| PROBLEM 1 – JOURNAL ENTRIES AND ACCOUNT BALANCES | ||||||
| On January 1, 2006, the Brian Toole Company Inc. had the following account balances in its accounting system. (all the below balances are normal balances) | ||||||
| Account | Debit | Credit | ||||
| Cash | 300 | |||||
| Accounts recivable | 1,200 | |||||
| Inventory Tools | 13,000 | |||||
| Machinery | 22,000 | |||||
| Accumulated Depreciation | -5,500 | |||||
| Land | 8,000 | |||||
| Accounts Payable | 2,000 | |||||
| Taxes Payable | 1,500 | |||||
| Long term Note Payable | 12,000 | |||||
| Common Stock | 10,000 | |||||
| Retained Earnings | 13,500 | |||||
| 39,000 | 39,000 | |||||
| The following transactions occurred during the month of January 2006. | ||||||
| a. The entire beginning inventory of tools was sold to customers for $22,000 cash | ||||||
| b. All outstanding taxes were paid in full. | ||||||
| c. $600 was collected from customers accounts receivables. | ||||||
| d. $1,000 was paid on the accounts payable. | ||||||
| e. New inventory was acquired on account for $8,500. | ||||||
| f. Wages were incurred for employees totaling $3,000 and $2,500 of this was paid in cash. | ||||||
| g. Depreciation expense of $2,000 was recorded on the machinery. | ||||||
| h. The note Payable incurrs interest at 12% and the interest was not paid in cash | ||||||
| i. Dividends of $1,000 were paid to stockholders | ||||||
| REQUIRED: | ||||||
| A. Provide Account Balances as indicated. | ||||||
| 1. Total Assets | ||||||
| 2. Total Liabilities | ||||||
| 3. Total Stockholders equity | ||||||
| 4. Total Net Income | ||||||
| 5. Total Ending Retained earning |
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