Shamsud Ltd operates on a calendar year basis At the beginning of December 2016, the company had the following current liabilities on its books Accounts payable $82,600 Rent payable 10,100 Warranty provision 13,000 Unearned revenue 14,500 In December, the following events occurred 1 Shamsud purchased a new computer system on account at a cost of $28,700, payable on January 15, 2017 In addition to this, $4,200 was paid in cash to have the new system installed and customized to the companys requirements 2 The company purchased inventory for $96,900 on account and made payments of $90,300 to its suppliers 3 The rent that was payable at the beginning of December represented the payment that should have been made in November In December, Shamsud paid the past rent owed, as well as the rent for December and January 4 By December 31, the company had earned $4,500 of the service revenue that was received in advance from customers 5 Shamsuds employees are paid a total of $1,900 per day Three work days elapsed between the last payday and the end of the fiscal year (Ignore deductions for income tax, CPP, and EI ) 6 The companys products are sold with a two year warranty Shamsud estimates its warranty expense for the year (not previously recorded) as $16,000 During December, it paid $1,100 in warranty claims Prepare the journal entries to record the December transactions and adjustments (Ignore the amounts that the company pays for its share of CPP and EI ) the amount is entered Do not indent manually ) No Account and explanation Debit Credit 1 (To record purchase of inventory ) To record payment to suppliers ) 4 5 To record warranty expenses ) To record warranty payments )

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Aug 10, 2024

Shamsud Ltd. operates on a calendar-year basis. At the beginning of December 2016, the company had the following current liabilities on its books: Accounts payable

Shamsud Ltd. operates on a calendar-year basis. At the beginning of December 2016, the company had the following current liabilities on its books:

Accounts payable		$82,600
Rent payable		10,100
Warranty provision		13,000
Unearned revenue		14,500

In December, the following events occurred:

1.		Shamsud purchased a new computer system on account at a cost of $28,700, payable on January 15, 2017. In addition to this, $4,200 was paid in cash to have the new system installed and customized to the companys requirements.
2.		The company purchased inventory for $96,900 on account and made payments of $90,300 to its suppliers.
3.		The rent that was payable at the beginning of December represented the payment that should have been made in November. In December, Shamsud paid the past rent owed, as well as the rent for December and January.
4.		By December 31, the company had earned $4,500 of the service revenue that was received in advance from customers.
5.		Shamsuds employees are paid a total of $1,900 per day. Three work days elapsed between the last payday and the end of the fiscal year. (Ignore deductions for income tax, CPP, and EI.)
6.		The companys products are sold with a two-year warranty. Shamsud estimates its warranty expense for the year (not previously recorded) as $16,000. During December, it paid $1,100 in warranty claims.

image text in transcribed

Prepare the journal entries to record the December transactions and adjustments. (Ignore the amounts that the company pays for its share of CPP and EI.) the amount is entered. Do not indent manually.) No. Account and explanation Debit Credit 1. (To record purchase of inventory.) To record payment to suppliers.) 4 5. To record warranty expenses.) To record warranty payments.)