Question

Need to make journal entires

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. ACCY1 Accounting Fundamentals Group Project 7 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 1 st, 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.

Answer 1

* 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 in February 2020.

No journal entry for this as the customer has not yet signed the deal.

30. 1st October

Inventory A/c 686,250

To Accounts Payable 686,250

(Units purchased on credit)

31. 10th October

Accounts Payable a/c 132,000

To Cash 132,000

(Amount paid to the creditor)

32. 1st November

No entry since the CEO ordered to repurchase the shares. Also, considering that nothing is mentioned about the repurchase price os share.

33. 1st November

Insurance 147,333

Prepaid Insurance 294,667

To Cash 442,000

(Insurance paid for the current and next two years in cash)

34. 17th November

Cash a/c 450,000

To Unearned Revenue 450,000

(Cas received in advance from the customer)

35. 19th November

Cash a/c 523,325

Accounts Receivable 428,175

Cost of Goods sold 527,650

To Inventory 527,650

To Revenue 951,500

(To record the sale of inventory, 55% cash, and 45% credit)

36. No journal entry since the company only offered him the position.