Described below are certain transactions of the Bell Company for 2020. Bell uses a perpetual inventory...

Described below are certain transactions of the Bell Company for 2020. Bell uses a perpetual inventory system.

A. June 10, the company purchased the rights to natural resources on land owned by Jay Company for $60,000. Bell’s geology team believes they can successfully remove 600,000 pounds of ore from the mine.

July 1, the company purchased a machine for $70,000 from Myers Company, paying $20,000 in cash and giving a two-year, 8% interest bearing note for the balance to Myers. The machine is to be used to facilitate the mining of the ore deposit on Jay Company’s land. The machine will become an integral part of the mine and will be abandoned when the ore deposit is fully depleted.

Bell has agreed to pay Jay Company a royalty of $2.00 per pound of ore removed.

Bell must also recover the land to a useful purpose when the mining efforts are completed. This is expected to cost $20,000. Because Bell did not buy the land there is no cost recovery when the mine is abandoned.

Bell incurred exploration and development costs of $310,000, for the mining operation.

F. October 31, the company borrowed $230,000 by issuing an interesting bearing 9%, ninety day,

note to the First State Bank to finance the mining operations.

G. On December 15, received utility bills totaling $5,245.00 related to mine operations that are due January15.

H. From November 1 until year end Bell removed 7,000 pounds of ore from the mine. They have a contract to sell and deliver 6000 pounds of the ore in January to an ore purifying firm for $145 per pound.

INSTRUCTIONS

(i) Prepare the journal entries necessary to record the transactions above using appropriate dates.

(ii) Prepare the adjusting entries necessary at December 31, in order to properly record adjusting journal entries.

Where necessary round to the nearest whole dollar.

Solutions

Expert Solution

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

Described below are certain transactions of Edwardson Corporation. The company uses the periodic inventory system. 1....

Described below are certain transactions of Edwardson Corporation. The company uses the periodic inventory system. 1. On February 2, the corporation purchased goods from Martin Company for $71,400 subject to cash discount terms of 2/10, n/30. Purchases and accounts payable are recorded by the corporation at net amounts after cash discounts. The invoice was paid on February 26. 2. On April 1, the corporation bought a truck for $76,000 from General Motors Company, paying $3,000 in cash and signing a...

Described below are certain transactions of Windsor Corporation. The company uses the periodic inventory system. 1....

Described below are certain transactions of Windsor Corporation. The company uses the periodic inventory system. 1. On February 2, the corporation purchased goods from Martin Company for $75,800 subject to cash discount terms of 2/10, n/30. Purchases and accounts payable are recorded by the corporation at net amounts after cash discounts. The invoice was paid on February 26. 2. On April 1, the corporation bought a truck for $50,000 from General Motors Company, paying $5,000 in cash and signing a...

Described below are certain transactions of Edwardson Corporation. The company uses the periodic inventory system. 1....

The following transactions occurred during 2020 (the company uses a perpetual inventory system with FIFO): 1)...

The following transactions occurred during 2020 (the company uses a perpetual inventory system with FIFO): 1) Jan 4 Stockholders invested an additional $10,000 cash in the business in exchange for common stock 2) Jan 4 Purchased 20 rabbits at $50 each on account from Jelly Bean Farms. 3) Jan 4 Established a $200 petty change fund 4) Jan 5 Sold 6 rabbits for $200 each to Mr. Karrot, terms 2/10, n/30. 5) Jan 6 Sold 12 rabbits at $200 each...

Walstrom Company uses a perpetual inventory system and had the following inventory transactions for June 2019....

Walstrom Company uses a perpetual inventory system and had the following inventory transactions for June 2019. June 1 Beg. Inventory 50 units @ $14 for $700, on June 4 Purchased 115 units @ $15 for $1,725, on June 5 Sold 100 units, on June 10 Purchased 75 units @ $16 for $1,200, and on June 24 Sold 50 units. Total Cost of Goods Sold Available equals $3,625. The June 30th Ending Inventory is 90 units. The June 30th ending inventory...

Olaf Corp. uses a perpetual inventory system. The company had the following inventory transactions in April:...

Olaf Corp. uses a perpetual inventory system. The company had the following inventory transactions in April: April 3 Purchased merchandise from Flounder Ltd. for $30,700, terms 1/10, n/30, FOB shipping point. 6 The appropriate company paid freight costs of $660 on the merchandise purchased on April 3. 7 Purchased supplies on account for $5,490. 8 Returned damaged merchandise to Flounder and was given a purchase allowance of $3,700. The merchandise was repaired by Flounder and returned to inventory for future...

The inventory data of Bilal Inc. is provided below, The company uses perpetual inventory system. Inventory:...

The inventory data of Bilal Inc. is provided below, The company uses perpetual inventory system. Inventory: 1st March = 200 units @ $4.00 (purchased) Purchases: 12th March = 500 units @ $4.50 (purchased) 15th March = 400 units @ $4.75 (purchased) 17th March = 828 units @ $5.00 (purchased) Sales: 20th March = 1928 units sold Instructions Under a perpetual inventory system, determine the cost of goods sold and ending inventory for the month of March under FIFO method

Listed below are some transactions for Resistant Products Ltd., which uses a perpetual inventory system and...

Listed below are some transactions for Resistant Products Ltd., which uses a perpetual inventory system and reports under ASPE. May 2 Sold inventory on account to Jameson Inc., terms 2/10, n/30. Selling price $24,000; cost $9,600. 3 Received a portion of the inventory sold on the previous day because it was damaged inventory that could never be sold in the future. Selling price $1,800; cost $720. 5 Received a portion of the inventory sold on May 2 that was in...

The transactions listed below occurred in September 2018 for Aquamarines. Aquamarines uses the perpetual inventory system...

The transactions listed below occurred in September 2018 for Aquamarines. Aquamarines uses the perpetual inventory system and estimates sales returns at the end of each month. 1) Using the General Journal tab, click Add Transaction to journalize each transaction. Click Post Transaction once you complete the entry, then repeat these steps for each transaction. 2) Click the Reports tab and review the results of recording these transactions on General Ledger. 3) Click Submit Work when complete. 09/03/2018 - Purchased merchandise...

Described below are certain transactions of Lamar Company for 2018: 1. On May 10, the company...

Described below are certain transactions of Lamar Company for 2018: 1. On May 10, the company purchased goods from Fox Company for $71,500, terms 2/10, n/30. Purchases and accounts payable are recorded at net amounts. The invoice was paid on May 18. 2. On June 1, the company purchased equipment for $91,200 from Rao Company, paying $27,600 in cash and giving a one-year, 9% note for the balance. 3. On September 30, the company discounted at 10% its $190,000, one-year...

Subjects