Question

Hi, here is the problem! i just need help with the ones i got wrong! thank you!

E3-4 (Static) Identifying Expenses LO3-2, 3-3

Revenues are normally recognized when a company transfers promised goods or services to customers in the amount the company expects to be entitled to receive. Expense recognition is guided by an attempt to match the costs associated with the generation of those revenues to the same time period. Assume that the following transactions occurred in January:

1. McGraw-Hill Education uses $3,800 worth of electricity and natural gas in its headquarters building for which it has not yet been billed.
2. At the beginning of January, Turner Construction Company pays $963 for magazine advertising to run in monthly publications each of the first three months of the year.
3. Dell pays its computer service technicians $403,000 in salaries for the two weeks ended January 7. Answer from Dell's standpoint.
4. The University of Florida orders 60,000 football tickets from its printer and pays $8,340 in advance for the custom printing. The first game will be played in September. Answer from the university's standpoint.
5. The campus bookstore receives 500 accounting texts at a cost of $210 each. The terms indicate that payment is due within 30 days of delivery.
6. During the last week of January, the campus bookstore sold 400 accounting texts received in (e) at a sales price of $280 each.
7. Fucillo Automotive Group pays its salespersons $63,800 in commissions related to December automobile sales. Answer from Fucillo's standpoint.
8. On January 31, Fucillo Automotive Group determines that it will pay its salespersons $55,560 in commissions related to January sales. The payment will be made in early February. Answer from Fucillo's standpoint.
9. A new grill is received and installed at a Wendy's restaurant at the end of the day on January 31; a $12,750 cash payment is made on that day to the grill supply company. Answer from Wendy’s standpoint.
10. Mall of America (in Bloomington, MN) had janitorial supplies costing $3,500 in storage. An additional $2,600 worth of supplies was purchased during January. At the end of January, $1,400 worth of janitorial supplies remained in storage.
11. An Iowa State University employee works eight hours, at $23 per hour, on January 31; however, payday is not until February 3. Answer from the university's point of view.
12. Wang Company paid $4,800 for a fire insurance policy on January 1. The policy covers 12 months beginning on January 1. Answer from Wang's point of view.
13. Derek Incorporated has its delivery van repaired in January for $600 and charges the amount on account.
14. Hass Company, a farm equipment company, receives its phone bill at the end of January for $154 for January calls. The bill has not been paid to date.
15. Martin Company receives and pays in January a $2,034 invoice (bill) from a consulting firm for services received in January. Answer from Martin's standpoint.
16. Parillo's Taxi Company pays a $595 invoice from a consulting firm for services received and recorded in December.
17. PVH Corp., manufacturer of IZOD, ARROW, Van Heusen, Calvin Klein, and Tommy Hilfiger apparel among other brands, completes production of 450 men's shirts ordered by Macy's department stores at a cost of $16 each and delivers the order in January. Answer from PVH Corp.'s standpoint.

a Expense Account Affected Utilities expense Advertising expense Amount of Expense Incurred in January 3,800 321 201,500 Salaries expense 0 0 112,000 X $ 15,560 X None None Cost of goods sold None Commission expense None Supplies expense Wages expense Insurance expense Repairs expense Utilities expense Consulting expense None Cost of goods sold ooooooooooooooo Esta A 4,700 120 X 400 600 154 2,034 A A A q 4,500 X

Answer 1

F.

Cost of goods sold entry =
	Dr.	Cr.
Cost of goods sold	84000
Inventory		84000
Units sold	400 units
cost of purchase	$210
total cost	400*210=
	84000
therefore
Expense account impacted		COGS
Amount		$84,000

H.
	Commission amonunt for Jan sales	$55,560
	since the entire amount pertains to Jan sales, we will recognize complete amount as expense in January so entry
		Dr.	Cr.
	Commission expense	55,560
	Commissison payable		55,560
	Expense account impacted	Commission
	Amount		55,560

K
	Wage rate	$23 per hour
	hours worked	8 hours
	wages earned by the employee	23*8
	=	184
	entire wages amount will be expensed on Jan31
		Dr.	Cr.
	wages expense	184
	wages payable		184
	Expense account impacted	wages
	Amount		184

Q
	Cost of goods sold
	units sold	450
	price per unit	$16
	total cogs	450*16
		7200
	entry for cogs
		Dr.	CR.
	Cost of goods sold	7200
	inventory		7200
	Expense account impacted	COGS
	Amount		7200