Record Transactions for the month of January. Write journalentries for the information provided.
January Transactions for Francineâs Fast Deliveries, Inc.
Jan.1 - Owners invest $16,000 of additional cash in thebusiness.
Jan. 2 - a)2Supplies are purchased for $1,000
b) Insurance is paid for 12 months beginning January 1: $5,700(Record as an asset)
c) Rent is paid for 3 months beginning in January: $4,500 (Recordas an asset)
d) Two employees are hired. Each employee will be paid $2,400 permonth
Jan. 3 - FFD borrows $30,000 from 1st State Bank at 10% annualinterest.
Jan. 6 -A delivery van is purchased for cash. Including tax thetotal cost was $24,000. It will be used for 4 years and will bedepreciated monthly using straight-line with no salvage value. Afull month of depreciation will be charged in January.
Jan. 7 - $600 of the receivables from Decemberâs sales arecollected.
Jan. 8 - $400 of the accounts payable from December are paid.
Jan. 9 - Performed services for customers on account. Mailedinvoices totaling $10,400.
Jan. 10 - Services are performed for cash customers: $7,600.
Jan. 16 - Wages for the first half of the month are paid on January16: $2,400.
Jan. 20 - The company receives $3,500 from a customer for anadvance order for services to be provided in January andFebruary.
Jan. 25 -Collections from customers on account (see January 9transaction): $4,500
Jan. 30 - a)The last 2 weeks wages earned by employees are $1,200per employee and will be paid on February 3.
b)A $1,200 utility bill for January arrived. It is due on February15.
Use this additional Information for adjusting entries at January31:(separate this from the original journal entries)
a) Supplies on hand on January 31 total $250.
b) The company completed 40% of the deliveries for the customer whopaid in advance on January 20.
c) Interest is accrued for the bank loan. (Assume a full month forthe 1st State Bank loan.)
d) Adjust the prepaid asset accounts as needed
e) Record January Depreciation
Record Transactions for the month of January. Write journalentries for the information provided.
January Transactions for Francineâs Fast Deliveries, Inc.
Jan.1 - Owners invest $16,000 of additional cash in thebusiness.
Jan. 2 - a)2Supplies are purchased for $1,000
b) Insurance is paid for 12 months beginning January 1: $5,700(Record as an asset)
c) Rent is paid for 3 months beginning in January: $4,500 (Recordas an asset)
d) Two employees are hired. Each employee will be paid $2,400 permonth
Jan. 3 - FFD borrows $30,000 from 1st State Bank at 10% annualinterest.
Jan. 6 -A delivery van is purchased for cash. Including tax thetotal cost was $24,000. It will be used for 4 years and will bedepreciated monthly using straight-line with no salvage value. Afull month of depreciation will be charged in January.
Jan. 7 - $600 of the receivables from Decemberâs sales arecollected.
Jan. 8 - $400 of the accounts payable from December are paid.
Jan. 9 - Performed services for customers on account. Mailedinvoices totaling $10,400.
Jan. 10 - Services are performed for cash customers: $7,600.
Jan. 16 - Wages for the first half of the month are paid on January16: $2,400.
Jan. 20 - The company receives $3,500 from a customer for anadvance order for services to be provided in January andFebruary.
Jan. 25 -Collections from customers on account (see January 9transaction): $4,500
Jan. 30 - a)The last 2 weeks wages earned by employees are $1,200per employee and will be paid on February 3.
b)A $1,200 utility bill for January arrived. It is due on February15.
Use this additional Information for adjusting entries at January31:(separate this from the original journal entries)
a) Supplies on hand on January 31 total $250.
b) The company completed 40% of the deliveries for the customer whopaid in advance on January 20.
c) Interest is accrued for the bank loan. (Assume a full month forthe 1st State Bank loan.)
d) Adjust the prepaid asset accounts as needed
e) Record January Depreciation
Related questions
Wallaby Kite Company, a small Melbournefirm that sells kites on the Web, wants a master budget for the 3months beginning January 1, 20X2. It desires an ending minimum cashbalance of $ 20,000 each month. Sales are forecasted at an averagewholesale selling price of $ 8 per kite. Merchandise costs average$ 4 per kite. All sales are on credit, payable within 30 days, butexperience has shown that 60% of current sales are collected in thecurrent month, 30% in the next month, and 10% in the monththereafter. Bad debts are negligible. In January, Wallaby Kite isbeginning just- in- time (JIT) deliveries from suppliers, whichmeans that purchases will equal expected sales. On January 1,purchases will cease until inventory decreases to $ 24,000, afterwhich time purchases will equal sales. Purchases during any givenmonth are paid in full during the following month. Monthlyoperating expenses are as follows:
Wages and salaries | $60,000 |
Insurance expired | 500 |
Depreciation | 1000 |
Miscellaneous | 10,000 |
Rent | $1000/month + 10% of quarterly sales over$40,000 |
Cash dividends of $ 6,000 areto be paid quarterly, beginning January 15, and are declared on thefifteenth of the previous month. All operating expenses are paid asincurred, except insurance, depreciation, and rent. Rent of $ 1,000is paid at the beginning of each month, and the additional 10% ofsales is settled quarterly on the tenth of the month following theend of the quarter. The next rent settlement date is January 10.The company plans to buy some new fixtures for $ 12,000 cash inMarch. Money can be borrowed and repaid in multiples of $ 2,000.Management wants to minimize borrowing and repay rapidly. Simpleinterest of 10% per annum is computed monthly but paid when theprincipal is repaid. Assume that borrowing occurs at the beginning,and repayments at the end, of the months in question. Computeinterest to the nearest dollar.
October | $152,000 |
November | 100,000 |
December | 100,000 |
January | 248,000 |
February | 280,000 |
March | 152,000 |
April | 180,000 |
Liabilities as ofDecember 31, 2007 | |||
Accountspayable | $ 142,200 | ||
Dividendspayable | $ 6,000 | ||
Rent payable | $ 31,200 | ||
Owners' Equity | $ 102,800 | ||
$282,200 | |||
Assets as of December31, 2007 | |||
Cash | $ 20,000 | ||
Accountsreceivable | $ 50,000 | ||
Inventory | $ 156,200 | ||
Unexpiredinsurance | $ 6,000 | ||
Fixed assets,net | $ 50,000 | ||
$ 282,200 | |||
A) Prepare a masterbudget including a budgeted income statement, balance sheet, cashbudget, and supporting schedules for the months Januaryââ¬â March20X2.
B) Explain why there is aneed for a bank loan and what operating sources provide the cashfor the repayment of the bank loan.
| Introduction |
Jones Widget Company (JWC) incorporated at the beginning of2014. Below is the post closing trial balance as of 12/31/2014. |
| Account Title | Balance | ||
| Cash | 10,900 | ||
| AccountsReceivable | 8,950 | ||
| Allowance for DoubtfulAccounts | 1,095 | ||
| Inventory | 11,560 | ||
| Prepaid Rent | 3,000 | ||
| Equipment | 39,000 | ||
| AccumulatedDepreciation | 3,800 | ||
| Accounts Payable | 0 | ||
| Sales Tax payable | 600 | ||
| FICA Taxes Payable | 1,000 | ||
| Federal Income Tax(FIT) Payable | 600 | ||
| Wages Payable | 1,350 | ||
| Unemployment taxespayable | 1,000 | ||
| Unearned Revenue | 3,750 | ||
| Interest Payable | 360 | ||
| Notes Payable | 16,000 | ||
| Common Stock | 20,300 | ||
| Add'l PIC | 16,210 | ||
| RE - December 31,2014 | 12,545 | ||
| Treasury Stock | 5,200 | ||
| Additional Information: |
| ⢠| JWC establishes a policy that it will sell inventory at $150 perunit. Sales taxes are 6%. JWC will use the FIFO method and recordCOGS on a perpetual basis. |
| ⢠| Employee wages are $3,800 per month. Employees are paid on the16th for the first half of the month and on the first of thefollowing month for the second half of each month. The income taxeswithheld are $300 each paycheck, and the FICA taxes are $250 perpaycheck. The withholding and the employerâs matching contributionare paid monthly on the second day of the month. In addition,unemployment taxes of $65 are accrued with each payroll. The taxesare paid on March 31. |
| ⢠| The Beginning inventory of $11,560 consists of 170 units. |
| ⢠| ThePrepaid Rent balance is for January 2015. |
| ⢠| The equipment was purchased on July 1, 2014. It is beingdepreciated using the straight line method. |
| ⢠| Unearned Revenue is for 25 units ordered and paid for in advanceby two customers in late December. One order will be filled inJanuary, the remainder in early February. |
| ⢠| The Notes payable represents a $16,000 bank loan received onOctober 1, 2013 at 9% annual interest. |
| ⢠| The parvalue on the common stock is $2. |
| ⢠| Thetreasury stock account has 400 shares. |
| ⢠| Record alltransactions to the nearest dollar. |
| Below are transactions for January2015 |
| Jan 1 | PaidDecember 31 payroll previously accrued. |
| Jan 2 | A $104,0006% six year bond is issued. The effective yield is 7%. |
| 6% | 7% | ||
| Present Value of $1factors | .7050 | .6663 | |
| Present Value of anAnnuity of $1 factors | 4.9173 | 4.7665 | |
| Jan 2 | A truck is purchased for $17,000 cash. It is estimated the truckwill be used for 50,000 miles and will have no salvage value.(Record the purchase to the account "Vehicles"). |
| Jan 2 | Payroll taxes payable (FIT & FICA) recorded in December areremitted to the IRS. |
| Jan 5 | A $1,050customer account is written off as uncollectible. |
| Jan 6 | Sales on account of 165 units of inventory occur during January.Include sales tax of 6%. |
| Jan 10 | Sales taxes of $600 which had been collected and recorded inDecember are paid to the state. |
| Jan 11 | Anadditional 60 units of inventory are purchased on account for$3,900. |
| Jan 12 | The equipment purchased in 2014 for $39,000 is sold for $37,000.No additional depreciation is recorded for January. |
| Jan 14 | Having sold the equipment, JWC pays off the note in full. Theamount paid is $16,414 which includes an additional $54 interestthrough Jan 14. |
| Jan 15 | A portion of the advance order from December (20 units) isdelivered. There is no sales tax on this order. |
| Jan 16 | Record and pay payroll for January 1-15. Record the employerâsmatching share of FICA taxes And the unemployment taxes also. |
| Jan 20 | 200 sharesof the treasury stock are sold for $3,800. |
| Jan 21 | Collections from sales on account totaled $9,900. |
| Jan 27 | Sold theother 200 shares of the treasury stock for $2,000. |
| Jan 28 | JWC declares and distributes a 10% Stock dividend. The marketprice of the stock at the time is $5 per share. (Hint on thestatement of retained earnings, this amount will should be shown asa dividend). |
| Jan 31 | (Adjusting 1) Record depreciation on the truck. During January,the truck is driven 2,500 miles. |
| Jan 31 | (Adjusting 2) It is estimated that 3% of the ending accountsreceivable balance will be uncollectible. |
| Jan 31 | (Adjusting3) Record January rent expired. |
| Jan 31 | (Adjusting 4) Accrue January 31 payroll, which will be payableon February 1. Record the employerâs matching share of FICA taxesalso. |
| Jan 31 | (Adjusting 5) Record ONE MONTHâS interest expense andamortization of premium or discount on the bond. Round to thenearest dollar. |
| 1-a. | Prepare all January journal entries and adjusting entries
|
Karen Noonan opened Marin Inc. on February 1, 2017. DuringFebruary, the following transactions were completed:
| Feb. 1 | Issued 4,200 shares of Marin common stock for $12,480. Eachshare has a $1.50 par. | |
| 1 | Borrowed $7,200 on a 2-year, 6% note payable. | |
| 1 | Paid $8,660 to purchase used floor and window cleaningequipment from a company going out of business ($4,440 was for thefloor equipment and $4,220 for the window equipment). | |
| 1 | Paid $210 for February Internet and phone services. | |
| 3 | Purchased cleaning supplies for $940 on account. | |
| 4 | Hired 4 employees. Each will be paid $460 per 5-day work week(Mondayâ Friday). Employees will begin working Monday, February9. | |
| 5 | Obtained insurance coverage for $11,040 per year. Coverage runsfrom February 1, 2017, through January 31, 2018. Karen paid $2,760cash for the first quarter of coverage. | |
| 5 | Discussions with the insurance agent indicated that providingoutside window cleaning services would cost too much to insure.Karen sold the window cleaning equipment for $3,790 cash. | |
| 16 | Billed customers $3,900 for cleaning services performed throughFebruary 13, 2017. | |
| 17 | Received $504 from a customer for 4 weeks of cleaning servicesto begin February 21, 2017. | |
| 18 | Paid $290 on amount owed on cleaning supplies. | |
| 20 | Paid $3 per share to buy 300 shares of Marin common stock froma shareholder who disagreed with management goals. The shares willbe held as treasury shares. | |
| 23 | Billed customers $4,130 for cleaning services performed throughFebruary 20. | |
| 24 | Paid cash for employeesâ wages for 2 weeks (February 9â13 and16â20). | |
| 25 | Collected $2,400 cash from customers billed on February16. | |
| 27 | Paid $210 for Internet and phone services for March. | |
| 28 | Declared and paid a cash dividend of $0.20 per share. |
Journalize the February transactions. (Creditaccount titles are automatically indented when amount is entered.Do not indent manually. If no entry is required, select "No Entry"for the account titles and enter 0 for the amounts. Record journalentries in the order presented in the problem.)
