Provide the journal entry to record each transaction. (1) In March 2014, Kicker
ID: 2537579 • Letter: P
Question
Provide the journal entry to record each transaction.
(1) In March 2014, Kicker Inc. received an advance payment of $14,000 from Rally Corporation for consulting services. Kicker performed half of the consulting in 2014 and the remainder in 2015. Kicker uses the accrual method of accounting. When preparing its financial statements on December 31, 2014, what adjusting journal entry will Kicker Inc. record?
(2) Taco Tuesday Company sells merchandise to Freedom Friday Corporation on January 4, 2016 for $2,000 cash. Taco Tuesday paid $1,100 for the merchandise from its vendor. What will Taco Tuesday record on January 4 for this sale?
(3) Jasmine Company purchases merchandise for resale from Aladdin Corporation for $1,000 with the terms 1/10, n/30. Jasmine also pays $200 in cash for freight costs related to this purchase. What will Jasmine Company record in its records on the date of purchase?
(4) Using the information provided in the trial balance, prepare the closing journal entries using Retained Earnings.
Debit
Credit
Cash
$50,000
Accounts Receivable
42,000
Inventory
28,000
Accounts Payable
16,000
Notes Payable
30,000
Common Stock
$10,000
Retained Earnings
94,000
Dividends
4,000
Sales Revenue
$98,000
Interest Revenue
2,000
Salaries Expense
24,000
Advertising Expense
8,000
Utilities Expense
2,000
Totals
$204,000
$204,000
(5) Glass Slipper Industries sells merchandise to Big Foot Corporation for $3,000 on September 5, 2016 with the terms 2/10, n/30. The merchandise cost $2,000 from the vendor.
(a) On September 10, Big Foot returns 20% of the merchandise and receives a credit from Glass Slipper for the returned merchandise. What entry will Glass Slipper prepare on September 10?
(b) On September 14, Big Foot pays the remaining balance to Glass Slipper. What entry will Glass Slipper prepare on September 14?
Debit
Credit
Cash
$50,000
Accounts Receivable
42,000
Inventory
28,000
Accounts Payable
16,000
Notes Payable
30,000
Common Stock
$10,000
Retained Earnings
94,000
Dividends
4,000
Sales Revenue
$98,000
Interest Revenue
2,000
Salaries Expense
24,000
Advertising Expense
8,000
Utilities Expense
2,000
Totals
$204,000
$204,000
Explanation / Answer
Requirement Date Accounts title Debit $ Credit $ 1 Dec31 2014 Unearned Revenue Account Dr. 7000 Service revenue Account 7000 (for half revenue recognized in the year for service performed) 2 Jan 42016 Cash Account Dr. 2000 Sales revenue 2000 (for sale of goods) Cost of goods sold Dr. 1100 Merchandise Inventory 1100 (for cost of godos sold) Accounts payable Dr. 1100 Cash 1100 (for paymentt of accounts payable) 3 Merchandise Inventory Account Dr. 1200 Accounts payable 1000 Cash Account 200 (for purchase of inventory and frieght paid) 4 Service revenue Account Dr. 98000 Interest revenue Account Dr. 2000 Income Summary 100000 (for closing the revenue) Income Summary Dr. 34000 Salaries expense 24000 Advertising expense 8000 Utilities expense 2000 (for closing expense) Income Summary Dr. 66000 Retained earnings 66000 (for transferring the net income) Retained earnings Dr. 4000 Dividend Account 4000 (for closing the dividend) 5 Sep 10 2016 Sales return and allowance Dr. 600 Accounts receivable 600 (for sales return) Merchandise Inventory 400 Cost of Goods sold 400 (for returned goods included in inventory) 14-Sep Cash Accoutn Dr. 2352 Sales Discount Dr. 48 Accounts receivable 2400
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