Problem 13-2 Listed below are selected transactions of Vaughn Department Store f
ID: 2570752 • Letter: P
Question
Problem 13-2
Listed below are selected transactions of Vaughn Department Store for the current year ending December 31.
Prepare all the journal entries necessary to record the transactions noted above as they occurred and any adjusting journal entries relative to the transactions that would be required to present fair financial statements at December 31. Date each entry. For simplicity, assume that adjusting entries are recorded only once a year on December 31. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Date
Account Titles and Explanation
Debit
Credit
1. On December 5, the store received $550 from the Selig Players as a deposit to be returned after certain furniture to be used in stage production was returned on January 15. 2. During December, cash sales totaled $810,600, which includes the 5% sales tax that must be remitted to the state by the fifteenth day of the following month. 3. On December 10, the store purchased for cash three delivery trucks for $121,700. The trucks were purchased in a state that applies a 5% sales tax. 4. The store determined it will cost $102,800 to restore the area (considered a land improvement) surrounding one of its store parking lots, when the store is closed in 2 years. Vaughn estimates the fair value of the obligation at December 31 is $87,300.Explanation / Answer
Entries:
Dec 5 Cash $550 Due to customers $550 Dec 31 Cash $810,600 Sales revenue(810,600/1.05) $772,000 Sales tax payable(772,000×5%) $38,600 Dec 10 Truck(121,700×1.05) $127,785 Cash $127,785 Dec 31 parking lot $87,300 Asset retirement obligation $87,300