Listed below are selected transactions of Schultz Department Store for the curre

Question

Listed below are selected transactions of Schultz Department Store for the current year ending December 31.

Prepare all the journal entries necessary to record the transactions noted above as they occurred and any adjusting journal entries relative to the transactions that would be required to present fair financial statements at December 31. Date each entry. For simplicity, assume that adjusting entries are recorded only once a year on December 31. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date

Account Titles and Explanation

Debit

Credit

Dec. 5

Dec. 1-31

Dec. 10

Dec. 31

1. On December 5, the store received $690 from the Selig Players as a deposit to be returned after certain furniture to be used in stage production was returned on January 15. 2. During December, cash sales totaled $832,125, which includes the 5% sales tax that must be remitted to the state by the fifteenth day of the following month. 3. On December 10, the store purchased for cash three delivery trucks for $128,400. The trucks were purchased in a state that applies a 5% sales tax. 4. The store determined it will cost $113,100 to restore the area (considered a land improvement) surrounding one of its store parking lots, when the store is closed in 2 years. Schultz estimates the fair value of the obligation at December 31 is $84,480.

Explanation / Answer

Date                               Account titles and explanations                debit              credit

Dec 5                               Cash              A/c                                      690

                                                   To refundable deposit                                          690

                                    (Being refundable deposit collected for use of assets)

Dec 1 -31                        Cash                      A/c                    832,125

   To sales    792,500

To sales tax payable    39,625                

                                     (Being sales for the month along with 5 % tax collected)

Dec 10                          Truck A/c                                                     128,400

                                                     To Cash                                                               128,400                         

                                       (being truck purchased )

Dec 31                          Land A/c                                                         84,480

                                                  To   Restoration expense payable                               84,480

                                    (Being future restoration cost capitalised at fairvalue)

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