Flair and Glory Incorporate as FG Designs, Inc

Essay

Flair and Glory incorporate as FG Designs, Inc.on January 1, Year 1.FG Designs creates custom wall finishes and sells painting products.The following transactions occur during January.

a. Glory contributes cash of $85,000 and receives 15,000 shares of $1 par value stock.
b. Flair contributes $45,000 cash, office furniture with a value of $5,000, and computer equipment with a value of $10,000 and receives 15,000 shares of $1 par value stock. The furniture and equipment is expected to last 5 years and has no salvage value.
c. On January 2, $12,000 of painting products were purchased. FG paid $8,000 cash with the remaining amount on account.
d. During January, painting products are sold for $10,000 cash. The cost of the products is $3,000.
e. Additional painting products with a value of $6,500 are sold, with a cost of $2,500, but the cash is not collected as of January 31st. It is expected that the $6,500 will be collected in full by February 15th.
f. Glory is paid a salary of $3,300.
g. FG paid $1,800 for January and February rent.
Required:
Prepare appropriate accrual basis journal entries.