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In: Accounting

On January 1, 2019, the general ledger of a company includes the following account balances: Accounts...

On January 1, 2019, the general ledger of a company includes the following account balances:

Accounts Debit Credit
Cash $ 76,000
Accounts Receivable 47,000
Allowance for Uncollectible Accounts $ 7,000
Inventory 36,000
Building 76,000
Accumulated Depreciation 16,000
Land 206,000
Accounts Payable 26,000
Notes Payable (7%, due in 3 years) 42,000
Common Stock 106,000
Retained Earnings 244,000
Totals $ 441,000 $ 441,000


The company accounts for all inventory transactions using the perpetual FIFO method. Purchases and sales of inventory are recorded using the gross method for cash discounts. The $36,000 beginning balance of inventory consists of 400 units, each costing $90. During January 2019, the company had the following transactions:

During January 2019, the following transactions occur:

January 2 Lent $26,000 to an employee by accepting 6% note due in six months.
January 5 Purchased 3,800 units of inventory on account for $380,000 ($100 each) with terms 1/10, n/30.
January 8 Returned 140 defective units of inventory purchased on January 5.
January 15 Sold 3,600 units of inventory on account for $432,000 ($120 each) with terms 2/10, n/30.
January 17 Customers returned 100 units sold on January 15. These units are placed in inventory to be sold in the future.
January 20 Received cash from customers on accounts receivable. This amount includes $42,000 from 2018 plus amount receivable on sale of 3,000 units sold on January 15.
January 21 Wrote off remaining accounts receivable from 2018.
January 24 Paid on accounts payable. The amount includes the amount owed at the beginning of the period plus the amount owed from purchase of 3,400 units on January 5.
January 28 Paid cash for salaries during January, $34,000.
January 29 Paid cash for utilities during January, $16,000.
January 30 Paid dividends, $9,000.


The following information is available on January 31, 2019.

  1. Of the remaining accounts receivable, the company estimates that 10% will not be collected.
  2. Accrued interest income on notes receivable for January.
  3. Accrued interest expense on notes payable for January.
  4. Accrued income taxes at the end of January for $5,600.
  5. Depreciation on the building, $2,600.

Need help with recording transactions

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ekkarill92 answered 1 year ago
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