Question

Selected balance sheet information for the Wolf Company at November 30, and December 31, 2021, is presented below. The company uses the perpetual inventory system and all sales to customers are made on credit. Accounts receivable Prepaid insurance Inventory Accounts payable Salaries payable Nov. 30 Debits Credits 10,200 5,200 7,200 12,200 5,200 Dec. 31 Debits Credits 3,200 7,700 6,200 15,200 3,200 The following cash flow information also is available: a. Cash collected from credit customers, $82,000. b. Cash paid for insurance, $5,200. C. Cash paid to suppliers of inventory, $62,000 (the entire accounts payable amounts relate to inventory purchases). d. Cash paid to employees for salaries, $10,200. Required: 1. Determine the following for the month of December: 2. Prepare summary journal entries to record the month's sales and cost of those sales.

Answer 1

Sales Revenue Cost of goods sold Insurance Expense Salaries Expense $ S $ S 75,000 66,000 2,700 8.200 Working Notes: Sales Revenue Closing Balance of Accounts Receivables Add: Cash collected from customers $ $ $ $ $ 3,200 82.000 85,200 10,200 75,000 Less: Opening Balance of Accounts Receivables Sales Revenue Cost of Goods sold Cash paid to suppliers Less :Beginning accounts payable $ $ $ $ Add Ending accounts payable 62,000 12.200 49,800 15,200 65.000 6,200 7,200 66,000 Less: Closig Inventory Add: Opening inventory S $ $

Insurance Expense Opening Balance of Prepaid Insurance Add: Income Tax Expenses $ $ 5,200 5.200 10,400 7,700 2,700 Less: Closing balance Prepaid Insurance $ d. Salaries Expense Closing balance of Salaries payable Add: Cash paid to employees $ $ $ $ $ 3,200 10.200 13,400 5,200 8,200 Less: Opening balance of salaries payable Credit Debit 75,000 $ Transaction General Journal Accounts Receivables Sales Revenue (Being sales on account recorded) $ 75,000 $ 66,000 2 Cost of Goods Sold Inventory (Being cost of sales on account recorded) $ 66,000