Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please create the T-Accounts for the following. Below are the balances for the beginning of 2018 and activities that occurred during 2018. The firm uses

Please create the T-Accounts for the following.

image text in transcribedimage text in transcribedimage text in transcribed

Below are the balances for the beginning of 2018 and activities that occurred during 2018. The firm uses Weighted Average to determine its inventory costs. For each transaction record the journal entries and adjust the t-accounts. Then complete the financial statements. #ERROR! All beginning balances are the normal balances of the accounts. 2,040 112,870 54,000 389,560 170 3,830 300,000 2,500 766,950 54 Accounts Payable Accounts Receivable Accumulated Depreciation Additional Paid-In Capital Additional Paid-In Capital - Treasury Allowance for Doubtful Accounts Bond Payable Bond Discount Cash Common Stock: 100,000 authorized, 5,400 issued, and 5,336 outstanding Gift Card Liability Interest Receivable Inventory: 2,254 units @ $48 each Note Payable Note Receivable Prepaid Rent Property, plant, and Equipment Retained Earnings Stock Dividend Distributable Taxes Payable Treasury Stock: 32 shares @ $98 each 104201 0 108192 0 0 48000 68,000 349,574 3,136 1-Jan Sold vehicle, the only piece of property, plant and equipment, for $11,500 in cash. 15-Jan Purchase 890 units of inventory @ $46 per unit in cash. 12-Feb Sell 2,198 units of inventory @ $64 per unit on account. 1-Mar Customer purchases a $123,000 gift card in cash. 2% of gift cards are expected to go unused. 12-Mar Declares a small stock dividend of 300 shares. The stock has par value $0.01 and market value of $140. 13-Apr 29-Mar Record date for small stock dividend. Repays bond and accrued interest. The 5 year $300,000 bond with an 6% coupon rate paid quarterly was 31-Mar issued on April 1, 2013 for $250,000. Payment date for the small stock dividend of 300 new shares. The stock has par value $0.01 and market value of $140. 4-May Purchase 2,187 units of inventory @ $45 per unit on account. Firm converts $98,000 in accounts receivable into a note receivable due in 9 months with a 4% annual 1-Jul interest rate. The interest and the note will be collected on March 31, 2019. 12-Aug Writes -off $870 in accounts receivable. Purchased a new piece of equipment for $50,000, $40,000 of which is a long-term note and $10,000 of which is paid in cash. The equipment has a residual value of $5,000 and a 10 year useful life. The firm uses 1-Oct straight-line depreciation. The long-term note has a quarterly interest rate of 2.5%. The firm will make quarterly cash payments of $3,064. 12-Oct Sell 780 units of inventory @ $62 per unit. The customer used a gift card. 2% of gift cards are expected to go unused. Firm retires 20 shares of treasury stock. Shares were initially issued at $72 each, then bought back at $98 13-Nov each. The shares have a par value of $0.01. 15-Dec| Sell 520 units of inventory @ $68 per unit on account. 31-Dec Makes first cash payment of $3,064 on 2.5% quarterly interest rate $40,000 note payable. Year End Adjustments: Record interest on $98,000 note receivable issued on July 1, 2018 and due on March 31, 2019 with a 4% annual interest rate. 2 Record Rent. Rent for 2018 totaled $24,000 and was paid in 2017. 3 Record estimation of bad debt. 1% of credit sales are expected to be uncollectable. Record depreciation on equipment bought during the year. The equipment was purchased on October 1st 4 for $50,000. The equipment has an expected residual value of $5,000 and an expected useful life of 10 years. The firm uses straight-line depreciation. 5 Record taxes of $1,140 associated with revenues and expenses for 2017, although it has not yet ben paid. 6 Record the closing entry. 7 Record the closing of the stock dividend account. Below are the balances for the beginning of 2018 and activities that occurred during 2018. The firm uses Weighted Average to determine its inventory costs. For each transaction record the journal entries and adjust the t-accounts. Then complete the financial statements. #ERROR! All beginning balances are the normal balances of the accounts. 2,040 112,870 54,000 389,560 170 3,830 300,000 2,500 766,950 54 Accounts Payable Accounts Receivable Accumulated Depreciation Additional Paid-In Capital Additional Paid-In Capital - Treasury Allowance for Doubtful Accounts Bond Payable Bond Discount Cash Common Stock: 100,000 authorized, 5,400 issued, and 5,336 outstanding Gift Card Liability Interest Receivable Inventory: 2,254 units @ $48 each Note Payable Note Receivable Prepaid Rent Property, plant, and Equipment Retained Earnings Stock Dividend Distributable Taxes Payable Treasury Stock: 32 shares @ $98 each 104201 0 108192 0 0 48000 68,000 349,574 3,136 1-Jan Sold vehicle, the only piece of property, plant and equipment, for $11,500 in cash. 15-Jan Purchase 890 units of inventory @ $46 per unit in cash. 12-Feb Sell 2,198 units of inventory @ $64 per unit on account. 1-Mar Customer purchases a $123,000 gift card in cash. 2% of gift cards are expected to go unused. 12-Mar Declares a small stock dividend of 300 shares. The stock has par value $0.01 and market value of $140. 13-Apr 29-Mar Record date for small stock dividend. Repays bond and accrued interest. The 5 year $300,000 bond with an 6% coupon rate paid quarterly was 31-Mar issued on April 1, 2013 for $250,000. Payment date for the small stock dividend of 300 new shares. The stock has par value $0.01 and market value of $140. 4-May Purchase 2,187 units of inventory @ $45 per unit on account. Firm converts $98,000 in accounts receivable into a note receivable due in 9 months with a 4% annual 1-Jul interest rate. The interest and the note will be collected on March 31, 2019. 12-Aug Writes -off $870 in accounts receivable. Purchased a new piece of equipment for $50,000, $40,000 of which is a long-term note and $10,000 of which is paid in cash. The equipment has a residual value of $5,000 and a 10 year useful life. The firm uses 1-Oct straight-line depreciation. The long-term note has a quarterly interest rate of 2.5%. The firm will make quarterly cash payments of $3,064. 12-Oct Sell 780 units of inventory @ $62 per unit. The customer used a gift card. 2% of gift cards are expected to go unused. Firm retires 20 shares of treasury stock. Shares were initially issued at $72 each, then bought back at $98 13-Nov each. The shares have a par value of $0.01. 15-Dec| Sell 520 units of inventory @ $68 per unit on account. 31-Dec Makes first cash payment of $3,064 on 2.5% quarterly interest rate $40,000 note payable. Year End Adjustments: Record interest on $98,000 note receivable issued on July 1, 2018 and due on March 31, 2019 with a 4% annual interest rate. 2 Record Rent. Rent for 2018 totaled $24,000 and was paid in 2017. 3 Record estimation of bad debt. 1% of credit sales are expected to be uncollectable. Record depreciation on equipment bought during the year. The equipment was purchased on October 1st 4 for $50,000. The equipment has an expected residual value of $5,000 and an expected useful life of 10 years. The firm uses straight-line depreciation. 5 Record taxes of $1,140 associated with revenues and expenses for 2017, although it has not yet ben paid. 6 Record the closing entry. 7 Record the closing of the stock dividend account

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting And Financial System Reform In A Transition Economy A Case Study Of Russia

Authors: Robert W. McGee, Galina G. Preobragenskaya

4th Edition

0387238476, 9780387238470

More Books

Students also viewed these Accounting questions