Question

DIRECTIONS: A) Prepare journal entries for the following items The following transactions occurred during 2017 (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 turkeys at $50 each on account from Turkey Farms.

3) Jan 4 Established a $200 petty change fund

4) Jan 5 Sold 6 turkeys for $200 each to Mr. Pilgrim, terms 2/10, n/30.

5) Jan 6 Sold 12 turkeys at $200 each for cash

6) Jan 8 Paid wages of $240

7) Jan 9 Mr. Pilgrim returned one turkey 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. Pilgrim

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

11) Jan 15 Paid utility bill of $120

12) Jan 16 Returned 2 turkeys to Thanksgiving Industries because they were defective.

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

14) Jan 18 Paid tax bill from 2016.

15) Jan 18 Performed the service of turkey grooming ($800 worth); we received the cash in 2016

16) Jan 19 Paid Accounts Payable in full from 2016

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 turkeys for $55 each on account from Stuffing & Cranberry Company; terms 2/5, n/30

20) Jan 23 Sold 10 turkeys to Turkey Leg Corporation for $260 each on account; terms 3/10, n/30

21) Jan 25 Paid freight costs from Stuffing & Cranberry Company of $10.

22) Jan 26 Received payment in full from Turkey Leg Corporation

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

24) Jan 28 Paid Stuffing & Cranberry 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 turkey 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

Assuming there is no Beginning Inventory.
Journal Entry
S. no.	Date	Particulas	Dr. Amt.	Cr. Amt.
1	4-Jan	Cash	10,000.00
		Common Stock		10,000.00
		(To record the issue of Common Stock)
2	4-Jan	Inventory (20 Nos X $50)	1,000.00
		Accounts Payable		1,000.00
		(To record the purchase of turkey)
3	4-Jan	Petty Cash	200.00
		Cash		200.00
		(To record the petty cash fund made)
4	5-Jan	Accounts Receivable (6 Nos X $200)	1,200.00
		Sales		1,200.00
		(To record the sale of 6 turkeys)
		Cost of Goods Sold	300.00
		Inventory (6 Nos X $50)		300.00
		(To record the cost of goods sold)
5	6-Jan	Cash (12 Nos X $200)	2,400.00
		Sales		2,400.00
		(To record the sale of 12 turkeys)
		Cost of Goods Sold	600.00
		Inventory (12 Nos X $50)		600.00
		(To record the cost of goods sold)
6	8-Jan	Salaries & Wages Expense	240.00
		Cash		240.00
		(To record the wages paid)
7	9-Jan	Sales Return & Allowance	200.00
		Accounts Receivable (1 Nos X $200)		200.00
		(To record the sales return of 1 Turkey)
		Inventory (1 Nos X $50)	50.00
		Cost of Goods Sold		50.00
		(to record the turkey return)
8	12-Jan	Equipment	2,000.00
		Accounts Payable		2,000.00
		(to record the equipment purchased)
9	14-Jan	Cash ($1,000 X 98%)	980.00
		Sales Discount ($1,000 X 2%)	20.00
		Accounts Receivable		1,000.00
		(To record the cash received)
10	15-Jan	Inventory (10 Nos X $52)	520.00
		Accounts Payable		520.00
		(To record the purchase of turkey)
11	15-Jan	Utility Expense	120.00
		Cash		120.00
		(To record the utility expense)
12	16-Jan	Accounts Payable	104.00
		Inventory (2 Nos X $52)		104.00
		(To record the return of turkey)
13	17-Jan	Cash (8 Nos X $245)	1,960.00
		Sales		1,960.00
		(To record the sale of 12 turkeys)
		Cost of Goods Sold	410.00
		Inventory (3 Nos X $50 + 5 Nos X $52 )		410.00
		(To record the cost of goods sold)
14	18-Jan	Income Tax Payable	No details are given
		Cash
		(To Record the tax paid)
15	18-Jan	Unearned Revenue	800.00
		Service Revenue - Turkey Grooming		800.00
		(To record the service revenue)
16	18-Jan	Accounts Payable	No details are given
		Cash
		(to record the amount paid)
17	20-Jan	Cash	2,200.00
		Accounts Receivables		2,200.00
		(To record the cash received)
18	21-Jan	Advertising Expense	400.00
		Accounts Payable		400.00
		(To record the advertising expense)
19	22-Jan	Inventory (20 Nos X $55)	1,100.00
		Accounts Payable		1,100.00
		(To record the purchase of turkey)
20	23-Jan	Accounts Receivable (10 Nos X $260)	2,600.00
		Sales		2,600.00
		(To record the sale of turkeys)
		Cost of Goods Sold	541.00
		Inventory (3 Nos X $52 + 7 Nos X $55)		541.00
		(To record the cost of goods sold)
21	21-Jan	Freight In	10.00
		Cash		10.00
		(To Record the freight paid)
22	26-Jan	Cash ($2,600 X 97%)	2,522.00
		Sales Discounts ($2,600 X 3%)	78.00
		Accounts receivable		2,600.00
		(To record the cash received)
23	27-Jan	Accounts Receivable (10 Nos X $260)	2,600.00
		Sales		2,600.00
		(To record the sale of turkeys)
		Cost of Goods Sold	550.00
		Inventory (10 nos X $55)		550.00
		(To record the cost of goods sold)
24	28-Jan	Accounts Payable	1,100.00
		Cash		1,100.00
		(To record the cash paid)
25	29-Jan	Gas Expense	20.00
		Postage Expense	39.00
		Office Depot Expense	16.00
		Misc.Expense	30.00
		Travel Expense	40.00
		Cash		145.00
		(To record the petty cash replenish)
26	30-Jan	Inventory - short & Excess	110.00
		Inventory		110.00
		(To record the shortage of 2 Turkeys)
27	30-Jan	Accounts Receivable	120.00
		Bank Charges	20.00
		Cash		140.00
		(To record the bank charges & NSF Checks)
28	31-Jan	Insurance Expense	100.00
		Prepaid Insurance		100.00
		(To record the insurance expense)
29	31-Jan	Depreciation Expense	No details are given
		Accumulated Depreciation - Building
		Accumulated Depreciation - Equipment
		(To record the Depreciation expense)
30	31-Jan	Bad Debt Expense	120.00
		Allowance for Doubtful Accounts		120.00
31	31-Jan	Dividends	500.00
		Cash		500.00
		(To record the dividends paid)