Question
The following items were selected from among the transactions completed by Sherwood Co. during the current year: Mar. 1 Purchased merchandise on account from Kirkwood
The following items were selected from among the transactions completed by Sherwood Co. during the current year:
Mar. | 1 | Purchased merchandise on account from Kirkwood Co., $175,000, terms n/30. |
Mar. | 31 | Issued a 30-day, 6% note for $175,000 to Kirkwood Co., on account. |
Apr. | 30 | Paid Kirkwood Co. the amount owed on the note of March 31. |
Jun. | 1 | Borrowed $400,000 from Triple Creek Bank, issuing a 45-day, 5% note. |
Jul. | 1 | Purchased tools by issuing a $45,000, 60-day note to Poulin Co., which discounted the note at the rate of 7%. |
Jul. | 16 | Paid Triple Creek Bank the interest due on the note of June 1 and renewed the loan by issuing a new 30-day, 6% note for $400,000. (Journalize both the debit and credit to the notes payable account.) |
Aug. | 15 | Paid Triple Creek Bank the amount due on the note of July 16. |
Aug. | 30 | Paid Poulin Co. the amount due on the note of July 1. |
Dec. | 1 | Purchased equipment from Greenwood Co. for $260,000, paying $40,000 cash and issuing a series of ten 9% notes for $22,000 each, coming due at 30-day intervals. |
Dec. | 22 | Settled a product liability lawsuit with a customer for $50,000, payable in January. Accrued the loss in a litigation claims payable account. |
Dec. | 31 | Paid the amount due to Greenwood Co. on the first note in the series issued on December 1. |
Required: | |||||
1. | Journalize the transactions. Refer to the Chart of Accounts for exact wording of account titles. Assume a 360-day year. | ||||
2. | Journalize the adjusting entry for each of the following accrued expenses at the end of the current year (refer to the Chart of Accounts for exact wording of account titles):
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CHART OF ACCOUNTS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sherwood Co. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
General Ledger | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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. Journalize the transactions. Refer to the Chart of Accounts for exact wording of account titles. Assume a 360-day year. Scroll down to access page 12 of the journal.
PAGE 11
JOURNAL
ACCOUNTING EQUATION
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