Question
The following information has been given by Put Put Inc. The information covers an accounting period from January 1 st December 31 st of its
The following information has been given by Put Put Inc. The information covers an accounting period from January 1st December 31st of its second year in operation.
Balance Sheet of accounts as of Jan 1st
Accounts Payable $75,000
Accounts Receivable $125,000
Accumulated Depreciation Display Cases $20,000
Allowance for Uncollectable Accounts $10,000
Cash $850,000
Common Stock $700,000
Merchandise Display Cases $200,000
Inventory (12,000 putters x $50/putter) $600,000
Note Payable (Due in 3 years) $200,000
Retained Earnings $720,000
Wage Payable $50,000
Business Activity, Inventory Purchases --- Jan 1st Dec 10th
Feb 1st
Bought 5,000 putters at $52/putter; payment made in cash
May 1st
Bought 9,000 putters at $55/putter; payment made in cash
Aug 1st
Bought 8,000 putters at $58/putter; payment made in cash
Nov 1st
Bought 4,000 putters at $60/putter; payment made in cash
Other Business Activity, Jan 1st Dec 10th
Sold 35,000 putters at $150/putter
Of the above, $2,000,000 were credit sales, the remaining were cash sales
Put Put Inc. Collected $1,950,000 of the credit sales
$15,000 of the Accounts Receivable was written off as bad debt
Operating Expenses - $2,500,000, paid in cash
The Operating Expenses account included interest paid on the Note Payable
The Operating Expenses account does not include any amount for Uncollectible Accounts Expense or Depreciation Expense.
No changes in the following accounts: Accounts Payable, Common Stock, Merchandise Display Cases, Note Payable, Wage Payable
Other Information
Income Tax Rate 30%
Periodic LIFO has been adopted to account for inventories
The Aging Method is used to account for account receivables
Put Put Inc. States that the AFUA account should have a balance of $20,000 after the adjusting journal entry has been made.
Depreciation Method Straight Line, No Residual Value
QUESTION:
1. Prepare all journal entries that would be made given the activity of the business between January 1st and December 10th. No adjusting journal entries are to be made at this time.
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