Colton Enterprises experienced the following events for Year 1, the first year of operation: 1. Acquired $56,000 cash from the issue of common stock.
2. Paid $14,100 cash in advance for rent. The payment was for the period April 1, Year 1 to March 31, Year 2.
3. Performed services for customers on account for $114,000.
4. Incurred operating expenses on account of $45,500
5. Collected $87,000 cash from accounts receivable.
6. Paid $42,000 cash for salary expense.
7. Paid $36,400 cash as a partial payment on accounts payable. Adjusting Entries
8. Made the adjusting entry for the expired rent. (See Event 2.)
9. Recorded $6,600 of accrued salaries at the end of Year 1.
Events for Year 2
1. Paid $6,600 cash for the salaries accrued at the end of the prior accounting period.
2. Performed services for cash of $63,000.
3. Purchased $4,900 of supplies on account.
4. Paid $16,800 cash in advance for rent. The payment was for one year beginning April 1. Year 2.
5. Performed services for customers on account for $130,000,
6. Incurred operating expenses on account of $62,500.
7. Collected $110,000 cash from accounts receivable.
8. Paid $60,000 cash as a partial payment on accounts payable.
9. Paid $33,600 cash for salary expense.
10. Paid a $12,000 cash dividend to stockholders. Adjusting Entries
11. Made the adjusting entry for the expired rent. (Hint Part of the rent was paid in Year 1.)
12. Recorded supplies expense. A physical count showed that $500 of supplies were still on hand.