In: Accounting
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.
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