Problem 2-11 (Algo) Cash versus accrual accounting [LO2-9]

Selected balance sheet information for the Wolf Company at November 30, and December 31, 2021, is presented below. The company uses the perpetual inventory system and all sales to customers are made on credit.

		Nov. 30								Dec. 31
		Debits				Credits				Debits				Credits
Accounts receivable		9,800								2,800
Prepaid insurance		4,800								7,300
Inventory		6,800								5,800
Accounts payable						11,800								14,800
Salaries payable						4,800								2,800

The following cash flow information also is available:

1. Cash collected from credit customers, $78,000.
2. Cash paid for insurance, $4,800.
3. Cash paid to suppliers of inventory, $58,000 (the entire accounts payable amounts relate to inventory purchases).
4. Cash paid to employees for salaries, $9,800.

Required:

1. Determine the following for the month of December: 2. Prepare summary journal entries to record the months sales and cost of those sales.