College Coasters is a San Diego-based merchandiser specializing in logo-adorned drink coasters. The company reported the following balances in its unedjusted trial balance at December 1 . The company buys coasters from one supplief. All amounts in Accounts Payable on December 1 are owed to that suppliee. The Inventory on December I consisted of 900 coasters, all of which were purchased in a batch on July 10 at a unit cost of $0.40 College Coasters records its inventory using perpetual inventory accounts and the FIFO cost flow method. During December, the company entered into the following transactions. Some of these transactions are explained in greater detaif below. a. Purchased 500 coasters on account from the regular supplier on 12/1 at a unit cost of $0.42, with terms of n/60. b. Purchased 800 coasters on account from the regular supplier on 12/2 at a unit cost of $0.45, with terms of n/60. c. Sold 1,600 coasters on account on 12/3 at a unit price of $100. d. Collected $910 from customers on account on 12/4 e. Paid the suppliler $1,280 cash on account on $2/18. t Paid employees $400 on 12/23, of which $290 related to work done in November and $110 was for wages up to December 22 . 9. Looded 90 coasters on a cargo ship on 12/31 to be delivered the following week to a customer in Kona, Hawali, The sale was made FOB destination with terms of n 60 . Other relevant information includes the following at 12/3t : h. College Coasters has not yet recorded $170 of office expenses incurred in December on account. 1. The company estimates that the equipment depreciates at a rate of $10 per month. One month of depreciation needs to be recorded. 1. Woges for the period from December 23-31 are $100 and will be paid on January 15 . k. The $540 of Prepaid Rent relates to a sx-month period ending on May 31 of next year. 1. The company incurred $800 of income tax but has made no tax peyments this year. m. No shrinkage or damage was discovered when the inventory was counted on December 31 , n. The company did not declare dividends and there were no transactions involving common stock. 1. The company estimates that the equipment depreciates at a rate of $10 per month. One month of depreciation needs to be recorded. J. Wages for the period from December 23-31 are $100 and will be paid on January 15. k. The $540 of Prepaid Rent relates to a six-month period ending on May 31 of next year. 1. The company incurred $800 of income tax but has made no tax payments this year, m. No shrinkage or damage was discovered when the inventory was counted on December 31 . n. The company did not declare dividends and there were no transactions involving common stock. Prepare the joumal entries to record the transactions (a) through (n). Review the accounts as shown in the General Ledger and Trial Balance tabs. (If no entry is required for a transaction/event, select "No joumal entry required" in the first account field.) Journal entry worksheet Purchased 500 coasters on account from the regular supplier on 12/1 at a unit cost of $0.42, with terms of n/60. Record the transaction. Note Enter debits before crecins. Each joumal entry is posted automatically to the general ledger. Use the drop-down button to view the unadjusted, adjusted, or post-closing balances. Notice the dropdown below that gives the options to select the unadjusted, adjusted or post-closing trial balance. The option you choose will be the values used to populate the income statement and balance sheet tabs. Choose the appropriate accounts to be reported on the income statement. Select the 'adjusted' from the dropdown, which will then populate the balances in those accounts from the trial balance. However, you will need to calculate and enter the amount of the net income or loss for the year ended December 31. Use the dropdowns to select the accounts properly included on the balance stfuet. The unadjusted, adjusted, or post-closing balances will appear for each account, based on your selection. However, you will need to enter the amount of the Equipment. (Net of accumulated depreciation), Common stock and Retained earnings as of December 31. a. Purchased 500 coasters on account from the regular supplier on 12/1 at a unit cost of $0.42, with terms of n/60. b. Purchased 800 coasters on account from the regular supplier on 12/2 at a unit cost of $0.45, with terms of n/60. c. Sold 1,600 coasters on account on 12/3 at a unit price of $1.00. d. Collected $910 from customers on account on 12/4. e. Paid the supplier $1,280 cash on account on 12/18. f. Paid employees $400 on 12/23, of which $290 related to work done in November and $110 was for wages up to December 22 . g. Loaded 90 coasters on a cargo ship on 12/31 to be delivered the following week to a customer in Kona, Hawail. The sale was made FOB destination with terms of n/60. Other relevant information includes the following at 12/31 : h. College Coasters has not yet recorded $170 of office expenses incurred in December on account. i. The company estimates that the equipment depreciates at a rate of $10 per month. One month of depreciation needs to be recorded W. Wages for the period from December 23-31 are $100 and will be paid on January 15 . k. The $540 of Prepaid Rent relates to a six-month period ending on May 31 of next yeat 1. The company incurred $800 of income tax but has made no tax payments this year. m. No shrinkage or damage was discovered when the inventory was counted on December 31. n. The company did not deciare dividends and there were no transactions involving common stock. Caloulate the inventory tumover ratio and days to sell, assuming that inventory was $360 on January 1 of this year. (Use 365 days a year. Round your intermediate calculations and final answers to 1 decimal place.)
