Can you double check my journal entries? Here is the problem: Spring Company has
ID: 2524601 • Letter: C
Question
Can you double check my journal entries?
Here is the problem:
Spring Company has the following opening account balances in its general ledger on January 1. All balances are normal balances. Spring uses all typical accounts used by a merchandising business. Listed below are accounts with balances other than zero. Snow uses the perpetual inventory system, records all sales by the net method, records sales returns and allowances as they occur (does not estimate at time of sale), records purchases by the gross method, and applies the cost method to account for treasury stock
** Please pay attention to what I bolded.
Here are my entries:
January transactions: January 2 | Issued $100,000, 5-year, debenture 7% bonds with a yield of 5%. Interest payable semiannually on June 30 and December 31. (DO NOT attempt to compute accrued interest; treat January 2 as if it had been an issuance on an interest payment date.) 3 Sold merchandise on account, FOB shipping point, 2/10,n/30, $5,900. Cost of merchandise sold, $3500 4 Purchased 500 shares of Tulips Inc. outstanding common stock at $88 per share. Management intends to hold this security for one year or less. Spring is not able to exercise significant influence over Tulips 5 Purchased merchandise on account, FOB shipping point, n/45, $2,700 7 Collected $1,370 from customers on account; discounts taken as originally recorded 8 Paid freight charges on merchandise purchased on Jan. 5, $180 9 Paid creditors on account, $25,000; no discounts taken 9Received returned merchandise from sale of Jan. 3; granted customer credit for $300 of billed sales. Cost of merchandise returned was $180 10 Cash sales for January 1 through 10 total $15,500. Cost of merchandise sold, $9200 11 Sold merchandise on account, FOB shipping point, 2/10,n/30, $2,800. Cost of merchandise sold, $1700 12 Paid January rent for the warehouse, $2,000 14Collected amount due from sale of January 11. Customer took advantage of discount 15 Declared and paid dividends of $0.40 per share on outstanding shares of common stock 16 Purchased merchandise on account, FOB destination, 1/15,n/45, $30,400 17 Paid cash for office supplies, $400 18 Returned $200 of merchandise purchased on Jan. 16 receiving credit from supplier 20 Cash sales for January 11 through 20 total $17,500. Cost of merchandise sold $10500 20Collected amount due from sale of January 3, less return of January 9. (Note: discount period expired) 21Paid one-half of amount due on purchase of January 16 after consideration of Jan. 18 return. Took advantage of early pay discount 22 | issued 90-day, 3%, $15,100 note payable for remainder of amount owed on Jan. 16 purchase 23 Purchased new equipment by issuing 100 shares of stock at $12 per share and paying $5,000 in cash. In addition, paid installation costs of $500 25 Sold for $350 old equipment with an original cost of $1,100 and accumulated depreciation of $650 28 Recorded and paid monthly sales salaries of $4,300 and office salaries of $2,600. (Not previously accrued: ignore withholdings) 30 Cash sales for January 21 through 30 total $19,920. Cost of merchandise sold, $11950 31 Paid $400 cash for repair and maintenance on existing equipment 31 Announced a 2 for 1 stock split on all issued shares 31 Purchased 500 shares of our own stock to hold temporarily paying $8 per shareExplanation / Answer
Journal Entry Date Particulars Dr. Amt. Cr. Amt. 2-Jan Cash 108,752.00 Bonds Payable 100,000.00 Premium on Bond Payable 8,752.00 3-Jan Accounts Receivable ($5,900 X 98%) 5,782.00 Sales 5,782.00 Cost of Goods Sold 3,500.00 Inventory 3,500.00 4-Jan Investment in Tulip Inc. 44,000.00 Cash (500 shares X $88) 44,000.00 5-Jan Inventory 2,700.00 Accounts Payable 2,700.00 7-Jan Cash 1,370.00 Accounts Receivables 1,370.00 8-Jan Inventory 180.00 Cash 180.00 9-Jan Accounts Payable 25,000.00 Cash 25,000.00 9-Jan Sales Returns & Allowances 294.00 Accounts Receivable ($300 X 98%) 294.00 Inventory 180.00 Cost of Goods Sold 180.00 10-Jan Cash 15,500.00 Sales 15,500.00 Cost of Goods Sold 9,200.00 Inventory 9,200.00 11-Jan Accounts Receivable ($2,800 X 98%) 2,744.00 Sales 2,744.00 Cost of Goods Sold 1,700.00 Inventory 1,700.00 12-Jan Rent Expense 2,000.00 Cash 2,000.00 14-Jan Cash 2,744.00 Accounts Receivables 2,744.00 15-Jan Dividends 200.00 Cash 200.00 (No details Given in Question, Taken from your answer) 16-Jan Inventory 30,400.00 Accounts Payable 30,400.00 17-Jan Office Supplies 400.00 Cash 400.00 18-Jan Accounts Payable 200.00 Inventory 200.00 20-Jan Cash 17,500.00 Sales 17,500.00 Cost of Goods Sold 10,500.00 Inventory 10,500.00 20-Jan Cash 5,600.00 Accounts Receivable 5,488.00 Sales Discount Forfeited 112.00 21-Jan Accounts Payable 15,100.00 Cash 14,949.00 Purchase Discount 151.00 22-Jan Accounts Payable 15,100.00 Notes Payable 15,100.00 23-Jan Equipment 6,700.00 Common Stock 200.00 Paid in Capital in Excess of Par 1,000.00 Cash 5,500.00 25-Jan Cash 350.00 Accumulated Depreciation - Equipment 650.00 Loss on Sale of Equipment 100.00 Equipment 1,100.00 28-Jan Salaries Expense - Sales 4,300.00 Salaries Expense - Office 2,600.00 Cash 6,900.00 30-Jan Cash 19,920.00 Sales 19,920.00 Cost of Goods Sold 11,950.00 Inventory 11,950.00 31-Jan Repair & Maint. Expense - Equipment 400.00 Cash 400.00 31-Jan No Entry For stock Split 31-Jan Treasury Stock (500 shares X $8) 4,000.00 Cash 4,000.00
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