11On Dec. 21 An uninhabited moon orbiting the planet of Star Wars, Inc.\'s headq

Question

11On Dec. 21 An uninhabited moon orbiting the planet of Star Wars, Inc.'s headquarters is acquired by issuing 20,000 shares of unissued common stock. The moon has a fair value of $1,200,000. The moon is immediately used for operations. The moon is considered land.

12.On Dec. 21 A bill from Han Solo, Esquire is received for legal services performed related to the acquisition of the moon. The total of the bill is $7,000 and is paid immediately.

13.On Dec. 24 Purchased office supplies from Naboo Stationery Co. for $3,227 in cash. Treat the supplies as an asset.

14.On Dec. 24 Purchased 200 units of inventory from Calrisian's Components for $380 each on credit, terms net/45

15.On Dec. 26 Sold 235 units of product to Jango Fett, Inc. for $825 each on credit.

16On Dec. 26 R2D2 Computers agrees to convert a $50,900 overdue A/R balance into a 13% note due in 6 months. The original sale was from a Nov. 15 sale. Previously, R2D2 paid $45,000 of the balance off.

17.On Dec. 26 Paid $375 for postage costs. Use misc. expenses.

On Dec. 27

Paid bi-weekly wages via payroll checks. The payroll summary is below:

Employee wages (gross)        $6,120

FICA taxes withheld                   468

Federal income taxes withheld 1,567

State income taxes withheld       355

   Net pay                           $3,730

Employer's payroll taxes:

FICA tax                                 $468

(no FUTA or SUTA)

18.On Dec. 27 Star Wars, Inc. repurchases 1,000 shares of its own stock from an investor for $45 per share. The repurchase is recorded as Treasury Stock at its repurchase cost.

19.On Dec. 27 Paid $10,500 for ordinary repairs and maintenance on star ships.

Explanation / Answer

Journal Debit Credit investment    1,200,000                   -   common stock    1,200,000                   -   Legal expenses            7,000                   -   cash            7,000                   -   office supplies            3,227                   -   cash            3,227                   -   inventory          76,000                   -   accounts payable          76,000                   -   Accounts receivable       193,875                   -   Sales revenue       193,875                   -   Notes receivable          50,900                   -   Accounts receivable          50,900                   -   Misc                375                   -   petty cash                375                   -   Employee wages (gross)            6,120                   -   FICA taxes withheld                468 Federal income taxes withheld            1,567 State income taxes withheld                355 Wages payable            3,730                   -   FICA tax                468                   -   Tax payable                468                   -   Treasury Stock          45,000                   -   cash          45,000                   -   repairs and maintenance          10,500                   -   cash          10,500

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