Healthy Eating Foods Company is a distributor of nutritious snack foods such as

Question

Healthy Eating Foods Company is a distributor of nutritious snack foods such as granola bars. On December 31, 2019, the firm's general ledger contained the accounts and balances that follow Healthy Eating Foods Company Year Ended December 31, 2019 alance Adjustments Income Statement Debit Adjusted Trial Balance alance Sheet Debit 29,900.ee 35,800.e3 Account Name redit Debit redit s 29,980.ea 35,880.e 5 29,980.e Cash Accounts Receivable Allowance for Doubtful Accounts Merchandise Inventory 35,8e0.e 2,79e.ee 3,190.ee 77,e0.ea 85,ee0.ee 77,e30.e 77,000.8e 85,e0.0 1e, 28a.e3 5,160.00 Prepaid Insurance Office Equipment Accumulated Depr.-office Equipment Warehouse Equipment Accumulated Depr.-Warehouse Equipment Notes Payable-Bank Accounts Payable Interest Payable Social Security Tax Payable Medicare Tax Payable Federal Unemployment Tax Payable State Unemployment Tax Payable Salaries Payable Phillip Tucker, Capital Phillip Tucker, Drawing 3,825 27,558.ea 27,5s8.88 27,sse.e0 9,see.ee 31,800.80 12,8e0.ee 4,75e.ee 14,250.ee 14,250.ee 31,880.e 12,900.ee 620 1,957.60 4Ss 12,0e0.ee 620.00 62e 297.6e 1,957 386 455.be 259.20 4,880.8e 259.20 4,800.8e 186,716.8e 186,716.8e 186,716.0e 5S, 8e0.ea SS, 888.ea 5S, 800.ee 651,778.8e 651,778.ee es Sales Returns and Allowances Purchases Purchases Returns and Allowance Income Summary Rent Expenses Telephone Expense Salaries Expense Payroll Taxes Expense Supplies Expense Insurance Expense Depr. Expense-office Equipment Depr. Expense-Warehouse Equipment Uncollectible Accounts Expense Interest Expense 651,77 9,880.e3 349,000.ea 9,880.ee 349,080.ea 9,800.ee 349,800.e0 9,000.8e 85,ee0.ea 77,e.85,eee.ea 77,8e0.e 85,e00.e0 77,ee.ee 35,880.0 35,880.0 35,880. 4,888.83 159,eea.ea 12,88a.e3 163,880.ea 163,800.8e 6SS.29 9,840.e0 9,848.ee 9,840.ee 1,275 1,275 4,758.e8 2,79e.ee 620.e0 4,758.ea 2,790.ee 620.e0 4,75e.ea 2,790.e8e $824,998 .ee 824,998.88 $189, 37a .28 $189,378.20 ?916,888.20 S916,888.29 $737,778 . ee 236,110.00 $680 , 778.20 57,807.80 $179, 102.20 $737,778.00 $737,778.ee $236,110.80 $236,110.8e 1. Record adjusting entries in the general journal as of December 31, 2019. 2. Record closing entries in the general journal as of December 31, 2019 3. Record reversing entries in the general journal as of January 1, 2020. Assuming that the firm did not record a reversing entry for salaries payable, what entry is required when salaries of $5,800 are paid on January 3?

Explanation / Answer

3) Reversing entries on Jan 1 2020, are the making payments to all payable expenses in the previous year. So reverse the payable entries whenever payment is made.

Analyze :

Journal Entry on Jan 3 2020:

Debit Prior period expense $5800

Credit Salaries payable $5800

(being prior period expenses were recorded)

1) Adjusting entries: General Journal : Date Accounts Titles Debit $ Crefit $ 31-Dec Uncollectible Accounts Exp 2790 Allowance for Doubtful accounts 2790 supplies exp 9040 supplies   9040 Insurance exp 3440 Prepaid Insu 3440 Dep exp - off eq 1275 Acc Dep - offe eq 1275 Dep exp - w/h eq 4750 Acc Dep - w/h eq 4750 Interest exp 620 interest payable 620 Payroll taxes exp 655.2 Social sec tax payable 297.6 Medicare tax payable 69.6 Fed Unemp Tax payble 28.8 Suta payable 259.2 Salaries exp 4800 Salaries payable 4800 2) Closing General Journal entries: 31-Dec Sales 651778 Purchase return 9000 Income Summary 660778 (being sales taken to income statement) 31-Dec Income Summary 603770.2 COGS(349000+8000) 357000 Sales return 9800 Rent exp 35800 tele exp 2000 sala exp 163800 Payroll tax exp 13455.2 suppl exp 9040 insu exp 3440 dep exp - off eq 1275 dep exp - wh eq 4750 Uncollectible A/c exp 2790 interest exp 620 (being expenses taken to Income statement) Income Summary 57007.8 Retained Earnings 57007.8 (being net income transferred to RE)

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