Question
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
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.)
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