Set up following T – Accounts Cash- ? Accounts Receivable- 800,000 Allowance for
ID: 2535842 • Letter: S
Question
Set up following T – Accounts
Cash- ?
Accounts Receivable- 800,000
Allowance for bad debts- 100,000
Shoe Inventory-?
Supplies- 50,000
Prepaid Insurance- 10,000
Equipment- 1,000,000
Accumulated Depreciation Equipment- 400,000
Auto-100,000
Accumulated Depreciation - Auto- 75,000
Accounts Payable-80,000
Wages payable-?
Unearned Revenue- 40,00
note payable- 90,000
JHJ Common Stock- 2,000,000
JHJ Retained Earnings- 1,500,000
JHJ Dividends
Shoe Sales
Cost of Shoes Sold
Rent Expense
Supplies Expense
Depreciation Expense
Journalize the following transactions utilizing WEIGHTED AVERAGE inventory valuation method.
Invested additional $200,000 in business
paid $40,000 for supplies
purchased 100,000 pairs of shoes on account for $30 each
paid salaries for $3,000,000
purchased 200,000 pairs of shoes for $40 each
sold on account, 150,000 pairs of shoes at $60 each
withdrew 500,000
collections on accounts receivable $ 4,000,000
write off of uncollectible accounts $90,000
cash sales, 30,000 pairs of shoes at $70 each
paid $20,00 on note plus $10,000 interest
ending supplies 20,000
accrued salaries end of year 300,000
*equipment is depreciated utilizing straightline method and has 10 year life
*auto is now 3 years old and is depreciated utilizing double declining balance with 4 year life
*bad debt expense is estimated to be 20% if credit sales
*the company uses weighted average in calculating perpetual inventories and beginning inventories consisted of:
50,000 pairs of shoes at $20 each
50,000 pairs of shoes at $25 each
Required:
Journalize all entries
Post all entries to ledger.
Prepare trial balance
Prepare income statement
Prepare statement of retained earnings/ owner equity
Prepare balance sheet
prepare inventory chart
Prepare cash flow statement
Prepare closing entries and statement of cash flow
Explanation / Answer
Ans. Journal entries of following transactions are as follows
Invested additional $200,000 in business = Cash A/c Dr $200,000
To Capital A/c Cr $200,000
paid $40,000 for supplies = Accounts payables A/c Dr $40,000
To Cash A/c Cr $40,000
purchased 100,000 pairs of shoes on account for $30 each = Purchases A/c Dr $30,00,000(100000*$30)
To Accounts payable Cr $30,00,000
paid salaries for $3,000,000 = Salary Payable A/c Dr $30,00,000
To Cash A/c Cr $30,00,000
purchased 200,000 pairs of shoes for $40 each = Purchases A/c Dr $80,00,000(200000*40)
To Accounts payable Cr $80,00,000
sold on account, 150,000 pairs of shoes at $60 each = Accounts receivables A/c Dr $90,00,000
To Sales A/c Cr $90,00,000
withdrew 500,000 = Drawings A/c Dr $500,000
To Cash A/c Cr $500,000
collections on accounts receivable $ 4,000,000 = Cash A/c Dr $40,00,000
To Accounts receivables Cr $40,00,000
write off of uncollectible accounts $90,000 = Bad debts A/c Dr $90,000
To Accounts receivables Cr $90,000
cash sales, 30,000 pairs of shoes at $70 each = Cash A/c Dr $21,00,000
To Sales A/c Cr $21,00,000
paid $20,00 on note plus $10,000 interest = Notes Payables A/c Dr $20,000
Interest A/c Dr $10,000
To Cash Cr $30,000
Lets discuss the depreciation entry of Equipment
Life = 10years , Method of Depreciation is Straight line method
Cost = $10,00,000
Depreciation = $10,00,000/10 = $100,000
Entry = Depreciation on equipment A/c Dr $100,000
To Accumulated dep. equipment A/c Cr $100,000
lets now calculate the depreciation on Auto
Cost = $100,000
Accumulated Dep = $75,000
Net Book value = $25,000
Rate of depreciation under double declining method = 100/4 = 25*2 = 50%
Depreciation = Net book value*rate of dep. = $25,000*50% = $12,500
Entry = Depreciation A/c Dr $12,500
To Accumulated dep. Auto Cr $12,500
At the time of closing depreciation would be transferred to Profit and Loss Account by entry
Profit & Loss A/c Dr $12,500
To depreciation Cr $12,500
Profit & Loss A/c Dr $100,000
To depreciation Cr $100,000
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.