Need Help with the Journal Entries and Specific dates for each transaction. Thank you so much in advance

Harriets Hats, Inc.

Harriets Hats is a fictional company. The following information includes the balance sheet as of

December 31, 2021, and the details of the transactions that occurred during 2022.

Background: Harriets Hats is a hat retailer (in other words, Harriets buys hats from a hat

manufacturer and then sells them in their stores). Transactions for 2022 are representative of such a

companys business activities. HINT: Read through the entire assignment at least twice before

beginning to do any work. This will help you familiarize yourself with all of the important facts.

Transactions for 2022:

1. Sales and Accounts Receivable

a. Harriets hats during 2022 had a sales price of $159 per hat. All sales were made on

account.

b. Cash collections on account amounted to $2,147,350.

c. On July 1, 2022, Harriets identified $195,000 of receivables as being uncollectible and

wrote them off.

d. Harriets follows a percentage-of-receivables approach to estimate their accounts

receivable that will become uncollectible. As of the end of 2022, Harriets estimates that

20% of their receivables will be uncollectible.

2. Inventory

a. Harriets began 2022 with 4,300 hats which had a cost of $60 each. Employees physically

counted 7,585 hats remaining in the warehouse at the end of 2022. Harriets uses a

periodic LIFO inventory system to cost their inventory (HINT: use the Purchases asset

account instead of Inventory when recording the inventory purchases). The following

purchases (all on account) were made during 2022:

i. January 15th 5,850 hats @ $80.00 each

ii. March 22nd 10,100 hats @ $90.00 each

iii. August 5th 6,120 hats @ $95.00 each

iv. October 26th 3,515 hats @ $102.00 each

b. During 2022, Harriets made cash payments to inventory suppliers on the following dates:

i. January 29th $421,200

ii. April 16th $681,750

iii. October 2nd $581,400

iv. November 30th $179,265

3. Property, Plant and Equipment

a. Harriets uses straight-line depreciation for all of its store fixtures and office equipment.

b. Below is a schedule of the store fixtures and office equipment Harriets had in place at the

end of 2021.

FIXTURES AND EQUIPMENT (as of December 31, 2021)

ID # Historical

Cost

Estimated

Useful Life

Estimated

Salvage Value

Date acquired

1256 $144,000 12 years $0 Jan. 1, 2015

1876 $102,000 10 years $18,000 Jan. 1, 2016

4299 $156,000 8 years $8,000 Jan. 1, 2020

c. On January 1, 2022, new store fixtures were purchased for $98,000 in cash. Harriets

expects the fixtures to have a 10-year useful life and a $15,000 salvage value.

d. On April 1, 2022, office equipment (ID#1876) was sold for $42,000.

4. Debt

a. On August 1, 2022, Harriets paid-off the note payable that was outstanding at the

beginning of the period. The note had an 10% interest rate, had been issued on August 1,

2021, and required semiannual interest payments on Jan 31, 2022, and July 31, 2022.

b. On October 1, 2022, Harriets borrowed $205,000 on a new note payable. The new note

carries a 12% interest rate with semiannual interest payments required on March 31, 2023,

and September 30, 2023.

5. Operations

a. Harriets made a rent payment of $264,000 on August 1, 2022. The payment was for rent

on the store building and was prepaid for one year. The balance in the prepaid account at

the end of 2021 represents the rent for January through July 31, 2022, that was paid for on

August 1, 2021.

b. Cash paid out during 2022 for wages totaled $235,000. Records indicate that salaries for

the last week of December 2022 amounted to $39,000 and would be paid at the end of the

first week in January 2022 (a two-week pay period).

c. Other expenses (paid in cash) totaled $142,500.

6. Income Taxes

a. On March 15, 2022, Harriets paid their 2021 income taxes. Harriets will pay their 2022

income taxes on March 15, 2023. Harriets has a 35% income tax rate for both 2021 and

2022.

7. Common Stock

a. On December 1, 2022, dividends of $40,000 were declared and paid.

b. On January 1, 2022, Harriets issued 7,000 additional shares of common stock for $23 per

share.

Required:

1. Using the journal and T-accounts provided, record the transactions that occurred during 2022.

If no specific date is provided for a transaction, leave the date column blank. IMPORTANT:

Since there are several transactions for which no date is given, the journal entries do NOT

need to be in chronological order. All adjusting and closing entries should have December 31,

2022, as the date.

2. Prepare the balance sheet, statement of retained earnings, income statement, and statement of

cash flows (direct format) for Harriets Hats, Inc. for the year ended December 31, 2022.

3. Record the closing entries for the company (this step is often skipped, dont lose these points).

Check Figures:

Basic Earnings Per Share: $14.89 (rounded from $14.8887598)

Total Current Assets: $2,679,055

Total Stockholders Equity: $1,891,501

Net Cash from Operating Activities: $(555,265)

Assets

Cash $ 424,000

Accounts Receivable 1,285,000

Less: Allowance for Doubtful Accounts (257,000)

Net Accounts Receivable 1,028,000

Prepaid Rent 105,000

Inventory 258,000

Total Current Assets $1,815,000

Property, Plant, and Equipment 402,000

Less: Accumulated Depreciation (171,400)

Net Property, Plant, and Equipment 230,600

Total Assets $2,045,600

Liabilities and Stockholders' Equity

Accounts Payable $ 186,000

Wages Payable 27,000

Interest Payable 5,208

Income Taxes Payable 185,000

Notes Payable 125,000

Total Current Liabilities $ 528,208

Common Stock (10,000 shares outstanding, $1 par) 10,000

Additional Paid In Capital 150,000

Retained Earnings 1,357,392

Total Liabilities and Stockholders' Equity $2,045,600