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The following transactions occurred in a merchandising business that was incorporated in the month of October The numbers beside the transactions represent the day of the month the transaction occurred. The company is using a sales price per unit of $10. Assume the company uses FIFO as its cost flow assumption. There are no discounts (for sales or purchases) in this problem. 1. JOURNAL ENTRIES: Prepare an appropriate journal entry for each of the following transactions 1 1 1 2 The organization issued 2,000 shares of S10 par value common stock, they received $40,000 in cash. Purchased 300 units of inventory on account, S3.50 per unit. Paid cash to overnight ship the inventory, $450 total. Purchased a building with land for the business with a Periodic Payment Note, 20 year, 6%. In addition to the purchase price of $150,000, renovations to the building were included in the Note amount, the renovation cost 25,000. The land and building were independently appraised at S50,000 and S150,000, respectively 2Paid cash for the on account purchase of inventory (300 units on 10/1) 2 Office supplies were purchased from Office Supply Store on account $550 3 Purchased 150 units of inventory on account, $3.50 per unit. 3 Paid cash to ship inventory (3-day shipping), $150 total. 3 Sold 320 products to customers on account, sales price of $10 per unit. (Determine the cost of products based on inventory purchases and any related transactions) Office furniture was purchased with a 2 year Periodic Interest-Lump Sum Principle Note: 12% annual interest, payable semi-annually $5,750 4 5 Sold 75 products to customers for cash. 5 Purchased 250 units of inventory on account, negotiated a quantity discount - S3.25 5 Paid cash to ship inventory (3-day shipping), $250 6 Paid off all inventory account purchases (150 units on 10/3 & 250 units on 10/5) 7Received cash for previous sale on account (320 units on 10/3) 7Sold 120 products to customers on account. 9 Sold 100 products to a customer for cash. 15 Received cash for previous sale on account (120 units on 10/7) 15 Paid employees with cash, Gross-$2,100. Federal and State withholdings, 15% and 5%, r ectiv FICA 7.65%. Employer payroll taxes include FUTA-.8%, SUTA-5.4%, FICA match-7.65%. Purchased 350 units of inventory on account, negotiated a quantity discount - S3.40 Paid cash to ship inventory (5-day), S175 16 20 Sold 220 products to a customer on account. 26 Paid Office Supply Store (10/2) S550 28 Sold 100 products to a customer for cash. 29 Sold 50 products to a customer on account, 30 Paid employees with cash, Gross-$2,100. Federal and State withholdings, 15% and 5%, respectively FICA 7.65%. Employer payroll taxes include FUTA-.8%, SUTA-54%, FICA match-7.65%
