Prepare a General Journal, a General Ledger and an unadjusted trial balance for the following: The articles of incorporation for Bella Computers specified that the corporation was authorized to issue 1 million shares of common stock; par value was set at $10 per share. During the meeting, stock certificates for 5,000 shares of $10.00 par stock were issued to Dale and Lee, each. Dale and Lee each wrote personal checks for $50,000 for deposit in the new business bank account. As officers of the new Bella Computers Company, Dale and Lee, were both required to sign all company expense checks. As soon as the meeting ended Dale and Lee drove to the warehouse facilities that they had arranged to lease for one year. The lease would be a 1-year prepaid lease for the sum of $1,000 per month. The company wrote a check that day to the real estate company for the entire sum for the first year’s lease. Also on June 1, Bella Computers paid deposits to the Electric Company for initial service hook-up. That deposit payment was $500. A separate deposit was paid to the city for water, sewage & garbage service for $200. On June 2 Bella Computers signed a contract to take delivery on July 1st of office furniture and fixtures to furnish the new office. The furniture and fixtures were purchased on credit. The total cost of furnishings and fixtures was $20,000. The note payable was a 5-year note at 6% interest to be compounded monthly. The office furnishings, fixtures, and equipment are estimated to have a 10-year useful life, with no residual value. On June 4 Bella Computers signed a contract to take delivery on July 1 of machinery necessary for constructing their computers. The total machinery cost is $100,000. Bella Computers paid $10,000 in cash on June 4 and signed a 7 year $90,000 note payable at 8% interest to be compounded annually (Note: Please see the Time Value of Money Tables located in Appendix A = 1.71382). The machinery has an estimated useful life of 10 years, with a salvage value of $10,000. The payments will be made annually, beginning on July 1. The electronic components to be used in the construction in the computers were contracted to be supplied by a company named Silicon Solutions. The contract specifies that for purchases of components to build up to 10,000 computers will cost $140.00 per computer. If production per year is 10,000 to 20,000 computers, the parts will cost $130.00 per computer. If production exceeds 20,000 computers per year the parts will cost $120.00 per computer. This price includes all internal components and the LCD screen. No parts have been ordered yet. A separate contract is signed on June 8 with Custom Casings and Fabrication, Inc. The contract specifies a single price regardless of production levels. Each custom computer case and all related hardware will cost $40.00 per computer. No hardware has been ordered yet. Based on careful estimates, Dale and Lee believe that it will take 4 man hours to assemble each computer. The prevailing wage for skilled labor is $25.00 per hour. Bella Computers will offer a 1 year warranty on parts and service for their computers. Dale and Lee believe that the total warranty expense will be 2% of sales. Bella Computers has placed an advertisement in the local newspaper posting the job openings. Bella Computers expects to hire 20 skilled computer technicians and 5 support staff. The support staff pay will be $15.00 per hour. The advertisement will run in the classified section for 2 weeks at a cost of $250.00 per week. The ad will run from June 23 to July 7.
Prepare a General Journal, a General Ledger and an unadjusted
The articles of incorporation for Bella Computers specified that the corporation was authorized to issue 1 million shares of common stock; par value was set at $10 per share. During the meeting, stock certificates for 5,000 shares of $10.00 par stock were issued to Dale and Lee, each. Dale and Lee each wrote personal checks for $50,000 for deposit in the new business bank account. As officers of the new Bella Computers Company, Dale and Lee, were both required to sign all company expense checks.
As soon as the meeting ended Dale and Lee drove to the warehouse facilities that they had arranged to lease for one year. The lease would be a 1-year prepaid lease for the sum of $1,000 per month. The company wrote a check that day to the real estate company for the entire sum for the first year’s lease.
Also on June 1, Bella Computers paid deposits to the Electric Company for initial service hook-up. That deposit payment was $500. A separate deposit was paid to the city for water, sewage & garbage service for $200.
On June 2 Bella Computers signed a contract to take delivery on July 1st of office furniture and fixtures to furnish the new office. The furniture and fixtures were purchased on credit. The total cost of furnishings and fixtures was $20,000. The note payable was a 5-year note at 6% interest to be compounded monthly. The office furnishings, fixtures, and equipment are estimated to have a 10-year useful life, with no residual value. On June 4 Bella Computers signed a contract to take delivery on July 1 of machinery necessary for constructing their computers. The total machinery cost is $100,000.
Bella Computers paid $10,000 in cash on June 4 and signed a 7 year $90,000 note payable at 8% interest to be compounded annually (Note: Please see the Time Value of Money Tables located in Appendix A = 1.71382). The machinery has an estimated useful life of 10 years, with a salvage value of $10,000. The payments will be made annually, beginning on July 1.
The electronic components to be used in the construction in the computers were contracted to be supplied by a company named Silicon Solutions. The contract specifies that for purchases of components to build up to 10,000 computers will cost $140.00 per computer. If production per year is 10,000 to 20,000 computers, the parts will cost $130.00 per computer. If production exceeds 20,000 computers per year the parts will cost $120.00 per computer. This price includes all internal components and the LCD screen. No parts have been ordered yet.
A separate contract is signed on June 8 with Custom Casings and Fabrication, Inc. The contract specifies a single price regardless of production levels. Each custom computer case and all related hardware will cost $40.00 per computer. No hardware has been ordered yet. Based on careful estimates, Dale and Lee believe that it will take 4 man hours to assemble each computer. The prevailing wage for skilled labor is $25.00 per hour. Bella Computers will offer a 1 year warranty on parts and service for their computers. Dale and Lee believe that the total warranty expense will be 2% of sales.
Bella Computers has placed an advertisement in the local newspaper posting the job openings. Bella Computers expects to hire 20 skilled computer technicians and 5 support staff. The support staff pay will be $15.00 per hour. The advertisement will run in the classified section for 2 weeks at a cost of $250.00 per week. The ad will run from June 23 to July 7.
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 4 images
