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Required information [The following information apolles to the questions displayed below.) Wally's Widget Company ( WC) incorporated near the end of 2011. Operations began in

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Required information [The following information apolles to the questions displayed below.) Wally's Widget Company ( WC) incorporated near the end of 2011. Operations began in January of 2012. WwC prepares adjusting entries and financial statements at the end of each month. Balances in the accounts at the end of January are as follows: Cash Accounts Receivable Allowance for Doubtful Accounts Inventory (45 units) $ 2470 Unearned Revenue (40 units) $ 5,200 $12,200 Accounts Payable (Jari Rent $ 3,000 $(1750) Notes Payable $ 3,825 Contributed Capital Retained Earnings - Feb 14,500 $ 6.700 $ 6,045 2012 . WWC establishes a policy that it will sell inventory of $165 per unit In January, WWC received a $5,200 advance for 40 units, as reflected in Unearned Revenue WWC's February inventory balance consisted of 45 units at a total cost of $3,825 WWC's note payable accrues interest at a 12 annual rate Wwe will use the FIFO Inventory method and record COGS on a perpetual basis 1 1 23 pots 02/02 February Transactions Included in WWC's February 1 Accounts Receivable balance is a $1500 account due from Kit kat, a WWC customer. Kit Kat is having cash flow problems and 02/01 cannot pay its balance at this time. WWC arranges with Kit Kat to convert the $1,500 balance to a note, and Kit Kat signs a 6 month note, at 9% annual interest The principal and all interest will be due and payable to WWC on August 1, 2012. WWC paid a $900 Insurance premium covering the month of February. The amount paid is recorded directly as an expense. 02/05 An additional 150 units of inventory are purchased on account by wwc for $11,250 - terms 2/15,n30. wwc paid Federal Express $450 to have the 150 units of Inventory delivered 02/05 overnight Delivery occurred on 02/06 02/10 Soles of 120 units of inventory occurred during the period of 02/07 - 02/10. The 02/15 The 40 units that were sold for in advance and recorded in January are delivered to the customer 10 units of the inventory that had been sold on 2/10 are retumed to wwc. The 02/5 units we not damaged and can be resold Therefore, they are returned to Inventory Assume the units returned are from the 2/05 purchase 02/16 WWc pays the first 2 wees wages to the employees. The total pad is $2.500 Pald in ful the amount owed for the 2/05 purchase of inventory WwC records 02/17 purchase discounts in the current period rather than as a reduction of inventory costs 02/18 Wrote off a customer's account in the amount of $1850 02/19 $6,000 of rent for January and February was paid. Because all of the rent wit soon expire, the February portion of the payment is charged directly to expense Collected $9.700 of customers' Accounts Receivable of the $9700, the discount 02/19 was taken by customers on $6,500 of account balances therefore wWC received less than 59700 23 02/26 been written off (see 02/18) 02127 A $800 utility bill for February arrived. It is due on March 15 and will be paid then 02/28 WWC declared and paid a $650 cash dividend. Adjusting Entries 02/29 Record the $2.500 employee salary that is owed but will be paid March 1 WWC decides to use the aging method to estimate uncolectible accounts. WWC 02/29 determines 6% of the ending balance is the appropriate end of February estimate of uncollectible accounts 02/29 Record February interest expense accrued on the note payable 02/29 Record one month's interest earned Kit Kat's note (see 02/01) Required: 1. Prepare al February Journal entries and adjusting entries (if no entry is required for a transaction/event, select "No Journal Entry Required in the first account field) No Date Answer is complete but not entirely correct. General Journal Notes Receivable Accounts Receivable Credit Debit 1,500 1 Feb. 1 . 1,500 2 Feb. 2 3 900 Insurance Expense Cash 900 3 Feb. 11,250 inventory Accounts Payable 11,250 4 Feb. 6 Inventory Cash 450 450 Feb 100 Accounts Receivable Sales Revenue 19,800 . 19.800 6 Feb. 106 Cost of Goods Sold Inventory 9.338 2.338 7 Feb. 150 5,200 S Uneamed Revenue Sales Revenue 5,200 8 Feb. 156 3,060 Cost of Goods Sold inventory OO 3,060 9 Feb. 150 765 Inventory Cost of Goods Sold lo 765 10 Feb. 150 5,650 Sales Retums and Allowance Acoounts Receivable 1.650 11 Feb. 10 Wages Export 2.500 Cash 2,500 OOOO 12 Feb 17 11.250 Accounts Payable Inventory Cash 225 11,025 13 Feb 18 Allowance for Doubtful Accounts Accounts Receivable 1,850 1,850 14 Feb. 19a 3.000 Accounts Payable Rent Expense Cash OO 3,000 6,000 15 Feb. 196 Cash Sales Discounts Accounts Recivable polo 9,570 130 9,700 16 Feb 268 Accounts Receivable Allowance for Doubt Accounts 570 570 17 Feb 20 Cash Accounts Receivable 570 570 18 Feb 27 Uw Expense Accounts Payable 200 800 19 Feb 25 650 Dividends Declared Cash 650 20 Feb. 29 2,500 Wages Expense Wagen Payable 2,800 21 Feb. 296 1,130 Bad Debt Export Allowance for Doubtful Accounts 1.530 22 Feb. 29 145 Interest Expense Interest Payable 145 23 Feb. 290 11 Interest Recivable Interest Ravenue slo 11

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