Meyer Corporation sells computers and provides computer repair services. The bal
ID: 2420411 • Letter: M
Question
Meyer Corporation sells computers and provides computer repair services. The balances in the General Ledger accounts as of 4/1/15 are as follow:
Cash
$ 30,000
Notes Payable
$ 15,500
Accounts Receivable
17,000
Contributed Capital
63,000
Inventory
8,000
Retained Earnings
45,700
Prepaid Advertising
2,500
Sales Revenue
Building
39,000
Repair Service Revenue
Land
28,000
Cost of Goods Sold (COGS)
Equipment
20,000
Advertising Expense
Accounts Payable
13,000
Salary Expense
Unearned Revenue
$7,300
The business transactions for April are shown below:
APRIL
2 Meyer invested $80,000 cash into the business and contributed $100,000 worth of equipment in exchange for stock.
4 Land and building were purchased for $185,000. Of this amount, $90,000 applied to the land, and $95,000 to the building. The corporation paid $50,000 in cash and financed the remaining balance with debt by signing a note promising to pay in four years.
7 Purchased $10,000 of computer inventory for the business on account.
10 Sold computers to customers for $20,000 receiving the entire amount in cash. The computers cost $15,000 (Hint: There are four accounts in this journal entry)
14 Received $7,000 from a customer on previously billed repair services
18 Meyers Corporation billed customers $15,000 for repair services rendered. Of this amount, $8,500 was received in cash, and the balance was billed on account.
21 Paid $8,000 of accounts payable that had become due.
24 Paid $7,000 for several television advertisements aired in April
27 Received a check from a customer for $6,000 for repair services to be rendered in May
30 Paid employees $15,500 in salaries to employees for work done during the month.
Submit all your answers to D2L in one Excel document.
Prepare journal entries for each transaction (list the date, accounts and amounts debited and credited in good form).
Accounts
Debit
Credit
April 1
Cash (+A)
$500,000
Contributed Capital (+SE)
$500,000
To record purchase of additional shares of stock
Create T- account for each account used with the beginning balance provided. Post each transaction from Question 1 to the appropriate T account and determine the ending balance as of April 30.
Prepare a trial balance dated April 30, 2015 (see page 64 in textbook). Use the “Sum” function in Excel to add up your debit and credit columns.
Prepare an income statement for the period ended April 30, 2015. Does April appear to be a profitable month for Meyer Corporation? What is one suggestion you would make to increase the profitability of the business?
Prepare a balance sheet as of April 30, 2015. Use the “Sum” function in Excel for your totals. (Remember: Ending Retained Earnings = Beginning Retained Earnings + Net Income – Dividends)
Cash
$ 30,000
Notes Payable
$ 15,500
Accounts Receivable
17,000
Contributed Capital
63,000
Inventory
8,000
Retained Earnings
45,700
Prepaid Advertising
2,500
Sales Revenue
Building
39,000
Repair Service Revenue
Land
28,000
Cost of Goods Sold (COGS)
Equipment
20,000
Advertising Expense
Accounts Payable
13,000
Salary Expense
Unearned Revenue
$7,300
Explanation / Answer
Journal entries Date Account Debit Credit 1.4.2015 cash 80000 equipment 100000 to contributed capital 180000 being cash and equipment introduced 1.4.2015 land 90000 building 95000 to cash 50000 to note payable 135000 being land and building acquired 1.4.2015 purchase 10000 to account payable 10000 being computer purchased 1.4.2015 cash 20000 to sale 20000 being sale made on cash basis cost of good sold 15000 to inventory 15000 being cost of good sold booked 1.4.2015 cash 7000 to account recivable 7000 being payment received from debtor 1.4.2015 cash 8500 account receivable 6500 to sale 15000 being sale made 1.4.2015 account payable 8000 to cash 8000 being creditors paid 1.4.2015 advertisement expenses 9500 to cash 7000 to prepaid advertising 2500 being advertisement expenses paid 1.4.2015 bank 6000 to unearned revenue 6000 being payemnt received in advance 30.4.2015 salary expense 15500 to cash 15500 being salary paid