Question

Please do the T-account, and journal entry for the following question

1. SeBASS has total sales for the year of $2,115,000. Included in the total sales figure are $317,250 of cash sales. During the year, the firm received $1,130,000 of payments on account.
2. During the year, the firm determined that accounts totaling $4,900 were uncollectible. Moreover, a $1,000 receivable written off during the year was subsequently collected. The $1,000 is not included in cash collections in “A.” above.
3. SeBASS uses the allowance method to record bad debts. Specifically, the firm uses the percentage of receivables method to compute the allowance for doubtful accounts. For the year ended June 30, 2019, SeBass estimates the required allowance for doubtful accounts to be 10% of the gross accounts receivable balance at June 30, 2019.
4. SeBASS, Inc. purchased $1,100,000 of additional inventory on account during the year. The purchases are charged to accounts payable. Total payments made on account for the year were $1,007,000. Inventory at June 30, 2019 totaled $98,950.
5. SeBASS has an outstanding 2.5% note payable (in long-term debt) as of June 30, 2018. Interest is paid annually on June 30^th.
6. Abbee Company 4% Bonds were acquired at $300,000 face (par) value during fiscal 2017. The bonds pay interest semi-annually on January 1^stand July 1^st. SeBASS correctly classified the bonds as Available-for-Sale Securities (AFS).
7. On July 1, 2018, the SeBASS put a new roof on the administrative building. The cash cost of the new roof was $27,000 and is expected to add 6 years to the life of the building from the date of installation. The firm also repainted the exterior of the building. The cash cost of the painting, which the firm does every four years, was $7,000.
8. Annual liability insurance premiums are payable on January 1^stof each year. The premium amount paid in January 2019 was $36,000.
1. On April 1^st, SeBASS purchased Sales Building 4 costing $480,000. SeBass paid forty-five percent (45%) of the building’s cost in cash and issued a 3% 5-year note payable for the balance. The note requires annual interest payments. The expected life of the facility is 20 years, with no salvage value. SeBASS uses the straight-line method of depreciation. The book values (as of June 30, 2018) of other PP&E currently on the books (also with no salvage value) are as follows:

	Historical	Accumulated	Remaining
Asset	Cost	Depreciation	Life
Land	$   251,450	$             -	-
Sales Building 1	468,000	280,800	8
Sales Building 2	404,000	181,800	11
Sales Building 3	445,000	133,500	14
Administration Building	156,000	39,000	15
Total	$1,724,450	$ 635,100

10. Administrative and Sales employee wages of $260,000 were earned and paid during fiscal 2019. In addition, during July 2018, SeBASS paid wages owed from the prior year. Unpaid wages for Fiscal 2019, which will be paid in July 2019, amount to $24,900.
11. On June 30, 2019, SeBASS sold Sales Building 2 for $195000. The firm received payment in cash.

50. On June 30, 2019, the ABBEE 6% bonds have a fair market value of $305,900.

1000. During June 2019, SeBASS paid $19,500 cash to acquire its own shares. These shares were correctly classified as Treasury Shares.
14. During May 2019, SeBASS’s board of directors declared $31,500 of dividends. At June 30, 2019, the Dividend Payable account balance was $2,400.

Answer 1

Bank & Cash A/c Trade receivables A/c Sales A/c Credit Debit Bank & Cash 317,250 Debit CreditDebit Credit Trade Receivables 1,130,000 317,250 1,130,000 1,000 1,447,250 1,447,250 Sales 1,007,000 1,000 113,000 7,000 Doubt ful debts 4,900 195,000 36,000 Provision for doubt ful debts 4,900 260,000 Trade Receivables 1,000 19,500 10 Provision for doubt ful debts 1,000 29,100 525,250 1,252,500 1,131,000 114,000 1,447,250 12 Bank & Cash 1,000 Trade Receivables 1,000 Doubt ful debts Provision for doubt ful Allowance for doubtful accounts Credit Debit Debit CreditDebit Credit 15 C Allowance for doubtful acc 113,000 4,900 4,900 113,000 16 Trade Receivables 113,000 1,000 18 D Inventory 1,100,000 19 Trade payables 1,100,000 20 4,900 5,900 113,000 Trade payables 1,007,000 Bank & Cash 1,007,000 Invento Trade payables Interest income Credit Debit Debit CreditDebit Credit Cost of good sold 1,001,050 12,000 1,007,000 1,100,000 25 Inventory 1,001,050 1,100,000 1,001,050 26 27 E No information 28 1,007,000 1,100,000 29 1,100,000 1,001,050 1,100,000 12,000

30 F Bank & Cash 12,000 Interest income Abbe company 4% bond Depreciation Acc Dep PPE 32 Debit Credit Debit CreditDebit Credit 33 G Depreciation 4,500 opening balance 4,500 201,273 635,100 Acc Dep PPE 4,500 300,000 79,348 4,500 79,348 5,900 36 Painting exp 7,000 37 Bank & Cash 38 305,900 83,848 201,273 718,948 39 PPE 40 H Insurance Preimium 36,000 Painting exp Insurance Preimium Bank & Cash 36,000 Debit Credit Debit CreditDebit Credit 42 7,000 36,000 1,724,450 450,000 43 PPE 450,000 404,000 Bank & Cash 247,500 45 3% 5-year note payable 46 Depreciation 5,625 7,000 36,000 2,174,450 404,000 5,625 Acc Dep PPE 3% 5-year note payable Interest expenses Administrative and Sales 49 Depreciation 23,400 employee wages 50 Acc Dep PPE 23,400 Debit Credit Debit CreditDebit Credit Depreciation 20,273 247,500 260,000 20,273 52 Acc Dep PPE 1,856 24,900 Depreciation Acc Dep PPE 7,800 Depreciation 7,800 Acc Dep PPE 249,356 1,856 284,900

57 Interest expenses Unpaid wages Gain on Investment Loss on PPE Credit Debit 59 3% 5-year note payable Debit CreditDebit Credit 24,900 7,727 Buy back Share 5,900 Administrative and Sales e 260,000 Bank & Cash 260,000 63 64 Administrative and Sales e 24,900 65 Unpaid wages 24,900 24,900 7,727 5,900 67 K Bank & Cash 195,000 Buy back Shares Dividend exp Dividend payable PPE Credit Debit 404,000 Debit CreditDebit Credit Acc Dep PPE Loss on PPE 201,273 69 19,500 31,500 2,400 70 7,727 72 AX 5,900 Abbe company 4% bond 5,900 Gain on Investment 19,500 31,500 2,400 75 Buy back Shares 19,500 76 Bank & Cash 19,500 78 Dividend exp 31,500 79 Bank & Cash 29,100 80 Dividend payable 2,400 81