Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Below is your chart of accounts: 101 Cash 102 Inventory 103 Prepaid Supplies 104 Accounts Receivable 105 Property, Plant & Equipment 201 Accounts Payable 202

Below is your chart of accounts:

101

Cash

102

Inventory

103

Prepaid Supplies

104

Accounts Receivable

105

Property, Plant & Equipment

201

Accounts Payable

202

Service Liability

203

Long-term Payables

301

Capital Stock

302

APIC (Additional Paid-In Capital)

303

Retained Earnings

401

Product Revenue

402

Service Revenue

501

COGS (Cost of Goods Sold)

502

Payroll Expense

503

Maintenance Expense

504

Supplies Expense

On 2/1/2018, the beginning balances for SCUBA were:

Beginning Balances

101

Cash

$10,000

102

Inventory

$45,000

103

Prepaid Supplies

$5,000

104

Accounts Receivable

$40,000

105

Property, Plant & Equipment

$100,000

201

Accounts Payable

$40,000

203

Long-term Payables

$80,000

301

Capital Stock

$50,000

302

Additional Paid-in Capital

$10,000

303

Retained Earnings

$20,000

$200,000

$200,000

The following is a list of transactions that occurred during February:

2/1/2018 Purchased $15,000 worth of regulators, buoyancy compensator devices, dive computers, masks, fins, dry suits, tanks, gas analyzers, and a variety of other parts for the technical service department. For the sake of simplicity, all can be categorized as inventory. The dive shop pays cash for 1/3 of the total, and uses vendor credit for the remaining 2/3 - payment terms are 2% 10 net 30 days. (Management has decided to book all A/P at gross, not net).

2/15/2018 Narcosis SCUBA Emporium received $10,000, upfront, for service work to be performed in the future on Hennepin County Search & Rescues diving gear.

2/20/2018 The dive shop sells a dry suit for $2,800, a regulator/BCD combo for $1,200, and two dive computers for $1,000. Total product sales are $5,000 cash. Narcosis SCUBA Emporium marks up their cost 200%; so the cost of their inventory (COGS) was $2,500.

2/28/2018 Narcosis SCUBA Emporium pays their two part-time employees monthly. Total payroll costs for February is $3,000 (disregard payroll taxes and other related liabilities).

Prepare journal entries for the transactions shown above (Journal Ref will be created by the student. Use whatever system you want in order to track each individual journal entry)

image text in transcribed

Account: Cash Account: Accounts Payable Account No. 101 Balance Debit Credit Account No. 201 Balance Debit Credit Date Post. Ref Debit Credit Date Post. Ref Debit Credit BEG BEG Account: Inventory Account: Service Liability Account No. 102 Balance Debit Credit Account No. 202 Balance Debit Credit Date Post. Ref Debit Credit Date Post. Ref Debit Credit BEG BEG Account: Prepaid Supplies Date Post. Ref Debit Account No. 103 Balance Debit Credit Account: Long-term Payables Date Post. Ref Debit Credit Credit Account No. 203 Balance Debit Credit BEG BEG Account: Capital Stock Account: Accounts Receivable Date Post. Ref Debit Credit Account No. 104 Balance Debit Credit Account No. 301 Balance Debit Credit Date Post. Ref Debit Credit BEG BEG

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting Practice And Principles

Authors: Jan Bebbington, M. Richard Laughlin, Robert H. Gray, Gray Dave

3rd Edition

1861527713, 978-1861527714

More Books

Students also viewed these Accounting questions