Prepare transactions and financial statements for the month of November. Novembe
ID: 2580754 • Letter: P
Question
Prepare transactions and financial statements for the month of November.
November 2 The owner, Haneen Mohamed, invested $150,000 cash by depositing it in the business account at QNB. In return, she received 15,000 shares of $10 par value common stock.
November 2 Paid Fatma Mohammed, an attorney, $5,250 for her services to help organize the corporation.
November 2 Paid the Qatar Corporation Commission a total of $750 for charter and filing fees.
November 2 The owner signed a contract to lease a small shop at a monthly rent of $600. You paid $1,800 for a three month period to Qatar Rent-It Company.
November 3 Paid $2,400 to the Gulf Insurance Company for one-year insurance policy.
November 3 Purchased equipment from Qatar Equipment Corporation for $30,000 paying a down payment of $14,000 and agreeing to pay the balance within 30 days.
November 4 Purchased on account office supplies costing $1,600 from Supplies Inc.
November 5 Purchased repair supplies for $3,500 from Hamad Electronic Supply Company. You paid for it in cash.
November 9 Paid $900 to the local newspaper for advertising the opening of the new business.
November 12 You repaired a chair for Ahmed Suleiman. The total bill was $5,000. When he picked up his chair, he paid you $3,000 and agreed to pay the balance within 30 days.
November 29 Received a check from Ahmed Suleiman for the mount due on his account.
November 30 Received the November telephone bill for $600 from Ooreedo and decided to pay it in February.
November 30 Received the November utility bill for $1,200 from Kharama and paid it.
November 30 Mohsen Ibrahim chair had been repaired for a total of $550 on account.
November 30 Your first month cash repair revenue totaled $10,300.
November 30 Paid Qatar Equipment Corporation the balance due on account.
Adjusting entries for November:
1. Office supplies with a cost of $900 are on hand at the end of the month.
2. Repair supplies with a cost of $2,500 are on hand at the end of the month.
3. The estimated useful life of the equipment is 5 years with no salvage value. Use straight line depreciation method.
4. You decided to amortize the organization costs over a period of five years.
5. Examine the prepaid rent account for possible adjustments.
6. Examine the prepaid insurance account for possible adjustment.
Explanation / Answer
02-Nov Cash 150000 Common stock 150000 02-Nov Organization cost 5250 Cash 5250 02-Nov Organization cost 750 Cash 750 02-Nov Prepaid rent 1800 Cash 1800 03-Nov Prepaid insurance 2400 Cash 2400 03-Nov Equipment 30000 Cash 14000 Accounts payable 16000 04-Nov Office supplies 1600 Accounts payable 1600 05-Nov Repair supplies 3500 Cash 3500 09-Nov Advertising expense 900 Cash 900 12-Nov Cash 3000 Accounts receivable 2000 Service revenue 5000 29-Nov Cash 2000 Accounts receivable 2000 30-Nov Telephone expense 600 accounts payable 600 30-Nov Utility expense 1200 Cash 1200 30-Nov Accounts receivable 550 Service revenue 550 30-Nov Cash 10300 Service revenue 10300 30-Nov Accounts payable 16000 Cash 16000 Adjusting entries 30-Nov Office supplies expense 700 Office supplies 700 30-Nov Repair supplies expense 1000 Repair supplies 1000 30-Nov Depreciation expense 500 (30000/5*1/12) Accumulated depreciation equipment 500 30-Nov Amortization expense 100 (6000/5*1/12) Organization costs 100 30-Nov Rent expense 600 Prepaid rent 600 30-Nov Insurance expense 200 Prepaid insurance 200