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1 . Knockoff Corporation makes a videogame unit known as the Gii. During the month of June, the following transactions occurred. Record any necessary journal

1. Knockoff Corporation makes a videogame unit known as the Gii. During the month of June, the following transactions occurred. Record any necessary journal entries for ae.
a. Knockoff purchased $300,000 of raw materials inventory on account.
Account Title Debit Credit
Merchandise Inventory $300,000
Accounts Payable $300,000
b. The company incurs salary expense of $45,000, which will not be paid until the beginning of July.
Account Title Debit Credit
Salary Expense $45,000
Salary Payable $45,000
c. Knockoff owes the IRS and other government entities $120,000 in taxes.
Account Title Debit Credit
Income Tax Expense $120,000
Income Tax Payable $120,000
d. OK Buy places an advance order for Giis and pays Knockoff $23,000. The Giis will be shipped in July.
Account Title Debit Credit
Cash $23,000
Unearned Sales Revenue $23,000
e. Knockoff owes a local bank $4,000 in interest.
Account Title Debit Credit
Interest Expense $4,000
Interest Payable $4,000
f. If Knockoff has $800,000 in current assets, and all current liabilities are given in ae above, what is Knockoffs current ratio?
g. Knockoffs main competitor, PlayItAgain, has a current ratio of 2.1. You are trying to decide which company to invest in. Which current ratio do you prefer? Why?

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