Perpetual Inventory Method: Record each transaction accordingly. During the mont
ID: 2584065 • Letter: P
Question
Perpetual Inventory Method: Record each transaction accordingly.
During the month of March 2017, the following transactions occur.
4 Buy five deluxe mixers on account from Kzinski Supply Co. for $2,875, terms n/30.
5 Teaches class at YMCA for which a $60 deposit was received in February
6 Pay $100 freight on the March 4 purchase (check #301).
7 Return one of the mixers to Kzinski because it was damaged during shipping. Kzinski issues a credit for the cost of the mixer plus $20 for the cost of freight that was paid on March 6 for one mixer.
8 Collects the amount due from the neighborhood community center that was accrued at the end of February.
10 Teaches the last two classes for the Stoughton schools
12 Sell three deluxe mixers on account to Samantha French for $3,450, FOB destination, terms n/30. The mixers cost $595 each (including freight).
13 Pay cell phone bill previously accrued in the February adjusting journal entries. (check #302)
14 Pay $75 of delivery charges for the three mixers that were sold on February 12. (check #303)
14 Buy four deluxe mixers on account from Kzinski Supply Co. for $2,300, terms n/30.
17 Concerned that there is not enough cash available to pay for all of the mixers purchased, issues additional common stock for $1,000.
18 Pays $80 freight on the March 14 purchase. (check #304)
19 Teaches a class for $150 and collects cash payment
20 Sells two deluxe mixers for $2,300 cash.
28 Issues a check to the assistant. The assistant worked 20 hours in March and is also paid for amounts owing at February 30, 2010. The assistant earns $8 an hour. (check #305)
28 Collects amounts due from customers in the March 12 transaction.
31 Pay Kzinski all amounts due. (check #306)
31 Cash dividends of $750 are paid. (check #307)
Adjusting entries:
As of March 31st, the following adjusting entry data are available.
1. A count of baking supplies reveals that $300 were used in March.
2. Another month’s worth of depreciation needs to be recorded on the baking equipment bought in January. (Recall that the baking equipment has a useful life of 5 years or 60 months.)
3. One month’s worth of amortization (write-off) needs to be recorded on the website. (Recall that the
website has a useful life of 2 years or 24 months.)
4. An additional month’s worth of interest on the loan needs to be accrued. (The interest rate is 9%.)
5. One month’s worth of insurance has expired.
6. The cell phone bill, $75 is received. The bill is for services provided in March and is due April 15. (Recall that the cell phone is used only for business purposes.)
7. An inventory count of mixers at the end of March reveals three mixers remaining at a cost of $595 each.
Explanation / Answer
Date Account Titles and Explanation Debit Credit Jan.4 Merchandise Inventory $2,875 Accounts Payable $2,875 Jan.5 Unearned Service Revenue $60 Cash $60 Jan. 6 Merchandise Inventory $100 Cash $100 Jan.7 Accounts Payable [($2,875 ÷ 5) + $20] $595 Merchandise Inventory $595 Jan.8 Cash $375 Accounts Receivable $375 Jan. 10 No entry Jan .12 Accounts Receivable $3,450 Sales $3,450 Jan .12 Cost of Goods Sold ($595 X 3) $1,785 Merchandise Inventory $1,785 Jan. 13 No Entry Jan.14 Freight-Out $75 Cash $75 Jan.14 Merchandise Inventory $2,300 Accounts Payable $2,300 Jan.17 Cash $1,000.00 Common Stock $1,000.00 Jan. 18 Merchandise Inventory 80 Cash 80 Jan.19 Cash 150 Service Revenue 150 Jan.20 Cash $2,300.00 Sales $2,300.00 Jan.20 Cost of Goods Sold ($595 X 2) 1190 Merchandise Inventory $1,190 Jan.28 Salaries Expense 160 Salaries Payable Cash 160 Jan.28 Cash $3,450 Accounts Receivable $3,450 Jan.31 Accounts Payable ($2,875 – $595 + $2,300) $4,580 Cash $4,580 Jan.31 Drawings $750.00 Cash $750.00
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