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In: Accounting

On January 1, 2021, Displays Incorporated had the following account balances:    Accounts Debit Credit Cash...

On January 1, 2021, Displays Incorporated had the following account balances:
  

Accounts Debit Credit
Cash $ 32,000
Accounts receivable 29,000
Supplies 35,000
Inventory 65,000
Land 237,000
Accounts payable $ 38,000
Notes payable (7%, due next year) 30,000
Common stock 196,000
Retained earnings 134,000
Totals $ 398,000 $ 398,000


From January 1 to December 31, the following summary transactions occurred:

  1. Purchased inventory on account for $340,000.
  2. Sold inventory on account for $620,000. The cost of the inventory sold was $320,000.
  3. Received $576,000 from customers on accounts receivable.
  4. Paid freight on inventory received, $34,000.
  5. Paid $330,000 to inventory suppliers on accounts payable of $338,000. The difference reflects purchase discounts of $8,000.
  6. Paid rent for the current year, $52,000. The payment was recorded to Rent Expense.
  7. Paid salaries for the current year, $160,000. The payment was recorded to Salaries Expense.


Year-end adjusting entries:

  1. Supplies on hand at the end of the year are $9,000.
  2. Accrued interest expense on notes payable for the year.
  3. Accrued income taxes at the end of December are $28,000.

Prepare the journal entries for transactions. (If no entry is required for a particular transaction/event, select "No journal entry required" in the first account field.)

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Event Account Debit Credit
a Inventory $   340,000
     Accounts Payable $     340,000
(To record purchase of inventory)
b Accounts Receivable $   620,000
     Sale $     620,000
(To record sale)
Cost of goods sold $   320,000
     Inventory $     320,000
(To record cost of goods sold)
c Cash $   576,000
     Accounts Receivable $     576,000
(To record payment received)
d Inventory $     34,000
     Accounts Payable $       34,000
(To record payment of freight)
e Accounts Payable $   338,000
     Inventory (Discount) $         8,000
     Cash $     330,000
(To record payment made)
f Rent Expense $     52,000
     Cash $       52,000
(To record rent expense payment)
g Salaries expense $   160,000
     Cash $     160,000
(To record payment of salaries)
Event Account Debit Credit
a Supplies Expense $     26,000
     Supplies $       26,000
(To record supplies consumed) $35,000-$9,000
b Interest Expense ($30,000*7%) $        2,100
      Interest Payable $         2,100
(To record interest accrued)
c Income Tax Expense $     28,000
     Income Tax Payable $       28,000
(TO record income tax expense)

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