Question

12/02/2017 Purchased 475 units of inventory for $2,850 on account from Sparkle, Co. on terms, 3/10, n/20.

12/05/2017 Purchased 600 units of inventory from Borax on account with terms 2/10, n/30. The total invoice was for $4,500, which included a $150 freight charge.

12/07/2017 Returned 75 units of inventory to Sparkle from the December 2 purchase.

12/09/2017 Paid Borax.

12/11/2017 Sold 285 units of goods to Happy Maids for $3,990 on account with terms 3/10, n/30.

12/12/2017 Paid Sparkle.

12/15/2017 Received 22 units with a retail price of $308 of goods back from customer Happy Maids. The goods cost Crystal Clear $132.

12/21/2017 Received payment from Happy Maids, settling the amount due in full.

12/28/2017 Sold 265 units of goods to Bridget, Inc. for cash of $3,975.

12/29/2017 Paid cash for utilities of $415.

12/30/2017 Paid cash for Sales Commission Expense of $550.

12/31/2017 Recorded the following adjusting entries:

a. Physical count of inventory on December 31 showed 428 units of goods on hand.

b. Depreciation, $270

c. Accrued salaries expense of $725

d. Prepared all other adjustments necessary for December. Assume the cleaning supplies left at December 31 are $30. Save WorkReset

Requirements

1. Journalize transaction.The accounts used by Crystal Clear Cleaning are provided in the Chart of Accounts (click on “Chart of Accounts” to view). The accounts have already been opened in the General Ledger (click on “General Ledger” to view).
2. Calculate the cost of goods sold on the 11th, 28th, and 31st.
3. Prepare the journal entries for December 11th and 28th and the December 31st inventory adjusting entry. Post the entries to the General Ledger.
4. Review each of the accounts in the General Ledger to see the results of posting the December 31 adjusting journal entries, including the changes in each account as well as the balance in each. (Note: These are adjusted balances, since the adjusting journal entries have been prepared and posted.)

Answer 1

Requirements:

Date	Accounts and Explanation	Debit	Credit
Dec. 2	Merchandise Inventory	2,850
	Accounts Payable—Sparkle, Co.		2,850
5	Merchandise Inventory	4,500
	Accounts Payable—Borax		4,500
7	Accounts Payable—Sparkle, Co.	450
	Merchandise Inventory		450
9	Accounts Payable—Borax	4,500
	Cash ($4,500 − $87)		4,413
	Merchandise Inventory [($4,500 – $150) ×0.02]		87
11	Accounts Receivable—Happy Maids	3,990
	Sales Revenue		3,990
	Cost of Goods Sold	1,710
	Merchandise Inventory		1,710
12	Accounts Payable—Sparkle, Co. ($2,850 – $450)	2,400
	Cash ($2,400 – $72)		2,328
	Merchandise Inventory ($2,400 ×0.03)		72
15	Sales Returns and Allowances	308
	Accounts Receivable—Happy Maids		308
	Merchandise Inventory	132
	Cost of Goods Sold		132
21	Cash	3,572
	Sales Discounts ($3,682×0.03)	110
	Accounts Receivable—Happy Maids ($3,990 – $308)		3,682
28	Cash	3,975
	Sales Revenue		3,975
	Cost of Goods Sold	1,691
	Merchandise Inventory		1,691

Dec. 29	Utilities Expense	415
	Cash		415
30	Sales Commission Expense	550
	Cash		550
	Adjusting Entries
Dec. 31	Cost of Goods Sold	324
	Merchandise Inventory		324
	($3,472− $3,148)
31	Depreciation Expense—Equipment and Truck	270
	Accumulated Depreciation—Equipment and Truck		270
31	Salaries Expense	725
	Salaries Payable		725
31	Insurance Expense	150
	Prepaid Insurance		150
31	Rent Expense	500
	Prepaid Rent		500
31	Interest Expense ($96,000 ×0.09 × 1/12)	720
	Interest Payable		720
31	Unearned Revenue	1,000
	Service Revenue		1,000