Question

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Credit Debit $ 70,000 40,000 $ 5,000 30,000 70,000 Accounts Cash Accounts receivable Allowance for uncollectible accounts Inventory Building Accumulated depreciation Land Accounts payable Notes payable (8%, due in 3 years) Common stock Retained earnings Totals 10,000 200,000 20,000 36,000 100,000 239,000 $410,000 $410,000 The $30,000 beginning balance of inventory consists of 300 units, each costing $100. During January 2021, the company had the following transactions: January 2 Lent $20,000 to an employee by accepting a 6% note due in six months. 5 Purchased 3,500 units of inventory on account for $385,000 ($110 each) with terms 1/10, n/30. 8 Returned 100 defective units of inventory purchased on January 5. 15 Sold 3,300 units of inventory on account for $429,000 ($130 each) with terms 2/10, n/30. 17 Customers returned 200 units sold on January 15. These units were initially purchased by the company on January 5. The units are placed in inventory to be sold in the future. 20 Received cash from customers on accounts receivable. This amount includes $36,000 from 2020 plus amount receivable on sale of 2,700 units sold on January 15. 21 Wrote off remaining accounts receivable from 2020. 24 Paid on accounts payable. The amount includes the amount owed at the beginning of the period plus the amount owed from purchase of 3,100 units on January 5. 28 Paid cash for salaries during January, $28,000. 29 Paid cash for utilities during January, $10,000. 30 Paid dividends, $3,000. Month-end adjusting entries: a. Of the remaining accounts receivable, the company estimates that 10% will not be collected. b. Accrued interest revenue on notes receivable for January. c. Accrued interest expense on notes payable for January d. Accrued income taxes at the end of January for $5,000. e. Depreciation on the building, $2,000. Requirement General Journal General Ledger Trial Balance Income Statement Balance Sheet Analysis

Answer 1

Date	Particulars	Debit	Credit
Jan-02,2021	6% Note Receivable A/c……..Dr	20000
	To Loan to Employee		20000
	( Lent $20000 to an employee by accepting a 6% note due in 6 months)
Jan-05,2021	Purchases A/c……….Dr	385000
	To Accounts Payable A/c		385000
	(Purchases of Inventory worth 385000 for credit)
Jan-08,2021	Accounts Payable A/c…………. Dr	11000
	To Purchases A/c		11000
	(Return of goods purchased on Jan 5th )
Jan-15,2021	Accounts Receivable A/c ……….Dr	429000
	To Sales A/c		429000
	(Sold 3300 units of inventory)
Jan-17,2021	Sales A/c ………….Dr	26000
	To Accounts Receivable A/c		26000
	(Sales Return of 200 units sold at 130 per unit)
Jan-20,2021	Cash A/c ……………Dr	387000
	To Accounts Receivable A/c		387000
	(Received cash 38000 related to 2020 and remaining for 2700 units sold on Jan 15th)
Jan-21,2021	Bad Debts A/c ………….Dr	4000
	To Accounts Receivable A/c		4000
	(Write off remaining Account receivable from 2020)
Jan-24,2021	Accounts Payable A/c…………. Dr	361000
	To Cash A/c		361000
	(Paid Accounts payable related to 2020 and 3100 units purchased on Jan 5th)
Jan-28,2021	Salaries A/c ………….. Dr	28000
	To Cash A/c		28000
	(Paid salaries to employees)
Jan-29,2021	Utilities A/c ……………Dr	10000
	To Cash A/c		10000
	(Paid for utilities for cash)
Jan-30,2021	Retained Earnings A/c …… Dr	3000
	To Common Stock A/c		3000
	(Paid dividend of $3000)
Jan-31,2021	Allowance for Bad Debts A/c ………….Dr	5200
	To Accounts Receivable A/c		5200
	(Estimate of bad debt on remaining dues 400 units sold for 5200 on Jan 15th)
Jan-31,2021	Interest Receivable A/c……..Dr	200
	To Interest revenue A/c		200
	(Interest Accrued on 6% Notes Receivable)
Jan-31,2021	Interest Expense A/c……..Dr	240
	To Interest Payable A/c		240
	(Interest Accrued on 8% Notes Payable)
Jan-31,2021	Income tax Expense A/c……..Dr	5000
	To Income Tax A/c		5000
	(Accrued Income tax expense)
Jan-31,2021	Depreciation A/c ……….Dr	2000
	To Building A/c		2000
	(Depreciation on Building)