Part A: Jelly World, Inc., is a purveyor of artisan jellies and is known for its high quality merchandise. The business started up in January 2015 and has been quite successful. Complete the Journal Entries for all 2019 transaction and adjustment information listed below. You do not have to date your journal entries. Be sure to sum the debit and credit columns to confirm they balance. The first journal entry has been completed for you. (15 points-graded for accuracy and format, including proper use of Excel spreadsheet links and formulas) There is no Check Figure for Part A. 5 5 s Transaction and Adjustment Data: 7 1 Collected the $28,250 of accounts receivable due to them at year end 2018. 3 2 Paid the $297,899 owed on account at year end 2018. 3 Paid the interest of $24,975 that was payable at year end 2018. 4 Made a payment on the mortgage note of $11,000. 1 5 Paid $5,292 to renew their annual insurance policy on March 1, 2019. 2 6 Made a payment on the long-term note of $83,000. 7 Issued 1,600 shares of Common Stock on March 1, 2019 for $10 per share. 1 8 Paid the taxes owed of $49,885 at year end 2018. 9 Purchased additional Furniture & Equipment on April 1, 2019 costing $64,440 due to increased shipping activities for their growing online presence. - 10 Purchased inventory during the year that cost $1,678,222. The company owed $396,430 on these purchases at year end 2019. 11 Purchased a new computerized sales system on June 30, 2019 for $74,600 in cash. The system has a useful economic life of 4 years and will be depreciated monthly using the straight line method. The system has a salvage value of $8,000. 12 Sales of artisan jellies for 2019 were $2,645,320. At December 31, 2019, $52,832 of this amount was still listed as receivable. 13 The total cost of the goods sold during 2019 was $1,689,576. 14 Supplies inventory of $4,860 was purchased with cash during 2019. Total supplies inventory of $806 was still on hand at year end 2019. 15 Total Salaries Expense for the year was $137,242 and total interest expense was $20,745. Salaries of $7,058 and interest of $20,745 are still payable at year end 2019. 3 1 3 5 16 Depreciation expense needs to be recorded on ALL buildings, furniture and equipment, and the new computer system at year end 2019. All items are depreciated on a monthly basis using straight line depreciation. The building has a useful life of 30 years and the furniture and equipment is depreciated over 5 years--there is no salvage value on the buildings or the furniture and equipment. As noted above, the new sales system has a useful life of 4 years and has a salvage value of $8,000. UTU TUJU JUIVUS VUIULUI YUUUU. The Prepaid Insurance and the Supplies Inventory need to be adjusted at year end 2019 so that the proper amount for insurance expense and supplies expense is recorded. See items 5 and 14 for details. (If you adjusted the supplies in #14, do not do it again) 18 Estimated income tax payable amounts for 2019 equaling $80,500 were paid during the year as they became due. 19 The company paid out cash dividends totaling $3,000 to its shareholders. 20 The company determined that two customer accounts were not collectible, and wrote off $634 on December 31. 21 The company believes that 2% of ending Accounts Receivable is a reasonable estimate of its Allowance for Doubtful Accounts balance. The Company uses the allowance method to record bad debts. 22 Tax expense is 21% of Income before Income Tax. Background Information: The Balance Sheet for December 31, 2018 is presented here to provide you with the beginning balances needed for your T-Accounts. Jelly World, Inc. Balance Sheet December 31, 2018 Assets $ Current Assets Cash Accounts Receivable Allowance for Doubtful Accounts Merchandise Inventory Supplies Inventory Prepaid Insurance Total Current Assets 443,437 28,250 (565) 1,207,665 677 824 1,680,288 Property, Plant, and Equipment Land Furniture and Equipment Accumulated Depreciation--Furniture and Equipment Buildings Accumulated Depreciation--Buildings Net Property, Plant, and Equipment 145,500 22,500 (15,000) 630,000 (63,000) 720,000 Total Assets 2,400,288 Liabilities and Stockholders' Equity Current Liabilities Accounts Payable Interest Payable Taxes Payable Total Current Liabilities 297,899 24,975 49,885 372,759 Long-term Liabilities Mortgage Note Payable Note Payable Total Long-term Liabilities 320,000 235,000 555,000 Total Liabilities 927,759 Stockholders' Equity Common Stock, 13,000 shares issued and outstanding, $10 par Retained Earnings Total Stockholders' Equity 130,000 1,342,529 1,472,529 Total Liabilities and Stockholders' Equity 2,400,288 - Part 8 1. Post the Journal Entries you made in Part A for Jelly World, Inc., to - the appropriate T-Accounts. Your T-Account entries must be properly linked to your Journal Entry amounts. The first journal entry has been - posted to the appropriate T-Accounts for you (15 points-graded for accuracy and format, including proper use of Excel spreadsheet links 12 Show calculations below your completed T-Accounts proving that 2 vour beainning and endina Accountina Equations balance. (3 points Check Figures: Ending Cash = $968,748; Total Ending Assets = $3,033,450. 5 NOTE: Make sure your Total Debits = your Total Credits in the T-Accounts! 31. T-Accounts Solution: Assets Liabilties Equity Cash Prepaid Insurance Accounts Payable Common Stock Cost of Goods Sold B 443 437 28.250 1 lalaries & Wages Expens Salaries Payable Retained Earnings Supoles Expense Building interest Payable Sales Revenue Insurance Expense Furniture & Equipment Bad Deat Expense Taxes Payable Accounts Receivable 28.250 28,250 1 Computerized Sales Syster Depreciation Expense Mortgage Note Payable Accum Depr-Bulding Interest Expense Alowance for Doubtful Accts Note Payable Tax Expense Accum Deor-Furn& Equip Merchandise Inventory mm Mmt in mmmm Accum Depr-Sales Systen Supoles Inventory 3 2 Accounting Equation Solution: Beginning Balance Assets Beginning Balance Liabilities Beginning Balance Equity Ending Balance Assets Ending Balance Liabilities Ending Balance Equity Net Income Bet Tax = Not Income =