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MARCHAKENYANT GUITAR STORE business transactions for its first year of operation.

January 1 The owner forms the corporation by purchasing 10,000 shares of P1


par stock.
January 15 The owner found a nice retail store front in the local mall and signs a
lease for P5,000 a month.
February 1 MARCHAKENYANT takes out a bank loan to renovate the new store
location for P100,000 and agrees to pay P1,000 a month and spends all
of the money on improving and updating the store's fixtures and looks
February 15 MARCHAKENYANT purchases P50,000 worth of inventory to sell to
customers on account with its vendors. He agrees to pay P1,000 a month.
March 1 MARCHAKENYANTs first rent payment is due.
March 15 MARCHAKENYANT has a grand opening and makes it first sale. It
sells a guitar for P5000 that cost P1000.
April 1 MARCHAKENYANT sells another guitar to a customer on account for
P3000. The cost of this guitar was P1000.
April 15 MARCHAKENYANT pays electric bill for P2000.
April 30 MARCHAKENYAT purchases supplies to use around the store worth
P5000.
May 15 The store is getting so busy that they decide to hire an employee for
P5000 a week. And makes his first payroll payment.
May 30 MARCHAKENYAT's first vendor inventory payment is due of P1,000.
June 1 The owner starts giving guitar lessons and receives P2,000 in lesson
income.
June 30 MARCHAKENYAT's first bank loan payment is due.
Nov 30 MARCHAKENYAT has more cash sales of P25,000 with cost of goods
of P10,000.
Dec 15 In lieu of paying himself, Paul decides to declare a P10,000 dividend
for the year.

Entries:
January 1 Cash 10,000
Common Stock 10,000
January 15 Prepaid Rent 5,000
Cash 5,000
February 1 Leasehold Improvements 100,000
Long Term Liabilities 100,000
February 15 Inventory 50,000
Accounts Payable 50,000
March 1 Rent Expense 5,000
Cash 5,000
March 15 Cash 5,000
Cost of Sale (COGS) 1,000
Sales 5,000
Inventory 1,000
April 1 Accounts Receivable 3,000
Cost of Sale (COGS) 1,000
Sales 3,000
Inventory 1,000
April 15 Utility Expense 2,000
Cash 2,000
April 30 Supplies Expense 5,000
Cash 5,000
May 15 Wages/Salaries Expense 35,000
Cash 35,000
May 30 Accounts Payable 1,000
Cash 1,000
June 1 Cash 2,000
Lesson/Service Income 2,000
June 30 Long Term Liabilities 500
Interest Expense 500
Cash 1000
Nov 30 Cash 25,000
Cost of Sales (COGS) 10,000
Sales 25,000
Inventory 10,000
Dec 15 Dividends 10,000
Cash 10,000

MARCHAKENYANTS GUITAR SHOP


UNADJUSTED TRIAL BALANCE
DECEMBER 31, 2015

ACCOUNT DEBIT CREDIT


Cash (35,000)
Accounts Receivable 3,000
Inventory 38,000
Prepaid Rent 5,000
Leasehold Improvements 100,000
Accounts Payable 49,000
Long-term Liabilities 99,500
Common Stock 10,000
Dividends 10,000
Revenues 35,000
Cost of Goods Sold 12,000
Rent Expense 5,000
Supplies Expense 5,000
Utilities Expense 2,000
Wages Expense 35,000
Interest Expense 500
193,500 193,500

MARCHAKENYANT GUITAR SHOP


INCOME STATMENT
FOR THE YEAR ENDED DECEMBER 31, 2015

MARCHAKENYANT GUITAR SHOP

Revenue

Sales Revenue 33000

Service Revenue 2000

Less: Cost of Goods Sold -12000

Total Revenue 23000

Expenses

Rent Expense 5000

Supplies Expense 5000

Utilities Expense 2000

Wages Expense 35000

Interest Expense 500

Total Expenses 17500

Net Income (24500)

BALANCE SHEET
FOR THE YEAR ENDED DECEMBER 31, 2015

ASSETS
Current Assets
Cash 13,000
Accounts Receivable 3,000
Inventory 38,000
Total Current Assets 54000

Non-Current Assets
Leasehold Improvements 100,000

Total Non-current Assets 100,000

Total Assets 154,000

LIABILITIES
Current Liabilities
Accounts Payable 49,000
Total Current Liabilities 49,000

Non-Current Liabilities
Long-term liabilities 99,500

Total Non-current liabilities 99,500

Owner's Equity
Common Stock 10,000
Dividends -10,000
Capital 5,500

Total Liabilities and Owners Equity 154000