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College Coasters, Inc. is a San Antonio, TX based merchandiser specializing in logo-adorned drink coasters. The companys unadjusted trial balance follows, and includes revenues and expenses for the eleven months ended November 30, 2017: COLLEGE COASTERS, INC. UNADJUSTED TRIAL BALANCE AS OF NOVEMBER 30, 2017 DR CR 10,005 2,000 500 600 700 CASH ACCOUNTS RECEIVABLE INVENTORY PREPAID RENT EQUIPMENT ACCUMULATED DEPRECIATION ACCOUNTS PAYABLE SALARIES &WAGES PAYABLE INCOME TAXES PAYABLE COMMON STOCK RETAINED EARNINGS SALES REVENUE COST OF GOODS SOLD DEPRECIATION EXPENSE INCOME TAX EXPENSE OFFICE EXPENSE RENT EXPENSE SALARIES &WAGES EXPENSE $ 110 1,500 300 6,500 3,030 15,875 8,900 110 1,400 1,100 2,000 $27,315 s 27.315
The company buys coasters from one supplier. All amounts in Accounts Payable on December 1, 2017 are owed to that supplier. Inventory on December 1 consisted of 1,000 coasters, all of which were purchased in a batch on July 10, 2017 for $0.50 each. College Coasters records its inventory using a perpetual inventory system and the weighted average cost method. During December, the company entered into the following transactions: his td 1. Purchased s500 coasters on account from the supplier on 12/1 for $0.50 each, with terms of 2/10, Net 30, FOB Shipping Point. Purchased 1,000 coasters on account from the supplier on 12/2 for $0.50 each, with terms of 2/10, Net 30, FOB Shipping Point. Sold 2,000 coasters on account on 12/3 for $2.50 each, with terms of 2/10, Net 30, FOB Destination. The coasters were delivered on 12/4 Collected $4,000 from customers on account on 12/17 Paid the supplier $2,250 cash on account on 12/18. Paid employees $500 on 12/23. $300 was related to work performed in November and the remaining $200 was related to work performed through 12/22. Sold 100 coasters on account on 12/31 for $2.50 each, with terms of 2/10, Net 30, FOB Destination. The coasters were dropped off with the common carrier on 12/31 and will be delivered on 1/4/2018. 2. 3. 4. 5. 6. 7.
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Answer #1

Journal Entries are recorded in the below table for the transactions done by the company in the December month.

Date of transaction Particulars Debit Amount (Dr) Credit Amount (Cr)
12/1/2017 Inventory A/c Dr $250
To Accounts payable A/c $250
(Being coasters purchased on account from the supplier)
12/2/2017 Inventory A/c Dr $500
To Accounts payable A/c $500
(Being coasters purchased on account from the supplier)
12/3/2017 Accounts Receivable A/c Dr $5000
To Inventory A/c $5000
(Being coasters sold on account)
12/17/2017 Cash A/c Dr $4000
To Accounts Receivable A/c $4000
(Being cash collected from customers on account)
12/18/2017 Accounts payable A/c Dr $2250
To Cash A/c $2250
(Being cash paid to the supplier account)
12/13/2017 Salary Outstanding A/c Dr $500
To Cash A/c $500
(Being outstanding salary paid to the employees)
12/31/2017 Accounts Receivable A/c Dr $250
To Inventory $250
(Being coasters sold on the account)

Calculation of Inventory Balance: Opening Inventory 1000 units @ $0.5 + 500 units @ $0.5 + 1000 units @$0.5 - 2000 units @$0.5 - 100 units@ $0.5 = $200 ( 400 coasters remaining @$0.5 each)

Calculation of Accounts Payable Balance: Opening Balance $1500+$250+$500-$2250= $0 ( No Accounts Payable Balance)

Calculation of Accounts Receivables Balance: Opening Balance $2000+$5000-$4000+$250= $3250

Calculation of Cash Balance: Opening Balance $10005+$4000-$2250- $500 = $11255

There was no outstanding salary, as it has been paid through cash

Adjusted Trial Balance as of December 31,2017

Particulars Debit (Dr) Credit (Cr)
Cash 11255
Accounts Receivable 3250
Inventory 200
Prepaid Rent 600
Equipment 700
Accumulated Depreciation 110
Accounts payable 0
Salaries & Wages Payable 0
Income & Tax Payable 0
Common Stock 6500
Retained Earnings 3030
Sales Revenue 21125
Cost of Goods sold 10150
Depreciation Expense 110
Income Tax Expense 0
Office Expense 1400
Rent Expense 1100
Salaries & Wages Expense 2000

Total $30765 $30765

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