Question

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 $400 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 $2,000, the employee taxes are $500 and the employer taxes are $500. 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 $2,000, the employee taxes are $500 and the employer taxes are $500.

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 $500 in advertising in December, and paid the December rent.

Sales: You record December cash sales of 11 units for $800 each. You also record credit sales to both Happy Time and to Wonderful Widgets of 25 units for $800 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.

How do I make these into journal entires. Please show all the steps and explain. Thank you  

Answer 1

In the books of Eagle View:

Transaction	Account Titles	Debit	Credit
		$	$
a.	Utilities Expense	500
	Accounts Payable		500
	To record utilities expense
b.	Merchandise Inventory	20,000
	Supplies	200
	Cash		20,200
	To record purchase of inventory and toolkits
c.	Salaries Expense	2,000
	Employee Taxes Payable		500
	Cash		1,500
	To record payment of salaries and withholding of taxes
d.	Payroll Tax Expense	500
	Payroll Taxes Payable		500
	To record employer payroll taxes
e.	Cash ( 11 x $ 800)	9,240
	Sales		8,800
	Sales Tax Payable		440
	To record cash sales and sales tax
f.	Accounts Receivable	21,000
	Sales ( 25 x $ 800)		20,000
	Sales Tax Payable ( $ 20,000 x 5% )		1,000
	To record sales on account, and sales tax
g.	Advertising Expense	500
	Cash		500
	To record payment for advertising
h.	Rent Expense	???
	Cash		???
	To record payment of rent