Selected transactions completed by Kornett Company during its first fiscal year
ID: 2589522 • Letter: S
Question
Selected transactions completed by Kornett Company during its first fiscal year ended December 31, 20Y5, were as follows:
Journalized the monthly payroll for November, based on the following data:
1. Journalize the selected transactions.
Jan. 3. Issued a check to establish a petty cash fund of $4,500. Feb. 26. Replenished the petty cash fund, based on the following summary of petty cash receipts: office supplies, $1,680; miscellaneous selling expense, $570; miscellaneous administrative expense, $880. Apr. 14. Purchased $31,300 of merchandise on account, terms 1/10, n/30. The perpetual inventory system is used to account for inventory. May 13. Paid the invoice of April 14 after the discount period had passed. 17. Received cash from daily cash sales for $21,200. The amount indicated by the cash register was $21,240. June 2. Received a 60-day, 8% note for $180,000 on the Ryanair account. Aug. 1. Received amount owed on June 2 note, plus interest at the maturity date. 24. Received $7,600 on the Finley account and wrote off the remainder owed on a $9,000 accounts receivable balance. (The allowance method is used in accounting for uncollectible receivables.) Sept. 15. Reinstated the Finley account written off on August 24 and received $1,400 cash in full payment. 15. Purchased land by issuing a $670,000, 90-day note to Zahorik Co., which discounted it at 9%. Oct. 17. Sold office equipment in exchange for $135,000 cash plus receipt of a $100,000, 90-day, 9% note. The equipment had a cost of $320,000 and accumulated depreciation of $64,000 as of October 17. Nov. 30.Journalized the monthly payroll for November, based on the following data:
30. Journalized the employer's payroll taxes on the payroll. Dec. 14. Journalized the payment of the September 15 note at maturity. 31. The pension cost for the year was $190,400, of which $139,700 was paid to the pension plan trustee.Explanation / Answer
1.
Jan.
3
Petty Cash
4,500
Cash
4,500
Feb.
26
Office Supplies
1,680
Miscellaneous Selling Expense
570
Miscellaneous Administrative Expense
880
Cash
3,130
Apr.
14
Merchandise Inventory
31,300
Accounts Payable
31,300
May
13
Accounts Payable
31,300
Cash
31,300
17
Cash
21,200
Cash Short and Over
40
Sales
21,240
June
2
Notes Receivable
180,000
Accounts Receivable—Ryanair
180,000
Aug.
1
Cash
182,400
Notes Receivable
180,000
Interest Revenue
2,400
($180,000 × 8% × 60/360 = $2,400).
24
Cash
7,600
Allowance for Doubtful Accounts
1,400
Accounts Receivable—Finley
9,000
Sept.
15
Accounts Receivable—Finley
1,400
Allowance for Doubtful Accounts
1,400
Cash
1,400
Accounts Receivable—Finley
1,400
Sept.
15
Land
654,925
Interest Expense
15,075
Notes Payable
670,000
($670,000 × 90/360 × 9%).
Oct.
17
Cash
135,000
Notes Receivable
100,000
Accumulated Depreciation—Office Equipment
64,000
Loss on Sale of Office Equipment
21,000
Office Equipment
320,000
Nov.
30
Sales Salaries Expense
135,000
Office Salaries Expense
77,250
Employees Federal Income Tax Payable
39,266
Social Security Tax Payable
12,735
Medicare Tax Payable
3,184
Salaries Payable
157,065
30
Payroll Tax Expense
16,229
Social Security Tax Payable
12,735
Medicare Tax Payable
3,184
State Unemployment Tax Payable*
270
Federal Unemployment Tax Payable**
40
*$5,000 × 5.4%
**$5,000 × 0.8%
Dec.
14
Notes Payable
670,000
Cash
670,000
31
Pension Expense
190,400
Cash
139,700
Unfunded Pension Liability
50,700
Pension cost of $190,400 funded
at $139,700.
Jan.
3
Petty Cash
4,500
Cash
4,500
Feb.
26
Office Supplies
1,680
Miscellaneous Selling Expense
570
Miscellaneous Administrative Expense
880
Cash
3,130
Apr.
14
Merchandise Inventory
31,300
Accounts Payable
31,300
May
13
Accounts Payable
31,300
Cash
31,300
17
Cash
21,200
Cash Short and Over
40
Sales
21,240
June
2
Notes Receivable
180,000
Accounts Receivable—Ryanair
180,000
Aug.
1
Cash
182,400
Notes Receivable
180,000
Interest Revenue
2,400
($180,000 × 8% × 60/360 = $2,400).
24
Cash
7,600
Allowance for Doubtful Accounts
1,400
Accounts Receivable—Finley
9,000
Sept.
15
Accounts Receivable—Finley
1,400
Allowance for Doubtful Accounts
1,400
Cash
1,400
Accounts Receivable—Finley
1,400
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