Hello, I need some assistance with entering journal entries.Example 4

The Balance Sheet of Shears Inc. for the year ended March 31, 2019 is given below:

Assets

Cash

$30,000

Accounts Receivable

$38,000

Prepaid Rent

$6,000

Inventory

$40,000

Property, Plant & Equipment (PP&E)

Cost

$120,000

Accumulated Depreciation

($20,000)

$100,000

Total Assets

$214,000

Liabilities & Equity

Accounts Payable

$20,000

Unearned Revenues

$10,000

Income Tax Payable

$12,000

Stockholders' Equity

Contributed Capital

$150,000

Retained Earnings

$22,000

$172,000

Total Liabilities & Equity

$214,000

During the year ended March 31, 2020 the company had the following transactions:

1.Bought inventory on credit for $200,000.

2.Sold inventory for cash $60,000.The cost of the inventory sold was $40,000.

3.Sold inventory on credit $240,000.The cost of the inventory sold was $160,000.

4.Paid salaries of $30,000.

5.On January 1, 2020 the company borrowed $100,000 from a bank.The interest rate on the loan was 10% a year.Interest is payable semi-annually on June 30 and December 31.

6.The company delivered goods to a customer who had paid $10,000 in advance in March 2019.The cost of the goods delivered was $6,000.The company has no remaining obligation to this customer.

7.Received $220,000 from customers who had previously purchased on credit.

8.Paid $190,000 to suppliers for prior credit purchases.

9.Received $15,000 in advance from a customer on March 1, 2020.The company is scheduled to deliver goods to this customer on May 15, 2020.

10.Paid rent of $24,000 on September 1, 2019.The rent is for the 12-month period beginning on September 1, 2019.

11.The company paid $12,000 to the IRS for income taxes that were due for the previous year.

12.The company declared a dividend of $10,000 on March 29, 2020.The dividend will be paid on April 15, 2020.

Required:

Step 1:Open "T" accounts and bring down balances from the previous year.

Step2:Prepare journal entries for all explicit transactions.

Step 3:Post all journal entries to ledger accounts.

Step 4:Extract all ledger balances and prepare a trial balance.