Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Winter Companys balance sheet at December 31, 2014, is presented below. WINTER COMPANY Balance Sheet December 31, 2014 Cash $13,100 Accounts receivable 19,780 Allowance for

Winter Companys balance sheet at December 31, 2014, is presented below. WINTER COMPANY Balance Sheet December 31, 2014 Cash $13,100 Accounts receivable 19,780 Allowance for doubtful accounts (8000 Inventory 9,400 $41,480

Accounts payable $ 8,750 Common stock 20,000 Retained earnings 12,730 $41,480

During January 2015, the following transactions occurred. Winter uses the perpetual inventory method.

Jan. 1. Winter accepted a 4-month, 8% note from Merando Company in payment of Merandos $1,200 account.

Jan 3. Winter wrote off as uncollectible the accounts of Inwood Corporation ($450) and Goza Company ($280).

jan 8. Winter purchased $17,200 of inventory on account.

jan 11. Winter sold for $28,000 on account inventory that cost $19,600.

jan 15. Winter sold inventory that cost $700 to Mark Lauber for $1,000. Lauber charged this amount on his Visa First Bank card. The service fee charged Winter by First Bank is 3%.

jan 17. Winter collected $22,900 from customers on account.

jan 21. Winter paid $14,300 on accounts payable.

jan 24. Winter received payment in full ($280) from Goza Company on the account written off on January 3.

jan 27. Winter purchased supplies for $1,400 cash.

jan 31. Winter paid other operating expenses, $3,718.

Adjustment data: 1. Interest is recorded for the month on the note from January 1. 2. Bad debts are expected to be 6% of the January 31, 2015, accounts receivable. 3. A count of supplies on January 31, 2015, reveals that $560 remains unused.

Instructions (You may want to set up T-accounts to determine ending balances.) (a) Prepare journal entries for the transactions listed above and adjusting entries. (Include entries for cost of goods sold using the perpetual system.) (b) Prepare an adjusted trial balance at January 31, 2015. (c) Prepare an income statement and a retained earnings statement for the month ending January 31, 2015, and a balance sheet as of January 31, 2015.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

CPA Exam Review 2020 At Least Know This Auditing And Attestation

Authors: At Least Know This

1st Edition

1706038364, 978-1706038368

More Books

Students also viewed these Accounting questions

Question

understand the meaning of the terms discipline and grievance

Answered: 1 week ago