Porter Corporation's balance sheet at December 31 is presented below.

PORTER CORPORATION

Balance Sheet

December 31

Cash

$13,100

Accounts payable

$ 8,750

Accounts receivable

19,780

Common stock

20,000

Allowance for doubtful accounts

(800)

Retained earnings

12,730

Inventory

9,400

$41,480

$41,480

During January, the following transactions occurred. Porter uses the perpetual inventory method.

3

Porter wrote off as uncollectible the accounts of Elrich Corporation ($450) and Rios Company ($280).

8

Porter purchased $17,200 of inventory on account.

11

Porter sold for $25,000 on account inventory that cost $17,500.

17

Porter collected $22,900 from customers on account, assuming the collection is not eligible for any discount.

21

Porter paid $16,300 on accounts payable.

24

Porter received payment in full ($280) from Rios Company on the account written off on January 3.

27

Porter purchased advertising supplies for $1,400 cash.

Adjustment data:

1.

Bad debts are expected to be 6% of the January 31, accounts receivable.

2.

A count of advertising supplies on January 31, reveals that $560 remains unused.

Instructions

(a)

(You may want to set up T accounts to determine ending balances.)

(b)

Prepare journal entries for the transactions listed above and adjusting entries. (Include entries for cost of goods sold using the perpetual system.)