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McGuire Corporation began operations in 2021. The company purchases computer equipment from manufacturers and then sells to retail stores. During 2021, the bookkeeper used a check register to record all cash receipts and cash disbursements. No other journals were used. The following is a recap of the cash receipts and disbursements made during the year. Cash receipts: Issue of common stock $ 50,000 320,000 Collections from customers Borrowed from local bank on April 1, note signed requiring principal and interest at 12% to be paid on March 31, 2022 40,000 $410,000 Total cash receipts Cash disbursements: $ 220,000 Purchase of merchandise Payment of salaries. 80,000 30,000 Purchase of office equipment Payment of rent on building Miscellaneous expense 14,000 10,000 Total cash disbursements $ 354,000 You are called in to prepare financial statements at December 31, 2021. The following additional information was provided to you: 1. Customers owed the company $22,000 at year-end. 2. At year-end, $30,000 was still due to suppliers of merchandise purchased on credit. 3. At year-end, merchandise inventory costing $50,000 still remained on hand. 4. Salaries owed to employees at year-end amounted to $5,000. 5. On December 1, $3,000 in rent was paid to the owner of the building used by McGuire. This represented rent for the months of December through February. 6. The office equipment, which has a 10-year life and no salvage value, was purchased on January 1, 2021. Straight-line depreciation is used.

McGuire Corporation began operations in 2021. The company purchases computer equipment from manufacturers and then sells to retail stores. During 2021, the bookkeeper used a check register to record all cash receipts and cash disbursements. No other journals were used. The following is a recap of the cash receipts and disbursements made during the year. Cash receipts: Issue of common stock $ 50,000 320,000 Collections from customers Borrowed from local bank on April 1, note signed requiring principal and interest at 12% to be paid on March 31, 2022 40,000 $410,000 Total cash receipts Cash disbursements: $ 220,000 Purchase of merchandise Payment of salaries. 80,000 30,000 Purchase of office equipment Payment of rent on building Miscellaneous expense 14,000 10,000 Total cash disbursements $ 354,000 You are called in to prepare financial statements at December 31, 2021. The following additional information was provided to you: 1. Customers owed the company $22,000 at year-end. 2. At year-end, $30,000 was still due to suppliers of merchandise purchased on credit. 3. At year-end, merchandise inventory costing $50,000 still remained on hand. 4. Salaries owed to employees at year-end amounted to $5,000. 5. On December 1, $3,000 in rent was paid to the owner of the building used by McGuire. This represented rent for the months of December through February. 6. The office equipment, which has a 10-year life and no salvage value, was purchased on January 1, 2021. Straight-line depreciation is used.

College Accounting (Book Only): A Career Approach
College Accounting (Book Only): A Career Approach
13th Edition
ISBN:9781337280570
Author:Scott, Cathy J.
Publisher:Scott, Cathy J.
Chapter6: Bank Accounts, Cash Funds, And Internal Controls
Section: Chapter Questions
Problem 2PB
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McGuire Corporation began operations in 2021. The company purchases computer equipment from manufacturers and then sells to retail stores. During 2021, the bookkeeper used a check register to record all cash receipts and cash disbursements. No other journals were used. The following is a recap of the cash receipts and disbursements made during the year. Cash receipts: Issue of common stock $ 50,000 320,000 Collections from customers Borrowed from local bank on April 1, note signed requiring principal and interest at 12% to be paid on March 31, 2022 40,000 Total cash receipts $ 410,000 Cash disbursements: $ 220,000 Purchase of merchandise Payment of salaries 80,000 Purchase of office equipment 30,000 14,000 Payment of rent on building Miscellaneous expense 10,000 Total cash disbursements $ 354,000 You are called in to prepare financial statements at December 31, 2021. The following additional information was provided to you: 1. Customers owed the company $22,000 at year-end. 2. At year-end, $30,000 was still due to suppliers of merchandise purchased on credit. 3. At year-end, merchandise inventory costing $50,000 still remained on hand. 4. Salaries owed to employees at year-end amounted to $5,000. 5. On December 1, $3,000 in rent was paid to the owner of the building used by McGuire. This represented rent for the months of December through February. 6. The office equipment, which has a 10-year life and no salvage value, was purchased on January 1, 2021. Straight-line depreciation is used.
Transcribed Image Text:McGuire Corporation began operations in 2021. The company purchases computer equipment from manufacturers and then sells to retail stores. During 2021, the bookkeeper used a check register to record all cash receipts and cash disbursements. No other journals were used. The following is a recap of the cash receipts and disbursements made during the year. Cash receipts: Issue of common stock $ 50,000 320,000 Collections from customers Borrowed from local bank on April 1, note signed requiring principal and interest at 12% to be paid on March 31, 2022 40,000 Total cash receipts $ 410,000 Cash disbursements: $ 220,000 Purchase of merchandise Payment of salaries 80,000 Purchase of office equipment 30,000 14,000 Payment of rent on building Miscellaneous expense 10,000 Total cash disbursements $ 354,000 You are called in to prepare financial statements at December 31, 2021. The following additional information was provided to you: 1. Customers owed the company $22,000 at year-end. 2. At year-end, $30,000 was still due to suppliers of merchandise purchased on credit. 3. At year-end, merchandise inventory costing $50,000 still remained on hand. 4. Salaries owed to employees at year-end amounted to $5,000. 5. On December 1, $3,000 in rent was paid to the owner of the building used by McGuire. This represented rent for the months of December through February. 6. The office equipment, which has a 10-year life and no salvage value, was purchased on January 1, 2021. Straight-line depreciation is used.
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