Wallys 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 monthBalances in the accounts at the end of January are as follows: Cash Accounts Receivable Allowance for Doubtful Accounts Inventory (30 units) $18,770 Unearned Revenue (25 units) $ 4,400 $9,800 Accounts Payable (Jan Rent) $ $ (950) Notes Payable 14,000 $ $ 2,400 Contributed Capital $5,100 Retained rnings-Feb 1 $5,120 2012 establishes a policy that it will sell inventory at $160 per unit. In January received a $4,400 advance for 25 units, as reflected in Unearned Revenue. WWCs February 1 inventory balance consisted of 30 units at a total cost of $ 2,400. WWCs note payable accrues interest at a 12% annual rate. will use the FIFO inventory method and record COGS on a perpetual basis. February Transactions Included in February 1 Accounts Receivable balance is a $1,600 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. arranges with Kit Kat to convert the $1,600 balance to a note and Kat signs a 6- month note, at 12% annual interest. The principal and all interest will be due and payable to WWC on August 1. 2012 02/02 paid a $550 insurance premium covering the month of February. The amount paid is recorded directly as an expense . 02/05 An additional 120 units of inventory are purchased on account by WwC for $9,000 - terms 2/15 n30. 02/05 WWC paid Federal Express $240 to have the 120 units of inventory delivered overnight. Delivery occurred on 02/06. Sales of 90 units of inventory occurred during the period of 02/07 - 02/10. The 02/10 sales terms are 2/10 10.net 30

[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: Cash $21,620 Unearned Revenue (30 units) $ . $12,650 Accounts Payable (Jan Rent) $ 3,300 Accounts Receivable Allowance for Doubtful Accounts Inventory (35 units) A $(1,900) Notes Payable $ 2,800 Contributed Capital 16,000 7,000 A A 2012 WWC establishes a policy that it will sell inventory at $180 per unit. In January, WWC received a $5,350 advance for 30 units, as reflected in Unearned Revenue. WWC's February 1 inventory balance consisted of 35 units at a total cost of $2,800. WWC's note payable accrues interest at a 12% annual rate. February Transactions Included in WWC's February 1 Accounts Receivable balance is a $1.400 account due from Kit Kat, a WWC customer. Kit Kat is having cash flow problems and cannot pay its balance at this time. WWC arranges with Kit Kat to convert the $1,400 balance to a note, and Kit Kat signs a 6-month note, at 12% annual interest. The principal and all interest will be due and payable to WWC on August 1, 2012 WWC paid a $650 insurance premium covering the month of February. The amount paid is recorded directly as an expense. 2/05 An additional 180 units of inventory are purchased on account by WwC for $13,500 - terms 2/15, n30. in WWC paid Federal Express $360 to have the 180 units of inventory delivered February Transactions Included in WWC's February 1 Accounts Receivable balance is a $1,400 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 $1,400 balance to a note, and Kit Kat signs a 6-month note, at 12% annual interest. The principal and all interest will be due and payable to WWC on August 1, 2012 02/02 10 WWC paid a $650 insurance premium covering the month of February. The amount paid is recorded directly as an expense. 02/05 An additional 180 units of inventory are purchased on account by WWC for $13,500 - terms 2/15, n30. 02/05 WWC paid Federal Express $360 to have the 180 units of inventory delivered overnight. Delivery occurred on 02/06. 0210 Sales of 150 units of inventory occurred during the period of 02/07 - 02/10. The sales terms are 2/10, net 30. 0245 The 30 units that were paid for in advance and recorded in January are delivered to the customer 25 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 period rather than as a reduction of inventory costs. 02/18 Wrote off a customer's account in the amount of $2,000. 0249 $6,600 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 $10,000 of customers' Accounts Receivable. Of the $10,000, the 02/19 discount was taken by customers on $8,000 of account balances; therefore WWC received less than $10,000. WWC recovered $600 cash from the customer whose account had previously been written off (see 02/18). 02/27 A $950 utility bill for February arrived. It is due on March 15 and will be paid then. 02/28 WWC declared and paid a $950 cash dividend. 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-a. Prepare all February journal entries and adjusting entries. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet 1 2 3 4 5 6 7 8 ..... 2 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 to convert the $1,400 balance to a note, and Kit Kat signs a 6-month note, at Note: Enter debits before credits. General Journal Debit Credit Date Feb. 1 Record entry Clear entry View general Journal Journal entry worksheet 3 4 5 6 7 8 ..... 23 WWC paid a $650 insurance premium covering the month of February. The amount paid is recorded directly as an expense. Note: Enter debits before credits. Date General Journal Debit Credit Feb. 2 Record entry Clear entry View general journal View transaction list Journal entry worksheet An additional 180 units of inventory are purchased on account by WwC for $13,500 - terms 2/15, n30. Note: Enter debits before credits. Date General Journal Debit Credit Feb. 5 Record entry Clear entry View general journal Journal entry worksheet WWC paid Federal Express $360 to have the 180 units of inventory delivered overnight. Delivery occurred on 02/06. Note: Enter debits before credits. Date General Journal Debit Credit Feb. 6 Record entry Clear entry View general journal Journal entry worksheet Record the sales of 150 units of inventory. Note: Enter debits before credits. Date General Journal Debit Credit Feb. 10a Record entry Clear entry View general journal Journal entry worksheet