Question

Submited 17.74/20 Total points awarded H Jack Hammer Company completed the following transactions. The annual accounting period ends December 31 Apr. 30 Received $600,000 from Commerce Bank after signing a twelve-month, 6 percent, promissory note June 6 Purchased merchandise on account at a cost of $75,000 (Assume a perpetual inventory system.) July 15 Paid for the June 6 purchase Aug. 31 Signed a contract to provide necurity services to a snall apartnent complex and collected six months fees in advance, amounting to $24,000 (Use an account called Deferred Revenue.) Dec. 31 Determined salary and vages of $40,000 were earned but not yet paid as of December 31 (ignore payroll taxes) Dec. 31 Adjusted the accounts at year-end, relating to interest Dec. 31 Adjusted the accounts at year-end, relating to security services warded red Required: 1. For each listed transaction and related adjusting entry, indicate the effects (accounts, and amounts on the accounting equation using the following format: (Enter any decreases to accounts with a minus sign.) ook

Answer 1

Jack Hammer Company Balance Sheet (partial) Journal Enteris Debit in $ Credit in $ Date Particulars At December 31 Salaries and Wages Payable Apr-30 Cash a/c Dr. 600000 40000 To Notes Payable Interest Payable 600000 24000 Unearned Revenue 8000 Jun-06 Inventory a/c Note Payable 75000 Dr. 600000 To Accounts Payable Total Current Liabilities 75000 672000 Accounts Payable a/c Jul-15 Dr. 75000 To Cash 75000 Aug-31 Cash a/c Dr. 24000 To Unearned Revenue 24000 Salaries and Wages Expense a/c Dr. To Salaries and Wages Payable Dec-31 40000 40000 Dec-31 Interest Expense a/c 24000 Dr. To Interest Payable Interest Expense= ($24,000 $600,000 x 6% x 8/12) 24000 X Dec-31 Unearned Revenue a/c Dr. 16000 To Service Revenue 16000 Unearned Revenue= ($16,000 $24,000 x 4/6)