Question

1. Bobcat Coffee had sales of goods totaling $200,000, receiving $150,000 in cash and $50,000 on account. The cost of the goods sold were $60,000.
2. Bobcat Coffee purchased $80,000 of inventory. All purchases were on account.
3. Bobcat Coffee paid salaries of $50,000. This was payment for salaries of $35,000 and $15,000 that was payable from last year.
4. Bobcat Coffee purchased $7,000 of supplies. All of these purchases were on account.
5. Bobcat Coffee received $40,000 cash from customers who had been granted credit. The entire amount collected relates to sales from last year.
6. Bobcat Coffee paid utilities for the current month of $5,000.
7. Bobcat Coffee paid $45,000 to its suppliers related to previous purchases on account.
8. Bobcat Coffee paid $12,000 in rent for the year.
9. Bobcat Coffee incurred depreciation expense for the year on old equipment $2,000.
10. After counting its supplies on hand, Bobcat Coffee determined that they had $6,000 in supplies on-hand. [Hint: What is the amount of supplies that has been used in the month? What journal entry needs to be prepared?]
11. $9,000 of prepaid insurance expired.
12. Bobcat Coffee paid $300 of interest on its long-term debt.
13. Bobcat Coffee incurred $17,000 of salaries expense in December, but will pay this amount next month (January).
14. Bobcat Coffee declared and paid $4,000 in cash dividends.
15. Bobcat Coffee bought a new piece of equipment for $50,000. Bobcat coffee financed the equipment with a note from the bank.
16. The equipment purchased has a 10 year useful life and no expected salvage value. Depreciation is calculated on a straight-line basis.
17. Bobcat Coffee pre sold $3,000 of coffee in December 20x4 to a customer for a week-long conference scheduled for January 20X5. The customer paid upfront for the large order a month ahead of time (December) to secure the order. The coffee was then delivered as planned for the conference in January.

REQUIRED:

1. Prepare journal entries for all of the above transactions.

Answer 1

Bobcat Coffee
Journal entries
Date	Account	Debit	Credit	Calculation
1a	Cash	$   150,000
	Accounts Receivable	$     50,000
	Sales		$   200,000
1b	Cost of goods sold	$     60,000
	Inventory		$     60,000
2	Inventory	$     80,000
	Accounts Payable		$     80,000
3	Salaries expense	$     35,000
	Salaries Payable	$     15,000
	Cash		$     50,000
4	Supplies	$        7,000
	Accounts Payable		$        7,000
5	Cash	$     40,000
	Accounts Receivable		$     40,000
6	Utilities expense	$        5,000
	Cash		$        5,000
7	Accounts Payable	$     45,000
	Cash		$     45,000
8	Rent expense	$     12,000
	Cash		$     12,000
9	Depreciation expense	$        2,000
	Accumulated Depreciation		$        2,000
10	Supplies expense	$        1,000		=7,000-6,000
	Supplies		$        1,000
11	Insurance expense	$        9,000
	Prepaid Insurance		$        9,000
12	Interest expense	$           300
	Cash		$           300
13	Salaries expense	$     17,000
	Salaries Payable		$     17,000
14	Dividends	$        4,000
	Cash		$        4,000
15	Equipment	$     50,000
	Notes Payable		$     50,000
16	Depreciation expense	$        5,000		=50,000/10 yrs
	Accumulated Depreciation		$        5,000
	Assuming equipment is purchased at start of the year, so full year depr
17	Cash	$        3,000
	Unearned Revenue		$        3,000