Question

The client's information is below: Tom Smith opened Smith's Computer Supply Warehouse on July 1, 2020. Tom sells computer supplies to businesses as well as consumers. During July, 2020, the following transactions occurred: 1) July 1 - Tom Smith purchased 1,000 common stock for $20,000 cash. 2) July 1 - Signed a 1-year lease on a warehouse and paid July rent in the amount of $1,000 3) July 1 - Purchased truck for $6,000, paying $3,000 cash and the balance on a note payable. The note payable is considered long term because it does not mature until December 31, 2023. 4) July 3-purchased computer supplies for $4,300 on account. These supplies represent inventory and a resource available to the company. 5) July 5 - purchased a one-year liability insurance policy effective July 1, 2020 for $6,000. 6) July 12-sold 2,500 of computer supplies to customer on account. The computer supplies had a cost of $1,000. Smith's Computer Supply Warehouse uses the perpetual inventory system 7) July 18 - paid $1,000 cash on amount owed on truck. $200 represents interest and $800 represents principal. 8) July 19-paid $2,800 on amount owed for computer supplies purchased on July 3. 9) July 20 - paid $800 cash for employee salaries. 10) July 22 - collected cash from customers billed on July 12. 11) July 25-sold $3,000 of computer supplies to customer on account. The computer had a cost of $ 1,200. Smith's Computer Supply Warehouse uses the perpetual inventory system 12) July 28 - paid gas and oil bill for the month on the truck in the amount of $200. 13) July 29-paid utility bill for warehouse in the amount of $250. 14) July 31 - paid a dividend to Tom Smith in the amount of $900. 15) July 31 - Collected $1.200 in advance from a customer for computer supplies to be delivered in August, 2020 Adjusting entry transactions: 1) Computer supplies sold but not yet bill to customers and uncollected at July 31 were $1,500 2) Depreciation on truck for the month of July was 5200 3) One-twelfth (1/12) of the insurance expired. (for the month of July) 4) An inventory count shows 52,000 of computer supplies on hand at July 31. 5) Accrued but unpaid employee salaries for the month of July 2020 were $600. MACRO Dro

Answer 1

Smith's Computer Supply Warehouse Journal Enteries Date Particulars 1.7.2020 Cash Common Stock (Common Stock issued) Debit in $ Credit in $ 20000 20000 1.7.2020 Rent Expense 1000 Cash 1000 (Rent paid) 1.7.2020 6000 Truck Cash 3000 3000 Note Payable (Truck purchased) 4300 3.7.2020 Computer Supplies Accounts Payable (Supplies on account) 4300 6000 5.7.2020 Prepaid Insurance Cash ( 1 year insurance) 6000 2500 12.7.2020 Accounts Receivable Sales (Sales made) 2500 1000 Cost of goods sold Computer Supplies (To record Cost of goods sold) 1000 200 800 18.7.2020 Note Payable Interest Expense Cash (Loan paid) 1000 2800 19.7.2020 Accounts Payable Cash (Creditors paid) 2800 800 20.7.2020 Salaries Expense Cash (Salary paid) 800 2500 22.7.2020 Cash Accounts Receivable (Cash fom debtors) 2500 3000 25.7.2020 Accounts Receivable Sales (Sales made) 3000 Cost of goods sold 1200 Computer Supplies (To record Cost of goods sold) 1200 200 28.7.2020 Gas expenses Cash (Expense paid) 200 250 29.7.2020 Utility Expense Cash (Expense paid) 250 900 31.7.2020 Dividend Cash (Dividend paid) 900 1200 31.7.2020 Cash Unearned Revenue (Advance from client) 1200

Adjusting Enteries Date Particulars 31.7.2020 Accounts Receivable Sales (Sales made) Debit in $ Credit in $ 1500 1500 200 31.7.2020 Depreciation Expense Accum.Depre - Truck (To record depreciation) 200 500 31.7.2020 Insurance Expense Prepaid Insurance (Insurance expired) 500 100 31.7.2020 Cost of goods sold Computer Supplies (To record Cost of goods sold) 100 600 31.7.2020 Salaries Expense Salaries Payable (Salary accrued) 600

Worksheet For the Month ending 31.7.2020 Unadjusted Adjustments Adjusted Debit in $ Credit in $ Debit in $ Credit in $ Debit in $ Credit in $ 7750 7750 3000 4500 2100 100 6000 500 5500 6000 6000 1500 2000 200 200 1500 1200 1500 1200 600 600 2800 2800 Particulars Cash Accounts Receivable Computer Supplies Prepaid Insurance Truck Accum.Depre - Truck Accounts Payable Unearned Revenue Salaries Payable Note Payable Common Stock Dividend Sales Cost of goods sold Rent Expense Salaries Expense Gas expenses Utility Expense Depreciation Expense Insurance Expense Interest Expense Totals 20000 20000 900 900 5500 1500 7000 100 2300 2200 1000 1000 800 600 1400 200 200 250 200 250 200 500 500 800 800 31000 31000 2900 2900 33300 33300

1.7.2020 1000 600 Cash 20000 1.7.2020 2500 1.7.2020 1200/5.7.2020 Salaries Payable 31.7.2020 600 600 3000 Bal. 22.7.2020 31.7.2020 6000 600 1000 18.7.2020 19.7.2020 20.7.2020 28.7.2020 29.7.2020 2800 800 3000 18.7.2020 Bal. Note Payable 2001.7.2020 2800 3000 200 250 3000 900 31.7.2020 Bal. 23700 7750 23700 20000 Common Stock 1.7.2020 20000 20000 Bal. 20000 2500 Accounts Receivable 12.7.2020 2500 22.7.2020 25.7.2020 30001 31.7.2020 1500 Bal. 7000 31.7.2020 Dividend 900 Bal. 900 900 4500 7000 900 3.7.2020 2500 Computer Supplies 4300 12.7.2020 25.7.2020 31.7.2020 Bal. 1000 1200 Sales 12.7.2020 25.7.2020 7000 31.7.2020 7000 3000 1500 Bal. 100 2000 4300 7000 4300 12.7.2020 Cost of goods sold 1000 1200 5.7.2020 500 Prepaid Insurance 6000 31.7.2020 Bal. 6000 25.7.2020 31.7.2020 100 Bal. 5500 6000 2300 2300 2300 1.7.2020 1.7.2020 Truck 6000 Bal. 6000 Rent Expense 1000 Bal. 1000 1000 6000 6000 1000 Accum.Depre - Truck 31.7.2020 Salaries Expense 800 200 20.7.2020 31.7.2020 Bal. 600 Bal. 1400 200 2001 200 1400 1400 4300 Accounts Payable 19.7.2020 2800 3.7.2020 Bal. 1500 43001 Gas expenses 28.7.2020 200 Bal. 2001 200 4300 200 Unearned Revenue 31.7.2020 1200 1200 Utility Expense 29.7.2020 250 Bal. Bal. . 250 1200 1200 250 250