Question

Prepare an Accounting Journal with ALL CALCULATIONS SHOWING!!!! Please and Thank you!

1) APR-1 the JW-Corp Received $200,000 in Exchange for 40,000 shares of Common Stock.

2) APR-1 the JW-Corp Borrowed $150,000 from US-Bank on a Note, Due in 5 Years with 8%

Interest Paid Monthly.

3) APR-2 the JW-Corp Purchased a Building for $360,000 (25 year life), with $60,000 Cash Down

Payment and signed a Note with SCHWAB BANK for the Remainder Due in 10 Years with

Interest Due Monthly at a 6% Rate.

4) APR-2 the JW-Corp purchased a Delivery Truck (5 Year and 200,000 Mile Life) for $90,000 on a

Note Due with FORD Corp with Interest Accrued Monthly at a 12% Rate. The Total Interest and

Principal are DUE in 6 Months.

5) APR-5 = JW-Corp received $105,000 from the TARGET Corp for BIKES we Will Deliver Later.

6) APR-6 = JW-Corp Purchased 1500 BIKES at $88 Each on Account from SPECIALIZED Corp.

a) FYI = JW-Corp uses a Perpetual FIFO Inventory System

7) APR-7 = JW-Corp Purchased 2000 BIKES at $95 Each on Account from SPECIALIZED Corp.

8) APR-10 = JW-Corp paid this Month’s Rent Expense of $18,000 with a Check

9) APR-15 = JW-Corp received this Month’s Phone Bill from ATT for $7,000 to pay Later.

10)APR-18 = JW-Corp received this Month’s Utility Bill from PGE for $8,000 to be paid Later.

11)APR-19 = JW-Corp Sold 1000 BIKES for $210 each on account to the COSTCO Corp.

12)APR-20 = JW-Corp Sold and Delivered 1100 BIKES for $180 each to the TARGET Corp. from

the Order and Check received in Trans#5. We Billed the Customer the Remainder on Account.

13)APR-22 = JW-Corp Paid $161,000 with a Check to SPECIALIZED Corp on Account.

14)APR-24 = JW-Corp Sold 1200 BIKES to the COSTCO Corp for $175 each, on account.

15)APR-25 = JW-Corp received a check from COSTCO Corp for $233,000 on account.

16)APR-26 = JW-Corp paid $29,000 for Current Months Salaries with a Check.

17)APR-27= JW-Corp bought Back 5,000 Shares of Common Stock from Investors for $3.00 per

Share with Electronic Transfers of Cash to the Stock Brokerage Firm.

18)APR-28 = JW-Corp Paid Dividends of $2.20 per Share to Current Shareholders via EFT.

19)APR-29 = JW-Corp Recorded the Following Items from the monthly Bank Reconciliation.

a) Bank Fees Expense of $400, Investment Income of $1,400

20)APR-30 = JW-Corp Recorded the Estimated Allowance for Un-collectible accounts at 5.00% of

The Month End TOTAL Accounts Receivable Balance.

21)APR-30 = JW-Corp recorded one month of Interest Expense Paid on the US BANK Loan. Tr#2

22)APR-30 = JW-Corp recorded one month of Interest Expense Paid to Schwab Bank. Tran#3

23)APR-30 = JW-Corp recorded one month of Interest Expense PAYABLE to Ford Later. Tran#4

4

24)APR-30 = JW-Corp recorded Depreciation Expense on the Building (Tran#3) for the Month

using the Straight-Line Method.

25)APR-30 = JW-Corp recorded Depreciation Expense on the Truck (Tran#4) Using the Units-of –

Production-Activity Method. The Truck was Driven 12,000 Miles during the Month.

26)APR-30 = JW-Corp Recorded Income Tax Expense Payable for the Month, at 30% Tax Rate.

Answer 1

IN THE BOOKS OF JW CORP

  Journal Entries

Date	Particulars	Debit($)	Credit($)
APR 1	Bank A/C.......................................................................Dr. To Common shares A/C (Being payment received for the 40000 shares issued from common stock @ $5 each = 40000 X $5)	200,000	200,000
APR 1	Bank a/c....................................................................... Dr To US Bank loan a/c (Being loan borrowed from US bank for a 5 year period)	150,000	150,000
APR 2	Building a/c....................................................................Dr. To Bank a/c To SCHWAB bank loan a/c (Being building purchased on credit by paying $60000 down)	360,000 60,000	300,000
APR 2	Delivery Truck a/c..........................................................Dr. To FORD corp loan a/c (Being delivery truck purchased on credit)	90,000	90,000
APR 5	Bank a/c........................................................................Dr. To TARGET Corp a/c (Being advance cash payment made to TARGET Corp for delivery of 1100 bikes)	105,000	105,000
APR 6	Purchases a/c.............................................................. Dr. To SPECIALIZED Corp a/c (Being purchase of 1500 bikes made on credit from Specialized corps @ $88 each - 1500 X 88)	132,000	132,000
APR 7	Purchases a/c...............................................................Dr. To SPECIALIZED Corp a/c (Being purchase of 2000 bikes made on credit from Specialized corps @ $95 each - 2000 X 95)	190,000	190,000
APR 10	Rent a/c.........................................................................Dr. To Bank a/c (Being rent paid for the month of April by cheque)	18,000	18,000
APR 15	Profit and loss a/c..........................................................Dr. To telephone expense a/c (Being telephone bill charge to P&L a/c)	7,000	7,000
APR 18	Profit and loss a/c..........................................................Dr. To Utility bill a/c (Being utility bill charge to P&L a/c)	8,000	8,000
APR 19	COSTCO Corp a/c.......................................................Dr. To Sales a/c (Being sales of 1000 bikes made on credit @ $210 each = 1000 bikes X $210)	210,000	210,000
APR 20	Purchase a/c...............................................................Dr. To TARGET a/c (Being 1100 bikes purchased from TARGET Corp @ $180 each and part payment for which was received in advance already on 5th April)	198,000	198,000
APR 22	SPECIALIZED Corp a/c................................................Dr. To Bank a/c (Being payment made to SPECIALIZED Corp through account payee cheque)	161,000	161,000
APR 24	COSTCO Corp a/c........................................................Dr. To Sales a/c (Being credit sales made to COSTCO Corp of 1200 bikes @ $175 each = 1200 X $175 )	210,000	210,000
APR 25	Bank a/c........................................................................Dr. To COSTCO a/c (Being payment of $233,000 received from COSTCO Corp for the credit sale made)	233,000	233,000
APR 26	Salaries expense a/c....................................................Dr. To Bank a/c (Being salaries for the month of April paid to the administration staff through cheque)	29,000	29,000
APR 27	Common shares a/c.....................................................Dr. To Common shareholders a/c (Being 5000 common shares bought back @ $3 each = 5000 X $3) Common Shareholders a/c..........................................Dr. To Bank a/c (Being payment made to common shareholders)	15,000 15,000	15,000 15,000
APR 28	Profit and loss A/c.........................................................Dr. To Dividend payable a/c (Being dividend proposed to be paid at General Meeting on 35000 common share @ $2.2 per share = 35000 X $2.2) Dividend payable a/c....................................................Dr. To Bank a/c (Being the proposed dividend paid)	77,000 77,000	77,000 77,000
APR 29	Bank fees a/c................................................................Dr. To Bank a/c (Being bank fees paid ) Profit and loss a/c.........................................................Dr. To Bank fees (Being bank fees charged to P&L a/c) Bank a/c......................................................................Dr. To Investment a/c (Being interest on investment received) Investment a/c...............................................................Dr. To Profit and loss a/c (Being interest on investment credited to P&L a/c)	400 400 1,400 1,400	400 400 1,400 1,400
APR 30	Profit and loss a/c..........................................................Dr. To Allowance of uncollectable accounts a/c (Being 5% allowance of uncollectable accounts made on month end debtor of $187,000) PLEASE SEE WORKING NOTE	9,350	9,350
APR 30	Profit and loss a/c..........................................................Dr. To Interest on US Bank loan a/c (Being interest @ 8% per month on US bank loan debited to profit and loss a/c = $150,000 X 8/100) Interest on US bank loan a/c........................................Dr. To Bank a/c (Being interest on US bank loan for the month of april paid by bank)	12,000 12,000	12,000 12,000
APR 30	Profit and loss a/c..........................................................Dr. To Interest on SCHWAB Bank loan a/c (Being interest @ 6% per month paid on SCHWAB bank loan debited to profit and loss a/c = $300,000 X 6/100 X 29/30) Interest on SCHWAB bank loan a/c.............................Dr. To Bank a/c (Being interest on SCHWAB bank loan for the month of april paid by bank) NOTE: interest for 29 days out of 30 days in April	17,400 17,400	17,400 17,400
APR 30	Profit and loss a/c..........................................................Dr. To Interest on FORD Corp loan a/c (Being interest @ 12% per month on FORD Corp loan debited to profit and loss a/c = $90,000 X 12/100 X 29/30) NOTE: interest for 29 days out of 30 days in April	10,440	10,440
APR 30	Profit and loss a/c..........................................................Dr. To Depreciation on building a/c (Being depreciation on building charged to profit and loss a/c = $360,000/25 year of life X 12 months = $1,200 (Depreciation per month)	1,200	1,200
APR 30	Profit and loss a/c..........................................................Dr. To Depreciation on truck a/c (Being depreciation on truck charged to profit and loss a/c = $90,000/200,000(miles of life) X 12,000(mile run during the month of april) = $5,400 (Depreciation per month)	5,400	5,400

WORKING NOTES:

TOTAL DEBTORS = $210,000(sales to Costco) + $210,000(sales to Costco) - $233,000(payment made by costco)

= $187000