HH #2: DECEMBER ORIGINAL JES IMPORTANT REMINDERS FOR DECEMBER ORIGINAL JEs A) DO
ID: 2564329 • Letter: H
Question
HH #2: DECEMBER ORIGINAL JES IMPORTANT REMINDERS FOR DECEMBER ORIGINAL JEs A) DON'T FORGET TO CONSULT THE HH CHART OF ACCOUNTS FOR ALL THE ACCOUNT TITLES YOU WILL NEED TO USE AND DON'T FORGET TO USE EXAMPLES IN YOUR CHAPTER 3 NOTES TO ASSIST YOU. B) USE AN ASSET (PREPAID) ACCOUNT FOR ALL PREPAYMENTS HOMER'S MAKES or INSURANCE, ADVERTISING, SUPPLIES, etc.), AND A LIABILITY (UNEARNED) ACCOUNT FOR ALL PAYMENTS RECEIVED in ADVANCE BY HOMER'S C) DON'T INCORPORATE ANY ADJUSTMENT DATA INTO THE ORIGINAL DECEMBER JOURNAL ENTRIES. YOU WILL RECEIVE A SEPARATE DOCUMENT WITH INSTRUCTIONS/INFORMATION ABOUT RECORDING THE AJEs D) SKIP A LINE BETWEEN JE'S. YOU WILL NOT NEED TO USE THE "REF" COLUMN IN JOURNALIZING THE ORIGINAL DECEMBER TRANSACTIONS. WE WON'T USE THAT COLUMN UNTIL WE GET TO THE POSTING PROCESS IN HH #3, YOU WILL ONLY NEED TO USE THE FIRST FEW LINES ON GJ PAGE J3, SO DON'T WORRY IF YOU HAVE A LOT OF LINES LEFT OVER ON THAT PAGE. DECEMBER TRANSACTION DATA Homer's prepays $1,200 (cash) for a general insurance policy. The term of the policy is one year, running from 12/1/16 through 11/30/17. Dec 1 Homer's purchases a forklift (Equipment) for $10,000, paying $5,000 in cash and signing a 5 year, $5,000, Note Payable for the remaining amount. Dec 1 Dec 1 Homer's purchases additional Equipment for $2,000, paying cash. Homer's purchases lumber (inventory) for $27,000 from MMLC. Homer's had previously established a $10,000 credit limit with MMLC. After using up that limit (as an Accounts Payable to MMLC), HH pays cash for the remaining amount. Dec 4Explanation / Answer
Solution : All Journal Entries for the month of December
2. Original JE's for the month of December
3. Adjusted Journal Entries
Date Account Title & Explanation Ref Debit Credit Dec 01 Insurance Expense 100 Prepaid Insurance 1,100 Cash 1,200 (Being General Insurance paid in cash) Dec 01 Equipment 10,000 Cash 5,000 Long Term Notes Payable 5,000 (Being Forklift equipment purchased and settled in cash and notes payable) Dec 01 Equipment 2,000 Cash 2,000 (Being additional equipment purchased in cash) Dec 04 Inventory 27,000 Accounts payable 10,000 Cash 17,000 (Being Inventory purchased and settled against cash and on account) Dec 05 Rent Expense 200 Cash 200 (Being current month's rent paid) Dec 15 Advertising expense 50 Prepaid Advertising 250 Cash 300 (Being Advertisement expenses paid for a period of 3 months) Dec 15 No Entry - as no mention of amount paid Dec 15 Cash 600 Rent Revenue 75 Unearned Rent Revenue 525 (Being Rent received) Dec 16 Cash 5,000 Notes Receivable 10,000 Land 10,500 Gain on sale of Land 4,500 (Being 3 acres of Land sold for cash and Notes) Dec 17 Office Supplies 250 Cash 250 (Being office supplies purchased for cash) Dec 18 Losses 1,800 Inventory 1,800 (Being Loss incurred to inventory due to fire) Dec 28 Salary and Wages Expense 5,248 Cash 5,248 (Being Salary and wages expenses paid in cash) Dec 31 Account Receivables 45,600 Sales 45,600 (Being Inventory sold on account) Dec 31 Cost of Goods Sold 25,650 Inventory 25,650 (Being COGS sold and reduced the same from Inventory balance) Dec 31 Dividends Declared 2,000 Dividend Payable 2,000 (Being Dividends declared by the Board) Dec 31 Cash 36,700 Accounts Receivable 36,700 (Being cash collected from the Debtors)Related Questions
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