January 1, 2008 Timber Company incorporated in the State of Pennsylvania. Initially it issued stock to three stockholders, Bob, Jim, and Frank. Each paid $50,000 (50,000 shares-- $.25 par value per share) for the stock. The Company¡¯s Articles of Incorporation indicate that it will function as a Great Value Hardware Franchise.

Question

The following transactions occurred during the month of January:
1. On January 1, 2008 purchased hardware inventory for $95,000 and miscellaneous supplies for $30,000. Paid $5,000 down and with the balance to be paid to Great Value Holding Company on a monthly basis, of $10,000, due the first of each month starting in February.
2. Purchased Furniture and Fixtures on January 1, 2008 at a cost of $50,000( $20,000 in cash and the balance due on January 2, 2009 @ 12% interest)
3. Hired 3 employees at $150.00 (each) a week On January 1, 2008. On January 4, 11, 18, and 25 paid employees for entire week ($450.00). Pay day is each Friday. For the week ended January 4, 2008 payroll is $360.
4. Total sales, for the period ended January 31, 2008, are $18,000, of which $11,000 is cash. The balance is on Timber credit cards.
5. Paid utility water bill, for three months, of $600 ( January-March) on January 19, 2008.
6. Received phone bill on January 24, 2008, for the month of January The bill is $625. Bill is due and will be paid on February 5, 2008.
7. Received $6,000 on accounts receivables on January 26, 2008. From industry information Timber anticipates that 8% of its credit sales will be uncollectible
8. On January 27, 2008 the company is notified that ABC customer went into bankruptcy and therefore will not pay its receivable of $340.
9. Furniture and Fixtures are determine to have a life of 10 years with no residual value
10. Timber borrowed $60,000 on January 26, 2008 from Wells Bank to expand the store. Construction is to start in February 2008. The note carries an interest rate of 13% and is payable in full on January 31, 2009. Timber actually received $52,200 in cash. The month of January is subject to a full month of interest.
11. Timber paid a Franchise Fee of $75,000 on January 27, 2008 to Great Value Hardware. The fee is amortizable over 25 years, after which Timber will own all future rights to the subject franchise location.
12. At January 31, 2008 inventory hardware is $87,000 and supplies on hand are $27,500.
13. The Board of Directors declares a dividend on January 30, 2008 of $3,000 payable to stockholders of record on January 30, 2008. The dividend will be paid on February 8, 2008.
14. On January 1, 2008 Timber signed a lease agreement to lease its headquarters building for 5-years, at a monthly rental of $1,500 per month, due the first day of each month. Timber paid January¡¯s rent on January 1, 2008.
15. On January 3, 2008 purchased JCY stock for $20,000 to be held as a Trading Security. The stock has a value of $35,000 on January 31, 2008.

Required for the Month of January:
1. Prepare required journal entries and post to ledger T accounts for Timber
2. Prepare a 10 column worksheet for Timber

I did the journal entries, but is having a hard time figuring out how many T-accounts are there in total. Also, having trouble with the worksheet due to the unadjusting Trial Balance is not balance for the Debit and Credit. Help please?

Answer 1

January 1, 2008 Timber Co issued stock to three stockholders, Bob, Jim, and Frank. Each paid $50,000 (50,000 shares-- $.25 par value per share) for the stock
Dr Cash $150,000
Cr Common stock $37,500
Cr Add'l paid up in excess of par $112,500

1. On January 1, 2008 purchased hardware inventory for $95,000 and miscellaneous supplies for $30,000. Paid $5,000 down and with the balance to be paid to Great Value Holding Company on a monthly basis, of $10,000, due the first of each month starting in Feb
Dr Merchandize inventory $95,000
Dr Supplies $30,000
Cr Cash $5,000
Cr Payable to GVHC $120,000

2. Purchased Furniture and Fixtures on January 1, 2008 at a cost of $50,000( $20,000 in cash and the balance due on January 2, 2009 @ 12% interest)
Dr F&F $50,000
Cr Cash $20,000
Cr Note payable $30,000 ?

Dr Interest exp. $300
Cr Interest payable $300

3. Hired 3 employees at $150.00 (each) a week On January 1, 2008. On January 4, 11, 18, and 25 paid employees for entire week ($450.00). Pay day is each Friday. For the week ended January 4, 2008 payroll is $360
Dr Wages expense $1,710
Cr Cash $1,710

Dr Wages exp. $360
Cr Wages payable $360
(for Jan 28, 29, 30 & 31)

4. Total sales, for the period ended January 31, 2008, are $18,000, of which $11,000 is cash. The balance is on Timber credit cards
Dr Cash $11,000
Dr Accounts receivable $7,000
Cr Sales $18,000

5. Paid utility water bill, for three months, of $600 ( January-March) on January 19, 2008
Dr Utilities expense $200?
Dr Prepaid utilities $400
Cr Cash $600

6. Received phone bill on January 24, 2008, for the month of January The bill is $625. Bill is due and will be paid on February 5, 2008
Dr Telephone expense $625
Cr Tel. payable $625

7. Received $6,000 on accounts receivables on January 26, 2008. From industry information Timber anticipates that 8% of its credit sales will be uncollectible
Dr Cash $6,000
Cr AR $6,000

Dr Doubtful debts exp. $560
Cr Allowance for doubtful debts $560

8. On January 27, 2008 the company is notified that ABC customer went into bankruptcy and therefore will not pay its receivable of $340
Dr Allowance for d.d. $340
Cr AR (ABC) $340

9. Furniture and Fixtures are determined to have a life of 10 years with no residual value
Dr Depreciation $416.67
Cr Accum. depn. $416.67

10. Timber borrowed $60,000 on January 26, 2008 from Wells Bank to expand the store. Construction is to start in February 2008. The note carries an interest rate of 13% and is payable in full on January 31, 2009. Timber actually received $52,200 in cash. The month of January is subject to a full month of interest
Dr Cash $52,200
Dr Interest exp. $650
Dr Prepaid interest $7,150
Cr Loan payable $60,000

11. Timber paid a Franchise Fee of $75,000 on January 27, 2008 to Great Value Hardware. The fee is amortizable over 25 years, after which Timber will own all future rights to the subject franchise location
Dr Franchise Fee $75,000
Cr Cash $75,000

12. At January 31, 2008 inventory hardware is $87,000 and supplies on hand are $27,500
Dr COGS $8,000
Cr Merchandize inventory $8,000

Dr COGS $7,300
Cr Supplies $7,300

13. The Board of Directors declares a dividend on January 30, 2008 of $3,000 payable to stockholders of record on January 30, 2008. The dividend will be paid on February 8, 2008
Dr Dividend $3,000
Cr Dividend payable $3,000

14. On January 1, 2008 Timber signed a lease agreement to lease its headquarters building for 5-years, at a monthly rental of $1,500 per month, due the first day of each month. Timber paid January¡¯s rent on January 1, 2008

Dr Prepaid Rent $1,500
Cr Cash $1,500

Dr Rent exp. $1,500
Cr Prepaid rent $1,500

15. On January 3, 2008 purchased JCY stock for $20,000 to be held as a Trading Security. The stock has a value of $35,000 on January 31, 2008

Dr Trading security $20,000
Cr Cash $20,000

Dr Trading security $15,000
Cr Gain on revaluation of Trading Security $15,000

Answer 2

That is the Journal Entries I did. I need help with the T-accounts.