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Posted: September 10th, 2021
BUAD 280 Company [the firm] was formed on April 30, Year 1 when three owners each invested $2,000
BUAD 280 Company [the firm] was formed on April 30, Year 1 when three owners each invested $2,000. On that same date, the two of the owners each lent $1,500 to the firm.
During the rest of Year 1, the firm bought supplies inventory on account at a cost of $120. At December 31, Year 1, there were supplies on hand totaling $30. Through December 31, Year 1, the firm paid its suppliers $80 for supplies previously purchased on account.
On May 1, Year 1, the firm collected $1,400 from its clients for work that would be done later.
By December 31, Year 1, the firm had provided services to its clients in the amount of $1,200. Of this amount, the clients had paid $1,000 in advance and the other $200 will be paid to BUAD 280 after December 31, Year 1.
BUAD 280 hired two consultants at a monthly salary of $30 each. These two consultants worked for the firm from May 1, Year 1 through December 31, Year 1. The firm pays its employees on the last day of each month for services rendered during that month. One of the consultants asked for and was granted a $60 advance against his salary for the following year. The oother consultant asked the firm to postpone paying her for the last month of Year 1. This postponement was for some special tax purpose and the postponed amounts will be paid in February of Year 2.
Through December 31, Year 1, the firm used up utilities with a value of $70. However the firm had only paid $50 to the utilities firms through December 31, Year 1.
The firm rented an office space on May 1, Year 1, at a monthly cost of $30. The contract with the landlord required that the rent be paid on May 1 and November 1 for the six-month periods beginning on those dates. The first payment was required on May 1, Year 1, the day the firm occupied the office space.
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