I need Adjusted Trial Balance and multi step Income statement to use this information.
Jones Widget Company (JWC) incorporated near the end of 2013. Operations began in January of 2014. JWC prepares adjusting entries and financial statements at the end of each month. The statements report monthly results for the period February 1-29, 2014.
Pertinent items of general information:
Beginning Balances from 1/31/14
Cash $33,620
Unearned Revenue (40 units) $6,000
Accounts Receivable $9,510
Accounts Payable (Jan Rent) $1,300
Allowance for Doubtful Accounts $700
Notes Payable $18,000
Inventory (30 units) $2,730
Contributed Capital $15,000
Retained Earnings $4,860
⢠JWC establishes a policy that it will sell inventory at $150 per unit.
⢠In January, JWC received a $6,000 advance for 40 units, as reflected in Unearned Revenue.
⢠JWCâs February 1 inventory balance consisted of 30 units at a total cost of $2,730.
⢠JWCâs note payable accrues interest at a 10% annual rate.
⢠JWC will use the FIFO inventory method and record COGS on a perpetual basis.
February Transactions
02/01 Included in JWCâs February 1 Accounts Receivable balance is a $2,000 account due from Kit Kat, a JWC customer. Kit Kat is having cash flow problems and cannot pay its balance at this time. JWC arranges with Kit Kat to convert the $2,000 balance to a note, and Kit Kat signs a 6-month note, at 12% interest. The principal and all interest will be due and payable to JWC on August 1, 2014.
02/02 JWC paid a $500 insurance premium covering the month of February. The amount paid is recorded directly as an expense.
02/05 An additional 150 units of inventory are purchased on account by JWC for $14,100 â terms 3/10, n30; FOB Destination.
02/10 Sales of 110 units of inventory occurred during the period of 02/07 â 02/10. The sales terms are 2/10, net 30.
02/15 The advance order for 40 units from January is delivered to the customer.
02/15 20 units of the inventory that had been sold on 2/10 are returned to JWC. The units are not damaged and can be resold. Therefore, they are returned to inventory. Assume the units returned are identified as being from the batch that was acquired on 02/05.
02/16 JWC pays the first 2 weeks wages to the employees. The total paid $1,500.
02/17 Paid in full the amount owed for the 02/05 purchase of inventory.
02/18 Wrote off a customerâs account in the amount of $700.
02/19 $2,600 of rent for January and February was paid. Because all of the rent will soon expire, the February portion of the payment is charged directly to expense.
02/19 Collected $4,000 on customersâ Accounts Receivable. Of the $4,000, the discount was taken by the customer on
$3,000 of the account balances.
02/21 A new inventory supplier that charges a lower price per unit is located. The new supplierâs terms are 2/15, n45; FOB Shipping Point. JWC purchases 50 units on account for $4,400.
02/22 JWC paid Federal Express $100 to have the 50 units of inventory delivered overnight. Delivery occurred on 02/22.
02/26 JWC recovered $400 cash from the customer whose account had previously been written off (see 02/18).
02/27 A $400 utility bill for February arrived. It is due on March 15 and will be paid then.
02/28 JWC declared and paid a $500 cash dividend.
02/28 Paid in full the amount owed for the 02/21 purchase of inventory.
Adjusting entries:
02/29 (adjusting 1) Record the $1,500 employee salary that is owed but will be paid March 1.
02/29 (adjusting 2) JWC decides to use the aging method to estimate uncollectible accounts. JWC determines 8% of the ending accounts receivable balance is the appropriate end of February estimate of uncollectible accounts.
02/29 (adjusting 3) Record February interest expense accrued on the note payable.
02/29 (adjusting 4) Record one monthâs interest earned Kit Katâs note (see 02/01)
I need Adjusted Trial Balance and multi step Income statement to use this information.
Jones Widget Company (JWC) incorporated near the end of 2013. Operations began in January of 2014. JWC prepares adjusting entries and financial statements at the end of each month. The statements report monthly results for the period February 1-29, 2014.
Pertinent items of general information:
Beginning Balances from 1/31/14
Cash $33,620
Unearned Revenue (40 units) $6,000
Accounts Receivable $9,510
Accounts Payable (Jan Rent) $1,300
Allowance for Doubtful Accounts $700
Notes Payable $18,000
Inventory (30 units) $2,730
Contributed Capital $15,000
Retained Earnings $4,860
⢠JWC establishes a policy that it will sell inventory at $150 per unit.
⢠In January, JWC received a $6,000 advance for 40 units, as reflected in Unearned Revenue.
⢠JWCâs February 1 inventory balance consisted of 30 units at a total cost of $2,730.
⢠JWCâs note payable accrues interest at a 10% annual rate.
⢠JWC will use the FIFO inventory method and record COGS on a perpetual basis.
February Transactions
02/01 Included in JWCâs February 1 Accounts Receivable balance is a $2,000 account due from Kit Kat, a JWC customer. Kit Kat is having cash flow problems and cannot pay its balance at this time. JWC arranges with Kit Kat to convert the $2,000 balance to a note, and Kit Kat signs a 6-month note, at 12% interest. The principal and all interest will be due and payable to JWC on August 1, 2014.
02/02 JWC paid a $500 insurance premium covering the month of February. The amount paid is recorded directly as an expense.
02/05 An additional 150 units of inventory are purchased on account by JWC for $14,100 â terms 3/10, n30; FOB Destination.
02/10 Sales of 110 units of inventory occurred during the period of 02/07 â 02/10. The sales terms are 2/10, net 30.
02/15 The advance order for 40 units from January is delivered to the customer.
02/15 20 units of the inventory that had been sold on 2/10 are returned to JWC. The units are not damaged and can be resold. Therefore, they are returned to inventory. Assume the units returned are identified as being from the batch that was acquired on 02/05.
02/16 JWC pays the first 2 weeks wages to the employees. The total paid $1,500.
02/17 Paid in full the amount owed for the 02/05 purchase of inventory.
02/18 Wrote off a customerâs account in the amount of $700.
02/19 $2,600 of rent for January and February was paid. Because all of the rent will soon expire, the February portion of the payment is charged directly to expense.
02/19 Collected $4,000 on customersâ Accounts Receivable. Of the $4,000, the discount was taken by the customer on
$3,000 of the account balances.
02/21 A new inventory supplier that charges a lower price per unit is located. The new supplierâs terms are 2/15, n45; FOB Shipping Point. JWC purchases 50 units on account for $4,400.
02/22 JWC paid Federal Express $100 to have the 50 units of inventory delivered overnight. Delivery occurred on 02/22.
02/26 JWC recovered $400 cash from the customer whose account had previously been written off (see 02/18).
02/27 A $400 utility bill for February arrived. It is due on March 15 and will be paid then.
02/28 JWC declared and paid a $500 cash dividend.
02/28 Paid in full the amount owed for the 02/21 purchase of inventory.
Adjusting entries:
02/29 (adjusting 1) Record the $1,500 employee salary that is owed but will be paid March 1.
02/29 (adjusting 2) JWC decides to use the aging method to estimate uncollectible accounts. JWC determines 8% of the ending accounts receivable balance is the appropriate end of February estimate of uncollectible accounts.
02/29 (adjusting 3) Record February interest expense accrued on the note payable.
02/29 (adjusting 4) Record one monthâs interest earned Kit Katâs note (see 02/01)
Related questions
| 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
|
| Wallyâs Widget Company (WWC) incorporated near the end of 2011. Operations began in January of 2012. WWC prepares adjusting entries and financial statements at the end of each month. Balances in the accounts at the end of January are as follows: |
| Cash | $ | 21,620 | Unearned Revenue (30 units) | $ | 5,350 | ||
| Accounts Receivable | $ | 12,650 | Accounts Payable (Jan Rent) | $ | 3,300 | ||
| Allowance for Doubtful Accounts | $ | (1,900) | Notes Payable | $ | 16,000 | ||
| Inventory (35 units) | $ | 2,800 | Contributed Capital | $ | 7,000 | ||
| Retained Earnings â Feb 1, 2012 | $ | 3,520 | |||||
| ⢠| WWC establishes a policy that it will sell inventory at $180 per unit. |
| ⢠| In January, WWC received a $5,350 advance for 30 units, as reflected in Unearned Revenue. |
| ⢠| WWCâs February 1 inventory balance consisted of 35 units at a total cost of $2,800. |
| ⢠| WWCâs note payable accrues interest at a 12% annual rate. |
| ⢠| WWC will use the FIFO inventory method and record COGS on a perpetual basis. |
| February Transactions | |
| 02/01 | Included in WWCâs February 1 Accounts Receivable balance is a $1,400 account due from Kit Kat, a WWC customer. Kit Kat is having cash flow problems and cannot pay its balance at this time. WWC arranges with Kit Kat to convert the $1,400 balance to a note, and Kit Kat signs a 6-month note, at 12% annual interest. The principal and all interest will be due and payable to WWC on August 1, 2012. |
| 02/02 | WWC paid a $650 insurance premium covering the month of February. The amount paid is recorded directly as an expense. |
| 02/05 | An additional 180 units of inventory are purchased on account by WWC for $13,500 â terms 2/15, n30. |
| 02/05 | WWC paid Federal Express $360 to have the 180 units of inventory delivered overnight. Delivery occurred on 02/06. |
| 02/10 | Sales of 150 units of inventory occurred during the period of 02/07 â 02/10. The sales terms are 2/10, net 30. |
| 02/15 | The 30 units that were paid for in advance and recorded in January are delivered to the customer. |
| 02/15 | 25 units of the inventory that had been sold on 2/10 are returned to WWC. The units are not damaged and can be resold. Therefore, they are returned to inventory. Assume the units returned are from the 2/05 purchase. |
| 02/16 | WWC pays the first 2 weeks wages to the employees. The total paid is $2,800. |
| 02/17 | Paid in full the amount owed for the 2/05 purchase of inventory. WWC records purchase discounts in the current period rather than as a reduction of inventory costs. |
| 02/18 | Wrote off a customerâs account in the amount of $2,000. |
| 02/19 | $6,600 of rent for January and February was paid. Because all of the rent will soon expire, the February portion of the payment is charged directly to expense. |
| 02/19 | Collected $10,000 of customersâ Accounts Receivable. Of the $10,000, the discount was taken by customers on $8,000 of account balances; therefore WWC received less than $10,000. |
| 02/26 | WWC recovered $600 cash from the customer whose account had previously been written off (see 02/18). |
| 02/27 | A $950 utility bill for February arrived. It is due on March 15 and will be paid then. |
| 02/28 | WWC declared and paid a $950 cash dividend. |
| Adjusting Entries: |
| 02/29 | Record the $2,800 employee salary that is owed but will be paid March 1. | ||
| 02/29 | WWC decides to use the aging method to estimate uncollectible accounts. WWC determines 8% of the ending balance is the appropriate end of February estimate of uncollectible accounts. | ||
| 02/29 | Record February interest expense accrued on the note payable. | ||
| 02/29 | Record one monthâs interest earned Kit Katâs note (see 02/01).
|
