Question

1. Javelina Unlimited's account balances on December 1, 2019 are as follows: Cash Account Recelvable Allowance for Doubtful Accounts Notes receivable Invesntory Prepaid insurance Office Supplies Iland Buildings Accumulated Depr-Building Equipment Accumulated Dept. Equip Patents Debit Credit S 7,800 S 12530 $ 740 S6,000 S 25.121 S 840 S 465 $ 74,350 S 66.580 S 21.400 $ 37,620 $ 11.480 S 25.000 Accounts Payable Uneamed Revenue Notes Payable Common Stock, No par Retained Earnings, Jan 1 Sales Revenue Cost of Goods Sold Sales Salaries Office Salaries Advertising Expense Utilities Expense Interest Revenue Interest Expense Debit Credit $ 38,750 4,000 $ 2.400 $ 165,000 $ 20,958 $ 36.833 $ 22.000 $6.200 5 4300 $ 1250 $ 1,845 $ 550 $ 210 During the month of December, the following transactions took place: Dec 1 Dec 3 Dec 4 Dec 7 Dec 9 Dec 11 Dec 13 Dec 15 Dec 17 Collected $5,000 on Account Receivable. Purchased $3,000 of inventory on credit (terms 2/10.n 30). Collected $1,500 on a note receivable ($1,450 principle, $50 interest) Recorded cash sales of $3,300. Cost of Inventory was $1,500. Paid for advertising $350. Purchased equipment for $15,000. Paid, $1,500 down, balance on a note. Paid for the inventory purchased on Dec 3 Purchased Office Supplies $300 Sold an old piece of equipment costing $10,000 for $2000. Related accumulated depreciation was $7,000 Made a sale of $5,000 on account. Cost of goods sold was $3,000. Paid 2020 insurance in advance $6,800 Paid sales salaries of $2.000 and office salaries of $1500. Dec 20 Dec 21 Dec 24 Required: 1. Prepare the joumal entries for the above transactions. 2. Post to general ledger T-accounts. (Yes - you need to do the T accts) 3. Prepare a trial balance for December 31, 2019 I

Answer 1

b.

a. Jorunal Entries Dr Cr Date Particulars Amount Amount 01-Dec-19 Dr $ 5,000 Cash To Accounts Receivable (Being Cash collected from receivables) $ 5,000 03-Dec-19 Dr $ 3,000 $ 3,000 Inventory To Accounts Payable (Being Inventory Purchased on credit 2/10 net 30 terms) 04-Dec-19 Dr $ 1,500 Cash To Note Receivable To Interest Revenue (Being cash collected from receivables inclusive of interest for delay of repayment) $ $ 1,450 50 07-Dec-19 Dr $ 3,300 Cash To Sales (Cash Sales accounted for) $ 3,300 09-Dec-19 Dr $ 350 Advertisment Expenses To Cash (Advertisment expenses paid in cash) $ 350 11-Dec-19 Dr $ 15,000 Equipment To Cash To Notes Payable (Being equipment purchased on credit down payment paid) $ $ 1,500 13.500 13-Dec-19 Dr $ 3,000 Accounts Payable To Cash To Cash Discount (Being Payables paid off after availing 2% discount on payment within the said 10 days) $ $ 60 2.940 15-Dec-19 Dr $ 300 Office Supplies To Cash (Office Supplies puchased) $ 300 Due to the absence of information it has been assumed that the above transaction has been settled in cash 17-Dec-19 Cash Accumulated Depreciation Loss on Sale To Equipment (Being equipment sold off at a loss) Dr Dr Dr $ $ 2,000 7,000 1,000 $ $ 10,000 20-Dec-19 Dr $ 5,000 Accounts Receivable To Sales (Credit Sales accounted for) $ 5,000 21-Dec-19 Dr $ 6,800 Prepaid Insurance To Cash (Insurance for 2020 paid in advance) $ 6,800 24-Dec-19 Dr Dr $ $ 2,000 1,500 Sales Salaries Office Salaries To Cash (Sales and office salaries paid in cash) $ 3,500

b. Relevant General Ledger T-Accounts Sales Date Particulars Amount Date Particulars Amount 01-Dec-19 07-Dec-19 20-Dec-19 45,133.00 Opening Balance Cash Accounts Receivable $ $ $ 36.833.00 3,300.00 5,000.00 31-Dec-19 Closing Balance $ 45,133.00 45,133.00 Cost of Goods Sold Date Particulars Amount Date Particulars Amount $ 01-Dec-19 07-Dec-19 20-Dec-19 Opening Balance Inventory Inventory $ $ 32,000.00 1,500.00 3,000.00 31-Dec-19 Closing Balance $ 36,500.00 36,500.00 36,500.00 Inventory Date Particulars Amount Date Particulars Amount 01-Dec-19 03-Dec-19 Opening Balance Accounts Payable $ $ $ 25.121.00 3,000.00 07-Dec-19 20-Dec-19 31-Dec-19 Cost of Goods Sold Cost of Goods Sold Closing Balance $ $ 1,500.00 3,000.00 23,621.00 28.121.00 28,121.00 Accounts Receivable Date Particulars Amount Date Particulars Amount 01-Dec-19 20-Dec-19 Opening Balance Sales $ $ 12,530.00 5,000.00 101-Dec-19 31-Dec-19 Cash Closing Balance $ $ 5,000.00 12,530.00 17,530.00 17,530.00 Notes Receivable Date Particulars Amount Date Particulars Amount 01-Dec-19 Opening Balance $ 6,000.00 04-Dec-19 31-Dec-19 Cash Closing Balance 1,450.00 4,550.00 $ 6,000.00 6,000.00 Interest Revenue Date Particulars Amount Date Particulars Amount 01-Dec-19 04-Dec-19 600.00 Opening Balance Cash $ $ 550.00 50.00 31-Dec-19 Closing Balance $ 600.00 600.00 Accounts Payable Date Particulars Amount Date Particulars Amount $ 38,750.00 Opening Balance Inventory $ $ 3.000.00 13-Dec-19 13-Dec-01 31-Dec-19 Cash Cash Discount Closing Balance 01-Dec-19 2,940.00 03-Dec-19 60.00 38,750.00 $ $ 41,750.00 41,750.00 Notes Payable Date Particulars Amount Date Particulars Amount 01-Dec-19 11-Dec-19 15,900.00 Opening Balance Equipments $ $ 2,400.00 13,500.00 31-Dec-19 Closing Balance $ 15,900.00 15,900.00 Cash Discount Date Particulars Amount Date Particulars Amount 13-Dec-19 Cash $ 60.00 31-Dec-19 Closing Balance $ 60.00 60.00 60.00 Equipments Date Particulars Amount Date Particulars Amount 01-Dec-19 11-Dec-19 11-Dec-19 Opening Balance Cash Accounts Payable $ $ $ 37,620.00 17-Dec-19 1,500.00 17-Dec-19 13,500.00 17-Dec-19 31-Dec-19 Cash $ Accumulated Depreciation - Equip. $ Loss on sale of Equipments $ Closing Balance $ 2,000.00 7,000.00 1,000.00 42,620.00 52,620.00 52,620.00

c.

Accumulated Depreciation - Equipments Date Particulars Amount Date Particulars Amount Opening Balance $ 11,480.00 17-Dec-19 31-Dec-19 Equipments Closing Balance $ $ 01-Dec-19 7,000.00 4,480.00 11,480.00 11,480.00 Loss on Sale of Equipments Date Particulars Amount Date Particulars Amount 17-Dec-19 Equipments $ 1,000.00 31-Dec-19 Closing Balance $ 1,000.00 1,000.00 1,000.00 Office Supplies Date Particulars Amount Date Particulars Amount 01-Dec-19 15-Dec-20 Opening Balance Cash $ $ 465.00 300.00 31-Dec-19 Closing Balance $ 765.00 765.00 765.00 Advertising Expenses Date Particulars Amount Date Particulars Amount 01-Dec-19 09-Dec-19 Opening Balance Cash $ $ 1.250.00 350.00 31-Dec-19 Closing Balance $ 1,600.00 1,600.00 1,600.00 Prepaid Insurance Date Particulars Amount Date Particulars Amount 01-Dec-19 21-Dec-19 Opening Balance Cash $ $ 840.00 6,800.00 31-Dec-19 Closing Balance $ 7,640.00 7.640.00 7,640.00 Sales Salaries Date Particulars Amount Date Particulars Amount 01-Dec-19 24-Dec-19 Opening Balance Cash $ $ 6,200.00 2,000.00 31-Dec-19 Closing Balance $ 8,200.00 8,200.00 8,200.00 Office Salaries Date Particulars Amount Date Particulars Amount $ 01-Dec-19 24-Dec-19 Opening Balance Cash $ 4,300.00 1,500.00 31-Dec-19 Closing Balance 5,800.00 5,800.00 5,800.00 Cash Date Particulars Amount Date Particulars Amount $ 01-Dec-19 01-Dec-19 04-Dec-19 04-Dec-19 07-Dec-19 17-Dec-19 $ $ Opening balance Accounts Receivable Note Receivable Interest Revenue Cash Sales Loss on sale of Equipments $ $ $ $ 7,800.00 5,000.00 09-Dec-19 1,450.00 11-Dec-19 50.00 13-Dec-19 3,300.00 15-Dec-19 2,000.00 21-Dec-19 24-Dec-19 24-Dec-19 31-Dec-19 Advertising Expenses Equipment Accounts Payable Office Supplies Prepaid Insurance Sales Salaries Office Salaries Closing Balance 350.00 1,500.00 2.940.00 300.00 6,800.00 2,000.00 1,500.00 4,210.00 $ $ $ $ $ $ 19,600.00 19,600.00

c. Trial Balance as on 31st December, 2019 Particulars Amount (Dr) Amount (Cr) $ $ 4,210 12,530 $ 740 $ 4,550 23,621 7,640 765 74,350 66,580 $ $ $ $ 21,400 $ 42,620 $ 4,480 $ 25,000 Cash Accounts Receivable Allowance for doubtful debts Notes Receivable Inventory Prepaid Insurance Office Supplies Land Buildings Accumulated Depreciation - Building Equipment Accumulated Depreciation - Equipments Patents Accounts Payable Unearned Revenue Notes Payable Common Stock Retained Earnings January 1 Sales Revenue Cost of Goods Sold Sales Salaries Office Salaries Advertisment Expenses Utlities Expenses Interest Revenue Interest Expense Cash Discount Loss on Sale of Equipments $ $ $ $ 38.750 4,000 15,900 1,65,000 20,958 45,133 $ 36,500 8,200 5,800 1,600 1,845 $ 600 $ 210 $ $ 60 $ 1,000 S 3,17,021 3,17,021 S $