Answer:
Valley Technology
1. Journal Entries:
Jan 25. Debit Cash $30,000
Credit Sales Revenue $30,000
To record the sale of goods for cash.
Debit Cost of goods sold $24,000
Credit Inventory $24,000
To record the cost of goods sold.
Jan 26. Debit Cash $40,000
Credit Service Revenue $40,000
To record the rendering of services for cash.
Jan 27. Debit Expenses $2,000
Credit Cash $2,000
To record the payment for good or service consumed.
2. T-accounts:
Cash
Date Account Titles Debit Credit
Jan. 24 Beginning balance 9,700
Jan 25. Sales Revenue 30
Jan 26. Service Revenue 40
Jan 27. Expenses 2
Jan. 31 Ending balance 9,768
Inventory
Date Account Titles Debit Credit
Beginning balance 3,800
Cost of goods sold 24
Ending balance 3,776
Sales Revenue
Date Account Titles Debit Credit
Cash $30
Service Revenue
Date Account Titles Debit Credit
Cash $40
Cost of goods sold
Date Account Titles Debit Credit
Inventory $24
Expenses
Date Account Titles Debit Credit
Cash $2
3. Balance Sheet As of January 31, 2021 (amounts in thousands)
Cash 9,768 Accounts Payable 1,500
Accounts Receivable 4,500 Debt 2,900
Inventory 3,776 Other Liabilities 800
Property Plant & Equipment 16,400 Total Liabilities 5,200
Other Assets 1,700 Paid-In Capital 7,300
Retained Earnings 23,644
Total Equity 30,944
Total Assets 36,144 Total Liabilities & Equity 36,144
4. The final amount in Total liabilities and equity is:
= $36,144
Explanation:
a) Data and Calculations:
Balance Sheet As of January 24, 2021 (amounts in thousands)
Cash 9,700 Accounts Payable 1,500
Accounts Receivable 4,500 Debt 2,900
Inventory 3,800 Other Liabilities 800
Property Plant & Equipment 16,400 Total Liabilities 5,200
Other Assets 1,700 Paid-In Capital 7,300
Retained Earnings 23,600
Total Equity 30,900
Total Assets 36,100 Total Liabilities & Equity 36,100
Analysis:
Jan 25. Cash $30,000 Sales Revenue $30,000
Cost of goods sold $24,000 Inventory $24,000
Jan 26. Cash $40,000 Service Revenue $40,000
Jan 27. Expenses $2,000 Cash $2,000
Revenue:
Sales revenue $30
Cost of goods sold (24)
Service revenue 40
Gross profit $46
Expenses 2
Net income $44
Retained Earnings, beginning $23,600
Net income 44
Retained Earnings,, ending $23,644
