FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Assume the following: Lomo Engineering Company had the following transactions:
Jan-01 Issued capital stock for $965,000.
Jan-01 Purchased a Packaging Equipment for $20,000.
Jan-01 Purchased an Insurance Policy (1 year) for $30,000.
Jan-03 Purchased a Machine, paying $15,000 in cash and issuing a note of
$20,000.
Jan-05 Purchased $28,000 of inventory on account.
Jan-07 Sold inventory costing $6,000 for $50,000 on account.
Jan-11 Paid $2,000 for inventory purchased on account (from Jan-05).
Jan-15 Collect $12,550 of
Jan-17 Paid utility bills totaling $1,500.
Jan-23 Paid wages for $13,000.
Jan-25 Collect $8,000 in bank interest.
Jan-30 Paid $12,590 due to income taxes.
Chart of Accounts for Lomo Engineering Company
Assets:
|
101 |
Cash |
|
105 |
Accounts Receivable |
|
110 |
Note Receivable |
|
115 |
Inventory |
|
120 |
Prepaid Insurance |
|
125 |
Warehouse Building |
|
130 |
Equipment |
|
Liabilities: |
|
|
201 |
Account Payable |
|
205 |
Note Payable |
|
210 |
Wages Payable |
|
215 |
Loan Payable |
|
220 |
Interest Payable |
Owners’ Equity:
301 Capital Stock
310 Dividends
Revenues:
401 Sales Revenue
405 Interest Revenue
Expenses:
|
501 |
Cost of Goods Sold |
|
505 |
Wages Expense |
|
510 |
Utilities Expense |
|
515 |
Insurance Expense |
|
520 |
Income Tax Expense |
|
530 |
Salvage Value / useful life |
Required:
- Prepare Balance
- Prepare a
Cash Flow Statement
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