Question: on february 3 2017 fcm signed an agreement with deion...
- On February 3, 2017, FCM signed an agreement with Deion Sanders to provide media consulting for his football camp. On December 1, FCM completed some of the work for Sanders, and issued an invoice for $15,000. Full payment was received on January 15, 2018. Note: the project did not involve video production.
- On December 1, to prepare for expansion, FCM issued 1,000 shares of stock at a PAR value of $70 per share and signed a $30,000 note that is due December 1st, 2022. The note carries a 5% annual rate of interest which is to be paid semi-annually so the first interest payment will be made May 31, 2018. (Do not forget to record accrued interest at the end of the year). On December 3, FCM purchased land for $90,000 on which to build a 4,000 sq. ft. facility.
- On November 15, 2017, FCM sent an invoice for $170,000 to the Livestrong Foundation for creating a promotional video. On December 2, FCM received the $170,000 payment from the Livestrong Foundation
- On November 30, 2017, FCM purchased, received, and recorded $4,000 of supplies from VimBoot on account. On December 4, FCM paid VimBoot for the supplies purchased the previous month.
- On November 30, 2017, FCM accrued $230 for that month’s AT&T Internet and telephone bill. That ATT&T bill was paid on December 5.
- FCM recorded the purchase of a $1,800 insurance policy to a real account on June 30, 2017, for coverage from July 1 through December 31, 2017. The company correctly recorded monthly adjusting entries related to the insurance through November 30th. FCM purchased a new 12-month policy on December 31 for $2,920 cash.
- On December 7, NBC Sports contacted FCM about a potential video project. On December 15, FCM paid $1,000 to a consultant to gather focus groups to determine if there was sufficient demand for the project NBC Sports proposed. On December 30, the consultant provided TCM with the report discussing the results of the focus groups.
- On December 11, FCM purchased two computers from Dell Inc. for $4,900 each. FCM paid $500 down with a check; the remaining balance is due in 30 days (n/30). Each computer has an estimated life of two years and a salvage value of $50 each.
- On December 12, an invoice in the amount of $150 was received from FedEx for transportation-in on the computers purchased on December 11. The invoice was paid the same day by check.
- On August 1, 2017, a $12,000 contract was signed for a social marketing project with Outright Fitness and FCM received the full payment on that date. On December 17, FCM completed the project for Outright Fitness.
- On December 18, FCM had an unpleasant communication with O-Dij-Games, a company producing on-line video games and a long-time customer of FCM. Recently, O-Dij-Games was having difficulty with revenue generation and financing. O-Dij-Games’ management expressed an unwillingness to pay FMC the remaining $1,500 due to FMC because of dissatisfaction with the outcome from FCM’s social media campaigns. O-Dij-Games indicated its intention to never use FMC services in the future. FCM wrote off the O-Dij-Games’ outstanding balance. FCM uses the allowance method for bad debts.
- On December 19, FCM received $28,000 payment for a promotional project that was completed for Chuck Nash Chevy in October 2017. At the time the project had been completed in October, FCM recorded revenue and issued an invoice.
- On November 25, FCM borrowed $18,000 on a 5%, 30-day note from SocialVid Consulting. FCM had not recorded accrued expenses related to this short-term note prior to its repayment. On December 26, FCM repaid the note and interest.
- On December 28, FCM issued a $340 check to reimburse an employee for travelling to Houston to make a presentation to potential customers.
- On December 29, supplies of $900 were purchased on account (n/30) and delivered. The purchase was recorded in a real account.
- A cash dividend of $9,700 was declared and paid on December 30.
- Beginning in April 2017, FCM performed a variety of social media services for Art Unlimited over a period of six months. Art Unlimited failed to make its last payment of $11,000, which was due November 15, 2017, because it was waiting for money to be transferred to it from a related art foundation. On December 31, FCM allowed Art Unlimited to replace its accounts receivable with a six-month note receivable due June 30, 2018; the note carries a 5% interest rate.
- All six FCM employees are monthly paid. Wages and Salary Expense for December 2017 was $8,220, which will be paid on January 2, 2018.