QUESTION 1.

Jania Corporation was organized on January 1 2003. In January, the following transactions were carried out by Jania Corporation:

January 1 Issued 3,000 shares of capital stock in exchange for $30,000 cash
January 2 Purchased land and a small office building for a total price of $150,000, of which $80,000 was
              the value of the land and $70,000 as the value of the building. Paid $20,000 in cash and
              signed a note payable for the remaining $130,000.
January 5 Bought office equipment on credit for $29,000 (15-day open account).
January 10 Obtained a loan from First Bank in the amount of $10,000. Signed a note payable.
January 15 Billed the customers $ 27,000 for the services rendered.
January 18 Collected $ 12,000 of the amount billed to customers on January 15.
January 19 Paid the $15,000 of account payable.
January 21 Purchased one year insurance policy for $7,000.
January 27 Received utilities bill $2,500
January 30 Declared a dividend of 20 cents per share of capital stock and paid
January 30 Billed customers $ 35,000 for the services rendered during the second period of the month.
               Of this amount $ 15,000 is received in cash.
January 31 Paid employees $ 12,500 for salaries.

Required:
a) Prepare journal entries to record the above transactions
Select the appropriate account titles from the following chart of accounts:
Accounts Payable, Accounts Receivable, Building, Capital Stock, Cash, Dividends, Land, Notes Payable, Office Equipment, Salaries Expense, Service Revenue, Unexpired Insurance, Utilities Expense
b) Post to the ledger.
c) Prepare a trial balance at January 31, 2003.

QUESTION 2.
Daxtor Company adjusts and closes its accounts monthly. Before any month-end adjustments are made, operating income of Daxtor Company is $100,000. Adjusting entries are necessary for the following items:

1. Depreciation for the month is $3,000.
2. Services performed for clients but not yet recorded or collected is $4,000
3. $1,000 of prepaid rent is expired.
4. Accrued wages payable amount to $2,500.
5. Supplies consumed amout to $2,200.

Required:
a) Prepare the adjusting entries for the items listed above?
b) After adjusting entries are made how much would be Daxtor Company's operating income before taxes for the month.
c) If the income taxes rate is 40%, how much would be net income of Daxtor Company for the month.

QUESTION 3.

Transform Company is a service company. The Company adjusts and closes its accounts monthly. The following is the adjusted trial balance of the company at January 31, 2003.

Required:
a. Prepare an income statement for the month ended January 31, 2003.
b. Prepare a statement of retained earnings for the month ended January 31, 2003.
c. Prepare a balance sheet at January 31, 2003.
d. Prepare journal entries to close the accounts.