(1) July 1, 2008: Receives $25,000 from Quinn Zealick for 25,000 shares of the stock
common face value $1 from the bookstore.
(2) July 1, 2008: Obtains $30,000 loan from local bank for needs
of working capital. The loan earns 6% interest per year. The loan is payable
with interest on June 30, 2009.
(3) July 1, 2008: Sign a three-year rental agreement at an annual rent of $20,000
Pay the first year's rent in advance.
(4) July 1, 2008: Purchases shelves for $4,000 in cash. The shelves have
an estimated useful life of five years and zero residual value.
(5) July 1, 2008: Purchase computers for $10,000 in cash. The computers
They have an estimated useful life of three years and $1,000 in residual value.
(6) July 1, 2008: Makes guarantee deposits with various book distributors for
a total of $8,000. Deposits are refundable on June 30, 2009 if the bookstore pays
on time all amounts payable for books purchased from distributors between
July 2008 and June 30, 2009.
(7) During 2008: Purchases books on account from various distributors for a cost of $160,000.
(8)During 2008: Sells books costing $140,000 to $172,800. Of the total sales,
$24,600 corresponds to cash and $148,200 is on account.
(9) During 2008: Returns unsold books and books ordered in error for a cost of
$14,600. The company had not yet paid for these books.
(10) During 2008: Collected $142,400 from sales on account.
(11) During 2008: Pays employees salaries of $16,700.
(12) During 2008: Pays $139,800 to book distributors of the amounts payable for
purchases on account.
(13) December 28, 2008: Receives customer advances of $850 due to order books
special that the bookstore will order and expects to receive during 2009.
(14) December 31, 2008: Record the corresponding amount of interest expense on the
loan in (2) for 2008.
(15) December 31, 2008: Record the corresponding amount of rental expense for 2008.
(16) December 31, 2008: Record the corresponding amount of depreciation expense
on the shelves in (4).
(17) December 31, 2008: Record the corresponding amount of depreciation expense
about computers in (5).
(18) December 31, 2008: Record the corresponding amount of income tax expense.
profits for 2008. The income tax rate is 40%. The taxes are
paid on March 15, 2009.
(1) March 15, 2009: Pays 2008 income tax.
(2) June 30, 2009: Pay off the bank loan with interest.
(3) July 1, 2009: Obtains a new bank loan for $75,000. He
loan is payable on June 30, 2010, with 8% interest payable
to the expiration.
(4) July 1, 2009: Receives security deposits from book distributors.
(5) July 1, 2009: Pay the rent corresponding to the period from July 1
2009 to June 30, 2010.
(6) During 2009: Purchase books on account for a cost of $310,000.
(7)During 2009: Sold books for a cost of $286,400 for $353,700. Of the total sales,
$24,900 corresponds to cash, $850 corresponds to special orders received during December
of 2008 and $327,950 are on account.
(8) During 2009: Returns unsold books at a cost of $22,700. The company has not yet
I had paid for these books.
(9) During 2009: Collects $320,600 from sales to accounts.
(10) During 2009: Pays employees compensation of $29,400.
(11) During 2009: pays $281,100 to book distributors for book purchases from
account.
(12) December 31, 2009: Declares and pays a dividend of $4,000.
4.9
