Question

Journalize the transactions

Purchased inventory on account $22,900

Sales on account $32,000

Cash Sales $23,400

Paid salaries $6,000

Cash collected from customers $19,600

Purchased inventory for cash $13,000

Wrote off customer account as uncollectable $300

Made payment on account $18,000, received a 2% discount

Declared dividend to be paid next month $5,000

A piece of equipment costing $600 was stolen. The insurance company reimbursed the company $300. The accumulated depreciation on the equipment amounted to $250

New equipment was purchased for $1000 cash

The short term note payable was paid. The note was for 30 days with 6% interest.

Journalize the Adjustments

It is estimated that 10% of accounts receivable is uncollectable

Supplies used $2,800

Depreciation Expense $650

Our employees are owed $740 at the end of the month

Interest on the note payable is 6%

Ending inventory is $35,000

$1,000 of prepaid insurance has expired

The income tax rate is 25% (round to the nearest dollar)

Answer 1

Journal entries are as follows :-

1. Inventory . Dr .22900

To accounts payable . 22900

2 .Accounts receivable. Dr .32000

To sales a/c. 32000

3 .cash a/c. Dr .23400

To sales a/c. 23400

4. Salaries a/c . Dr . 6000

To cash a/c . 6000

5. Cash a/c . Dr .19600

To accounts receivable . 19600

6. Inventory a/c . Dr .13000

To cash a/c. 13000

7. Bad debts a/c . Dr .300

To accounts receivable . 300

8 . Accounts payable Dr 18000

To cash a/c . 17640

To discount received . 360

9 . Retained earnings . Dr .5000

To Dividend payable . 5000

10 .Loss on asset. Dr 50

Insurance company. Dr. 300

Accumulated depreciation Dr 250

To equipment a/c . 600

11 . Equipment a/c. Dr 1000

To cash a/c . 1000

12 .Provision for bad debt* . Dr 1210

To accounts receivable . 1210

13. Supplies exp. Dr 2800

To supplies . 2800

14 .Depreciation . Dr .650

To equipment . 650

15 . Salaries a/c . Dr. 740

To salaries payable . 740

16 . Insurance expenses . Dr 1000

To prepaid insurance . 1000

* Calculation of provision for bad and doubtful debts

Total sales on account. 32000

(-) receive cash from debtors. 19600

(-) bad debts. 300

Total debtors at the end . 12100

Provision for bad debts 10% of 12100 = 1210

Note : we are not mentioned with the amount of notes payable and interest in it. Further nothing is mentioned about opening inventory and various other figures of previous year balance sheet aa a result it would not possible to calculate and profit and tax on profit or income.