SECTION D-JOURNAL ENTRIES (40 points) Seafood Restaurant Limited (SRL) is a popular private kitchen" restaurant specializing in Chinese seafood dishes. It has been in operation for many years. SRL uses the FIFO in-first-out) inventory cost assumption. A recent balance sheet for SRL showed the following numbers: Seafood Restaurant Limited Balance Sheet 31 December 2018 ASSETS LIABILITIES & OWNERS' EQUITY Cash 72,500 Accounts Payable 17,960 Accounts Receivable 8,651 Unearned Revenues 3,000 Allowance for uncollectable accounts (643) Interest Payable 800 Inventories (300kg*$10/kg) 3,000 Note Payable 40,000 Supplies 1,428 Share Capital 20,000 Notes Receivable 5.000 Retained Earnings 8,176 89,936 89,936 REQUIREMENT 1: Journalize the following transactions, all occurring during January, 2019 (no explanations necessary): (Hint: do the T-account analysis for Inventories and Allowance for Uncollectible Accounts) anuary 2: Purchase 100 kg of seafood for $12/kg inventory on account with payment terms 2019 (no explanations necessary! ! UUM Allowance for Uncollectible Accounts) January 2: Purchase 100 kg of seafood for $12/kg inventory on account with payment terms 5/8, n/20. No delivery or other charges are incurred. (2 points) January 3: Prepare and host a private wedding party. The price of the wedding party is $6,000, including $1,000 that was prepaid in December 2018. The customer pays half of the remaining balance and will pay the rest in February 2019. SRL used 250kg of seafood for the meal. (6 points) January 6: Pay $3,000 rent for the month of January in advance. (2 points) January 9: Pay for the purchase made on January 2. (3 points) January 18: Host a birthday dinner at the price of $3,000. Half of the price was prepaid in December. The remaining amount was settled in cash on the night of the dinner. 100kg of seafood was served during the meal. (5 points) January 25: Pay $2,300 to settle accounts payable. (2 points) January 31: A physical count reveals that there are only 40kg of seafood on hand (alive). Interest on the note receivable is 0.5% per month. An aging-of-receivables analysis reveal that the Amount of allowance for uncollectable accounts should be $600. The Note Payal was signed on November 1 at 12% interest rate per year. Record the adjusting entries needed for these transactions. (10 points) REQUIREMENT 2: Fill in the Income Statement for the month ending 31 January 2019. Ignore income taxes. (6 points) Seafood Restaurant Limited Income Statement Month ending 31 January 2019 Revenues Cost of Goods Sold Gross Profit Interest revenue Bad Debt Expense Rent Expense Interest Expense Net Income 8
