G ENERAL I NSTRUCTIONS FOR MAY Journalize the transactions listed below. Prepare
ID: 2492653 • Letter: G
Question
GENERAL INSTRUCTIONS FOR MAY
Journalize the transactions listed below.
Prepare an unadjusted trial balance.
Prepare an adjusted trial balance.
Prepare a schedule of accounts receivable.
Prepare an income statement
Prepare a retained earnings statement
Prepare a balance sheet as of May 31, 20--.
TRANSACTIONS FOR MAY
General Entries
May 2 Issued Check No. 132 for $21,500 for this month’s advertising.
4 Purchased furniture and fixtures for $16,000, plus sales tax of $1,040, by issuing a 10% short-term note payable due in monthly installments of $2,840.00 principal plus interest for six months.
May 6 Issued Check No. 133 for $3,000 for May office rent. The company expanded its office space to accommodate its new furniture business. No additional moneys were requested as prepayments.
Received $13,600 from Marble Tile Co. for decorating services.
Issued Check No. 134 for $1,800 on account to A & D Inc. for the purchase of supplies on April 7.
Purchased supplies on account from A & D Inc. for $3,200 (net 30).
Purchased merchandise on account from Golden Antiques for $55,000 (net 60).
Performed services on account for Marie’s Boat Shop for $28,000 (net 60).
Received $18,000 cash from the sales of an antique office table and a chair. The cost of the merchandise was $11,250.
Received $10,800 cash on account from Adelle’s Gift Shop.
20 Sold an antique dining room set on account to Romi Architect, P.A. for $21,000 (terms 2/15, net 60). The cost of the merchandise was $13,125.
25 Performed decorating services on account for Haute Couture Dresses for $15,000 (net 60).
30 Issued Check No. 135 for $240 to pay the utilities bill for the month.
30 Issued Check No. 136 for $320 in payment of the telephone bill for the month.
30 Issued Check No. 137 for $350 for postage.
30 Issued Check No. 138 for $600 for business automobile expenses.
30 Issued Check No. 139 to Sophia LeBron for salary: gross amount $7,500, withholding income tax of $1,500, and FICA (Medicare and Social Security) at 7.5%.
30 Recorded the payroll tax expenses: FICA at 7.5% (employer), SUTA at 3%, and FUTA at 0.8%. (Ignore the salary limit amount for SUTA and FUTA.)
30 Issued Check No. 140 to replenish petty cash. The expenditures were for supplies used, $85, and auto expenses, $150.
Adjusting Entries
Expired insurance for the period, $500.
Supplies on hand at the end of the month, $3,375.
Provision for uncollectible accounts estimated at 3.0% of May credit sales, $1,290.
(Note: This estimate applies only to the service part of the business.)
Monthly depreciation on plant (fixed) assets is based on an 8-year life, no salvage value, and the straight-line method of depreciation.
Explanation / Answer
2-May Advertising expense 21,500 To Bank account 1,300 (To record check 132 issued towards advertising for the month) 4-May Furniture & Fixtures 17,040 To 10% Note Payable 17,040 (To record furniture purchased against note payable) 6-May Office rent 3,000 To Bank 3,000 (To record rent paid for the month) 6-May Bank account 13,600 Service revenue 13,600 (To record amount received from Marble Tile & Co towards decorating services) 6-May Accounts Payable 1,800 To Bank account 1,800 (Issued check 134 to Vendor A*D) 6-May Supplies account 3,200 To Accounts Payable 3,200 (To record supplies purchased on credit - net 30) 6-May Inventory account 55,000 To Accounts Payable 55,000 (To record supplies purchased on credit - net 60) 6-May Accounts Receivable 28,000 To Service revenue 28,000 (To record services provided on account to Marie's boat shop - net 60) 6-May Bank account 18,000 To Sales 18,000 (To record sale of antique table and chair) 6-May Cost of goods sold 11,250 To Inventory 11,250 (To record gost of goods sold) 6-May Bank account 10,800 To Accounts Receivable 10,800 (To record amount received on account from Adelle's gift shop) 20-May Accounts Receivable 21,000 To Sales 21,000 (To record sale of antique table and chair) 20-May Cost of goods sold 13,125 To Inventory 13,125 (To record gost of goods sold) 25-May Accounts Receivable 15,000 To Service revenue 15,000 (To record services provided on account toHaute Couture Dresses - net 60) 30-May Utilities 240 To Bank account 240 (To record payment of Utilities - check no 135) 30-May Telephone expenses 320 To Bank account 320 (To record payment of telephone bill - check no 136) 30-May Postage 350 To Bank account 350 (To record payment of postage - check no 137) 30-May Automobile expenses 600 To Bank account 600 (To record payment of automobile expense - check no 138) 30-May Salary 7,500 To Payroll Taxes 848 To Payroll taxes payable 2,910 To Bank account 5,438 (To record payment of automobile expense - check no 138) 30-May Petty cash 235 To Bank 235 (To record check issued for petty cash - check no. 140) 30-May Supllies 85 Automobile expenses 150 To Petty Cash 235 (To record petty cash expenses) Adjusting entries 31-May Insurance expense 500 To Prepaid Insurance 500 (To record expense for the month) 31-May Supplies expenses To Supplies (To record expense for the month) 31-May Doubtful debts expense 1290 To Provision for uncollectible accounts 1290 (To create a provision on credit sales @3%) 31-May Depreciation expense 177.5 To Accumulated depreciation 177.5 (To record depreciation on F&F purchased)
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