Question

Roth Inc. experienced the following transactions for Year 1, its first year of operations:

1. Issued common stock for $80,000 cash.
2. Purchased $225,000 of merchandise on account.
3. Sold merchandise that cost $168,000 for $334,000 on account.
4. Collected $282,000 cash from accounts receivable.
5. Paid $210,000 on accounts payable.
6. Paid $64,000 of salaries expense for the year.
7. Paid other operating expenses of $53,000.
8. Roth adjusted the accounts using the following information from an accounts receivable aging schedule:

  

Number of Days Past Due	Amount				Percent Likely to Be Uncollectible				Allowance Balance
Current	$	31,200				0.01
0−30		13,000				0.05
31−60		2,600				0.10
61−90		2,600				0.20
Over 90 days		2,600				0.50

Required
a. Record the above transactions in general journal form and post to T-accounts. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Journal entry worksheet

• Record entry for issuance of common stock.

Note: Enter debits before credits.

	Event General Journal Debit Credit 01

Cash Common Stock Beg. Bal. Beg. Bal. End. Bal. End. Bal. Accounts Receivable Sales Revenue Beg. Bal. Beg. Bal. End. Bal. 0 End. Bal. Allowance for Doubtful Accounts Cost of Goods Sold Beg. Bal. Beg. Bal. End. Bal. End. Bal. Merchandise Inventory Operating Expenses Beg. Bal. Beg. Bal. End. Bal. End. Bal. Accounts Payable Salaries Expense Beg. Bal. Beg. Bal. End. Bal. End. Bal. Uncollectible Accounts Expense Beg. Bal. End. Bal.

Answer 1

Answer :-

	Journal Entry
date	explanation	debit( $)	credit($)
1-	cash	80,000
	common stock		80,000
2-	Inventory	225,000
	accounts payable		225,000
3-	accounts receivables	334,000
	sales revenue		334,000
b-	cost of good sold	168,000
	inventory		168,000
4-	cash	282,000
	accounts receivables		282,000
5-	accounts payable	210,000
	cash		210,000
6-	salaries expense	64,000
	cash		64,000
7-	other operating expense	53,000
	cash		53,000
8-	bad debts	$3,042
	allowance for doubtful debts		$3,042

Working note :-

Days past due	Amount	Uncollectible%	Uncollectible amount	Calculation
Current	$31,200	1%	$312	31,200*1%
0-30	$13,000	5%	$650	13,000*5%
31-60	$2,600	10%	$260	2,600*10%
61-90	$2,600	20%	$520	2,600*20%
Over 90 days	$2,600	50%	$1,300	2,600*50%
Totals	$52,000		$3,042

Cash
1.....	$80,000	5.....	$210,000
4	$282,000	6	$64,000
		7	$53,000
Bal	$35,000
Accounts receivable
3	$334,000	4	$282,000
Bal.	$52,000
Allowance for doubtful accounts
		8	$3,042
Bal			$3,042
Inventory
2	$225,000	3	$168,000
Bal	$57,000
Accounts payable
5	$210,000	2	$225,000
Bal.			$15,000
Common stock
		1	$80,000
Bal			$80,000
Sales revenue
		3	$334,000
Bal			$334,000
Cost of goods sold
3	$168,000
Bal	$168,000
Salaries expense
6	$64,000
Bal	$64,000
Operating expense
7	$53,000
Bal	$53,000
Bad debt expense
8	$3,042
Bal.	$3,042