Roxy Corp Prepares its financial statements under US GAAP Du

Roxy Corp. Prepares its financial statements under U.S. GAAP

During the Year

The company begins operations on January 1, 2016. The company is started by issuing 50,000 shares of common stock for $1,000,000 ($1 Par value stock)

The company immediately purchases $400,000 in inventory for cash and sells $100,000 of this inventory to customer #1 for $150,000 on credit.

The company purchases a machine for $120,000 cash on January 1st and depreciates it over 10 years (depreciation is recorded at year end and there is no salvage value)

On June 1st, customer #1 pays us $70,000 of the amount due.

During June $25,000 dollars of research and development expenses are incurred. $10,000 has not been paid as of yearend.

Required:

Using a separate Excel Spreadsheet, journalize the transactions and create Balance Sheet and Income Statement for year end 2016

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Journal Entry
1	Cash a/c	Dr.	1,000,000
	To Common stock A/c			50,000
	To Paid-in capital excess of par value A/c	950,000

2	Purchases A/c	Dr.	400,000
	To cash A/c			400,000

3	#1 Customer A/c	Dr.	150,000
	To sales A/c			150,000

4	Machine A/c	Dr.	120,000
	To Cash A/c			120,000

5	Depreciation Expense A/c	Dr.	12,000
	To Machine A/c			12,000

6	R & D Expense A/c	Dr.	25,000
	To Cash A/c			15,000
	To Account payable A/c			10,000

Roxy Corp. Prepares its financial statements under U.S. GAAP During the Year The company begins operations on January 1, 2016. The company is started by issuing

Roxy Corp Prepares its financial statements under US GAAP Du

Solution

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