Question

1) Rite Shoes was involved in the transactions described below. Required: Prepare the appropriate journal entry for each transaction. If an entry is not needed, state "No Entry" (1 pt each)

I. Purchased $8,200 of inventory on account.

2. Paid weekly salaries and wages, $920.

3. Recorded sales for the first week: Cash: $7,100; On account: $5,300.

4. Paid for inventory purchased in event (1).

5. Placed an order for $6,200 of inventory.

2) Flint Hills, Inc. has prepared a year-end 2018 trial balance. Certain accounts in the trial balance do not reflect all activities that have occurred.

Required: Prepare adjusting journal entries, as needed, for the following items. (1 point each)

1. The Supplies account shows a balance of $540, but a count of supplies reveals only $210 on hand. 2. Flint Hills initially records the payments of all insurance premiums as expenses. The trial balance shows a balance of $420 in insurance expense. A review of insurance policies reveals that $125 of insurance is unexpired.

3. Flint Hills employees work Monday through Friday, and salaries of $2,400 per week are paid each Friday. Flint Hills' year-end falls on Tuesday.

4. On December 31, 2018, Flint Hills received a utility bill for December electricity usage of $190 that will be paid in early January of 2019.

Answer 1

1.
Journal entry for Rite shoes is shown below
General Journal	Debit	Credit
Inventory	$8,200
Accounts payable		$8,200
(To record purchase of inventory on account)
Explanation: Increase in inventory and thus debited, increase in liabilities and thus credited.
Salaries and wages	$920
Cash		$920
(To record salaries and wages paid)
Explanation: Salaries and wages expense incurred and thus debited, Cash is decreased and thus credited.
Cash	$7,100
Accounts receivable	$5,300
Sales revenue		$12,400
(To record sales revenue)
Explanation: Increase in assets and thus debited, Increase in revenue and thus sales revenue credited.
Accounts payable	$8,200
Cash		$8,200
(To record payment made for purchases)
Explanation: Decrease in accounts payable and thus debited, decrease in cash and thus credited.
No entry required for order placed
2.
Journal entry to record adjusting entry for Flint hills
General Journal	Debit	Credit
Supplies expense (540-210)	$330
Supplies		$330
(To record supplies expense)
Explanation: Increase in expense and thus debited; decrease in supplies (asset) and thus credited.
Insurance expense	$125
Prepaid insurance		$125
(To record insurance expense)
Explanation: Increase in expense and thus debited; decrease in prepaid insurance (asset) and thus credited.
Salaries and wages expense (2400/5)*2	$960
Salaries and wages expense payable		$960
(To record accrued salaries and wages)
Explanation: Increase in expense and thus debited; increase in payable (liabilities) and thus credited.
Utility expense	$190
Utility expense payable		$190
(To record utility expense)
Explanation: Increase in expense and thus debited; increase in payable (liabilities) and thus credited.