Denise’s Cleaning Services
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Free InquiryDenise’s Cleaning Services has been operating for 5 years. At December 31 of last year, the accounting records reflected the following:
Assets |
Amount |
Liabilities & Equity |
Amount |
Cash |
$ 23,000 |
Accounts Payable |
$ 20,000 |
Marketable Securities |
2,000 |
Notes Payable (Short-Term) |
8,000 |
Accounts Receivable |
5,000 |
Long Term Notes Payable |
47,000 |
Equipment |
50,000 |
Common Stock |
10,000 |
Factory |
90,000 |
Additional Paid in Capital |
60,000 |
Intangibles |
5,000 |
Retained Earnings |
30,000 |
Total Assets |
$175,000 |
Total Liabilities & Equity |
$175,000 |
During the current year, the company had the following summarized activities:
a. Purchased furniture for $13,000 cash.
b. Purchase supplies on account for $3,000.
c. Purchased equipment that cost a total of $29,000; paid $5,000 cash and signed a one-year note for the balance.
d. Hired a new president at the end of the year. The contract was for $60,000 per year plus options to purchase company stock at a set price based on company performance.
e. Issued additional shares of common stock for $5,000 cash and $15,000 in equipment.
f. Borrowed $48,000 cash as a two-year note payable from a local bank.
g. Purchased Land for $40,000 cash.
h. Performed Services for a customer and received $15,000 cash.
i. Built an addition to the factory for a total cost of $45,000; paid $9,000 in cash and signed a three-year note for the balance.
j. Performed services for a customer on account for $12,600.
k. Paid $5,200 on account.
l. Received $3,100 from a customer on account.
m. Paid expenses: Rent-$1,500 and Salaries-$4,000
n. Paid dividends $2,000.
Required
1. Create a journal entry for each transaction.
2. Prepare a trial balance as of December 31 of the current year.
3. Prepare an Income Statement of December 31 of the current year.
4. Prepare a Statement of Retained Earnings as of December 31, of the current year.
5. Prepare a Balance Sheet as of December 31, of the current year.
6. Analyze the financial status of the company over this last year. (Don’t forget to use ratios.)
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