On March 1 started business by funding with $ 1,000,000. cash in exchange for 100,000 shares of no par common stock Purchased land valued at 75,000 together with the building for a total of $ 225,000 paid for with $ 25,000 a Paid down payment of and for $

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Breaking Bad Company ("BBC")
Date
March 1, 2013
March 31, 2013
March 31, 2013
June 30, 2013

On March 1 started business by funding with $ 1,000,000. cash in exchange for 100,000 shares of no par
common stock
Purchased land valued at 75,000 together with the building for a total of $ 225,000 paid for with $ 25,000 a
Paid down payment of and for $25,000. by issuing a three year 12%at 1, 2013 interest payment is due
Purchase Office an annual insurance policy that commence interest Note. per
cash $12,000. forEquipment by obtaining a mortgage, bearing as of April 7 % Firstannum for the balance.
January is payable semi annualy except withthe first payment which is due on January 1. The the entire
Interest 1 and semi-annually thereafter for the entire principal due at maturity
principal due at maturity.

September 1, 2013
September 30, 2013
September 30, 2013
October 1, 2013
October 15, 2013
November 15, 2013
November 30, 2013
December 31, 2013
January 1, 2014

Opened an account with Dewey, Cheatem and Howe to purchase goods
for resale deliveredpaid $ 20,000 Breaking Bad Blue on Account to ABC Co. with a gross margin/gross
On September 30 $ 200,000 of for rent 300,000.six Breaking Bad Blue for
Sold and On September 1 purchased $ the next of months
resale employeesdue an Net 90 days and 24,000; per year,in 135 days
profit2of 50% 1/2 for in annual salary of the balance due per employee. The employees are paid
Hire Terms
which BBC paid within the the following month in which the services were rendered.
monthly on the first day of terms
Purchased office supplies of $ 5,000
ABC and pays the balance due on its account Blue on Account to XYZ Co. with a gross margin/gross
Sold Co. delivered $ 100,000 of Breaking Bad
profit received a deposit of $ 125,000 for goods to be manufactured and delivered in January 2014 From
BBC of 50%
DEFBank paid interest on the cash held in accounts of $ 5,000. for the
The Corp
year ended December 31, 2013

Additional Information
The company uses a prepetual inventory system
The office equipment has an estimated useful life of 5 years with no salvage value.
The building has an estimated useful life of 20 years and a salvage value of $ 50,000
The endingcalendar year company 2,000 income tax rate is 50% and is payable on April 15th
BBC's is a supplies inventory is $ whose
2014
The company takes a physical inventory and records any adjustments necessary at the end of
the year
The company uses 5% of outstanding AR as a general reserve for bad debts

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2
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4
5

REQUIRED
Go through the accounting cycle for the nine months ending December 31, 2013:
Record gerneral journal entries for all of the transactions in the table.
Record all necessary adjusting entries.
Prepare a worksheet with columns for the unadjusted trial balance, adjusting entries,
adjusted trial balance, income statement and balance sheet.
Record the closing entries.
Prepare an income statement (including EPS), balance sheet and statement of changes
in retained earnings.

Breaking Bad Company
Trial Balance
Acccount Name
Cash
Accounts Receivable
Inventories
Equipment
Note Payable
Accounts Payable
Owners Equity
Sales
Cost of Goods Sold
Operating Expenses
Taxes

Unadjusted Trial Balance
Debit
Credit
10,000.00
10,000.00
5,000.00
5,000.00
5,000.00
7,000.00
10,000.00
10,000.00
2,000.00
32,000.00

32,000.00

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