Question

On December 1, 2018, Jack Stone forms a merchandising company, named J-Mart and set up as a proprietorship, which earns income mainly by buying and selling shoe. Stone owns and manages the business. Here are the transactions which had occurred during December of 2018. On 12/1/18, Jack Stone personally invests $1,000,000 cash in J-Mart and deposits the cash in a bank account opened under the name of J-Mart 1. On 12/1/18, J-Mart paid $48,000 for rent for 2-years (24-months, December 2018 through December 2020). J-Mart recorded the expenditure 2. Prepaid Rent on as 12/1/18. 3. On 12/1/18, J-Mart paid $2,400 for insurance for 1-year (12-months, December 2018 through December 2019). J-Mart recorded the expenditure as Prepaid Insurance on 12/1/18. J-Mart borrowed $20,000 from First National Bank on December 1, 2018. The note bears interest at the annual rate of 6 % and is due to be repaid in half year with principal and interest. 5. J-Mart has three employees. It's employees earn $100 per day and is paid every two weeks on Friday. The first payday was 12/14/18, paid for the past 10 days work. The second payday Monday. From 12/28 until year-end is one working day. The employees will not be paid until Friday 1/11/19. Friday, 12/28/18. Year-end, 12/31/18, falls on a was C 6. On December 1, 2018, J-Mart purchased equipment for $68,000 cash. The equipment has an estimated useful life of five years (60 months) and J-Mart expects to sell the equipment at the end of its life for $8,000 cash. 7. On December 1, 2018, J-Mart purchased $3,000 of supplies for office with cash J-Mart recorded the expenditures in the asset account, "Supplies." On December 31, 2018, account of the supplies indicated $1,500 on hand, so $1,500 of supplies were used during December. On December 2, J-Mart purchased $52,000 of merchandise inventory on account from ABC Co., credit terms are 8. 2/10, n/30. J-Mart purchased merchandise on terms of FOB shipping point. The transportation charge is $1,000. 9. On December 5, J-Mart purchased $80,000 of merchandise inventory on account from GG Co., credit terms are 2/10, n/30. J-Mart purchased merchandise on terms of FOB destination. The transportation charge is $1,000.

Answer 1

In the books of J-Mart:

Transaction / Event	Date	Account Titles	Debits	Credits
			$	$
1.	12/1/18	Cash	1,000,000
		J. Stone, Capital		1,000,000
2.	12/1/18	Prepaid Rent	48,000
		Cash		48,000
3.	12/1/18	Prepaid Insurance	2,400
		Cash		2,400
4.	12/1/18	Cash	20,000
		Notes Payable		20,000
6.	12/1/18	Equipment	68,000
		Cash		68,000
7.	12/1/18	Supplies	3,000
		Cash		3,000
8.	12/2/18	Merchandise Inventory	53,000
		Accounts Payable: ABC Co.		52,000
		Cash		1,000
9.	12/5/18	Merchandise Inventory	80,000
		Accounts Payable: GG Co.		80,000
10.	12/8/18	Accounts Payable: GG Co.	500
		Merchandise Inventory		500
11.	12/12/18	Accounts Payable: ABC Co.	52,000
		Merchandise Inventory		1,040
		Cash		50,960
12.	12/13/18	No journal entry required	0	0
13.		Accounts Payable: GG Co.	79,500
		Merchandise Inventory		1,590
		Cash		77,910
5.	12/14/18	Salaries Expense	3,000
		Cash		3,000
14.	12/15/18	Accounts Receivable	14,000
		Sales		14,000
14.	12/15/18	Cost of Merchandise Sold	8,500
		Merchandise Inventory		8,500
15	12/18/18	Accounts Receivable	50,000
		Sales		50,000
15	12/18/18	Cost of Goods Sold	29,000
		Merchandise Inventory		29,000
16.	12/20/18	Sales Returns and Allowances	2,000
		Accounts Receivable		2,000
16.	12/20/18	Merchandise Inventory	1,100
		Cost of Goods Sold		1,100
17.	12/21/18	J.Stone, Withdrawals	2,000
		Cash		2,000
18.	12/25/18	Cash	???
		Sales Discounts	???
		Accounts Receivable		14,000
19.	12/26/18	Cash	1,000
		Unearned Revenue		1,000
20.	12/27/18	Cash	???
		Sales Discounts	???
		Accounts Receivable		48,000
21.	12/27/18	Accounts Receivable	8,000
		Sales		8,000
21.	12/27/18	Cost of Goods Sold	2,500
		Merchandise Inventory		2,500
5.	12/28/18	Salaries Expense	3,000
		Cash		3,000
22.	12/29/18	Accounts Receivable	12,000
		Sales		12,000
22.	12/29/18	Cost of Goods Sold	7,000
		Merchandise Inventory		7,000
23.	12/29/18	Cash	8,000
		Sales		8,000
23.	12/29/18	Cost of Goods Sold	4,500
		Merchandise Inventory		4,500
24.	12/31/18	Utilities Expense	2,135
		Cash		2,135
25.	12/31/18	Bad Debt Expense	200
		Allowance for Doubtful Accounts		200
Adjusting Entries
a.	12/31/18	Salaries Expense	300
		Salaries Payable		300
b.	12/31/18	Rent Expense	2,000
		Prepaid Rent		2,000
c.	12/31/18	Insurance Expense	200
		Prepaid Insurance		200
d.	12/31/18	Interest Expense	100
		Interest Payable		100
e.	12/31/18	Depreciation Expense	1,000
		Accumulated Depreciation		1,000