DIRECTIONS: A) Prepare journal entries for the following items B) Post the journ

Question

DIRECTIONS:

A)      Prepare journal entries for the following 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 31,2017

D)      Prepare a Statement of Retained Earnings for the month ended January 31, 2017

E)      Prepare a Balance Sheet for January 31, 2017

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

Journal Entries Date Account titles and Explanations Debit Cedit Jan.4 Cash $10,000.00 Common Stock $10,000.00 Jan.4 Merchandise Inventory (20 x $50) $1,000.00 Accounts Payable ---------Turkey Farms $1,000.00 Jan.4 Petty Change Fund $200.00 Cash $200.00 Jan.5 Accounts Receivables ------------Mr. Pilgrim $1,200.00 Sales ( 6 x $200) $1,200.00 Cost of Good Sold (6 x $50) $300.00 Merchandise Inventory $300.00 Jan.6 Cash $2,400.00 Sales (12 x $200) $2,400.00 Cost of Good Sold (12 x $50) $600.00 Merchandise Inventory $600.00 Jan.8 Salaries and Wages Expenses $240.00 Cash $240.00 Jan. 9 Sales return $200.00 Accounts Receivables ------------Mr. Pilgrim $200.00 Merchandise Inventory $200.00 Cost of good Sold $200.00 Jan.12 Equipment $2,000.00 Accounts Payable $2,000.00 Jan. 14 Cash $980.00 Discount $20.00 Accounts Receivables ------------Mr. Pilgrim $1,000.00 Jan.15 Merchandise Inventory (10 x $52) $520.00 Accounts Payable ------Thanksgiving Industries $520.00 Jan. 15 Utility Expenses $120.00 Cash $120.00 Jan.16 Accounts Payable ------Thanksgiving Industries $104.00 Purchases Return (2 x $52) $104.00 Jan.17 Cash (8 x $245) $1,960.00 Sales $1,960.00

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