Question

Exam Review (Journal Entries) Sept 1 Kim Kardashian opens a merchandising store D-A-S-H by contibuting $100,000 in cash, $50,000 in equipment and a building costing $300,000. Sept 2 Purchase merchandise for $40.000 from Kson on credit with terms of 2/10 Sept 10 Return $5000 of delfective merchandise back to kitson Sept 11Sold $20.000 worth of merchandse for $50.000 on account to Fred Segal Sept 12 Kim pays the balance owing for the punchase on September 2 net 30 Co under terms 2/10 net 30, FOB destinalion Sept 12 Paid $200 shipping charges related to the Sepit 11 sale to Fred Segal Co Sept 21 Received balance owing for September 11 sale Sept 23 Purchase a vehicle for $75,000 with a useful life of 5 years and a residual value of $25.000 Established a petty cash fund for $200 Nov 1 Nov 12 Replenished petty cash fund by submitting he folowing receipts:$50 miscellaneous expenses, $100 delivery charges $30 ententainment expense The pefty cash box had $25 remaining Increased he Pey Cash fund to $300 Nov 16 Kim is being swamped with work and is desperate to seek out a partner She decides to admit her ster Koney asmer prgup29% ownership in exchange for an investment of $18,000 Kim's capital account Dec 16 has a balance of $3000 overdue on e account with DAS Adrienne Balon has a of H In exchange anextension DAS-H acepts a 60 rom A Balion to setfie the past due account note at 12% Dec 31 Using the mid-month rule, make the necessary adjusting en to necond the depreciation of the vehicle which was purchased on September 23rd Use Dec 31Recognized revenue on note receivable issued December Dec 31 Dec 31 Dec 31 Merchandise Inventory records indicate a balance of 540,000 A physical account produces a balance o39 678 D-A-S-Hhad credit sales of $320,000. Based on past esperience, D-A-S-H estimates 1% of sales to be uncoledatle Year end nominal account balances are as follows: Total Revenue $900,000, Total Expenses $600,000, and m Kandashian, Drawings HAPPY NEW YEAR Page 2 of2

Do journal entry for February 14, and explain how to do calculations

Answer 1

Date	General Journal	Debit	Credit
Feb. 14	Accounts receivable	3060
	Notes receivable		3000
	Interest revenue ($3000 x 12% x 60/360)		60
	(To record dishonour of note)

Note: A year is assumed to have 360 days for purpose of interest calculation above.

In case 365 days is considered, the journal entry will be:

Date	General Journal	Debit	Credit
Feb. 14	Accounts receivable	3059.18
	Notes receivable		3000
	Interest revenue ($3000 x 12% x 60/365)		59.18
	(To record dishonour of note)

The interest revenue is rounded off to 2 decimal places in the absence of instructions regarding the same. Kindly round off as required.

Since no instructions have been provided regarding the number of days in a year to be used for calculation of interest on note, both entries have been shown. Kindly use the one required.