SWeygandt, Financial& Managerial Accounting, 1e ACCTG (o Practice Gradebook ORIO

Question

SWeygandt, Financial& Managerial Accounting, 1e ACCTG (o Practice Gradebook ORION CALCULATOR FULL SCREEN PRINTER VERSION ES Comprehensive Problem 8 (Part Level Submission) Victoria Company balance sheet at December 31, 2013, is presented below. VICTORIA COMPANY Balance Sheet Cash $13,130 Accounts payable 19,200 Common stock $8,760 18,200 13,600 Accounts receivable Alowance for doubtful accounts (780) Retained earnings 9,010 Inventory $40,560 $40,560 During January 2014, the following transactions occurred. Victoria uses the perpetual inventory method. Jan. 1 Victoria accepted a 4-month, 8% note from Leon Company in payment of Leon's $2,400 account. 3 Victoria wrote off as uncollectible the accounts of Barker Corporation ($400) and Elmo Company ($200). 8 Victoria purchased $18,220 of inventory on account. 11 Victoria sold for $26,800 on account inventory that cost $17,290 15 Victoria sold inventory that cost $730 to Joe Haribo for $1,400. Haribo charged this amount on his Visa First Bank card. The service fee charged Victor First Bank is 3%. 17 Victoria collected $20,700 from customers on account. 21 Victoria paid $16,320 on accounts payable. 24 Victoria received payment in full ($200) from Elmo Company on the account written off on January 3 27 Victoria purchased advertising supplies for $1,430 cash. 31 Victoria paid other operating expenses, $3,290 Adjustment data recyPolicy 1 2000-2012John.mkr.A Sons. Inc. Aas Rights Reserved. A Dinson or lotn.wirssons.ls. Versior

Explanation / Answer

VICTORIA COMPANY General journal for the month of January 2014 Date Account Title Debit Credit Jan.1 Note receivable 2400 Accounts Receivable 2400 (To record note received from Leon company) Jan.3 Allowance for doubtful accounts 600 Accounts Receivable 600 (To record write off of amounts due from Barker Corp. And Elmo Co.) Jan.8 Inventory 18220 Accounts Payable 18220 (To record purchase of inventory on account) Jan.11 Accounts Receivable 26800 Sales Revenue 26800 (To record sales on account) Cost of goods sold 17290 Inventory 17290 (To record cost of goods sold on account) Jan.15 Cash 1358 Card charges 42 Sales Revenue 1400 (To record sale of inventory to Joe Haribo againct card payment) Cost of goods sold 730 Inventory 730 (To record cost of goods sold to Joe) Jan.17 Cash 20700 Accounts Receivable 20700 (To record collections from customers) Jan.21 Accounts Payable 16320 Cash 16320 (To record payment on accoumts payable) Jan.24 Cash 200 Allowance for doubtful accounts 200 (Cash recovered from Elmo Co. Written off earlier) Jan.27 Advertising supplies 1430 Cash 1430 (To record advertissing supplies purchased) Jan.31 Other operating expenses 3290 Cash 3290 (To record payment of other operating expenses) Jan.31 (1) Interest receivable 16 Interest revenue 16 (To record interest revenue on note receivable of Leon company) Jan.31 (2) Bad debt expense 745 Allowance for doubtful accounts 745 (To record bad debts allowance made) Jan.31 (3) Advertising expense 1020 Advertising supplies 1020 (To record advertisning supplies used during the month) Working: Accounts receivable as at Jan.1 19200 Note receivable -2400 Written off -400 Sales 26800 Colelctions -20700 Balance as on January 31 22500 Expected bad debts 5% Allowance to be made 1125 Balance in allowance account 380      ($780 - $400) Allowance to be made now 745

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