Question

Record entries from the transaction and event list provided below in proper journal entry format. Show your work if the entry requires you to make a calculation (i.e. depreciation, interest expense, etc.).

October

29. Your top sales officer met with a new customer to discuss a potential future contract. She informs you that the customer is considering signing the $200,000 deal, which would become effective February 2020. 6 ACCY1 Accounting Fundamentals Group Project

30. On October 1st, you purchased 11,250 units at the decreased price of $61 per unit. The purchase was made on account.

31. On October 10th you paid your supplier $132,000 cash for inventory purchased on account.

November 32.

November 1st, the CEO, in an effort to adjust ratios, ordered the repurchasing of the company’s own stock. The quantity of stock repurchased was 175,000 shares.

33. Purchased a three-year building insurance policy on November 1st for $442,000 cash. [Adjusting Entry Required]

34. On November 17th a customer pays you $450,000 for work that you will finish in January of 2020.

35. November 19th, your customers bought 8,650 units of your product at $110 per unit. The cost of this product is determined by the method of inventory valuation used by your company. Customers paid you 55% in cash and the remainder was on account.

36. An employment contract is signed with a new regional manager. You have offered him $150,000 per year. He will not begin working for the company until March 2020. December

37. Wages earned from July 1st through December 31st was $480,000. Wages earned between Dec. 15th and Dec 31st amounting to $27,500 was not paid this until Jan 7th.

38. At the end of the year, $42,000 cash was paid to the local bank for the long-term note payable taken out on January 1, 2019. $38,000 of this was applied to the loan principal. The remaining amount was the accumulated interest due for 2019.

39. On December 31st, the marketable (trading) securities you purchased on September 23, 2019 transaction now has a fair market value of $134,000.

40. On December 31st, $480,000 depreciation expense for the year was calculated for equipment purchased before January 1, 2019.

41. On December 31st, you declare dividends of $.32 per share to be paid at a later date.

42. On December 31st, the utility bill was paid for the year. The amount was $66,000 and you paid in cash.

43. On December 31st, you pay in cash recurring interest on the long-term note acquired prior to the year 2017. HINT: See prior year financial statements.

44. On December 31st, your company earned interest on the average 2019 cash balance which will be paid January 5th, 2020. The average interest rate for the year was 4.0%. Note: Compute the average cash using only the beginning and ending balance.

45. By December 31st, 85 of the prepaid service hours from March 20, 2019 were completed.

46. A count of office supplies indicated that $27,000 of office supplies had been used by December 31st.

47. Since the inception of your company, you have been able to collect 84% of your ending accounts receivable balance from customers that bought your product on account. Based on this information, adjust your allowance for bad debt account. NOTE: Use your 2019 ending accounts receivable balance to make this calculation.

Answer 1

S.No	Date	Particulars	Debit($)	Credit($)
29		No accounting entry for discussion of future contract.
30	01 oct	Purchase Account (11250*61)	686250
		To supplier account		686250
		(11250 Units purchased @ 61 each)
31	10-Oct	Supplier account	132000
		To Cash		132000
		(Being paid to supplier)
32	01-Nov	Equity share capital	xxxx
		To Bank account		xxxx
		(As per share price not given)
33	01-Nov	Pre-paid insurance	442000
		To Cash		442000
		(Being insurance paid)
		Insurance	147333
		To prepaid insurance		147333
		(1 year insurance= 442000/3)
34	17-Nov	Bank account	45000
		To customer account		45000
		(Being amount recived from customer)
35	19-Nov	Customer account (8650*110)	951500
		To sales		951500
		(Being sales made)
		Cash	523325
		to customer account		523325
		(being sales made in cash)