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Crazy: JE revenue, stock, discontinued operations, accruals

1-Jan Crazy's sold 100% of its common stock for $200K cash. Par value of stock was 80.00/share and a thousand shares were sold

1-Jan Crazy borrowed $50K cash by issuing a 3-year note with a stated interest rate of 8% per year. To be compounded semi-annually. The interest is due on January 1 of each year; and the principal will be paid on the maturity date

1-Mar Started up a second line of consulting services. Sold services for a $100K in cash; and paid related misc. expenses of $70K - all related to second line of business. All other transactions related to first consulting operations, unless noted.
1-Oct
Purchased $10K of an investment in another company's stock. Not sure if it will be sold, traded, or held to maturity
1-Dec Found a buyer for second line of consulting services. Sold the entire business for equipment worth 60K; which resulted in a gain of $60K

31-Dec
Hired an employee in mid-December. Salaries are to be paid on 1/3. The amount unpaid at year-end is $15.4K.
The amount that will be paid on 1/3 is $19.8K. Ignore payroll taxes (FICA, state and federal withholdings.)
31-Dec Determined that there is still about $5K to do for client X. Determined that we sold inventory at $40K (cost). (Credit inventory $40K and debit cost of goods sold $40K)
31-Dec Determined that the stock purchased on 10/1 was now only worth $8K. However, the stock was not sold.
31-Dec We declared and paid a dividend of 10K to our investor/owner

Tax Rate is 30% (none of the tax is paid, but it is accrued as a liability. Include tax in the journal entries)

Solution Summary

The journal entries are in excel. Click in cells to see computations. The most complicated entry is for the gain on sale and operating income from the discontinued operation.

$2.19