DIRECTIONS: A) Prepare journal entries for the below items B) Post the journal e
ID: 2523193 • Letter: D
Question
DIRECTIONS:
A) Prepare journal entries for the below items
B) Post the journal entries into t-accounts or three-column form of account (starting balances would be those amounts per the post-closing trial balance)
C) Prepare an Income Statement for the month ended January 31, 2018
D) Prepare a Statement of Retained Earnings for the month ended January 31, 2018
E) Prepare a Balance Sheet for January 31, 2018
The following transactions occurred during 2018 (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 rabbits at $50 each on account from Jelly Bean Farms.
3) Jan 4 Established a $200 petty change fund
4) Jan 5 Sold 6 rabbits for $200 each to Mr. Karrot, terms 2/10, n/30.
5) Jan 6 Sold 12 rabbits at $200 each for cash
6) Jan 8 Paid wages of $240
7) Jan 9 Mr. Karrot returned one rabbit 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. Karrot
10) Jan 15 Purchased 10 rabbits at $52 each on account from Easter Industries, terms 1/10, n/30.
11) Jan 15 Paid utility bill of $120
12) Jan 16 Returned 2 rabbits to Easter Industries because they were defective.
13) Jan 17 Sold 8 rabbits for $245 each for cash
14) Jan 18 Paid tax bill from 2017.
15) Jan 18 Performed the service of rabbit grooming ($800 worth); we received the cash in 2017
16) Jan 19 Paid Accounts Payable in full from 2017
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 rabbits for $55 each on account from Eggs & Chicks Company; terms 2/5, n/30
20) Jan 23 Paid freight costs from Eggs & Chicks Company of $10.
21) Jan 25 Sold 10 rabbits to Bunny Tail Corporation for $260 each on account; terms 3/10, n/30
22) Jan 26 Received payment in full from Bunny Tail Corporation
23) Jan 27 Sold 10 rabbits to customers on credit for $260 each.
24) Jan 28 Paid Eggs & Chicks 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 rabbit 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
The Above Solutions is for first 10 Sub Parts of your first question.
Journal Entries Date Particular Debit Credit 4-Jan-18 Cash A/C $ 10,000.00 To Common Stock/Capital A/C $ 10,000.00 Being capital introduced into the business 4-Jan-18 Rabbits/Purchase A/C (20x50) $ 1,000.00 To Jelly Bean Farms A/C (20x50) $ 1,000.00 Being Purchases of Rabbits on Credit 4-Jan-18 Petty Change Fund $ 200.00 To Cash A/C $ 200.00 Being established a $200 petty change fund 5-Jan-18 Mr. Karrot A/C (6x200) $ 1,200.00 To Rabbits/Sales A/C (6x200) $ 1,200.00 Being Rabbits sold on credit 6-Jan-18 Cash A/C $ 2,400.00 To Rabbits/Sales A/C (12x200) $ 2,400.00 Being Rabbits sold on cash 8-Jan-18 Wages A/C $ 240.00 To Cash A/C $ 240.00 Being Wages Paid 9-Jan-18 Rabbits/Sales Returned A/C $ 200.00 To Mr. Karrot A/C (1x200) $ 200.00 Being Rabbits sold returned by Mr Karrot 12-Jan-18 Equipment A/C $ 2,000.00 To Cash A/C $ 2,000.00 Being equipment purchased on cash 14-Jan-18 Cash A/C $ 1,000.00 To Mr. Karrot A/C (1x200) $ 1,000.00 Being payment received from Mr Karrot 15-Jan-18 Rabbits/Purchase A/C (10x52) $ 520.00 To Easter Industriess A/C (10x52) $ 520.00 Being Purchases of Rabbits on CreditRelated Questions
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