DIRECTIONS: A) Prepare journal entries for the following items The following tra
ID: 2521068 • Letter: D
Question
DIRECTIONS: A) Prepare journal entries for the following items The following transactions occurred during 2017 (the company uses a perpetual inventory system with FIFO):
1) Jan 4 Stockholders invested an additional $10,000 cash in the business in exchange for common stock
2) Jan 4 Purchased 20 turkeys at $50 each on account from Turkey Farms.
3) Jan 4 Established a $200 petty change fund
4) Jan 5 Sold 6 turkeys for $200 each to Mr. Pilgrim, terms 2/10, n/30.
5) Jan 6 Sold 12 turkeys at $200 each for cash
6) Jan 8 Paid wages of $240
7) Jan 9 Mr. Pilgrim returned one turkey because they originally ordered only 5.
8) Jan 12 Purchased equipment on account for $2,000
9) Jan 14 Received payment in full from Mr. Pilgrim
10) Jan 15 Purchased 10 turkeys at $52 each on account from Thanksgiving Industries, terms 1/10, n/30.
11) Jan 15 Paid utility bill of $120
12) Jan 16 Returned 2 turkeys to Thanksgiving Industries because they were defective.
13) Jan 17 Sold 8 turkeys for $245 each for cash
14) Jan 18 Paid tax bill from 2016.
15) Jan 18 Performed the service of turkey grooming ($800 worth); we received the cash in 2016
16) Jan 19 Paid Accounts Payable in full from 2016
17) Jan 20 Received $2,200 cash from customers paying on their accounts
18) Jan 21 Received a bill from the local radio station for advertising in the amount of $400
19) Jan 22 Purchased 20 turkeys for $55 each on account from Stuffing & Cranberry Company; terms 2/5, n/30
20) Jan 23 Sold 10 turkeys to Turkey Leg Corporation for $260 each on account; terms 3/10, n/30
21) Jan 25 Paid freight costs from Stuffing & Cranberry Company of $10.
22) Jan 26 Received payment in full from Turkey Leg Corporation
23) Jan 27 Sold 10 turkeys to customers on credit for $260 each.
24) Jan 28 Paid Stuffing & Cranberry Company for the purchase on Jan 22
25) Jan 29 Petty cash was replenished and had the following receipts: gas receipt for $20, postage stamps for $39, Office Depot receipt for $16, miscellaneous receipt for $30, travel receipts for $40
26) Jan 30 Performed a physical inventory count and counted only 1 turkey on hand.
27) Jan 30 Bank statement arrives today and there is a $20 bank service charge as well as a $120 NSF check.
28) Jan 31 One month’s prepaid insurance needs to be expensed for January ($1,200 is for the whole year)
29) Jan 31 Depreciate one month’s worth of the building and equipment (Using straight line method; building has a useful life of 20 years, equipment has a useful life of 5 years and no salvage value)
30) Jan 31 The estimated bad debt expense under the percentage of sales basis is $120.
31) Jan 31 Paid dividends of $500
Explanation / Answer
Assuming there is no Beginning Inventory. Journal Entry S. no. Date Particulas Dr. Amt. Cr. Amt. 1 4-Jan Cash 10,000.00 Common Stock 10,000.00 (To record the issue of Common Stock) 2 4-Jan Inventory (20 Nos X $50) 1,000.00 Accounts Payable 1,000.00 (To record the purchase of turkey) 3 4-Jan Petty Cash 200.00 Cash 200.00 (To record the petty cash fund made) 4 5-Jan Accounts Receivable (6 Nos X $200) 1,200.00 Sales 1,200.00 (To record the sale of 6 turkeys) Cost of Goods Sold 300.00 Inventory (6 Nos X $50) 300.00 (To record the cost of goods sold) 5 6-Jan Cash (12 Nos X $200) 2,400.00 Sales 2,400.00 (To record the sale of 12 turkeys) Cost of Goods Sold 600.00 Inventory (12 Nos X $50) 600.00 (To record the cost of goods sold) 6 8-Jan Salaries & Wages Expense 240.00 Cash 240.00 (To record the wages paid) 7 9-Jan Sales Return & Allowance 200.00 Accounts Receivable (1 Nos X $200) 200.00 (To record the sales return of 1 Turkey) Inventory (1 Nos X $50) 50.00 Cost of Goods Sold 50.00 (to record the turkey return) 8 12-Jan Equipment 2,000.00 Accounts Payable 2,000.00 (to record the equipment purchased) 9 14-Jan Cash ($1,000 X 98%) 980.00 Sales Discount ($1,000 X 2%) 20.00 Accounts Receivable 1,000.00 (To record the cash received) 10 15-Jan Inventory (10 Nos X $52) 520.00 Accounts Payable 520.00 (To record the purchase of turkey) 11 15-Jan Utility Expense 120.00 Cash 120.00 (To record the utility expense) 12 16-Jan Accounts Payable 104.00 Inventory (2 Nos X $52) 104.00 (To record the return of turkey) 13 17-Jan Cash (8 Nos X $245) 1,960.00 Sales 1,960.00 (To record the sale of 12 turkeys) Cost of Goods Sold 410.00 Inventory (3 Nos X $50 + 5 Nos X $52 ) 410.00 (To record the cost of goods sold) 14 18-Jan Income Tax Payable No details are given Cash (To Record the tax paid) 15 18-Jan Unearned Revenue 800.00 Service Revenue - Turkey Grooming 800.00 (To record the service revenue) 16 18-Jan Accounts Payable No details are given Cash (to record the amount paid) 17 20-Jan Cash 2,200.00 Accounts Receivables 2,200.00 (To record the cash received) 18 21-Jan Advertising Expense 400.00 Accounts Payable 400.00 (To record the advertising expense) 19 22-Jan Inventory (20 Nos X $55) 1,100.00 Accounts Payable 1,100.00 (To record the purchase of turkey) 20 23-Jan Accounts Receivable (10 Nos X $260) 2,600.00 Sales 2,600.00 (To record the sale of turkeys) Cost of Goods Sold 541.00 Inventory (3 Nos X $52 + 7 Nos X $55) 541.00 (To record the cost of goods sold) 21 21-Jan Freight In 10.00 Cash 10.00 (To Record the freight paid) 22 26-Jan Cash ($2,600 X 97%) 2,522.00 Sales Discounts ($2,600 X 3%) 78.00 Accounts receivable 2,600.00 (To record the cash received) 23 27-Jan Accounts Receivable (10 Nos X $260) 2,600.00 Sales 2,600.00 (To record the sale of turkeys) Cost of Goods Sold 550.00 Inventory (10 nos X $55) 550.00 (To record the cost of goods sold) 24 28-Jan Accounts Payable 1,100.00 Cash 1,100.00 (To record the cash paid) 25 29-Jan Gas Expense 20.00 Postage Expense 39.00 Office Depot Expense 16.00 Misc.Expense 30.00 Travel Expense 40.00 Cash 145.00 (To record the petty cash replenish) 26 30-Jan Inventory - short & Excess 110.00 Inventory 110.00 (To record the shortage of 2 Turkeys) 27 30-Jan Accounts Receivable 120.00 Bank Charges 20.00 Cash 140.00 (To record the bank charges & NSF Checks) 28 31-Jan Insurance Expense 100.00 Prepaid Insurance 100.00 (To record the insurance expense) 29 31-Jan Depreciation Expense No details are given Accumulated Depreciation - Building Accumulated Depreciation - Equipment (To record the Depreciation expense) 30 31-Jan Bad Debt Expense 120.00 Allowance for Doubtful Accounts 120.00 31 31-Jan Dividends 500.00 Cash 500.00 (To record the dividends paid)
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