Question

on October 10 and 18. Date Item Oct Beginning inventory 4 Purchase 10 Sales 18 Purchase Quantity Units) 10 Unit Price $6 26 15 Sales 20 TO IV. (40") Journalize the following transactions secording to each description 1. Nov. 1. purchased supplies on account. $600 2. Nov. 3. bought a one-year insurance contract for $3,600. 3. Noy. 5, returned $6,000 of the merchandise purchased 06 Oct 26 (Oct 26. purchased $12.000 of merchandise on credit terms of 3/10, 1/30, FOB shipping point 4. Nov 6, made the corresponding payment for the purchase on Oct 26 and a $200 for freight in 5. Nov. 11 wrote off $900 owed by Moore's Land. The company uses allowance method 6. Nov. 20, received $2,000 from Fossil On that was written off on Apt. 10 7. Nov. 30. prepared adjusting entries: 1) insurance expense the insurance was bought on Nov. 3)2) beginning balance of supplies is $300, and at the end of the Now, the physical check showed a $400 supplies on hand: 3) accrued salaries $900; 4) depreciation for track, which was bought on Mar 10 for $5800 with expected residual value of $400 and a useful life of 6 years the company uses straight linethod) 8. Nov, 30, prepared the closing entries: 1) Revenues: $85,000, 2) wage expenses: $12.000. 3) willy expose 5800; 4) interest expense: $200; 5) cost of merchandise sold: $60,000 9. Dec. 5. a furniture acquired at a cost of $4.000 is fully deprecated and discardet. 10. Dec. 10, petty cash fund is increased from $200 10 $300.

Answer 1

IV	Journal Entries:
Date	Account	Debit ($)	Credit ($)	Calculations
01-Nov	Purchase	600
	Accounts Payable		600
	(Being supplies purchased on account.)
03-Nov	Insurance Expense	3600
	Cash		3600
	(Being bought one year Insurance contract.)
05-Nov	Accounts Payable	6000
	Purchase		6000
	(Being merchandise returned , which was purchased on Oct.26)
06-Nov	Accounts Payable	6000		(12000-6000)
	Freight In	200
	Cash		6020
	Discount		180	(12000-6000)*3%
	(Being payment made for purchase on Oct.26 within 10 days and 3% discount received. Also Freight In paid.)
11-Nov	Bad Debt Dr	900
	Moore's Ltd.		900
	(Being amount written off.)
20-Nov	Cash	2000
	Bad Debt Recovered		2000
	(Being amount written off from Fossil Fuel recovered.)
30-Nov	Prepaid Insurance	3300		3600*11/12
	Insurance Expense		3300
	(Insurance contract bought on Nov. 03. So prepaid for 11 months.)
	P&L Ac	500		300+600-400
	Supplies		500
	(Being supplies used debited to P&L.)
	Salaries	900
	Accrued salaries		900
	(Being accrued salaries debited to salary expense.)
	Depreciation for Truck	675		(5800-400)/6*9 months/12
	Truck		675
	(Being Depreciation charged on Truck on SLM basis.)
30-Nov	Revenue Dr	85000
	P&L		85000
	(Being Revenue recorded in P&L.)
	P&L Dr	12000
	Wages Expense		12000
	(Being wages recorded in P&L.)
	P&L Dr	800
	Utility Expense		800
	(Being utility expense recorded in P&L.)
	P&L Dr	200
	Interest Expense		200
	(Being Interest expense recorded in P&L.)
	P&L Dr	60000
	Cost of Merchandise sold		60000
	(Being cost of merchandise sold recorded in P&L.)
05-Dec	No Entry as furniture is fully depreciated , so no balance of furniture is there. Also nothing is received for discarding it.
10-Dec	Petty cash	100
	Cash		100
	(Being petty cash fund increased.)

II	Journal Entries:
No.	Date	Account	Debit ($)	Credit ($)	Calculations
1	01-01-2013	Machine	21500
		Cash		21500
		(Being Machine purchased.)
	31-12-2013	Depreciation	3500		(21500-4000)/5
		Machine		3500
		(Being Depreciation charged on SLM Basis.)
	31-12-2014	Depreciation	3500		(21500-4000)/5
		Machine		3500
		(Being Depreciation charged on SLM Basis.)
	31-12-2015	Depreciation	3500		(21500-4000)/5
		Machine		3500
		(Being Depreciation charged on SLM Basis.)
	31-12-2016	Depreciation	3500		(21500-4000)/5
		Machine		3500
		(Being Depreciation charged on SLM Basis.)
	29-06-2017	Depreciation	1750		(21500-4000)/5*6/12
		Machine		1750
		(Being Depreciation charged on SLM Basis for 6 months.)
	29-06-2017	Cash	5500
		Loss on sale of Machine	250
		Machine		5750
		(Being Machine sold and loss recorded.)
2	a	Account Receivable	560
		Service Revenue		560
		(Being service performed but not recorded , now recorded.)
	b	Salaries	900
		Accrued Salaries		900
		(Being accrued salaries recorded.)
3	31-12-2016	P&L	34800		(650000*5%)+2300
		Allowance for doubtful debts		34800
		(Being Allowance for doubtful debt balanced as 5% of Accounts receivables.)
	05-03-2017	Allowance for doubtful debts	10600
		T. Marz		3700
		D. Weigh		6900
		(Being uncollectible accounts debited to allowance for doubtful debts.)
	15-06-2017	Cash	6900
		Allowance for doubtful debts		6900
		(Being amount received from D. Weigh, earlier written off.)