Question

Required information [The following information applies to the questions displayed below.) 25 points Wally's Widget Company (WWC) incorporated near the end of 2011. Operations began in January of 2012. WWC prepares adjusting entries and financial statements at the end of each month. Balances in the accounts at the end of January are as follows: eBook References Cash $ 21,170 Unearned Revenue (40 units) $ 5,200 $12,200 Accounts Payable (Jan Rent) $ Accounts Receivable Allowance for Doubtful Accounts Inventory (45 units) $ (1,750) Notes Payable $ 14,500 $ 3,825 Contributed Capital Retained Earnings - Feb 1, 2012 6,700 6,045 · WWC establishes a policy that it will sell inventory at $165 per unit. In January, WWC received a $5,200 advance for 40 units, as reflected in Unearned Revenue. • WWC's February 1 inventory balance consisted of 45 units at a total cost of $3,825. . WWC's note payable accrues interest at a 12% annual rate. • WWC will use the FIFO inventory method and record COGS on a perpetual basis. February Transactions Included in WWC's February 1 Accounts Receivable balance is a $1,500 account

Please help me make the following:

Required:

1-a.	Prepare all February journal entries and adjusting entries. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Answer 1

Wally's Widget Company Journal Enteries Particulars 1.2.2012 Note Receivable a/c Dr. To Accounts Receivable Debit in $ Credit in $ 1500 I 1500 2.2.2012 900 Insurance expense a/c Dr. To Cash 900 11250 5.2.2012 Inventory a/c Dr. To Accounts Payable 11250 5.2.2012 Dr. 450 Freight in a/c To Cash 450 19800 10.2.2012 Accounts Receivable a/c Dr. To Sales 19800 Dr. Cost of goods sold a/c To Inventory 9450 1 9450 5200 15.2.2012 Unearned Revenue a/c Dr. To Sales 5200 Dr. 3000 Cost of goods sold a/c To Inventory 3000 2500 15.2.2012 Sales Return a/c Dr. To Accounts Receivable 2500

Date Particulars Inventory a/c Dr. To Cost of goods sold Debit in $ Credit in $ 750 750, Dr. 2500 16.2.2012 Wages expense a/c To Cash 2500 11250 17.2.2012 Accounts Payable a/c Dr. To Cash To Purchase discount 11025 225 18.2.2012 Allowance for doubtful accounts a/c Dr. Bad debts a/c Dr. To Accounts Receivable 1750 100 1850 19.2.2012 | Accounts Payable a/c Dr. Rent expense a/c Dr. To Cash 3000 3000 6000 19.2.2012 Cash a/c Dr. Sales discount a/c Dr. To Accounts Receivable 9570 130 9700 570 26.2.2012 Accounts Receivable a/c Dr. To Allowance for doubtful accounts 570 570 Cash a/c Dr. To Accounts Receivable 570 800 27.2.2012 Utility expense a/c Dr. To Utility payable 800 Dr. 650 28.2.2012 Dividend a/c To Cash 650 Adjusting Enteries Date Particulars 29.2.2012 Salary expense a/c Dr. To Salary payable Debit in $ Credit in $ 2500 2500 417 29.2.2012 Bad debt a/c Dr. 417 To Allowance for doubtful accounts (16450) * 0.06 - 570 = 417 Allowance for doubtful accounts = 1750-1750+570 = 570 29.2.2012 Interest expense a/c Dr. 145 To Interest payable 14500 * 12% * 1/12 145 11.25 29.2.2012 Interest Receivable a/c Dr. To Interest income 1500 * 0.09 * 1/12 11.25

Closing Enteries Date Particulars 29.2.2012 Income Summary a/c Dr. To Cost of goods sold To Sales Return To Insurance expense To Wages expense To Purchase discount To Bad debts To Rent expense To Sales discount To Utility expense To Salary expense To Freight in To Interest expense Debit in $ Credit in $ 24917 11700 2500 900 2500 -225 517 3000 130 800 2500 450 145 Dr. 29.2.2012 Sales a/c Interest Income a/c Dr. To Income Summary 25000 11.25 25011.25 94.25 29.2.2012 Income Summary a/c Dr. To Retained Earnings 94.25 Dr. 650) 29.2.2012 Retained Earnings a/c To Dividends 650

Purchase Cost of Merchandise sold Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Quantity Date 1.2.2012 5.2.2012 Inventory Unit Cost Total Cost 85 3825 3825 11250 75 5625 150 75 11250 45 85 10.2.2012 75 75 3825 5625 3000 75 35 75 2 625 75 7 50 15.2.2012 15.2.2012 10 29.12.2012 Purchases 75 3375 3375 12000 Ending Inventory COGS Returns 12450 -750 11700