In: Accounting
prepare journal entries for the following transactions
Transactions for Eagle View for the Month of December 2018
Purchases
Eagle View receives the utility bill for the month. The total amount due is $500, payable net 20. Eagle View also purchases 50 units of inventory at $500 each and 50 more toolkits at $4 each.
Payroll
Eagle View pays its employees for the fifth two weeks of business (November 26 through December 9). The gross pay is $2,200, the employee taxes are $550 and the employer taxes are $550. Part of this has already been accrued in November. Eagle View pays its employees for the sixth two weeks of business (December 10 through December 23). The gross pay is $2,200, the employee taxes are $550 and the employer taxes are $550.
Cash Payments
Eagle View paid the outstanding November liabilities: payroll taxes, sales taxes, utilities, WeMakeIt and the Office Shop bills. Office Shop has offered a discount of 2% and Eagle View paid within the discount period. Eagle View also purchased $400 in advertising in December and paid the December rent.
Sales
You record December cash sales of 10 units for $1,000 each. You also record credit sales to both Happy Time and to Wonderful Widgets of 16 units for $1,000 each. For all sales, sales tax is 5%.
Cash Receipts Wonderful Widgets pays its balance in full after the discount period. Giggles pays for last month's sale within the discount period.
Ans- Transactions for Eagle View for the Month of December 2018:-
Transaction | Account Titles and Explanation | Debit ($) | Credit ($) |
a | Utilities Expense | 500 | |
Accounts Payable | 500 | ||
(To record the utilities expenses) | |||
b | Merchandising Inventory (50*500) | 25,000 | |
Supplies (50*4) | 200 | ||
Cash | 25,200 | ||
(To record purchase of inventory and toolkits) | |||
c | Salaries Expenses | 2,200 | |
Employee Taxes Payable | 550 | ||
Cash | 1,650 | ||
(To record payment of salaries and withholding of taxes) | |||
d | Payroll Tax Expense | 550 | |
Payroll Taxes Payable | 550 | ||
(To record employer payroll taxes) | |||
e | Cash (10*1,000) | 10,000 | |
Sales | 9,500 | ||
Sales Tax Payable | 500 | ||
(To record cash sales and sales tax) | |||
f | Accounts Receivable | 16,800 | |
Sales (16*1,000) | 16,000 | ||
Sales Tax Payable ($16,000*5%) | 800 | ||
(To record sale on account and sales tax) | |||
g | Advertising Expense | 400 | |
Cash | 400 | ||
(To record payment for advertising) | |||
h | Rent Expense | ||
Cash | |||
(To record payment of rent) |
The amount of rent is not given.