TRANSACTIONS FOR THE MONTH OF JANUARY—Note that we will ignore Sales Tax for thi
ID: 2419772 • Letter: T
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TRANSACTIONS FOR THE MONTH OF JANUARY—Note that we will ignore Sales Tax for this project. Normally, one would have to provide an explanation for each general journal entry. However, since we are recording all entries in the general journal, explanations will not be necessary.
Jan 2 Issued a bond, face value $100,000, to Daniel Scheri’s Investment Company for $91,000 cash. Terms of the bond is 5 years and the stated interest rate is 9.6%. Interest and amortization will be recorded as an adjusting entry the end of the month.
2 Issued 6,000 shares of common stock for $50,000. Remember that common stock is always recorded at par value.)
3 Sold a Yamaha Waverunner for $8,000 on account to Buena by the Shore,). Issued Invoice No. 719. (Note that we are using FIFO for inventory)
(Note that when making a sale using a perpetual inventory system, you always need two entries, one recognizing the sale, and one reducing inventory.)
Cash or/and Accounts Receivable XX
Sales XX
Cost of Goods Sold XX
Merchandise Inventory XX
3 Purchased a Snyder Craft for $16,800 on account from Szumowski’s’s Boats, Invoice No. 630, terms 3/10, n/60. Note that since we are using a perpetual inventory system, all purchases and sales need an entry in the account Merchandise Inventory.
4 Purchased various boat merchandise of $3,000 from Szumowski’s’s Boats on Account, Invoice No. 631, terms 3/10, n/60.
4 Issued Check No. 292 to Szumowski’s’s Boats in full settlement of our December account balance --Invoice No. 580, terms n/30.
Issued credit memorandum No. 75 to Parth Patel’s Boats for $1,000 for miscellaneous merchandise previously purchased. Our cost and value is 500. (Reverse the entry listed above on the 2nd but use Sales Returns and Allowance instead of the account Sales and the numbers given in this entry.)
4 Issued Check No. 293 to Copier Repair Co. for copier repairs, $500.
5 Received payment in full from Parth Patel’s Boats on sale made in December. (Do not forget the credit memorandum on the 4th.)
5 Sold a Seahawk to Evan Hughes Boats, for $36,000. We received $10,000 as a down payment. Issued Invoice No. 720.
Returned defective merchandise from the December 3rd purchase to Szumowski’s’s Boats and received a $500 credit memorandum. (Credit Merchandise Inventory—Boat Supplies)
6 Sold all the old warehouse storage equipment for $22,000. The warehouse equipment has a five-year life and a salvage value of $4,000. Assume the company uses the straight-line method to depreciate Warehouse Equipment. (Step 1—Bring the depreciation up to date by depreciating the warehouse for one month. Step 2—Remove the asset and accumulated depreciation and debit cash. Step 3—Plug to a realized gain or loss account-- 701.)
7 Sold boat merchandise on account to Paige Connery Best Buys for $900, our cost $450. Invoice no. 720.
8 Issued Check No. 294 to Amanda Muetter’s Contractors to purchase a Building for $150,000. Straight-line method will be used over 20 years without any salvage value. At this time, you only will need to make the entry for the purchase of the building. (Note, that a month’s depreciation will have to be recorded as an adjusting entry at the end of the period.)
10 Issued Check No. 295 to the Internal Revenue Service in payment of FICA taxes accrued as of December 30 (FICA Taxes Payable— look at beginning trial balance for amount.)
10 Issued Check No. 296 to the Internal Revenue Service in payment of federal income taxes withheld as of December 30. (Employees’ Federal Income Taxes Payable—look at beginning trial balance for amount.)
.
Issued Check No. 297 to Kyj and Cheatem Investment Company for $3,000 of
equity marketable securities to hold excess cash. (This should be debited
to Investments--Available for Sale Securities –Account number 109.)
11 Issued Check No. 298 to Mathew Hamilton’s Distributors in full settlement of the December 30 purchase, Invoice No. 1002, terms n/20.
11 Issued Check No. 299 to Szumowski’s’s Boats in full settlement of our account for the two purchases early this month. (Recall the credit memorandum on the 5th.) (Note that when paying suppliers within a discount period, one must credit Merchandise Inventory.)
15 Check No. 300 voided. (No entry needed.)
15 Sold boat supplies on account to Parth Patel’s Boats , for $1,800 (Cost $900). Issued Invoice No. 721.
Explanation / Answer
S.No Particulars Debit Credit 1) Cash A/c Dr 91000 To Bonds Payble Cr 91000 2) Cash A/c Dr 50000 To Common Stock Cr 50000 3) Cash/Account receivable Dr 8000 To Sales Cr 8000 COGS Dr xxxx To Inventory Cr xxxx 4) Inventory Dr 3000 To Accounts Payble Cr 3000 Account Payble Dr 3000 To Bank Cr 2910 To Inventory Cr 90 Acccount payble Dr 500 To Bank A/c Cr 500 5) Bank A/c Dr 500 To patel Boats Cr 500 Evan Hughes Boats Dr 26000 Cash Dr 10000 To Sales Cr 36000 COGS Dr xxxx To Inventory Cr xxxx 6) Cash 22000 To Profit & Loss A/c 701 To Old Equipment 21299 7) Paige Connery Dr 900 To Sales Cr 900 COGS Dr 450 To Inventory Cr 450 8) Building A/c Dr 150000 To Amanda Mutter Cr 150000 Amanda Mutter Dr 150000 To Bank A/c Cr 150000 10) FICA withholding tax Dr xxxx To Bank Cr xxxx 11) Investment Dr 3000 To KYJ & Cheatem Co Cr 3000 KYJ & Cheatem Co Dr 3000 To Bank Cr 3000 15) Parth Patel Dr 1800 To Sales Cr 1800 COGS Dr 900 To Inventory Cr 900
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