Question

On December 1, 2022, Windsor, Inc. had the account balances shown below. Debits Cash Credits Accumulated Depreciation-Equipment Accounts Payable $1,620 Accounts Receivable Inventory (2,700 x $0.60) Equipment 3,280 $4,850 4,050 1.620 19,000 $29,520 Common Stock Retained Earnings 9.000 15,620 $29,520 The following transactions occurred during December. Dec. 3 Purchased 3.700 units of inventory on account at a cost of $0.78 per unit. 5 Sold 4,100 units of inventory on account for $0.80 per unit. (It sold 2,700 of the $0.60 units and 1.400 of the $0.78.) 7 Granted the December 5 customer $80 credit for 100 units of inventory returned costing $50. These units were returned to inventory. 17 Purchased 2,000 units of inventory for cash at $0.90 each. 22 Sold 1,700 units of inventory on account for $1.02 per unit. (It sold 1,700 of the $0.78 units.) Adjustment data: 1. Accrued salaries and wages payable $430. 2. Depreciation on equipment $210 per month. 3. Income tax expense was $190. to be paid next year.

Answer 1

Windsor Inc. Journal Enteries Date Particulars 3.12.2022 Inventory a/c To Accounts Payable (Inventory on account) Dr. Debit in $ Credit in $ 3700 3700 3280 5.12.2022 Accounts Receivable a/c Dr. To Sales (Sales on account) 4100 x 0.80 3280 2712 2712 Cost of goods sold a/c Dr. To Inventory (To record cost of goods sold) ( 2700 x 0.60 ) + ( 1400 x 0.78) Dr 7.12.2022 Sales Return and allowances a/c To Accounts Receivable (Goods returned by customer) 80 50 Inventory a/c Dr. To Cost of goods sold (Cost of goods returned) 50 Dr. 1800 17.12.2022 Inventory a/c To Cash (Inventory for cash) 1800 1734 22.12.2022 Accounts Receivable a/c Dr. To Sales (Sales on account) 1700 x 1.02 1734 1326 Cost of goods sold a/c Dr. To Inventory (To record cost of goods sold) 1700 X 0.78 1326 Adjusting Enteries Date Particulars 31.12.2022 Salaries and Wages Expense a/c Dr. To Salaries and Wages Payable (Salaries and wages accrued) Debit in $ Credit in $ 430 430 Dr. 210 31.12.2022 Depreciation Expense a/c To Accum. Depre - Equip. (To record depreciation) 210 Dr. 190 31.12.2022 Income Tax Expense a/c To Income Tax Payable (Income Tax accrued) 190

Worksheet For the period ending 31.12.2022 Particulars Cash Accounts Receivable Inventory Equipment Accum. Depre-Equip. Accounts Payable Salaries and Wages Payable Income Tax Payable Common Stock Retained Earnings Sales Sales Return and allowances Cost of goods sold Salaries and Wages Expense Depreciation Expense Income Tax Expense Totals Unadjusted Adjustments Adjusted Debit in $ Credit in $ Debit in $ Credit in $ Debit in $ Credit in $ 3050 3050 8984 8984 3132 3132 19000 19000 1620 210 1830 6980 6980 430 430 190 190 9000 9000 15620 15620 5014 5014 80 3988 3988 430 430 210 210 190 190 38234 38234 830 39064 39064 80 830 5014 -80 Statement of Income For the period ending 31.12.2022 Sales Sales Return and allowances Net Sales Cost of goods sold Gross Profit Salaries and Wages Expense Depreciation Expense 4934 -3988 946 430 210 640 -190 Income Tax Expense Net Income 116 Statement of Retained Earnings For the period ending 31.12.2022 Beginning Balance Net Income 15620 116 15736

Amounts in $ Amounts in $ Balance sheet As at 31.12.2022 Assets Current Assets Cash Accounts Receivable Inventory Amounts in $ Amounts in $ Liabilities Current Liabilities 3050 Accounts Payable 8984 Salaries and Wages Payable 3132 15166 Income Tax Payable 6980 430 190 7600 Non Current Assets Equipment Accum. Depre - Equip. Totals Assets 19000 -1830 Shareholders Equity Common stock 17170 Retained Earnings 32336 Total Liabilities & Shareholders Eq. 9000 15736 24736 32336

FIFO Periodic Date 1.1.2022 3.12.2022 17.12.2022 Units 2700 3700 2000 8400 -2700 5700 Unit Cost Total Cost 0.6 1620 0.78 2886 0.9 1800 6306 -2346 COGS 3960 Closing Stk Closing Stock = 2700 +3700 - 4100 + 100+2000-1700 = 2700 Closing Stock Date Units 17.12.2022 2000 3.12.2022 700 2700 13 Unit Cost Total Cost 0.9 1800 0.78 546 2346 LIFO Periodic Date 1.1.2022 3.12.2022 17.12.2022 Units 2700 3700 2000 8400 -2700 5700 Unit Cost Total Cost 0.6 1620 0.78 2886 0.9 1800 6306 -1620 COGS 4686 Closing Stk Closing Stock = 2700 +3700 - 4100 + 100+2000-1700 = = 2700 Closing Stock Date Units 1.1.2022 2700 2700 Unit Cost Total Cost 0.6 1620 1620