Accounting by warren reeve Question 4 journalizong the adjusted entries based on
ID: 2480112 • Letter: A
Question
Accounting by warren reeve Question 4 journalizong the adjusted entries based on the following data a. Salaries accrued: sales salaries, $4,275; officers salaries, $2,175; office salaries, $825. The payroll taxes are immaterial and are not accrued b. Vacation pay, $13,350. nsive Problem 3 Selected transactions completed by Kornett Company during its first fiscal year ended De cember 31, 2016, were as follows: Jan. 3. Issued a check to establish a petty cash fund of $4,500. Feb. 26. Replenished the petty cash fund, based on the following summary of petty cash receipts: office supplies, $1,680; miscellaneous selling expense, $570; miscella- neous administrative expense, $880. Apr. 14. Purchased $31,300 of merchandise on account, terms 1/10, n/30. The perpetual inventory system is used to account for inventory May 13. Paid the invoice of April 14 after the discount period had passed. 17. Received cash from daily cash sales for $21,200. The amount indicated by the cash register was $21,240 June 2, Received a 60-day, 8%, note for $180,000 on the Ryanair account. Aug. 1. Received amount owed on June 2 note, plus interest at the maturity date 24. Received $7,600 on the Finley account and wrote off the remainder owed on a $9,000 accounts receivable balance. (The allowance method is used in ac- counting for uncollectible receivables.) in full payment. discounted it at 9%. 90-day, 9% note. The equipment had a cost of $320,000 and accumulated Sept.15. Reinstated the Finley account written off on August 24 and received $1,400 cash 15. Purchased land by issuing a $670,000, 90-day note to Zahorik Co., which 35,000 cash plus receipt of a $100,000, Oct. 17. Sold office equipment in exchange for $1 depreciation of $64,000 as of October 17 (Continued)Explanation / Answer
4) a) Allowance for Doubtful Debts ( P&L) Dr 18000 Allowance for Doubtful Debts ( BS) Cr 18000 ( To record allowance for doubtful debt 16000+2000) b) Loss on inventory Dr 3300 Inventory Cr 3300 ( To record for loss on inventory) c) Insurance Expense Dr 22820 Prepaid Insurance Cr 22820 ( To record expired insurance for the year) d) Supplies Expense Dr 3920 Supplies Cr 3920 ( To record office supplies expense for the year) e) Depriciation - Building Dr 36000 Depriciation - Office equipment Dr 44000 Depriciation - store equipment Dr 5000 Accumulated depriciation - Building Cr 36000 Accumulated depriciation - Office equip Cr 44000 Accumulated depriciation - Store equip Cr 5000 ( To record depriciation for the year) Working Building - double declining SLM Depriciation - 900000/50 = 18000 SLM Rate = 18000 / 900000 * 100 = 2% Double declining rate = 2 * SLM Rate = 2*2 = 4% Building depriciation = 900000 * 4%=36000 36000 ( Acquisition January 2) Office equipment SLM (acquisition date January 3) Depriciation = ( 246000 - 26000) /5 = 44000 Store equipment SLM ( acquisition date July 1) Depriciation = ( 112000 - 12000) /10 = 10000 Depriciation for 6 months = 10000 / 2 = 5000 f) Amortization - patent Dr 6000 Accumulated Amortizatiomn - Patent Cr 6000 ( To record amortization of patent for the year 48000/8) g) Cost of goods sold - mineral ore Dr 30000 Inventory - mineral ore Cr 30000 ( To record of goods sold 546000/910000*50000) h) Vacation pay expense Dr 10500 Expense payable Cr 10500 ( To accrue vacation payable) i) Warranty expense Dr 63333.333 Warranty Payable Cr 63333.333 (To record warranty exoense for the month 1900000*4%/12) j) Interest receivable Dr 750 Interest Income Cr 750 ( To record interest income for the month 100000*9%/12)