Need help with the Journal Entries and Trial Balance.

June Transactions

1. $26,000 of vendor invoices were paid during June. These invoices had already been accrued

into accounts payable in May.

2. The Company received a shipment of shoes on June 12th. The invoice cost totaled $25,800

and the shipping costs were an additional $500. Both are expected to be paid in July.

3. The following invoices totaling $22,410 were also received and recorded (to be paid in July):

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- $4,360 for banners and other supplies related to the 10-K run (all expenses associated

with the 10-K are considered promotion expense).

- $2,200 for liability insurance expense for the month of June.

- $3,850 for utilities expense for the month of June.

- $12,000 for rent for the month of June.

4. June sales records indicate that $64,913 of products (e.g., running shoes, workout clothes,

etc.) were sold. These products had a cost of goods sold of $31,850. Of the sales, $54,913

were cash sales and $10,000 were sales on account.

5. On June 1

st Oregon City High School placed an order for shoes for cross-country season and

made full payment of $5,000. The sale had a gross margin of 50%. The School will take

delivery of half of the shoes in June and the other half in July.

6. Total June wages were $6,400 and associated payroll taxes were $415. Of the total payroll,

$5,000 was paid in June and the remainder will be paid in July. All of payroll taxes are to be

paid in July.

7. On June 15th, the Company paid an estimated federal income tax payment of $15,000.

Adjustments

Claudia also provided you the following information that she thought may be helpful in preparing

the year-end financial statements.

8. On April 30th, the Company had acquired new furniture for $3,000. It was incorrectly

entered in books as office supplies expense.

9. On October 1, 2019, "We be losin' Weight Loss & Running Club" had paid MSR $12,000

advance fee to provide coaching services for the end of 2019 and the first nine months of

2020. Claudia had been properly recording coaching revenue each month.

10. It is Company's policy to follow GAAP and record sales when the product is shipped. You

discover that a product which is scheduled to be shipped on July 1, 2020 was recorded as a

sale on June 30 (sale on account - no cash received). The amount of the sale and associated

cost of goods sold are $2,700 and $1,300, respectively.

11. The Company has determined that 100% of the receivables in its allowance for doubtful

accounts at May 31, 2020 will never be collected. In addition, bad debt expense has been

estimated at $403 for the current year.

12. The Prepaid Expense account includes a two-year renter's insurance policy purchased on

January 1, 2020 for $12,000. Claudia has been properly recognizing insurance expense each

month.

13. The building has a useful life of 30 years with no salvage value. The equipment has a useful

life of 10 years with an estimated salvage value is $2,250. Depreciation is provided using the

straight line depreciation method. Company policy requires that any equipment purchased

during the first year will receive a full year of depreciation in the year of acquisition. Claudia

has not recorded any depreciation expense during this fiscal year.

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14. Interest expense accrued for the month of June on its long-term debt is $895. Interest is

accrued every month and is paid at the beginning of each quarter (i.e. July). The company

also makes a principle payment at the beginning of each quarter in the amount of $3,200

(and has since the inception of the loan in 2016). All principle payments have been properly

paid.

15. On June 1st MSR declared a dividend of $800, to be paid on July 15, 2020.

16. A review of the accounts at year end revealed that fees runners had been paying throughout

the fiscal year for the 2020 run had been incorrectly recorded as goodwill. A total of $36,540

of fees had been collected so far this year.

17. The Company has yet to receive an invoice, but legal fees for fiscal 2020 have totaled

$3,000.

18. Claudia admittedly knows little about income taxes and has not recorded income tax expense

in fiscal 2020. She does know that prior years' taxes were properly paid and the CPA has

mentioned that the Company should use a tax rate of 30% for financial statement purposes.