Complete P2-3A on p. 82 of Financial Accounting, using the templates provided for your answers. Each part of the problem corresponds to one tab in the template. Complete all three tabs.
- Write a message, in memo format (word document), of 250 to 400 words in the body of your posting that justifies what you did. Address your message to your creditors and explain:
o The general goals of financial reporting
o The steps you took in the recording process
o How the steps you took support the principles of accounting
- Due Date: Day 7. Post your message (memo) and the completed template as an attachment in the Assignments Tab
P2-3A Jack Shellenkamp owns and manages a computer repair service, which had the following
trial balance on December 31, 2007 (the end of its fiscal year).
BYTE REPAIR SERVICE INC.
December 31, 2007
Cash $ 8,000
Accounts Receivable 15,000
Parts Inventory 13,000
Prepaid Rent 3,000
Shop Equipment 21,000
Accounts Payable $19,000
Common Stock 30,000
Retained Earnings 11,000
Summarized transactions for January 2008 were as follows:
1. Advertising costs, paid in cash, $1,000.
2. Additional repair parts inventory acquired on account $4,000.
3. Miscellaneous expenses, paid in cash, $2,000.
4. Cash collected from customers in payment of accounts receivable $14,000.
5. Cash paid to creditors for accounts payable due $15,000.
6. Repair parts used during January $4,000. (Hint: Debit this to Repair Parts Expense.)
7. Repair services performed during January: for cash $6,000; on account $9,000.
8. Wages for January, paid in cash, $3,000.
9. Dividends paid in January were $3,000.
(a) Open T accounts for each of the accounts listed in the trial balance, and enter the opening
balances for 2008.
(b) Prepare journal entries to record each of the January transactions.
(c) Post the journal entries to the accounts in the ledger. (Add accounts as needed.)
(d) Prepare a trial balance as of January 31, 2008.