Question: Journalize the following transactions that occurred in January 2018 for Mike’s Amusements. Assume Mike’s uses the gross method to record sales revenue. No explanations are needed. Identify each accounts payable and accounts receivable with the vendor or customer name.
Jan. 4 Purchased merchandise inventory on account from Vanderbilt Company, $5,000. Terms 1/10, n/EOM, FOB shipping point.
6 Paid freight bill of $150 on January 4 purchase.
8 Returned half the inventory purchased on January 4 from Vanderbilt Company.
10 Sold merchandise inventory for cash, $1,100. Cost of goods, $440. FOB destination.
11 Sold merchandise inventory to Gilmore Corporation, $10,100, on account, terms of 3/10, n/EOM. Cost of goods, $5,555. FOB shipping point.
12 Paid freight bill of $30 on January 10 sale.
13 Sold merchandise inventory to Cadet Company, $8,800, on account, terms of 3/10, n/45. Cost of goods, $4,400. FOB shipping point.
14 Paid the amount owed on account from January 4, less return and discount.
18 Purchased inventory of $4,600 on account from Roberts Corporation. Payment terms were 1/10, n/30, FOB destination.
20 Received cash from Gilmore Corporation, less discount.
26 Paid amount owed on account from January 18, less discount.
28 Received cash from Cadet Company.
29 Purchased inventory from Silk Corporation for cash, $12,000, FOB shipping point. Freight in paid to shipping company, $240.
The total of debits and credits is $80,915
In accounting, sales returns refer to the goods returned by the customers. Sales returns occur when goods are not up to the mark, are defective, or are found damaged by the customers. Sales returns decrease the sales revenues of the business entity and are treated separately in the books.
The unadjusted trial balance for Tuttle Electronics Company follows:
TUTTLE ELECTRONICS COMPANY
Unadjusted Trial Balance
October 31, 2018
Account Title Debit Credit
Accounts Receivable 33,800
Merchandise Inventory 45,700
Office Supplies 5,700
Accumulated Depreciation-Equipment $37,200
Accounts Payable 15,600
Unearned Revenue 13,400
Notes Payable, long-term 53,000
Common Stock 48,000
Retained Earnings 6,700
Sales Revenue 300,300
Cost of Goods Sold 171,600
Salaries Expense (Selling) 26,000
Rent Expense (Selling) 15,400
Salaries Expense (Administrative) 4,800
Utilities Expense (Administrative) 10,500
Total $474,200 $474,200
1. Journalize the adjusting entries using the following data:
a. Interest revenue accrued, $550.
b. Salaries (Selling) accrued, $2,800.
c. Depreciation Expense—Equipment (Administrative), $1,295.
d. Interest expense accrued, $1,500.
e. A physical count of inventory was completed. The ending Merchandise Inventory should have a balance of $45,300.
f. Tuttle estimates that approximately $6,200 of merchandise sold will be returned with a cost of $2,480.
2. Prepare Tuttle Electronics’s adjusted trial balance as of October 31, 2018.
3. Prepare Tuttle Electronics’s multi-step income statement for year ended October 31, 2018.
The adjusted trial balance of Rachael Rey Music Company at June 30, 2018, follows:
RACHAEL REY MUSIC COMPANY
Adjusted Trial Balance
June 30, 2018
Account Title Debit Credit
Accounts Receivable 38,400
Merchandise Inventory 18,100
Office Supplies 300
Accumulated Depreciation-Furniture $8,200
Accounts Payable 13,800
Salaries Payable 850
Unearned Revenue 7,500
Notes Payable, long-term 17,000
Common Stock 6,000
Retained Earnings 21,350
Sales Revenue 184,000
Cost of Goods Sold 85,500
Selling Expense 18,600
Administrative Expense 12,000
Interest Expense 1,900
Total $258,700 $258,700
1. Prepare Rachael Rey’s multi-step income statement for the year ended June 30, 2018.
2. Journalize Rachael Rey’s closing entries.
3. Prepare a post-closing trial balance as of June 30, 2018.
Journalize the following transactions that occurred in March 2018 for Faucet. Assume Faucet uses the gross method to record sales revenue. No explanations are needed. Identify each accounts payable and accounts receivable with the vendor or customer name.
Mar. 3 Purchased merchandise inventory on account from Sidecki Wholesalers, $3,500. Terms 2/15, n/EOM, FOB shipping point.
4 Paid freight bill of $75 on March 3 purchase.
4 Purchased merchandise inventory for cash of $2,200.
6 Returned $800 of inventory from March 3 purchase.
8 Sold merchandise inventory to Harvey Company, $5,700, on account. Terms 2/15, n/35. Cost of goods, $2,508.
9 Purchased merchandise inventory on account from Teaton Wholesalers, $6,000. Terms 2/10, n/30, FOB destination.
10 Made payment to Sidecki Wholesalers for goods purchased on March 3, less return and discount.
13 After negotiations, received a $100 allowance from Teaton Wholesalers.
15 Sold merchandise inventory to Jackson Company, $2,900, on account. Terms n/EOM. Cost of goods, $1,276.
22 Made payment, less allowance, to Teaton Wholesalers for goods purchased on March 9.
25 Sold merchandise inventory to Secker for $2,000 on account that cost $880. Terms of 2/10, n/30 were offered, FOB shipping point. As a courtesy to Secker, $85 of freight was added to the invoice for which cash was paid by Faucet.
28 Received payment from Harvey Company.
29 Received payment from Secker, less discount.
30 Received payment from Jackson Company.
Suppose Muddyriver.com sells 2,000 books on account for $19 each (cost of these books is $22,800), credit terms 1/20, n/45 on October 10, to The Salem Store. The Salem Store paid the balance to Muddyriver.com on October 22.
1. Journalize the Salem Store’s October transactions.
2. Journalize Muddyriver.com’s October transactions. Assume Muddyriver.com uses the gross method to record sales revenue.
The records of Farm Quality Steak Company list the following selected accounts for the quarter ended April 30, 2018:
Interest Revenue $ 400 Accounts Payable $ 17,700
Merchandise Inventory 45,000 Accounts Receivable 38,200
Notes Payable, long-term 54,000 Accumulated Depreciation—Equipment 37,700
Salaries Payable 2,800 Common Stock 30,000
Net Sales Revenue 298,000 Retained Earnings 5,380
Rent Expense (Selling) 15,100 Dividends 25,000
Salaries Expense (Administrative) 2,000 Cash 7,100
Office Supplies 6,500 Cost of Goods Sold 154,960
Unearned Revenue 13,100 Equipment 132,000
Interest Expense 2,100 Interest Payable 1,700
Depreciation Expense—Equipment (Administrative) 1,320
Rent Expense (Administrative) 7,100
Utilities Expense (Administrative) 4,600 Salaries Expense (Selling) 6,000
Delivery Expense (Selling) 3,800 Utilities Expense (Selling) 10,000
1. Prepare a single-step income statement.
2. Prepare a multi-step income statement.
3. M. Doherty, manager of the company, strives to earn a gross profit percentage of at least 50%. Did Farm Quality achieve this goal? Show your calculations
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