FIFO INVENTORY ADJUSTING JOURNAL ENTRY STUDY PROBLEM 1 BEGINNING ACCOUNT BALANCES: 1. Cash 200,000 2. Accounts Receivable 300,000 3. Inventory (10,000 units $20 each) 200,000 4. Prepaid Insurance 24,000 5. Equipment 500,000 6. Accumulated Depreciation 100,000 7. Accounts Payable 150,000 8. Note Payable 250,000 9. Common Stock 300,000 10. Retained Earnings ? Current Transactions: TRANSACTIONS: Quantity Unit Cost or SP 1. Invested additional $100,000 in business 2. Purchase Inv 10,000 $25 3. Purchase Inv 10,000 $30 4. Cash Sale 20,000 $100 5. Purchase Inv 30,000 $32.50 6. Sale on Account 10,000 $100 7. Sale on Account 20,000 $100 8. Purchase Inv 30,000 $40 9. Sale on Account 10,000 $100 10. Cash Sale 20,000 $100 11. Purchased new insurance policy on July 1 for $36,000 as old policy expired 12. Paid salaries expense, $2,000,000 13. Salaries Accrued at year end $200,000 14. Equipment was purchased last year and has a 5-year life with no salvage value, make adjusting entry for depreciation expense 15. Record adjusting entry for insurance expense 16. Paid rent expense $1,000,000 17. Paid $$1,200,000 on accounts payable 18. Collections 19. Paid dividends $200,000 20. Collections in advance for James Hardin special edition shoe 2,000 pairs $200 each 21. Purchased James Hardin special edition shoe for $50 each (since this is a special item, pace on separate inventory table 22. A total of 1500 customers picked up James Hardin special edition ( two entries required) REQUIRED: 1. Post beginning balances to T-accounts 2. Record current transactions 3. Post to ledger 4. Prepare trial balance 5. Prepare income statement 6. Prepare statement of retained earnings 7. Prepare balance sheet 8. Prepare closing entries