Accrual based accounting

Current date: Jan 1 2012

Annual report ending December 31,2011


a.borrowed $12,000 in cash on a 5 year, 10 percent notes payable, dated March 1, 2012

c. Earned $208,000 in revenues for 2012, including $52,000 on credit and the rest in cash.

d. Sold 4,000 additional shares of capital stock for cash at $1 market value per share on Jan 1, 2012

e.incurred $111,000 in remaining expense for 2012 including $20,000 on credit and the rest paid in cash.

i. Purchased supplies on account for future use, $23,000.

j. Signed a three year $33,000 service contract to start february 1, 2013.

k. Declared and paid cash dividend, $22,000.


a. Dr cash $12,000

Dr interest expense $1200

Cr longterm not payable $12,000

Cr interest payable $1200

c. Dr cash $156,000

Dr account receivable $52,000

Cr service revenue $208,000

d. Dr cash $4000

Cr contributed capital $4000

e. Cr account payable $111,000

Dr remaining expense $111,000

i. Dr supplies $23,000

Cr account payable $23,000

j. No transaction

k. Cr cash $22,000

Dr retained earnings $22,000

I have been working on this very hard but now that i attempted to do the income statement, my net income did not meet the checkpoint my teacher gave us. Please help.