Question

Make Journal Entries for the following.

1. On December 5, ACME purchased $56,250 of merchandise on account from Indiana Corp terms 3/10, n/30.
2. Sold Merchandise for $5,000 to Lee Corp on account on December 7. Cost of the merchandise was $3,390 and the terms of the sale were 2/15, n/30.
3. On December 14 ACME wrote a check to Indiana Corp for the purchase made on December 5 to take advantage of the purchase discount.
4. On December 15, Lee Corp requested credit for $500 of defective merchandise included in their December 7 purchase. We granted them an allowance and they disposed of the defective merchandise at our request.
5. Lee Corp paid their balance due taking the sales discount offered on December 19.
6. December 20 ACME issued 50 shares of $10 par stock for $31 per share for cash. Prepare the adjustment to record the issuance of stock below.
7. ACME purchased supplies for $1,350 cash on December 21.
8. On December 21 ACME received $2,500 in cash as an advance payment for merchandise to be delivered next month.
9. On December 23 ACME paid in cash the December utility bill of $1,650
10. On December 23, 2016 the board of directors declared a dividend of $8 per share on its 170 issued and outstanding shares to shareholders of record on January 16, 2014 and payable on February 16, 2014. (Note that the company uses a dividends general ledger account to record its dividend payments during the year rather than recording the dividends directly to retained earnings. Be sure to use that account!)
11. On December 28 ACME paid their employees $4,250 for the pay period ending December 23. The salary expense has already been accrued into salaries payable.

Prepare required adjusting Journal Entries.

1. A one year insurance policy was purchased on Sept. 30 for a premium of $18,000. In the space below show your calculations to receive full credit. Complete the required
year-end (December 31, 2016) adjusting entry below.
2. The company’s employees are paid weekly and it is open for business Monday through Saturday each week. The employees have been paid through Friday December 23. The total payroll for all employees is $850 per day and they are paid for all holidays. In the space below show your calculation of the amount due to receive full credit. Record the adjustment to accrue the salary expense through December 31 (ignore the effect of any related payroll taxes).
3. he company takes a physical inventory count at the end of the year and adjusts their inventory and cost of goods sold if there is a difference between the inventory value determined from the actual count compared to the value in the general ledger. The information below includes the number of units counted in inventory at the end of the year and the purchases of inventory during the month.
Number of units held in the company's inventory at 12/31/2016 based on a count of the inventory was 17,728 units.
A listing of purchases during the month of December are as follows:
12/5/16 15,000 3.75/per 56,250
12/14/16 6,500 4.00 26,000
12/21/16 7,500 4.50 33,750

The company uses FIFO to account for its inventory cost.
What is the cost of the company's ending inventory

The balance in inventory per the unadjusted trial balance before making any adjustments is $76,730.
What is the amount of the December 31 adjustment to inventory cost

Answer 1