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In: Accounting

On December 1, 2020, Lily Company had the account balances shown below. Debit Credit Cash $5,000...

On December 1, 2020, Lily Company had the account balances shown below.

Debit

Credit
Cash $5,000 Accumulated Depreciation—Equipment $1,100
Accounts Receivable 3,200 Accounts Payable 3,200
Inventory 2,700* Owner’s Capital 28,600
Equipment 22,000
$32,900 $32,900


*(4,500 x $0.60)

The following transactions occurred during December:

Dec. 3 Purchased 4,400 units of inventory on account at a cost of $0.70 per unit.
5 Sold 4,900 units of inventory on account for $0.86 per unit. (Lily sold 4,500 of the $0.60 units and 400 of the $0.70.)
7 Granted the December 5 customer $198 credit for 200 units of inventory returned costing $132. These units were returned to inventory.
17 Purchased 2,100 units of inventory for cash at $0.76 each.
22 Sold 3,500 units of inventory on account for $0.91 per unit. (Lily sold 3,500 of the $0.70 units.)


Adjustment data:

1. Accrued salaries payable $700.
2. Depreciation $240 per month.

Journalize the December transactions and adjusting entries, assuming Lily uses the perpetual inventory method. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)

Solutions

Expert Solution

ekkarill92 answered 2 years ago
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