Case details

Mr.Junjam is an only owner of the Junjam Inc., which is registered at the beginning of the year. The company produces a budget-friendly device (an audio book player) that boasts excellent functionality and satisfying sound production. he developed it on his own and in the next quarter he wants to apply for a patent, but for now he is going to sell it through specially organized marketing events and in the online store.

At the end of March, 2020, he records journal entries and posts them to ledger accounts calculating totals, to prepare the unadjusted trial balance. He is not much experienced in accounting, so make some useful notes for an accountant that should be taken into account while preparing final statements.

His records are presented in the pic.

Name of Account Totals Amount Notes Cash Dt 258000 Cash Cr 159200 Capital Cr 160000 Placed for the period $76,000 of raw materials into production in the process of making goods. Special note: the company produced in January 1260 devices, in February 1280 and in March 1300 Materials purchased Dt 112000 devices. Sales Cr 96000 3840 devices sold for this period: 400 in January, 2100 in February and 1340 in March 6 machines have useful life of 5 years and their common estimated salvage value is $4,000 24000 Depreciation is provided using the straight line Equipment Dt depreciation method. Land Dt 8000 Land Cr 4000 Delivery service prepaid Dt 5000 Carriage on purchase of raw materials for the Year 2020 Paid for the Event agency to organise presentations of products. One event took place on St. Valentine's, Direct marketing campaigns Dt 2000 the second is scheduled in July on Mother's day Prepaid insurance was paid for the months January - Factory Insurance prepaid Dt 4600 June, 2020. Utilities Dt 80 Internet shop fee prepaid Dt 1100 Prepaid fee (all services included) was paid for the Year 2020 Audit fees Dt 20 Paid quarterly after the draft presentation Wages Dt 3000 Machines operators, 6 persons Factory supervisor's salary Dt 1000 Accounts Receivable Dt 1200 Accounts Receivable Cr 800