Prepare Journal Entries (60marks)

Q1(7marks)

Feb.10 Purchase inventory of $6,890 on account from a supplier. Terms were 2/10, n/EOM.

Feb.15 Received a $890 allowance for slightly damaged goods

Feb.19 Paid the supplier

Q2 (8marks)

Mar.3 sold $12,200 of goods on account, credit terms are 3/15,n/30. These goods costed the company $8,900.

Mar.9 negotiated a $2,200 allowance on the Mar.3 sale

Mar.23 received cash from the customer of the Mar.3 sale.

Q3 (14marks)

The reconciling items in the Bank Reconciliation are as follows:

EFT receipt from a customer $1,200

Bank service charge $100

NSF check $2,300

EFT payment a utility bill $,1,699

Establish a petty cash fund by writing a $3,000 check

The petty cash fund has $500 in cash and $2,400 in petty cash tickets (including office supplies 1,000, Entertainment Expense $1,400) Replenished the fund and recorded the expenditures.

Q4(6marks)

At the beginning of a year, the accounts of a company include the following:

Accounts Receivable---$145,000 Allowance for Bad Debts---$3,900

Wrote off accounts receivable as uncollectible debts: Company A--$1,900, Company B --$2,100, Company C--$1,500

Record bad debts expense based on the aging of accounts receivable method as follows:

	Age of accounts
Accounts receivable	1-30 days	31-60 days	61-90 days	Over 90days
$200,000	100,000	45,000	25,000	30,000
	1%	3%	10%	20%

Q5(11 marks)

Purchase a land, paying $70,000 cash plus a $500,000 note payable.

The original cost of a building is $850,000, The building is depreciated using straight-line method. The useful life is 20years. Residual value is estimated to be $50,000. Record the depreciation expense at the year end.

At the year end, disposed a Truck for $6,000 cash. Its original cost is $32,000, updated accumulated depreciation at the year beginning is $22,000. Record the disposal. The truck is depreciated using a double-declining balance method. Its useful life is 10 years. And no residual value is estimated.

Q6(8marks)

May1 Purchase a building costing $900,000 by signing a nine-month 8% note payable.

Dec.31 accrued interest on the note payable

Jan. 30 of the next year, paid the note payable plus interest at maturity.

Q7(6marks)

Issue 2,000,000 shares of $2 par value common stock at $10 per share

Declare a 10% stock dividend. Before the declaration, 50,000,000 shares of $2 par value common stock are outstanding. Market value at the time of declaration is $ 10 per share.