! Required information [The following information applies to the questions displayed below] Wally's Widget Company (WWC) 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: es 4,650 Cash $19,520 Unearned Revenue (25 units) $ Accounts Receivable Allowance for Doubtful Accounts $10,550 Accounts Payable (Jan Rent) $1,900 13,000 $(1200) Notes Payable 5,600 $ $ 2100 Contributed Capital Inventory (30 units) Retained Earnings - Feb 1, 2012 5,820 $ wWC establishes a policy that it will sell inventory at $165 per unit In January, WWC received a $4,650 advance for 25 units, as reflected in Unearned Revenue wwC's February 1 inventory balance consisted of 30 units at a total cost of $2.100. .wwC's note navahle accrues interest at a 12% anniual rate Prey 1 of 1 Next wWC's note payable accrues interest at a 12 % annual rate . wWC will use the FIFO inventory method and record COGS on a perpetual basis February Transactions Included in WWC's February 1 Accounts Receivable balance is a $1,500 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 8% annual interest The principal and all interest will be due and payable to WWC on August 1, 2012 wwC paid a $800 insurance premium covering the month of February. The 02/02 amount paid is recorded directly as an expense. ces 02/05 An additional 170 units of inventory are purchased on account by wWC for $12,750-terms 2/15, n30 wwC paid Federal Express $340 to have the 170 units of inventory delivered 02/05 overnight. Delivery occurred on 02/06 Sales of 140 units of inventory occurred during the period of 02/07 02/10. The sales terms are 2/10, net 30. The 25 units that were paid for in advance and recorded in January are delivered 02/10 02/15 to the customer 15 units of the inventory that had been sold on 2/10 are returned to wWC. The 02/15 units are 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 weeks wages to the employees. The total paid is $2,800. Paid in full the amount owed for the 2/05 purchase of inventory. WWC records 02/17 purchase discounts in the current perlod rather than as a reduction of inventory costs. 02/18 Wrote off a customer's account in the amount of $1,200. VU0 TvIOLC UII a LusiU CI3 OLLUUIL 1 UrC auvuLUI D1,Vw $3,800 of rent for January and February was paid. Because all of the rent will soon expire, the February portion of the payment is charged directly to expense. Collected $8,600 of customers' Accounts Receivable. Of the $8,600, the 02/19 discount was taken by customers on $6,500 of account balances; therefore 02/19 wwC received less than $8,600. wwC recovered $460 cash from the customer whose account had previously been written off (see 02/18) 02/27 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 $600 cash dividend. 02/26 ook rences Adjusting Entries: 02/29 Record the $2,800 employee salary that is owed but will be paid March 1. wwC decides to use the aging method to estimate uncollectible accounts. WWC 02/29 determines 8 % 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-e. Prepare all February journal entries and adjusting entries. (If no entry is required for a traisaction/event, select "No Journal Entry Required" in the first account field.) Required information 1-b. Post all February entries (transactions and adjustments) to the T-accounts Cash Accounts Receivable Beg bal Beg bal ok -nces End bal 0 End bal Inventory Allowance for Doubtful Accounts Beg bal. Beg bal. Required information AIlowance Tor uoubtrurACCOunts Inventory Beg bal Beg bal k mces End. bal. End bal. Notes Receivable Interest Receivable Beg bal Beg bal End. bal End bal Accounts Payable Unearned Revenue Beg bal Beg bal Beg. bal. Beg bal End. bal. End. bal. nces Accounts Payable Unearned Revenue Beg bal. Beg bal End. bal. End bal. Wages Payable Interest Payable Beg bal Beg bal End bal End. bal Wages Payable Interest Payable Beg. bal. Beg bal ook ences End. bal End bal Notes Payable Contributed Capital Beg ba Beg bal End bal End bal. Retained Earnings Dividends Declared Beg bal Beg bal Retained Earnings Dividends Declared Beg bal. Beg. bal. es End bal. End bal. Sales Revenue Sales Returns & Allowances Beg bal Beg bal End bal. End bal. Sales Discounts Cost of Goods Sold Beg bal Beg bal. Sales Discounts Cost of Goods Sold Beg bal. Beg bal. ok nces End. bal. End bal Interest Revenue Bad Debt Expense Beg bal. Beg. bal. End bal End. bal Insurance Expense Interest Expense Beg bal Beg bal Required informmation Insurance Expense Interest Expense Beg. bal. Beg bal End. bal. End. bal. ces Rent Expense Utility Expense Beg bal Beg bal End bal. End bal. Wages Expense Beg bal. 1-c. Prepare the financial statements at the end of February (Balance Sheet only, items to be deducted must be indicated with a negative amount.) wWC, Inc. ook Income Statement ences 0 S 0 Book erences wWC, Inc. Statement of Retained Earnings Retained Earnings, Beginning of Period Retained Earnings, End of Period www. Inc. Balance Sheet Assets k Liabilities Current Assets Current Liabilities nces Total Current Assets 0 Total Current Liabilities Total liabilities Ctnckhnldere Eault Required information Total Current Assets $ 0 Total Current Liabilities S 0 Total liabilities 0 Stockholders' Equity Total Stockholders' Equity 0 Total Assets 0 Total Liabilities and Stockholders' Equity Saved Help Required information Journal entry worksheet