Question

4. Identify, analyze, record, and post transactions (THERE ARE 4 PARTS TO THIS QUESTION): King Toot's music store sells musical instruments and other related merchandise to customers. The following is a list of King Toot's account balances at the beginning of December (.e. as of December 19, 2017): Cash: $18,750; Accounts Receivable (A/R): $11,980; Inventory: $20,800; Equipment: $34,400; Accounts Payable (A/P): $13,930; Notes Payable (N/P): $55,000; Common Stock: $17,000. Assume all other accounts had a balance of $0 as of 12/1/17. The accountant for King Toot's observed the following transactions which occurred during December 2017. a. 12/3/17: Issued 400 shares of common stock for $10 per share. b. 12/5/17: Sold merchandise inventory, which originally cost $900, for $2,200 to customers. Of the $2,200 in sales, $500 worth was purchased by customers using cash. The remaining $1,700 was purchased by customers on account. (HINT: don't forget there will be two parts to record here-one part to record the sales revenue and one part to record the cost of the merchandise inventory sold). c. 12/8/17: Paid $4,250 in cash to creditors on outstanding accounts payable. d. 12/20/17: Received $3,080 in cash from customers as payment on their accounts receivable. e. 12/30/17: Paid $1,100 in cash for December's Rent. f. 12/30/17: Paid $120 in cash dividends to stockholders. Part 1 - Account Identification and transaction analysis: Prepare a transaction worksheet summarizing all of the December transactions for King Toot's. I have provided a framework for you and completed transaction a. for you as an example. After recording all transactions, be sure to calculate ending balances as of 12/31/17 and enter them in the last row of the worksheet. HINT: Make sure the accounting equation remains in balance after entering each transaction! Equip. Assets Accts. Inventory Rec. CARI $11,980 $20,800 Liabilities Accts Notes Payable Payable (A/P) $13,930 $55,000 Common Stock Stockholders' Equity Retained Earnings Rev. (Exp.) (Div.) 12/1 $18,750 +$4.000 $34,400 = $17,000 54.000 $0 $0 $0 12/31

Answer 1

Answer: Date 12/1 0 a. Assets Liabilities Stockholders Equity Cash Accounts Receivables Inventory Equipment = Accounts payable Notes payable + Common Stock Retained Earnings Revenues Expenses Dividends 18750 11980 20800 34400 13930 55000 17000 0 +4000 +40001 +500 +1700 +2200 -900 -900 -4250 -4250 +3080 -3080 -1100 -1100 -120 20860 10600 19900 34400 9680 55000 21000 2200 -2000 12/31