Instructions: Prepare journal entries for each event below: The 2013 balance she
ID: 2432487 • Letter: I
Question
Instructions: Prepare journal entries for each event below:
The 2013 balance sheet of the Captain Jet Inc. is attached. During 2014, the following events occurred.
1. On January 10, sell merchandise on account to Rayms $9,600 and Fischer $8,800. Terms 2/10, n/30. Freight $100 for each sale, F.O.B. shipping point.
2. On January 12, purchase merchandise on account from Zapfel $3,000 and Liotta $2,400. Terms 1/10, n/30. Freight $120 for each sale, F.O.B. destination.
3. Receive checks, $4,000 from Longhini and $2,000 from Hall, for sales on account after discount period has lapsed.
4. On January 15, send checks to Joosten for 9,000 less 2% cash discount, and to Maida for $11,000 less 1% cash discount.
5. On January 16, issue credit of $400 to Fieber for merchandise returned.
6. Summary daily cash sales total $15,500.
7. On January 21, pay off the balances to Zapfel and Liotta for the purchases on January 12.
8. On Feburary 9, receive payment in full from Rayms and Fischer.
9. On March 1, pay rent of $6,000 for a two-year term.
10. On April 1, sell merchandise on account to Dunlap $1,600, term 2/10, n/30. Freight $80, F.O.B. shipping point.
11. Pay $400 cash for office supplies.
12. Cash dividends totaling $800 are declared on June 13 and paid to stockholders on June 23.
13. Issue a note of $120,000 to bank (one year, annual interest rate 3%) for cash.
14. On July 5, purchase merchandise from Maida $33,000, terms 3/10, n/30.
15. On July 7, issue common stock 1000 shares, $10 par, in exchange of a land with a fair market value of $15,000.
16. On July 8, return $200 of merchandise to Maida and receive credit.
17. On August 1, sell merchandise to Lachey on account $80,000, term 1/10, n/30. Freight $1,500, F.O.B. shipping point.
18. Pay off the balance to Maida on August 4.
19. On August 10, receive half of the payment from Lachey.
20. On August 14, write off $1,300 bad debt for one account, Tooket.
21. Pay utitlities expense, $10,902.
22. On August 31, Lachey pays off its balance.
23. On September 1, pay cash $7,500 to Farmington for merchandise purchased last year.
24. On October 1, pay off notes payable $110,000 and associated accrued interest $6,000, of which $1,500 was shown on the balance sheet.
25. Over the year, sales and office employees earned $45,500 in salaries and wages, of which $1,500 was still payable at the end of year.
26. An unpaid utilities bill (December, $1,250) is due on January 10 next year.
Additional Information at the end of the year:
1. Depreciation expense for the year was $14,250.
2. The company estimated that it has to pay federal income tax, $3,250.
3. After physically counting, the company decided that the ending inventories worth $40,146.
4. Based on its historical data, the company estimated that the bad debts were about 1% of net credit sales.
5. Unearned revenue is decreased by $10,000.
6. The company expenses all of the supplies purchased during the year.
7. No insurance policy is effective during the year.
8. The company used the gross method to record its purchases and sales on credit.
9. The company adopts the periodic inventory system.
Explanation / Answer
In the book of Captain Jet Inc. :
Contd.
Transaction / Event Date Account Titles Debit Credit 2014 $ $ 1. Jan 10 Accounts Receivable: Rayms 9,700 Accounts Receivable: Fischer 8,900 Sales 18,400 Cash 200 2. Jan 12 Purchases 5,400 Accounts Payable : Zapfel 2,880 Accounts Payable: Liotta 2,280 Cash 240 3. Cash 6,000 Accounts Receivable: Longhini 4,000 Accounts Receivable: Hall 2,000 4. Jan 15 Accounts Payable: Joosten 9,000 Accounts Payable: Maida 11,000 Purchase Discounts 290 Cash 19,710 5. Jan 16 Sales Returns and Allowances 400 Accounts Receivable: Feiber 400 6. Cash 15,500 Sales 15,500 7. Jan 21 Accounts Payable 2,880 Accounts Payable 2,280 Purchase Discounts 54 Cash 5,106 8. Feb 9 Cash 18,600 Accounts Receivable: Rayms 9,700 Accounts Receivable: Fischer 8,900 9. Mar 1 Prepaid Rent 6,000 Cash 6,000 10. Apr 1 Accounts Receivable: Dunlap 1,680 Sales 1,600 Cash 80 11. Office Supplies 400 Cash 400 12. June 13 Retained Earnings 800 Dividends Payable 800 12. June 23 Dividends Payable 800 Cash 800