ONLY DO THE JOURNAL

Jamukha Corporation prepares annual financial statements. The balance sheet at December 31, 2017, is presented below. Jamukha Corporation Balance Sheet December 31, 2017 Assets Cash Accounts receivable Allowance for doubtful accounts Inventory Prepaid insurance Equipment A/D- Equipment Liabilities and Stockholders' Equity Accounts payable Common stock ($1 par) Paid-in capital in excess of par - Common stock Retained earnings 66,750 10,000 190,000 134,115 18,250 39,175 (3,000) 84,000 7,440 375,000 (120,000) 400,865 400,865 During 2018 the following transactions occurred: 1. Purchased $111,500 inventory on account. Jamukha Corp. uses a perpetual inventory system. 2. Sales of $225,000, plus 5.6% sales tax, were made to customers on account. Cost of goods sold was $125,000. The company uses a perpetual inventory system. 3. 4. Received $45,000 cash down payment for orders that will be shipped next year. Issued 10 year, $75,000 face value, 4% bonds on July 1 at 102. The bonds were sold to yield an effective annual rate of 3.758218%, and they pay interest every January 1 and July 1. Collected $180,500 on account. 6. Paid general expenses of $70,250. Assume these were paid as incurred (debit expenses). 7. Paid $130,000 for amount due to supplier. 8. Paid the sales tax collected from customers to the State of Wisconsin. 9. On La On January 1, Jamukha Corp. sold for $106,000 cash equipment which originally cost $200,000. Accumulated depreciation for this equipment as of December 31, 2017, was $75,000. This transaction is exempt from sales tax. 10. Issued 1,250 shares of $100 par, 7% preferred stock for $200,000 cash. 11. Purchased equipment on July 1, 2018, for $225,000 cash. 12. Purchased 800 shares of Jamukha Corp. common stock from a disgruntled shareholder for $44 per share. 13. Recorded salaries and payroll taxes. Employee's gross salaries were $90,000. FICA tax was withheld at a rate of 7.65%. Federal income taxes (FIT) of $7,000 were withheld, and state income taxes (SIT) of $4,500 were withheld. The federal unemployment tax (FUTA) rate was 1%, and the state unemployment tax (SUTA) rate was 3.25%. No cash has been paid yet, so record all the amounts due in the appropriate payable accounts. 14. The paychecks and payroll taxes from entry #13 were paid. Adjusting Journal Entries: 15. Straight-line depreciation with an 14 year useful life and no salvage value is used for equipment purchased in previous years. The equipment purchased on July 1, 2018 (#11) is depreciated using double-declining balance with a useful life of 25 years and a $30,000 salvage value. (Hint: The equipment was purchased midway through the year.) 16. Accrue bond interest payable and amortize bond discount/premium. Jamukha Corp. uses effective-interest amortization. (Hint: The bond was issued midway through the year.) 17. The prepaid insurance relates to a policy purchased on December 31, 2017. This insurance expires at a rate of $225 per month. Record as a general expense. 18. Jamukha estimates that 5.5% of accounts receivable are uncollectible. 19. Jamukha Corp. is an S-corporation and is not subject to income tax. REQUIRED: Print out the solution pages for the general journal, ledger, and worksheet that follow and enter the following transactions. I suggest that you use a pencil. a. Enter the transactions numbered 1-14 in the general journal provided on the following pages. b. Post the journal entries to the ledger accounts for items 1-14. Look at the cash account for an example of how to use the running balance ledger. I have completed the first two lines of it for you. It is a good idea to keep track of whether your balance column is a debit or a credit, particularly for contra accounts. c. Prepare an unadjusted trial balance at December 31, 2018 and enter on the worksheet. d. Worksheet requirement: Using your unadjusted trial balance (c) above and the data for adjusting entries (#15-19), prepare a 12-column worksheet similar to the worksheet for Sierra Corporation in Chapter 4 and the prior extra credit assignments. You will not receive any credit if the worksheet is incomplete. To save time, you are not required to formally journalize or post your adjusting entries (you can just enter them on the worksheet). You are not required to record closing entries. e. Prepare a formal statement of cash flows using the T-account approach. Templates for the statement and the T-account worksheet are attached. (You are not required to formally present the other statements just complete them on the worksheet.) Journal: Requirement (a) General Journal Debit Credit a. 1. a. 3. a.4. a.5. a.6. a. 7. a. 8. a.9. a. 10. a. 11. a.12. a. 13. a.14. Jamukha Corporation prepares annual financial statements. The balance sheet at December 31, 2017, is presented below. Jamukha Corporation Balance Sheet December 31, 2017 Assets Cash Accounts receivable Allowance for doubtful accounts Inventory Prepaid insurance Equipment A/D- Equipment Liabilities and Stockholders' Equity Accounts payable Common stock ($1 par) Paid-in capital in excess of par - Common stock Retained earnings 66,750 10,000 190,000 134,115 18,250 39,175 (3,000) 84,000 7,440 375,000 (120,000) 400,865 400,865 During 2018 the following transactions occurred: 1. Purchased $111,500 inventory on account. Jamukha Corp. uses a perpetual inventory system. 2. Sales of $225,000, plus 5.6% sales tax, were made to customers on account. Cost of goods sold was $125,000. The company uses a perpetual inventory system. 3. 4. Received $45,000 cash down payment for orders that will be shipped next year. Issued 10 year, $75,000 face value, 4% bonds on July 1 at 102. The bonds were sold to yield an effective annual rate of 3.758218%, and they pay interest every January 1 and July 1. Collected $180,500 on account. 6. Paid general expenses of $70,250. Assume these were paid as incurred (debit expenses). 7. Paid $130,000 for amount due to supplier. 8. Paid the sales tax collected from customers to the State of Wisconsin. 9. On La On January 1, Jamukha Corp. sold for $106,000 cash equipment which originally cost $200,000. Accumulated depreciation for this equipment as of December 31, 2017, was $75,000. This transaction is exempt from sales tax. 10. Issued 1,250 shares of $100 par, 7% preferred stock for $200,000 cash. 11. Purchased equipment on July 1, 2018, for $225,000 cash. 12. Purchased 800 shares of Jamukha Corp. common stock from a disgruntled shareholder for $44 per share. 13. Recorded salaries and payroll taxes. Employee's gross salaries were $90,000. FICA tax was withheld at a rate of 7.65%. Federal income taxes (FIT) of $7,000 were withheld, and state income taxes (SIT) of $4,500 were withheld. The federal unemployment tax (FUTA) rate was 1%, and the state unemployment tax (SUTA) rate was 3.25%. No cash has been paid yet, so record all the amounts due in the appropriate payable accounts. 14. The paychecks and payroll taxes from entry #13 were paid. Adjusting Journal Entries: 15. Straight-line depreciation with an 14 year useful life and no salvage value is used for equipment purchased in previous years. The equipment purchased on July 1, 2018 (#11) is depreciated using double-declining balance with a useful life of 25 years and a $30,000 salvage value. (Hint: The equipment was purchased midway through the year.) 16. Accrue bond interest payable and amortize bond discount/premium. Jamukha Corp. uses effective-interest amortization. (Hint: The bond was issued midway through the year.) 17. The prepaid insurance relates to a policy purchased on December 31, 2017. This insurance expires at a rate of $225 per month. Record as a general expense. 18. Jamukha estimates that 5.5% of accounts receivable are uncollectible. 19. Jamukha Corp. is an S-corporation and is not subject to income tax. REQUIRED: Print out the solution pages for the general journal, ledger, and worksheet that follow and enter the following transactions. I suggest that you use a pencil. a. Enter the transactions numbered 1-14 in the general journal provided on the following pages. b. Post the journal entries to the ledger accounts for items 1-14. Look at the cash account for an example of how to use the running balance ledger. I have completed the first two lines of it for you. It is a good idea to keep track of whether your balance column is a debit or a credit, particularly for contra accounts. c. Prepare an unadjusted trial balance at December 31, 2018 and enter on the worksheet. d. Worksheet requirement: Using your unadjusted trial balance (c) above and the data for adjusting entries (#15-19), prepare a 12-column worksheet similar to the worksheet for Sierra Corporation in Chapter 4 and the prior extra credit assignments. You will not receive any credit if the worksheet is incomplete. To save time, you are not required to formally journalize or post your adjusting entries (you can just enter them on the worksheet). You are not required to record closing entries. e. Prepare a formal statement of cash flows using the T-account approach. Templates for the statement and the T-account worksheet are attached. (You are not required to formally present the other statements just complete them on the worksheet.) Journal: Requirement (a) General Journal Debit Credit a. 1. a. 3. a.4. a.5. a.6. a. 7. a. 8. a.9. a. 10. a. 11. a.12. a. 13. a.14