Question

Prepare Journal Entries for the following below

January

1. On January 1^st, The Board of Directors issued 250,000 additional shares (par of $.25) to raise capital for the New Year. Assume no change in price from Dec 31, 2018.

2. Purchased a truck for $240,000 cash on the 1^st of January. The truck will be depreciated over a 5 year period. You decide to use the 200% declining-balance depreciation method because it is determined that the truck will be more productive when it is newer. The truck has an estimated salvage value of $25,000.[Adjusting Entry Required]

3. Purchased new office equipment for $97,000 with cash from California Furniture on January 1, 2019. The new furniture will be depreciated over a ten-year period on a straight-line basis. The cabinet has an estimated salvage value of $5,000.[Adjusting Entry Required]

4. On January 1^st, a 5 year, $138,000 long-term note payable was taken from a local bank.

5. On January 5^th you receive payment from interest earned and accrued in 2018.

6. On January 22^nd you purchased 8,500 additional units of inventory at a cost of $76.50 per unit. You paid 45% in cash and purchased the remainder on account.

7. On January 25^th you pay $289,000 cash toward your accounts payable.

February

8. Paid cash for $52,300 worth of radio advertising on February 1^st. This gives you radio advertising space until January 31^st, 2020.[Adjusting Entry Required]

9. February 13^th you collect $356,000 of account payments from customers.

March

10. Purchased a parcel of land on March 1, 2019 for $990,000 by paying $480,000 in cash and signing a short-term note payable with the seller for $510,000. You must repay the $510,000 in exactly one year on March 1, 2020. You agree to pay the seller 5 percent interest (annual rate) on a quarterly basis (June 1, September 1, December 1, 2019, and March 1, 2020).[Adjusting Entry Required]

11. On March 19^th you purchased $29,000 of office supplies from Super Office Supplies with cash.

12. On March 20^th you received a payment of $41,000 for 200 hours of service to be performed in the future.

April

13. April 21^st, your customers bought 15,000 units of your product for $122 per unit (you decide what your company sells). The cost of this product is determined by the method of inventory valuation used by your company. Customers paid you 60% in cash and the remainder was on account.

14. On April 27^nd you purchased 9,250 units at a cost of $78.5 per unit. You paid 65% in cash and purchased the remainder on account.

15. On April 29^th you pay $546,000 cash toward your accounts payable.

May

16. On May 1^st you pay all dividends owed to your owners.

June

17. Leased additional warehouse space from Leasing Solutions for two years on June 1^st due to expiration of the previous rental contract. $105,000 cash was paid for the new contract on this date which covers the rental fee for two years. There is no value left in the previous contract. [Adjusting Entry Required]

18. Wage expenses from January 1 – June 30 are $506,000. Pay this in full including your beginning balance in wages payable.

19. On June 19^th, $134,000 of prepaid insurance was used.

20. On June 26^th a customer that previously bought your product on account has filed for bankruptcy. He owed you $47,500. You expect to collect $0.

July

21. Your company issued 1,000, 2.9% bonds (face value of each bond is $1,000) at 96.8229 on July 1^st, 2019. The bonds are due on July 1, 2024, with interest payable each January 1 and July 1. The market rate at the time of the bond issuance was 3.6 Percent. Use the effective-interest method to calculate both the interest expense and the amortization of the bond discount when each interest payment is made.[Adjusting Entry Required]

August

22. Purchased a Patent (Intangible Asset) for $97,000 on August 1^st. The patent will be amortized over a 10 year period on a straight-line basis.[Adjusting Entry Required]

23. On August 6^th, a piece of land that was originally purchased for $1,150,000 was sold for $2,000,000 cash.

24. August 15^th, your customers bought 9,000 units of your product at $128 per unit. The cost of this product is determined by the method of inventory valuation used by your company. Customers paid you 60% in cash and the remainder was on account.

25. Received on August 25^th a $164,000 cash payment from a customer paying on their account.

September

26. $49,000 cash was paid for an investment in Company X's marketable securities on September 3^rd.   

27. On September 12^th, a piece of equipment was sold for $760,000 cash. The equipment was originally purchased for $530,000. At the time of the sale, it had been depreciated by $75,000.

28. Purchased and used $11,900 worth of fuel for the delivery truck on September 18^th.

October

29. Your top sales officer met with a new customer to discuss a potential future contract. She informs you that the customer is considering signing the $280,000 deal, which would become effective February 2020.

30. On October 1^st, you purchased 11,250 units at the increased price of $80 per unit. The purchase was made on account.

31. On October 10^th you paid your supplier $95,000 cash for inventory purchased on account.

November

32. November 1^st, the CEO, in an effort to adjust ratios, ordered the repurchasing of the company’s own stock. The quantity of stock repurchased was 150,000 shares.

33. Purchased a two-year building insurance policy on November 1^st for $391,000 cash.[Adjusting Entry Required]

34. On November 17^th a customer pays you $736,000 for work that you will finish in January of 2020.

35. November 19^th, your customers bought 8,650 units of your product at $136 per unit. The cost of this product is determined by the method of inventory valuation used by your company. Customers paid you 45% in cash and the remainder was on account.

36. An employment contract is signed with a new regional manager. You have offered him $190,000 per year. He will not begin working for the company until March 2020.

December

37. Wages earned from July 1^st through December 31^st was $552,000. Wages earned between Dec. 15^th and Dec 31^st amounting to $34,000 was not paid this until Jan 7th.

38. At the end of the year, $54,000 cash was paid to the local bank for the long-term note payable taken out on January 1, 2019. $46,000 of this was applied to the loan principal. The remaining amount was the accumulated interest due for 2019.

39. On December 31^st, the marketable (trading) securities you purchased on September 3, 2019 transaction now has a fair market value of $35,000.

40. On December 31^st, $579,000 depreciation expense for the year was calculated for equipment purchased before January 1, 2019.

41. On December 31^st, you declare dividends of $.24 per share to be paid at a later date.

42. On December 31^st, the utility bill was paid for the year. The amount was $54,000 and you paid in cash.

43. On December 31^st, you pay in cash recurring interest on the long-term note acquired prior to the year 2017. HINT: See prior year financial statements.

44. On December 31^st, your company earned interest on the average 2019 cash balance which will be paid January 5^th, 2020. The average interest rate for the year was 4.0%. Note: Compute the average cash using only the beginning and ending balance.

45. By December 31^st, 147 of the prepaid service hours from March 20, 2019 were completed.

46. A count of office supplies indicated that $26,800 of office supplies had been used by December 31^st.

47. Since the inception of your company, you have been able to collect 89% of your ending accounts receivable balance from customers that bought your product on account. Based on this information, adjust your allowance for bad debt account. NOTE: Use your 2019 ending accounts receivable balance to make this calculation.

Answer 1

Solution:
Journal Entries
Date	Particulars	Debit	Credit
Jan-01	Cash	10,62,500.00
	Common Stock		62,500.00
	Excess of Par		10,00,000.00
Jan-01	Truck	2,40,000.00
	Cash		2,40,000.00
Jan-01	Office Equipment	97,000.00
	Cash		97,000.00
Jan-01	Cash	1,38,000.00
	Notes Payable		1,38,000.00
Jan-05	Cash	1,000.00
	Accrued Interest		1,000.00
Jan-22	Inventory	6,50,250.00
	Cash		2,92,612.50
	Accounts Payable		3,57,637.50
Jan-25	Accounts Payable	2,89,000.00
	Cash		2,89,000.00
Feb-01	Advertisement	52,300.00
	Cash		52,300.00
Feb-13	Cash	3,56,000.00
	Accounts Receivable		3,56,000.00