500 new shares of common stock for $343000
April 3 - Purchased merchandise of $7600 on account from Prescott Co., terms FOB destination, 2/10, n/30. The appropriate party paid the freight charge of $250.
April 4 - Sold merchandise for cash, $89100. The cost of the merchandise sold was $47000.
April 5 - Purchased merchandise on account from Stafford Co., $23000, terms FOB shipping point, 2/10, n/30. The appropriate paid the freight charge of $610.
April 6 - Returned $570 of merchandise purchased on April 3 from Prescott Co.
April 13 - Paid Prescott Co. on account for purchase of April 3.
April 15 - Paid Stafford Co. on account for purchase of April 5.
April 17 - Purchased merchandise for cash $1500.
April 20 - Received refund for poor quality merchandise from supplier on cash purchase $170.
Additional Information on Smallville Company:
A review of the ledger of Smallville Company at April 30, 2020, produces the following data pertaining to the preparation of monthly
(a) Notes Payable $25400. This balance consists of a note for 6 months at an annual interest rate of 15%, dated January 1, 2020.
(b) There are five workers in Smallville Company who are paid wages weekly. The five workers are paid $800 each for a 5-day work week (Monday to Friday). April 30 is a Tuesday and workers are paid on Fridays.
(c) Annual depreciation is $12100 on equipment.
(d) Physical check reveals inventory actually on hand on April 30, 2020 is $57069.4.
(1) Journalize the adjusting entries at April 30, 2020.
(2) Prepare an adjusted
(3) Using the balances from the adjusted trial balance, prepare a multi-step income statement and owner’s equity statement for the one month ended April 30. (Assume that the company falls under 40% tax bracket).
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