Please Can you dojournal entries for each event. 2. Prepareadjusting entries, and Closing entries
The 2014 balance sheet of the Captain Jet Inc. is attached.During 2015, the following events occurred.
1. On January 10, sell merchandise on account to Rayms $9,800 andFischer $8,600. Terms 1/10, n/30. Freight $100 for each sale,F.O.B. shipping point.
2. On January 12, purchase merchandise on account from Zapfel$3,000 and Liotta $2,400. Terms 2/10, n/30. Freight $120 for eachsale, F.O.B. destination.
3. On January 13, receive checks, $4,000 from Longhini and $2,000from Hall, for sales on account after discount period haslapsed.
4. On January 15, send checks to Joosten for 9,000 less 2% cashdiscount, and to Maida for $11,000 less 1% cash discount.
5. On January 16, issue credit of $100 to Fieber for merchandisereturned.
6. On January 18, summary daily cash sales total $17,520.
7. On January 21, pay off the balances to Zapfel and Liotta for thepurchases on January 12.
8. On Feburary 9, receive payment in full from Rayms andFischer.
9. On March 1, pay rent of $6,000 for a two-year term.
10. On April 1, sell merchandise on account to Dunlap $1,600, term2/10, n/30. Freight $100, F.O.B. shipping point.
11. Pay $500 cash for office supplies on May 1.
12. Cash dividends totaling $900 are declared on June 13 and paidto stockholders on June 23.
13. Issue a note of $120,000 to bank (one year, annual interestrate 2%) for cash on July 1.
14. On July 5, purchase merchandise from Maida $33,000, terms 2/10,n/30.
15. On July 7, issue common stock 1000 shares, $10 par, in exchangeof a land with a fair market value of $15,000.
16. On July 8, return $200 of merchandise to Maida and receivecredit.
17. On August 1, sell merchandise to Lachey on account $80,000,term 1/10, n/30. Freight $1,500, F.O.B. shipping point.
18. On August 4, pay off the balance to Maida.
19. On August 10, receive half of the payment from Lachey.
20. On August 14, write off $1,300 bad debt for one account,Tooket.
21. On August 21, pay utilities expense, $10,092.
22. On August 31, Lachey pays off its balance.
23. On September 1, pay cash $7,500 to Farmington for merchandisepurchased last year.
24. On October 1, pay off notes payable $110,000 and associatedaccrued interest $6,000, of which $1,500 was shown on the balancesheet.
25. Over the year, sales and office employees earned $45,500 insalaries and wages, of which $1,500 was still payable at the end ofyear.
26. An unpaid utilities bill (December, $1,250) is due on January10 next year.
Additional Information at the end of the year:
1. Depreciation expense for the year was $13,250.
2. The company estimated that it has to pay federal income tax,$3,250.
3. After physically counting, the company decided that the endinginventories worth $40,146.
4. Based on its historical data, the company estimated that the baddebts were about 1% of net credit
1
sales.
5. Unearned revenue is decreased by $12,000.
6. The company expenses all of the supplies purchased during theyear.
7. No insurance policy is effective during the year.
8. The company used the gross method to record its purchases andsales on credit. 9. The company adopts the periodic inventorysystem.
Instructions:
Prepare journal entries for each event. 2. Prepare adjustingentries. Closing entries
CAPTAIN JET INC. BALANCE SHEETDECEMBER 31, 2014
Current Assets
Cash 42,500
Notes Receivable 16,000
Accounts Receivable 41,800
Less: Allowance for Doubtful Accounts I (3,000)
Nventories 38,000
Prepaid Insurance 540
Prepaid Rent 600
Total Current Assets 136,440
Non-Current Assets
Long-term Investments
Investments in held-for-maturity securities 52,000
Land held for future development 45,500
Property, Plant, and Equipment
Land 85,000
Buildings 675,000
Less: Accumulated Depreciation (187,500)
Intangible Assets
Capitalized Development Costs 8,000
Goodwill 76,700
Other Identifiable Intangible Assets 48,000
Total Non-Current Assets 802,700
Total Assets 939,140
Current Liabilities
Notes Payable 110,000
Accounts Payable 33,500
Unearned Revenues 12,000
Income Taxes Payable 8,440
Property Taxes Payable 6,600
Interest Payable 1,500
Total Current Liabilities 172,040
Non-Current Liabilities
Provisions Related to Pensions 84,100
Bonds Payable 300,000
Total Non-Current Liabilities 384,100
Total Liabilities 556,140
Stockholders' Equity
Common Stock 100,000
Preferred Stock 100,000
Paid-in-capital - Common Stock 27,500
Paid-in-capital - Preferred Stock 10,000
Retained Earnings 153,250
Accumulated Other Comprehensive Income 5,000
Less: Treasury Stock (12,750)
Total Stockholders' Equity 383,000
Total Liabilities and Stockholders' Equity393,140
Use the following check figures
Adjusted Trial Balance: Total $1,276,055
Income Statement:
Earning after income tax: $9,827
Retained Earnings Statement:
Retained Earnings: $162,177
Balance Sheet:
Inventory: $40,146
Total assets: $939,267
Statement of Cash Flows
Net cash flows from this year: ($1,274)
Cash (ending): $41,226
