Question

8. Jan 1, 2018 McCalister Johnson invested Cash, $500,000; Equipment $300,000, Accounts Receivable; $20,000 and transferred notes payable of $50,000 to start McCalister Company, LLC. Jan 3, 2018 Purchased merchandise costing $60,000 from Joseph Company, term 3/10; n/30; FOB shipping point and McCalister Company paid a transportation charge of $4,000 Jan 4, 2018 Interviewed and entered into an agreement that Mr. Yellow should start working on January 15, 2018 at a salary of $6.000 a month. Jan 5, 2018 Returned $7,000 goods to Joseph company for defectiveness. Jan 6 Sold goods costing $10,000 to ABC at $25,000; term 4/15; n/30; FOB destination. McCalister Company paid $3,000 transportation charge. Jan 13, 2018 Paid the amount due to Joseph Company. Jan 14, 2018 ABC returned $5,000 goods sold to that company on January 6. The cost of the goods returned was $2,000. Jan 15, 2018, Mr. Yellow started working at a salary of $6,000 a month as promised. Jan 17, 2018 Collected the amount due from ABC company. Jan 30, 2018 Paid Mr. Yellow $2,000 of his salary and accrued the balance of $1,000 for the two weeks that he worked. Required: a) Prepare journal entries for the above transactions. hi Post your journal entries to the general ledger using the "T" shape format of accounts c) Prepare a trial balance.

Answer 1

a. In the books of McCalister Company, LLC :

Date	General Journal	Debit	Credit
		$	$
Jan 1, 2018	Cash	500,000
	Equipment	300,000
	Accounts Receivable	20,000
	Notes Payable		50,000
	Share Capital		770,000
Jan 3, 2018	Merchandise Inventory	64,000
	Accounts Payable		60,000
	Cash		4,000
Jan 4, 2018	No journal entry required	0	0
Jan 5, 2018	Accounts Payable	7,000
	Merchandise Inventory		7,000
Jan 6, 2018	Accounts Receivable	25,000
	Sales		25,000
Jan 6, 2018	Cost of Goods Sold	10,000
	Merchandise Inventory		10,000
Jan 6, 2018	Freight Out	3,000
	Cash		3,000
Jan 13, 2018	Accounts Payable	53,000
	Merchandise Inventory		1,590
	Cash		51,410
Jan 14, 2018	Sales Returns and Allowances	5,000
	Accounts Receivable		5,000
Jan 14, 2018	Merchandise Inventory	2,000
	Cost of Goods Sold		2,000
Jan 15, 2018	No journal entry required	0	0
Jan 17, 2018	Cash	19,200
	Sales Discounts	800
	Accounts Receivable		20,000
Jan 30, 2018	Salaries and Wages Expense	3,000
	Cash		2,000
	Salaries and Wages Payable		1,000

b.

Cash
Jan 1	500,000	Jan 3	4,000
Jan 17	19,200	Jan 6	3,000
		Jan 13	51,410
		Jan 30	2,000
Bal, Jan 31	458,790
Accounts Receivable
Jan 1	20,000	Jan 14	5,000
Jan 6	25,000	Jan 17	20,000
Bal, Jan 31	20,000
Merchandise Inventory
Jan 3	64,000	Jan 5	7,000
Jan 14	2,000	Jan 6	10,000
		Jan 13	1,590
Bal, Jan 31	47,410
Equipment
Jan 1	300,000
Bal, Jan 31	300,000
Accounts Payable
Jan 5	7,000	Jan 3	60,000
Jan 13	53,000
Bal, Jan 31	0
Notes Payable
		Jan 1	50,000
		Bal., Jan 31	50,000
Salaries and Wages Payable
		Jan 30	1,000
		Bal, Jan 31	1,000
Share Capital
		Jan 1	770,000
		Bal, Jan 31	770,000
Sales
		Jan 6	25,000
			25,000
Cost of Goods Sold
Jan 6	10,000	Jan 14	2,000
	8,000
Sales Returns and Allowances
Jan 14	5,000
	5,000
Sales Discounts
Jan 17	800
Jan 31	800
Freight Out
Jan 6	3,000
	3,000
Salaries and Wages Expense
Jan 30	3,000

c.

McCalister Company Trial Balance January 31, 2018
Account Titles	Debit	Credit
	$	$
Cash	458,790
Accounts Receivable	20,000
Merchandise Inventory	47,410
Equipment	300,000
Accounts Payable		0
Salaries and Wages Payable		1,000
Notes Payable		50,000
Share Capital		770,000
Sales		25,000
Cost of Goods Sold	8,000
Sales Returns and Allowances	5,000
Sales Discounts	800
Freight Out	3,000
Salaries and Wages Expense	3,000
Totals	$ 846,000	$ 846,000