Question

I need assistance in entering these into Journal entries.

Especially part 3 Property Plant and Equipment. I am confused on how to depreciate the items properly (please show work on how to do it)

1. Using the Journal, record the transactions that occurred during 2017. If no specific date is provided for a transaction, leave the date column blank. Since there are several transactions for which no date is given, the journal entries, do NOT need to be in chronological order. All adjusting and closing entries should have Dec 31, 2017, as the date.

**Second Page info Below

4. Debt

a. On August 1, 2017, Harriet’s paid-off the note payable that was outstanding at the beginning of the period. The note had an 10% interest rate, had been issued on August 1, 2016, and required semiannual interest payments on Jan 31, 2017 and July 31, 2017.

b. On October 1, 2017, Harriet’s borrowed $120,000 on a new note payable. The new note carries a 6% interest rate with semiannual interest payments required on March 31, 2018 and September 30, 2018.

5. Operations

a. Harriet’s made a rent payment of $51,000 on August 1, 2017. The payment was for rent on the store building and was prepaid for one year. The balance in the prepaid account at the end of 2016 represents the rent for January through July 31, 2017 that was paid for on August 1, 2016.

b. Cash paid out during 2017 for wages totaled $142,000. Records indicate that salaries for the last week of December 2017 amounted to $25,000 and will be paid at the end of the first week in January 2018 (a two-week pay period).

c. Other expenses (paid in cash) totaled $38,000. 6. Income Taxes a. On March 15, 2017, Harriet’s paid their 2016 income taxes. Harriet’s will pay their 2017 income taxes on March 15, 2018. Harriet’s has a 40% income tax rate for both 2016 and 2017.

7. Common Stock

a. On December 1, 2017, dividends of $35,000 were declared and paid.

b. On January 1, 2017, Harriet’s issued 10,000 additional shares of common stock for $10 per share.

Harriet's Hats, Inc. Harriet's Hats is a fictional company. The following information includes the balance sheet as of December 31, 2016, and the details of the transactions that occurred during 2017. Background: Harriet's Hats is a hat retailer (in other words, Harriet's buys hats from a hat manufacturer and then sells them in their stores). Transactions for 2017 are representative of such a company's business activities. HINT: Read through the entire assignment at least twice before beginning to do any work. This will help you familiarize yourself with all of the important facts. Transactions for 2017: Sales and Accounts Receivable a. Harriet's hats during 2017 had a sales price of $80 per hat. All sales were made on account. b. Cash collections on account amounted to $980,000. C. On July 1, 2017, Harriet's identified $40,250 of receivables as being uncollectible and wrote them off. d. Harriet's follows a percentage-of-receivables approach to estimate their accounts receivable that will become uncollectible. As of the end of 2017, Harriet's estimates that 10% of their receivables will be uncollectible. Inventory a. Harriet's began 2017 with 1,900 hats which had a cost of $40 each. Employees physically counted 2,690 hats remaining in the warehouse at the end of 2017. Harriet's uses a periodic LIFO inventory system to cost their inventory. The following purchases (all on account) were made during 2017: i. January 15th - 4,250 hats @ $43.00 each ii. March 22nd - 2,900 hats @ $45.00 each iii. August 5th - 3,420 hats @ $47.00 each iv. October 26th - 6,020 hats @ $50.00 each b. During 2017, Harriet's made cash payments to inventory suppliers on the following dates: i. January 29th - $146,200 ii. April 16th - $156,600 iii. October 2nd - $160,740 iv. November 30th - $270,900 Property, Plant and Equipment a. Harriet's uses straight-line depreciation for all of its store fixtures and office equipment. b. Below is a schedule of the store fixtures and office equipment Harriet's had in place at the end of 2017. FIXTURES AND EQUIPMENT (as of December 31, 2017) ID # Historical Estimated Estimated Date acquired Cost Useful Life Salvage Value 1256 $60,000 12 years $0 Jan. 1, 2007 1876 | $100,000 10 years $15,000 Jan 1, 2008 4299 $92,000 15 years $5,000 Jan 1, 2009 c. On April 1, 2017 new store fixtures were purchased for $42,000 in cash. Harriet's expects the fixtures to have a 10 year useful life and a $4,000 salvage value. d. On October 1, 2017 office equipment (ID#1876) was sold for $16,825. 4. Debt a. On August 1, 2017, Harriet's paid-off the note payable that was outstanding at the beginning of the period. The note had an 10% interest rate, had been issued on August 1, 2016, and required semiannual interest payments on Jan 31, 2017 and July 31, 2017 b. On October 1, 2017, Harriet's borrowed $120,000 on a new note payable. The new note carries a 6% interest rate with semiannual interest payments required on March 31, 2018 and September 30, 2018. 5. Operations a. Harriet's made a rent payment of $51,000 on August 1, 2017. The payment was for rent on the store building and was prepaid for one year. The balance in the prepaid account at the end of 2016 represents the rent for January through July 31, 2017 that was paid for on August 1, 2016. b. Cash paid out during 2017 for wages totaled $142,000. Records indicate that salaries for the last week of December 2017 amounted to $25,000 and will be paid at the end of the first week in January 2018 (a two-week pay period). c. Other expenses (paid in cash) totaled $38,000. 6. Income Taxes a. On March 15, 2017, Harriet's paid their 2016 income taxes. Harriet's will pay their 2017 income taxes on March 15, 2018. Harriet's has a 40% income tax rate for both 2016 and 2017. Common Stock a. On December 1, 2017, dividends of $35,000 were declared and paid. b. On January 1, 2017, Harriet's issued 10,000 additional shares of common stock for $10 per share. Required: Using the journal and T-accounts provided, record the transactions that occurred during 2017 If no specific date is provided for a transaction, leave the date column blank. IMPORTANT: Since there are several transactions for which no date is given, the journal entries do NOT need to be in chronological order. All adjusting and closing entries should have December 31, 2017 as the date. Prepare the balance sheet, statement of retained earnings and income statement for Harriet's Hats, Inc. for the year ended December 31, 2017. 3. Record the closing entries for the company (this step is often skipped, don't lose these points). Check Figures: • 2017 Gross Profit Percentage: 41.375% 2017 Current Ratio: 1.9799 2017 Profit Margin: 9.376% •

Answer 1

Journal Entry in the borek of Harsiet's Hats, Inc. for the Year ended Dec. 34, 2017 1) and Sale Account Receivable i - Particularz Date L-f. Ce. Amt. Do. Amt. (4) Cash AlC 9, 80,00 Accourt recevable Alc - 2, 84,000 Oso To sales AlC sale is made) 13,64.000 ( Being Accourting Receivable Alc-. To Bad debt 01 July, 40,250 40,250 AlC 2017 (Beens uncollected Account Recewable is witeff) 24, 375 Bad debt exxpenses AIC-Po 31 dec." To Allouance for 2017 Daubt ful Aecounts is 24,375 (Beeng un caelected estimated @ 107) Bud debt esepenses for year ended: Nate i- Calculation of Bad debt = Accoust Recewable ending balance x Pescentazo estimated as en callectible

O × 10%. Bad debt esepenses = 2,43,75 Bad debt esep. = $24 375 2) Inventory:- Cro Amto Ds. Amt. Parti culas8 Date ($) ($) Jan. Inwertory AIC- To opering stock AlC ( Beeing apering stock Record) 76,000 2017 76,070 1,82,750 AIC Puschase 1SJAD. To supplies's AlC CBeing puschcese made) 1.82,750 2017 Supplier Alc To carh AIC 1,46,200 29 Jan- 2017 L,46.200 ( Beeng pay mert made to supplies) 22ndmarch Purchase AIC 1,30,500 To supplies's AlC (Being puschase made) 2017 1,30,500

Particulase Date Dri Auto Gri Anto (in $) Cin $. Supplier's AIC- Deo To carh AIC 16* April 1.56,602 2017 I,56,600 CBeing pa ment made to suppliez in carsh) Puschase AIc ste Aus I 60,740 To supplies AlC ( Being puschase made) L,60,740 supplies's AlC - Ds. ocd. 2nd L.60,740 To cash AIC 1o רo 2017 CBeing pay ment made to Supplier in carh) 26 octo Purchuse Alc 3,01,00 To supplies's AIC (Being Purcherse made) 3,01,0250 2017 30th eupplies's Alc To cash AIC 2,70,g00 nou. 2017 2,70,g00 Beirg paymeret made to supplier in cash)

Cóo Auto Dar Amto Particulas 8 Date (in$ (in$) I,09,970 dlosing To Trading p&L AIC ( Being closing entoy for Alc- Rso 3idec. stock 169.970 2017 us made ) Stock Col culationof lusing stock :- Nate:- Remairins urit : ۷هسله As per lifo ( Last -in cef Truvertory ueill be : - Opering stock First out) method 1900 uzit xşuo -76,000 790 urit xu3 = $33790 - Praperty, Plant and equipmert: 3) Dr. Amt. Pasticulars Aut. Date ($) ($) New store iacture/ Fizcture and equepiment Alc-eso LApril. 2017 प२.000 Cosh AlC To U2,000 C Being new fineture Puschased)

Partiuulas Date (o Anto De. Auto Carh AIC – 1oct. 16,825 To fracture& equipment" AIC (Being ( ID # 187<) is sceld) 2017 16,825 Depreciation AlC- Deo To Accumulated Dep AIC 3i dec. 5,000 2017 S,000 (Being dep. for ID# 1256) Depreciatin AlC - 3idec. G3,75 To Accum. Dep. AlcC) 2017 63,75 (Being dep.for ID# 1876) fizeture & jequepmeRt 3idec- 2017 3idec. office & equipment (I0# 1816) To depreciation AlC To Cash AlC 23,500 2017 63,25 16,829 loss To (Being ID # l8n6) adjusted) 3lde Depreciation AlC 58,00 2017 To Aeco Depres AlC 58, (Being deps for ID# w299)

Date Co Anut Particulars Ds. Auto 28,50 3ideco Depreciatien AlC- Di • 28,50 AlC To Aeci Dep. 2017 (Being dep.for new store Fizcture ceilculated) Debt 4) Doo Anto Particulaos Date Account note Payable A|C-Dro I Aug- 1OU50 10,450 Tocash AIC 2017 CBung amaurt cef mate payable puid) Supplier's Alc To mate Dso Ace. payuble (Beung nate wssed) 2017 1,20,0 Carh AlC Loct. L,20, Un0 To new nete payable 2017 (Being new nate useued) Istesest AIC Jan.31 To cash AlC ( Being Pnterest pend)

Operations : - Ceo Auto Aut- Doo Particulars Date C$) ט ,רן Rent AlC - Dso LAUS. Prepaid esep. AIC - Ds. 2017 To cash AIC CBeens Rept Paid) AlC wages 1,42,e 31dec. 2017 Tocash AIL (Being wage paie) Quut sa Salary AIC-so To outstandins 3idec. 25,010 2017 Stdcry AIL (Being salary OIS *25c0) 3)dec. Misc. Other esep. AIC -Dso 38,0250 To Cash AIL 2017 ( Being esep. paid)

Inceeme Tase:- Income Tase AlC i5masch To casl 2017 Tncame fax paid ) (Beeng 7) Common stock:- Cro Auts Dro Anto ($) Particulass Dirvidend AIC -Ds- To casle Date 3'5,000 Dec.1 35,000 2017 dreidend Paid) C Being I,co,u Dso 1San.> To share caital AlC (Being @ F10 Pes) 2017 10,0000 share essued

Calculation or Depreciation for 3idec.,20 1) calculation of Deprecialiov of fizeture & equipment ID # 1256 Dep. (Strauglt line) = Historical Cost - salvage valee Estimated efe Depreciation $ 60,00o 2) calcuatien of fizelure & equpment Dep. of 1876 Historical cost- Value of Asset on IJan. 2017 %3D Dep. for uears (ఆsలాఆ =$10000O = $1,00,1o 23,500 Dep. for 9 monte Current year for Oupto Locto 2017 Dep.:- 85,000 10 10 Dep.for gmonte = 8500X9 263,15-

3) Depreciatiow for fizeture & equepment ID # U299 salvage value use ful life - Historical cost Dep. Estimuted Dep. - $500 $ 92 00o %3D 58,00 15 4) Depreciatiow fer new Fiaclhuse Puschcsed on 1st, April 2017, Depreiation us to be caludateel for gmonths : Depo:- 42000 =$38,00 10