1. Enter the post-closing trial balance amounts into T-accounts from the Midterm Project Cash–$58,575 Note Payable–$30,000 Supplies– $300 Interest Payable–$625 Prepaid Insurance–$1800 Retained Earnings–$24,050 Equipment–$31,000 Common Stock–$30,000 Accumulated Depreciation–$7,000 2. Add the following T-accounts with zero opening balances: Accounts Receivable Allowance for Uncollectible Accounts Inventory Vehicle Prepaid Rent Accounts Payable Sales Tax Payable Payroll Taxes Payable Note Payable – Vehicle Sales Revenue Sales Discounts Service Revenue (clinics/ races) Cost of Goods Sold Salaries Expense Payroll Tax Expense Interest Expense Insurance Expense Rent Expense Depreciation Expense Bad Debts Expense Bank Service Charge Expense Supplies Expense Check Figures: Cash: $84,995/ Balance Sheet-Current Liabilities: $11,245 NOTE: You may be one or two dollars different depending on rounding. This is OK! 3. Journalize and post the following transactions for the 1st quarter of 2013: Although the clinics and races have been successful, Tony and Suzie decide to expand the business by selling heart-rate monitor watches. They agree to use the FIFO method of accounting for their inventories. a. On January 1st, Great Adventures pays $6,000 for January-June rent. ($1,000 per month) b. On January 3rd, purchased 40 watches for $2000 ($50 per watch) on account, terms 2/10, n/30. c. On January 5th, returned 10 of the watches purchased on January 3rd. d. On January 7th, sold 20 watches for $3,000 on account to The Human Race, terms 4/10, n/30. e. On January 12th, paid for the watches purchased on January 3rd. f. On January 14th, received payment from the Human Race for the sale on January 7th. g. On January 18th, purchase $1200 of supplies with cash. h. January 31st, pay Victor’s salary of $3,000, less $450 federal and state income tax withholding and $230 FICA withheld. Accrue employer’s FICA of $230 and federal and state unemployment taxes of $186. i. On February 1st, Suzie and Tony decide to purchase a vehicle to take customers on rock climbing trips. The vehicle cost $28,000 and was financed through the dealership with a 36 month loan at 6.5% interest. Payments of $858.17, including principle and interest will be due on the 1st of each month, beginning March 1st. j. On February 4th, purchased 60 watches for $3600 ($60 per watch) for cash. k. On February 9th, take Energy Group Inc. on a corporate leadership rock climbing trip. Energy Group Inc. is billed on account for the trip for $10,000. l. On February 14th, sold watches at the Valentines’ Day Couples Relay. Sold 15 watches for $175 each, plus 6.5% sales tax. In addition, they collected $10,000 cash for entry fees of 100 couples. m. February 15th – paid the payroll taxes from January 31st. n. On February 28th, invoices are sent to various other customers totaling $35,000 for clinics given during the month of February. o. February 28th, pay Victor’s salary of $3,000, less $450 federal and state income tax withholding and $230 FICA withheld. Accrue employer’s FICA of $230 and federal and state unemployment taxes of $186. p. March 1st – the first payment of $858.17 on the vehicle loan is made. ($706.51 is applied toward the principal and $151.66 is interest expense) q. March 8th, purchased 30 watches for $1950 ($65 per watch), on account, terms 3/10, n/30. r. March 15th – paid the payroll taxes from February 28th. s. March 20th – pay for the watches purchased on March 8th. t. March 22nd – collect $10,000 from Energy Group Inc. for their trip in February. u. March 23rd – collect $25,000 from customers previously invoiced in February. v. March 31st– send invoices of $21,000 to customers for rock-climbing trips in March. w. March 31st, pay Victor’s salary of $3,000, less $450 federal and state income tax withholding and $230 FICA withheld. Accrue employer’s FICA of $230 and federal and state unemployment taxes of $186. 4. Adjusting entries at March 31, 2013: 1. Record three months of expired insurance ($300 per month). 2. Record three months of rent used ($1000 per month). 3. Record supplies expense. $500 of supplies remain on March 31st. 4. Record depreciation on Bikes, Kayaks and Vehicle of $4,500 ($1,500 per month). 5. The note payable of $30,000 is due in 3 years and accrues interest at 5% per year. The interest is payable on July 31 of each year. Record the interest for 3 months ended March 31st. 6. Accrue the interest due on April 1st on the vehicle loan. 7. Estimated uncollectible accounts receivable at March 31st are $500. 8. Reconciled the bank statements for the 1st quarter of 2013. Service charges of $25 need to be recorded. 5. Prepare the following financial statements at March 31, 2013 A. Income Statement (multiple-step) for the 3 months ended March 31, 2013 B. Statement of Stockholders’ Equity for the 3 months ended March 31, 2013 C. Balance Sheet (classified), March 31, 2013. The amount of the vehicle loan that is due within the next 12 months (Current portion of long-term debt) is $8830. D. Statement of Cash Flows for the 3 months ended March 31, 2013 using the indirect method. (We will go over this in class on Wednesday the 7th).