Question

1. CREATE JOURNAL ENTRIES FOR THE JANUARY 2018 TRANSACTIONS BELOW FOR SUNFLOWER DESIGNS:

2. CREATE THE JANUARY 31, 2018 UNADJUSTED TRIAL BALANCE

a. On January 1, $350 of office supplies was purchased on credit; the terms of the invoice were net 30. All of the supplies were used during the month of January. b. On January 1, a 24-month liability insurance policy was purchased to cover Sunflower Designs. The full cost of the policy, $1,800, was paid in cash on the same date. c. On January 1, a desktop computer was purchased on credit totaling $2,100. The estimated useful life of the computer is five (5) years and is expected to have no salvage value. The invoice terms were 2/10, net 30. d. On January 5, Sunflower Designs purchased $1,275 worth of inventory items for resale. These items were purchased on credit and the invoice term is net 30. e. On January 8, a check was issued to pay for the computer purchased on January 1. f. On January 10, Sunflower Designs paid for the office supplies purchased on credit on January 1. g. On January 12, Sunflower Designs completed and delivered an interior design layout to a customer for $5,000. The customer had paid for the services in advance in a previous month, and Sunflower Designs had appropriately recorded the deposit. h. On January 14, Sunflower Designs completed, delivered, and billed an interior design layout for $18,500 to a new customer. The terms of the invoice were 2/10, net 30. i. On January 16, Sunflower Designs paid $4,225 in wages to a temporary employee. The wages had been accrued in a previous period. On the same date, the company remitted payroll taxes of $1,055, previously accrued, to the appropriate government entities. j. On January 18, Sunflower Designs received a refund of $30 from their office supply vendor for items that were returned on the January 1 purchase. k. On January 20, a customer paid the balance due for an interior design layout. The invoice for these services was sent to the customer on December 20, 2017. The contract price was $5,000. Last edit: 8/7/18 Page 2 of 3 l. On January 24, Sunflower Designs sold a side table from inventory for $275. The inventory cost for this item was $125. The customer paid cash for this purchase. m.On January 26, $200 worth of inventory was returned to supplier because of defects. The inventory had been purchased on account in December, and had not yet been paid for. n. On January 30, the customer delivered a check for one-half of the interior design invoice delivered on January 14.

Answer 1

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Part 1 Journal Entries:
Date	Account	Debit	Credit
Jan 1	Office Supplies	$    1,350
	Accounts Payable		$    1,350
	(to record purchase of office supplies)
Jan 1	Prepaid Insurance	$    1,800
	Cash		$    1,800
	(to record payment for insurance)
Jan 1	Computer Equipment	$    2,100
	Accounts Payable		$    2,100
	(to record purchase of computer)
Jan 5	Inventory	$    1,275
	Accounts Payable		$    1,275
	(to record purchase of inventory)
Jan 8	Accounts Payable	$    2,100
	Computer Equipment		$          42	2100*2%
	Cash		$    2,058
	(to record payment of computer)
Jan 10	Accounts Payable	$    1,350
	Cash		$    1,350
	(to record payment of supplies)
Jan 12	Unearned Service Revenue	$    5,000
	Service Revenue		$    5,000
	(to record revenue earned)
Jan 14	Accounts Receivable	$ 18,500
	Service Revenue		$ 18,500
	(to record revenue earned)
Jan 16	Wages Payable	$    4,225
	Payroll Tax Payable	$    1,055
	Cash		$    5,280
	(to record payment of wages and taxes)
Jan 18	Cash	$          30
	Office Supplies		$          30
	(to record refund received)
Jan 20	Cash	$    5,000
	Accounts Receivable		$    5,000
	(to record amount received)
Jan 20	Cash	$        275
	Sales Revenue		$        275
	(to record sale of inventory)
	Cost of goods sold	$        125
	Inventory		$        125
	(to record cost of goods sold)
Jan 26	Accounts Payable	$        200
	Inventory		$        200
	(to record return of inventory)
Jan 30	Cash	$    9,250
	Accounts Receivable		$    9,250
	(to record of collection)

Part 2 Unadjusted trial Balance:
	Unadjusted
Account	Debit	Credit
Cash	$    4,067
Accounts Receivable	$    4,250
Offce Supplies	$    1,320
Prepaid Insurance	$    1,800
Inventory	$        950
Computer Equipment	$    2,058
Accounts Payable		$    1,075
Wages Payable	$    4,225
Payroll Tax Payable	$    1,055
Unearned Service Revenue	$    5,000
Sales Revenue		$        275
Service Revenue		$ 23,500
Cost of Goods Sold	$        125
Total	$ 24,850	$ 24,850