90.2K

Verified Solution

Link Copied!

2400 TOD 1200 whe 3. On January 1, Kevin Reynolds, a student at State U, decides to start a business. Kevin has noticed that various student organizations around campus are having more and more need for mass produced copies of programs on CDs. While a lot of students have a CD drive on their computers that can write to CDs, it is a slow process when a high volume of CDs is needed. Kevin believes that with a beginning investment in specialty equipment, he can provide a valuable product to the college community. So on 1/1, Kevin officially begins "Kevin's Kool CD Kopies." or course, Kevin is very careful to ensure that his customers have full ownership rights to the material on their CDs. The following occurs during January. 1. Kevin deposits $500 of his own money into the company's checking account. 2. Kevin signs a note payable in the amount of $1,000 from Neighborhood Bank. The note is due in one year. 3. KKCDK (Kevin's Kool CD Kopies) purchases a CD duplicator that cost is $1,300. 4. KKCDK purchases 500 blank CDs for $150 on account. 5. KKCDK pays $20 cash for flyers to advertise. 6. KKCDK quickly catches on with the student groups on campus. KKCDK sells 400 CDs to various groups for $0.80 per CD. KKCDK receives cash payment for 300 of the CDs and the groups owe for the other 100 CDs. 7. KKCDK pays $100 on its accounts payable. 8. KKCDK receives $40 in advance to copy 50 CDs for a student group. He will not begin work until February. 9. KKCDK incurs $40 in tax expense. The taxes will be paid in February Required: A. Prepare journal entries for the above events if needed. B. Post the journal entries to T-accounts. C. Prepare adjusting entries for the following and post them to your T-accounts. 10. Kevin's roommate, Mark, helps with the CD copying and delivering. KKCDK pays Mark a salary of $50 per month. Mark will get his first check on February 1. 11. KKCDK incurs $10 in interest expense. The interest will be paid with the note. E. Prepare financial statements for KKCDK for January 460 7

Answer & Explanation Solved by verified expert

See Answer