Question

DIRECTIONS:

A)        Prepare journal entries for the below items

B)        Post the journal entries into t-accounts or three-column form of account (starting balances would be those amounts per the post-closing trial balance)

C)        Prepare an Income Statement for the month ended January 31,       2018

D)        Prepare a Statement of Retained Earnings for the month ended       January 31, 2018

E)        Prepare a Balance Sheet for January 31, 2018

The following transactions occurred during 2018 (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 for cash

6)         Jan 8 Paid wages of $240

7)         Jan 9 Mr. Karrot returned one rabbit because they originally ordered only 5.

8)         Jan 12 Purchased equipment on account for $2,000

9)         Jan 14 Received payment in full from Mr. Karrot

10)       Jan 15 Purchased 10 rabbits at $52 each on account from Easter Industries, terms 1/10, n/30.

11)       Jan 15 Paid utility bill of $120

12)       Jan 16 Returned 2 rabbits to Easter Industries because they were defective.

13)       Jan 17 Sold 8 rabbits for $245 each for cash

14)       Jan 18 Paid tax bill from 2017.

15)       Jan 18 Performed the service of rabbit grooming ($800 worth); we received the cash in 2017

16)       Jan 19 Paid Accounts Payable in full from 2017

17)       Jan 20 Received $2,200 cash from customers paying on their accounts

18)       Jan 21 Received a bill from the local radio station for advertising in the amount of $400

19)       Jan 22 Purchased 20 rabbits for $55 each on account from Eggs & Chicks Company; terms 2/5, n/30

20)       Jan 23 Paid freight costs from Eggs & Chicks Company of $10.

21)       Jan 25 Sold 10 rabbits to Bunny Tail Corporation for $260 each    on account; terms 3/10, n/30

22)       Jan 26 Received payment in full from Bunny Tail Corporation

23)       Jan 27 Sold 10 rabbits to customers on credit for $260 each.

24)       Jan 28 Paid Eggs & Chicks Company for the purchase on Jan 22

25)       Jan 29 Petty cash was replenished and had the following receipts: gas receipt for $20, postage stamps for $39, Office Depot receipt for $16, miscellaneous receipt for $30, travel receipts for $40

26)       Jan 30 Performed a physical inventory count and counted only 1 rabbit on hand.

27)       Jan 30 Bank statement arrives today and there is a $20 bank service charge as well as a $120 NSF check.

28)       Jan 31 One month’s prepaid insurance needs to be expensed for January ($1,200 is for the whole year)

29)       Jan 31 Depreciate one month’s worth of the building and equipment (Using straight line method; building has a useful life of 20 years, equipment has a useful life of 5 years and no salvage value)

30)       Jan 31 The estimated bad debt expense under the percentage of sales basis is $120.

31)       Jan 31 Paid dividends of $500

Answer 1

	Journal Entries
Date	Particular	Debit	Credit
4-Jan-18	Cash A/C	$ 10,000.00
	To Common Stock/Capital A/C		$ 10,000.00
	Being capital introduced into the business
4-Jan-18	Rabbits/Purchase A/C (20x50)	$    1,000.00
	To Jelly Bean Farms A/C (20x50)		$    1,000.00
	Being Purchases of Rabbits on Credit
4-Jan-18	Petty Change Fund	$        200.00
	To Cash A/C		$        200.00
	Being established a $200 petty change fund
5-Jan-18	Mr. Karrot A/C (6x200)	$    1,200.00
	To Rabbits/Sales A/C (6x200)		$    1,200.00
	Being Rabbits sold on credit
6-Jan-18	Cash A/C	$    2,400.00
	To Rabbits/Sales A/C (12x200)		$    2,400.00
	Being Rabbits sold on cash
8-Jan-18	Wages A/C	$        240.00
	To Cash A/C		$        240.00
	Being Wages Paid
9-Jan-18	Rabbits/Sales Returned A/C	$        200.00
	To Mr. Karrot A/C (1x200)		$        200.00
	Being Rabbits sold returned by Mr Karrot
12-Jan-18	Equipment A/C	$    2,000.00
	To Cash A/C		$    2,000.00
	Being equipment purchased on cash
14-Jan-18	Cash A/C	$    1,000.00
	To Mr. Karrot A/C (1x200)		$    1,000.00
	Being payment received from Mr Karrot
15-Jan-18	Rabbits/Purchase A/C (10x52)	$        520.00
	To Easter Industriess A/C (10x52)		$        520.00
	Being Purchases of Rabbits on Credit

The Above Solutions is for first 10 Sub Parts of your first question.