Question

Required information [The following information applies to the questions displayed below.) 25 points Wally's Widget Company (WWC) incorporated near the end of 2011. Operations began in January of 2012. WWC prepares adjusting entries and financial statements at the end of each month. Balances in the accounts at the end of January are as follows: eBook References Cash $ 21,170 Unearned Revenue (40 units) $ 5,200 $12,200 Accounts Payable (Jan Rent) $ Accounts Receivable Allowance for Doubtful Accounts Inventory (45 units) $ (1,750) Notes Payable $ 14,500 $ 3,825 Contributed Capital Retained Earnings - Feb 1, 2012 6,700 6,045 · WWC establishes a policy that it will sell inventory at $165 per unit. In January, WWC received a $5,200 advance for 40 units, as reflected in Unearned Revenue. • WWC's February 1 inventory balance consisted of 45 units at a total cost of $3,825. . WWC's note payable accrues interest at a 12% annual rate. • WWC will use the FIFO inventory method and record COGS on a perpetual basis. February Transactions Included in WWC's February 1 Accounts Receivable balance is a $1,500 account

Above this is all the information they have given me in the question. I need help with the following:

2.	Prepare all February 29 closing entries for WWC. Post to the T-Accounts in requirement 1-b. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Answer 1

Wally's Widget Company Journal Enteries Particulars 1.2.2012 Note Receivable a/c Debit in $Credit in $ Date 1500 Dr. To Accounts Receivable 1500 Insurance expense a/c Dr. 900 2.2.2012 To Cash 900 5.2.2012 Inventory a/c Dr. 11250 To Accounts Payable 1125 5.2.2012 Freight in a/c 450 Dr. To Cash 450 10.2.2012 Accounts Receivable a/c Dr. 19800 To Sales 19800 Cost of goods sold a/c Dr. 9450 To Inventory 9450 15.2.2012 Unearned Revenue a/c Dr 5200 To Sales 5200 Cost of goods sold a/c 3000 Dr. To Inventory 3000 15.2.2012 Sales Return a/c Dr. 2500 To Accounts Receivable 2500

Particulars Inventory a/c Debit in $ Credit in $ Date Dr. 750 To Cost of goods sold 750 16.2.2012 Wages expense a/c 2500 Dr. To Cash 2500 17.2.2012 Accounts Payable a/c 11250 Dr. To Cash 11025 225 To Purchase discount 18.2.2012 Allowance for doubtful accounts a/c Dr. 1750 Bad debts a/c Dr. 100 To Accounts Receivable 1850 19.2.2012 Accounts Payable a/c Dr. Rent expense a/c 3000 3000 Dr. To Cash 6000 19.2.2012 Cash a/c 9570 Dr. Sales discount a/c 130 Dr. 9700 To Accounts Receivable 26.2.2012 Accounts Receivable a/c Dr 570 To Allowance for doubtful accounts 570 570 Cash a/c Dr. To Accounts Receivable 570 27.2.2012 Utility expense a/c Dr 800 To Utility payable 800 28.2.2012 Dividend a/c Dr. 650 To Cash 650 Adjusting Enteries Particulars 29.2.2012 Salary expense a/c To Salary payable Debit in $Credit in $ Date 2500 Dr. 2500 29.2.2012 Bad debt a/c 417 Dr. To Allowance for doubtful accounts 417 (16450) 0.06-570 417 Allowance for doubtful accounts 1750-1750+570 570 29.2.2012 Interest expense a/c Dr. To Interest payable 14500 12% 1/12 145 145 29.2.2012 Interest Receivable a/c Dr 11.25 To Interest income 11.25 1500 0.09 1/12

Closing Enteries Particulars Debit in $ Credit in $ Date 29.2.2012 Income Summary a/c Dr. 24917 To Cost of goods sold 11700 To Sales Return 2500 To Insurance expense To Wages expense 900 2500 To Purchase discount -225 517 To Bad debts To Rent expense 3000 To Sales discount 130 To Utility expense To Salary expense 2500 450 To Freight in To Interest expense 145 29.2.2012 Sales a/c Interest Income a/c Dr. 25000 Dr. 11.25 To Income Summary 25011.25 29.2.2012 Income Summary a/c Dr. 94.25 To Retained Earnings 94.25 29.2.2012 Retained Earnings a/c Dr. 650 To Dividends 650

Purchase Cost of Merchandise sold Inventory Unit Cost Total Cost Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Quantity Date 3825 1,2.2012 45 85 3825 5.2.2012 150 75 11250 45 85 150 75 11250 10.2.2012 45 85 3825 75 75 5625 5625 75 75 3000 15.2.2012 40 75 35 75 2625 15.2.2012 10 75 750 3375 29.12.2012 45 75 Purchases Ending Inventory 12000 COGS 12450 3375 Returns -750 11700

Unadjusted Trial Balance As at 29.2.2012 Debit in $ Credit in $ Particulars Cash 9785 Accounts Receivable 16450 Allowance for Doubtful Accounts 570 Interest Receivable Prepaid Insurance Note Receivable 1500 3375 Inventory Unearned Revenue 0 Accounts Payable 0 Interest Payable Salary Payable Utility Payable 800 Notes Payable Contributed Capital 14500 6700 Retained Earnings -Feb 1, 2012 6045 Dividend 650 Sales 25000 Sales Return 2500 Interest income Cost of goods sold 11700 Insurance expense 900 2500 Wages expense Purchase discount 225 Bad debts 100 Rent expense 3000 Sales discount 130 Utility expense 800 Salary expense Freight in 450 Interest expense Totals 53840 53840 0

Adjusted Trial Balance As at 29.2.2012 Debit in $ Credit in $ Particulars Cash 9785 Accounts Receivable 16450 Allowance for Doubtful Accounts 987 Interest Receivable 11.25 Prepaid Insurance Note Receivable 1500 3375 Inventory Unearned Revenue Accounts Payable Interest Payable 145 Salary Payable 2500 Utility Payable 800 Notes Payable Contributed Capital 14500 6700 Retained Earnings - Feb 1, 2012 6045 Dividend 650 Sales 25000 Sales Return 2500 Interest income 11.25 Cost of goods sold 11700 Insurance expense 900 Wages expense 2500 Purchase discount 225 Bad debts 517 Rent expense 3000 Sales discount 130 Utility expense 800 Salary expense 2500 Freight in 450 Interest expense 145 Totals 56913 56913 0 O C

Statement of Income For the period ending 29.2.2012 Sales 25000 Sales Return -2500 Interest income 11.25 22511.25 Less Cost of goods sold 11700 Insurance expense 900 2500 Wages expense Purchase discount -225 Bad debts 517 Rent expense 3000 Sales discount 130 Utility expense 800 Salary expense 2500 Freight in 450 Interest expense 145 22417 Net Income 94 Statement of Retained Earnings For the period ending 29.2.2012 6045 1.1.2012 Add:Net Income 94.25 6139.25 Dividend -650 5489 31.12.2012

Balancesheet As at 31.12.2012 Amounts in $ Amounts i Liabilities Amounts in $ Amounts in $ Assets Current Assets Current Liabilities Interest Payable Cash 9785 145 Accounts Receivable Salary Payable 16450 2500 Allowance for Doubtful Accounts Interest Receivable Note Receivable Utility Payable Notes Payable 987 800 11.25 14500 17945 1500 3375 30134.25 Owner's Equity Contributed Capital Inventory 6700 Retained Earnings - Feb 29, 2012 5489 12189.25 Totals 30134 Totals 30134 0