Record Journal entries for the month ended June 30th 2015(adjusting entries are provided)
Chart of Accounts: No. Account Cash Accounts Receivable No. 101 106 Account Guiding Revenue Store Sales 403 404 Fly Rod Inventory Supplies for guides Prepaid Insurance Prepaid Rent Trucks Rafts Accumulated Depreciation - Accumulated Depreciation- Accounts Payable Wages Payable Interest Payable Unearned Guiding Revenue Notes Payable Common Stock, $5 par value Retained Earnings Dividends 119 125 128 131 153 155 163 165 201 210 212 236 240 307 318 319 COGS Depreciation Expense - Trucks Depreciation Expense Rafts Wages Expense Interest Expense Insurance Expense Rent Expense Supplies Expense Advertising Expense Telephone Expense Repairs Expense Income Summary 502 613 615 623 633 637 638 652 655 677 684 901 The following is a list of transactions for CB's Fly Shop in June. If no entry is required - write "No Entry" in the General Journal. June 1 C. Brown, his family, and friends all invest $70,000 cash in the corporation, in exchange for 14,000 shares of common stock ($5 par value). 1 Received and paid the bill for a two-year premium for insurance, $12,240. 1 Borrowed $25,000 for Alpine Bank, promising to pay back the principal on June 1, 2021 and interest (6%) monthly on July 1. Using the money borrowed from Alpine Bank, Brown bought two rafts, $6,000 each (total $12,000) and a truck, valued at $12,500 paying cash for all three. 2 3 Rented a shop and paid rent for the first 3 months, $3,600. Signed a contract to take the staff at CMC on 2 days worth of float trips over the summer. CMC paid $5,000 up-front for the float trips. Bought 6 fly rods, on account from Winston FlyRod Company for $1200. (Debit Inventory - fly rods). Bought 1200 flies on account from FlyDeals, $300 (Debit Supplies). June 4 5 Hired two employees - one head guide and a shop manager. The head guide will be paid $1000/wk and the shop manager makes $15/hr. Took a client on a guided float trip down the Roaring Fork and received $500 for the trip. Sold two fly rods to a customers for $1600 cash. (Note: CB FlyShop uses a perpetual inventory system). 7 10 Took a group of 5 clients on guided fishing trips, float trip income for these trips totaled $2,500 which was paid in cash. 15 Received and paid for a bill for advertising in the Post Independent - $60. 17 Paid the bill from Winston FlyRod company. 18 Took one of the rafts to Alpine Rafting to fix a tear in the floor. Alpine made minor repairs on the raft and sent CB FlyShop an invoice for $200. (Hint: Debit repair expense). 19 Paid the head guide for his first two weeks of work. 19 The shop manager has worked 30 hours since starting and was paid on June 19. 22 A client purchases a fly rod ($800) and goes on a float trip. The client doesn't have any cash on hand but promises to pay the shop for both the trip ($450) and the fly rod next month. 24 Took half of the CMC employees on the first float trip. 27 Received and paid the telephone bill, $150. 28 Paid Alpine Rafting on account, $200. 29 Paid investors $200 in dividends. Additional Information: a) Record the adjusting entry for insurance expense. b) The truck is expected to last 5 years and have a salvage value of $1500. (The Fly Shop uses Straight-line depreciation) c) The rafts are expected to have a useful life of 3 years and have no salvage value. d) The head guide and the shop manager work a 7 day work week starting on Saturdays and are paid every two weeks on a Friday. The last day of the month falls on a TUESDAY. The shop manager worked 35 hours from June 19 to the end of the month. e) Record the adjusting entry for rent expense. f) An inventory of flies (Supplies) showed $150 on hand at month end. g) Record the interest payable for the first month
