Question

Joey Juno began a web-based computer sales and service company on October 1, 2015 called Juno's Toys Inc. The plan is to prepare monthly adjustments so that financial statements can be done each month. The following information is available for October, 2015 (assume a perpetual inventory system). October 1 Joey invested $10,000 cash along with $9,000 of computer equipment into his new business in exchange for 900 shares. The equipment is estimated to have a useful life of 3 years and have no value after that time. 1 Purchased 7 months worth of insurance for $1,300 cash, the insurance is effective immediately. 1 Sold merchandise to John Smith that cost $2,800 for $3,600; terms 1/15, n30. 1 $22,000 of merchandise was purchased from Vision Consulting Inc. on account; terms 1/10, n30. 2 Bought $400 of office supplies, paid cash. 2 Sold merchandise to John Smith that cost $5,200 for $6,200 cash. 4 The customer of October 1, 2015 returned $1,000 of their purchase due to defects, the returned merchandise will not be returned to inventory. 6 Bought used office furniture for $1,800 cash. It is estimated that the business will use the furniture for 5 years and then donate it to a charity 6 Collected the balance owing regarding the October 1, 2015 sale. 8 Purchased $10,000 of merchandise inventory from Stake Technology Inc.; terms 1/10, n30; FOB shipping point. 9 Received the October 8, 2015 purchase and paid cash of $200 for shipping. 13 Paid for the merchandise purchased from Vision Consulting Inc. on October 1, 2015 15 Paid for the merchandise purchased from Stake Technology Inc. on October 8, 2015. Additional information available at month end, October 31: • A count of the office supplies showed a balance on October 31 of $100. • The merchandise inventory was counted and there was a balance on hand at October 31 of $23,050. • The October utility bill arrived from Epcor Utility Company, the $600 balance owing must be paid by November 15, 2015. Please make sure your final answer(s) are accurate to 2 decimal places. Enter an appropriate description when entering the transactions in the journal. Dates must be entered in the format dd/mmm (ie. January 15 would be 15/Jan). For each journal entry, indicate how each account affects the balance sheet (Assets, Liabilities, Equity). Use + for increase and for decrease. For example, if an account decreases equity, choose '-Equity'. Prepare the journal entries based on the transactions that occurred from October 1 to October 31. Also, record the six adjusting entries for the month ended October 31 based on the additional information and a review of the October transactions.

Answer 1

Answer:

Journal Entries

Date	Particulars	LF	Debit	Credit
Oct 1	Accounts Receivable		3600
	Sales Revenue			3600
	To record sale of merchandise on credit,1/15, n30
Oct 1	Cost of goods sold		2800
	Merchandise inventory			2800
	To record cost of merchandise sold to John Smith
Oct 1	Merchandise Inventory		22000
	Accounts payable			22000
	To record purchase of merchandise on credit, 1/10, n30
Oct 2	Merchandise Inventory: Office Supplies		400
	Cash			400
	To record purchase of office supplies
Oct 2	Cash		6200
	Sales Revenue			6200
	To record sale of merchandise for cash
Oct 2	Cost of goods sold		5200
	Merchandise Inventory			5200
	To record cost of merchandise sold to John smith
Oct 4	Sales Return		1000
	Accounts Payable			1000
	To record defect in item returned
Oct 6	Merchandise Inventory: Used Office furniture		1800
	Cash			1800
	To record purchase of used office furniture
Oct 6	Sales Return		3600
	Sales Allowance			1000
	Cash			2600
	To record sales defect goods and cash returned
Oct 8	Merchandise inventory		10000
	Accounts Payable			10000
	To record purchase of merchandise inventory on credit, 1/10, n30
Oct 9	Merchandise Inventory		200
	Cash			200
	To record the payment of shipping charges)
Oct 13	Accounts Payable		22000
	Cash			22000
	To record payment for merchandise purchased
Oct 15	Accounts Payable		10000
	Merchandise Inventory (10000*1%)			100
	Cash (10000-100)			9900
	To record payment of merchandise less discount