Question

Record the journal entries for the following transactions during 2020

Bow AutoSave | OFF Review Data View Tell me Home Insert Draw Formulas Page Layout A A y Wrap Text Paste B TU Uv CA Merge & Center M B4 Xfx =E_3 1 K G L А с H B D E F 1 Entry Bowers Inc.'s transactions during 2020: 21 On Jan 1, Bowers Inc.pays cash of $1,605 towards their Accounts Payable. 382 On Jan 15, Bowers Inc. purchases $4,210 in supplies, on account 4 #on Feb 15, the company purchases 149 units of inventory for $1,070 each, half with accounts payable and the rest with cash. 5 Note: Bowers Inc. had 1 unit of inventory on hand at the beginning of the year. 644 On Apr 15, Bowers Inc. sells all but 5 units of inventory at a price of $2,600 each. Half are sold on account, the rest for cash. 75 On Apr 30, you record the use of 4 month's rent, which is the beginning balance in your prepaid rent account. On May 1. you pre-pay the next 12 months of rent. Your rent has increased $1,000 per month over your initial monthly payment. 9 27 On Dec 1. you collect $131,950 from customers related to previous sales 108 On Dec 31, you declare and pay dividends equal to 40% of the outstanding common stock value. 12 Bowers Inc.'s disting entries at December 31, 2020 13 BAL A count of supplies shows you have $2,950 supplies on hand at the end of the year. 14 A2 Perform an adjusting entry to account for any additional rent from May until year end 15 BAB Record depreciation on equipment, based on the original value. The expected life is 10 years, with no salvage value 16 A Record tax expense of $12,939, to be paid next April 17 * Based on the above transactions, complete your Income Statement and Balance Sheet. 19 Once the financial statements are prepared, perform closing entries 20 ct Close all revenue accounts to retained earnings 21 Close all expense accounts to retained earnings 22 C3 Cose all vidend accounts to retained earnings. 24 Steps & Rube Beg TB JES Ledger Adj TB

Answer 1

Solution

Journal

Date	Particulars		Debit	Credit
01/01/2020	Accounts Payable A/c Dr To Cah A/c (Payment made to accounts Payable)		$1605	$1605
15/01/2020	Purchase A/c Dr To Supplier A/c (Purchase on credit)		$4210	$4210
15/01/2020	Inventory A/c Dr ($1070*149 units) To Accounts Payable A/c To Cash A/c (Inventory purchased on cash and credit)		$159430	$79715 $79715
15/01/2020	Accounts Receivables A/c Dr Cash A/c Dr To Sales A/c (Inventory sold on cash and credit)		$188500 $188500	$377000
15/01/2020	Cost of goods slod A/c Dr To Finished goods Inventory (Changes in inventory accounts are Recorded)		$160,500	$160500
30/04/2020	Rent Expenses A/c Dr To Prepaid Rent  A/c (Prepaid Rent expired.Note: The amount data not given so we considered as $x)		$x	$x
01/05/2020	Prepaid Rent A/c Dr To Cash (Rent paid in advance. Note: Previous monthly rent amount is considered as ($x/4))		($x/4+$12000)	($x/4+$12000)
01/12/2020	Cash A/c Dr To Accounts Receivables (Previous sales amount collected)		$131950	$131950
31/12/2020	Retained Earnings A/c Dr To Dividends Payable (40% of the outstanding common stock value considered as dividend amount)
31/12/2020	Supplies on Hand A/c Dr To Accounts Payable (Supplies on hand at the end of the year)		$2,950	$2,950
31/12/2019	Depreciation A/c Dr To Equipement A/c (Depreciation Charged on eauipement. Amount not given)
31/12/2019	Reserve For Tax A/c Dr To Cash (Estimated Tax paid)		$12,939	$12,939