You are the controller at Star Wars, Inc. you must Create Journal Entries for th

Question

You are the controller at Star Wars, Inc. you must Create Journal Entries for the following transactions:

1. On Dec 7, Star Wars Inc. receiveed ac check in the amount of $49,294 from C3PO Co. in full payment of a sales invoice dated Nov. 27 for $50,300.

2. On Dec 10, Star Wars, Inc. received payment of $72,863 from Jabba's Huts, Inc. in full payment of an invoice dated Nov. 30 for $74,350

3. On Dec 11, Star Wars Inc. received payment of $22000 from C3PO Co, in full payment for an invoice dated Nov. 14th. No discout applies.

4.On Dec 12, Star Wars Inc. sold 165 units to R2D2 Computers on crecdit for $815 each.

5. On Dec 12, Star Wars Inc. Paid $75250 to Ewok Inc. for an invoice dated Nov. 28.

6. On Dec 17, Star Wars Inc. finds out that Yoda, Inc. agrees to convert its overdue $20,000 A/R balance into a 12% note due in 10 months.

7.On Dec 18, Star Wars Inc. purchased a new supercomputer from Palpatine Computing Co. for $38,000. A down payment of $5,000 was paid immediately, the remainder is owed within 45 days (n/45). Use the equipment account.

8. On Dec 20, Star Wars Inc. paid dederal withholding taxes of $13,521, and FICA wihholdings of $3,805 to the US Treasury Department. these amounts were previously recorded as liabilities. THe amounts were paid with one check.

Explanation / Answer

Below are the Journal Entries needed -

Please note -

1) Payment and Receipts if not mentioned are considered as Cash Transactions

2) on Dec 12 entry for Goods Sold shows only Sales effect - Inventory and COGS effect not shown as no Cost Price or Inventory details given

3) Considered Yoda, Inc.as a Customer and please note the Interest Effect will come in effect after completion of first month and therefore as of now there will no considering for Interest

Below are the Journal Entries for the given transactions:

Particulars Debit Credit Dec-07 Bank A/C 49294 Dec-07 Trade Discount 1006 Dec-07 Accounts Receivable 50300 Dec-10 Cash 72863 Dec-10 Trade Discount 1487 Dec-10 Accounts Receivable 74350 Dec-11 Cash 22000 Dec-11 Accounts Receivable 22000 Dec-12 Accounts Receivable 134475 Dec-12 Sales 134475 Dec-12 Accounts Payable 75250 Dec-12 Cash 75250 Dec-17 Notes Receivabe 20000 Dec-17 Accounts Receivable 20000 Dec-18 Equipment Account 38000 Dec-18 Accounts Payable 33000 Dec-18 Cash 5000 Dec-20 Federal taxes Payable 13521 Dec-20 FICA Tax Payable 3805 Dec-20 Cash 17326

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