Intermediate Accounting (2nd Edition)
2nd Edition
ISBN: 9780134730370
Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Publisher: PEARSON
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Textbook Question
Chapter 13, Problem 13.1P
Current Operating Liabilities. James Stores, Inc. completed the following transactions during the current year the company’s first year of operations. James Stores has a December 31 year-end.
- 1. January 16: Purchased $546,000 of merchandise inventory from various suppliers on account (no discount for early payment offered).
- 2. February 1: Sold merchandise that cost $100,000 for $120,500 on account. The sales tax rate is 8%
- 3. February 10: Paid half of the January 16 purchases.
- 4. February 16: Paid the remaining balance of accounts payable from the January 16 purchase.
- 5. March 1: Paid the sales taxes recorded on February 1.
- 6. June 1: Sold merchandise that cost $212,000 for $300,000 on account. The sales tax rate is 8%.
Required
- a. Prepare the
journal entries required to record the transactions in the preceding list. Assume that a perpetual inventory system is used. - b. Prepare a partial income statement for the current fiscal year.
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Vigeland Company completed the following transactions during Year 1. Vigeland’s fiscal year ends on December 31.
January 15
Purchased and paid for merchandise. The invoice amount was $15,200; assume a perpetual inventory system.
April 1
Borrowed $774,000 from Summit Bank for general use; signed a 10-month, 9% annual interest-bearing note for the money.
June 14
Received a $24,000 customer deposit for services to be performed in the future.
July 15
Performed $3,450 of the services paid for on June 14.
December 12
Received electric bill for $26,160. Vigeland plans to pay the bill in early January.
December 31
Determined wages of $15,000 were earned but not yet paid on December 31 (disregard payroll taxes).
Required:
Prepare journal entries for each of these transactions.
Prepare the adjusting entries required on December 31.
The following items were selected from among the transactions completed by Sherwood Co. during the current year:
Feb. 15.
Purchased merchandise on account from Kirkwood Co., $144,000, terms n/30.
Mar. 17.
Issued a 60-day, 7% note for $144,000 to Kirkwood Co., on account.
May 16.
Paid Kirkwood Co. the amount owed on the note of March 17.
June 15.
Borrowed $136,800 from Triple Creek Bank, issuing a 60-day, 8% note.
July 21.
Purchased tools by issuing a $114,000, 90-day note to Poulin Co., which discounted the note at the rate of 7%.
Aug. 14.
Paid Triple Creek Bank the interest due on the note of June 15 and renewed the loan by issuing a new 60-day, 10% note for $136,800. (Journalize both the debit and credit to the notes payable account.)
Oct. 13.
Paid Triple Creek Bank the amount due on the note of August 14.
Oct. 19.
Paid Poulin Co. the amount due on the note of July 21.
Dec. 1.
Purchased office equipment from Greenwood Co. for $144,000, paying $24,000 cash and…
The following items were selected from among the transactions completed by Shin Co. during the current year:
Jan. 10. Purchased merchandise on account from Beckham Co., $420,000, terms n/30.
Feb. 9. Issued a 30-day, 6% note for $420,000 to Beckham Co., on account.
Mar. 11. Paid Beckham Co. the amount owed on the note of February 9.
May 1. Borrowed $240,000 from Verity Bank, issuing a 45-day, 5% note.
June 1. Purchased tools by issuing a $312,000, 60-day note to Rassmuessen Co., which discounted the note at the rate of 5%.
15. Paid Verity Bank the interest due on the note of May 1 and renewed the loan by issuing a new 45-day, 7% note for $240,000. (Journalize both the debit and credit to the notes payable account.)
July 30. Paid Verity Bank the amount due on the note of June 15.
30. Paid Rassmuessen Co. the amount due on the note of June 1.
Dec. 1. Purchased office equipment from Lambert Co. for $700,500 paying $160,500 and issuing a series of ten 5% notes for $54,000 each, coming due…
Chapter 13 Solutions
Intermediate Accounting (2nd Edition)
Ch. 13 - Prob. 13.1QCh. 13 - Prob. 13.2QCh. 13 - Prob. 13.3QCh. 13 - Do sellers recognize sales taxes as expenses on...Ch. 13 - Prob. 13.5QCh. 13 - Prob. 13.6QCh. 13 - Prob. 13.7QCh. 13 - What is a gam contingency? Is It accrued and...Ch. 13 - Do firms always accrue and record loss...Ch. 13 - Prob. 13.10Q
Ch. 13 - Prob. 13.11QCh. 13 - Prob. 13.12QCh. 13 - Prob. 13.13QCh. 13 - Prob. 13.14QCh. 13 - Prob. 13.15QCh. 13 - Prob. 13.16QCh. 13 - Prob. 13.1MCCh. 13 - Prob. 13.2MCCh. 13 - Prob. 13.3MCCh. 13 - Medical Services Inc allows employees at the end...Ch. 13 - Trade Notes Payables. On February 1, Seville...Ch. 13 - Unearned Revenues. On June 1 of the current year,...Ch. 13 - Unearned Revenues. GoSnow Inc. provides snow...Ch. 13 - Prob. 13.4BECh. 13 - Prob. 13.5BECh. 13 - Prob. 13.6BECh. 13 - Sales Taxes Payable. Kloth Fabric Store operates...Ch. 13 - Prob. 13.8BECh. 13 - Prob. 13.9BECh. 13 - Prob. 13.10BECh. 13 - Asset Retirement Obligation at Acquisition. On...Ch. 13 - Prob. 13.12BECh. 13 - Asset Retirement Obligation, Disposal. Buckner...Ch. 13 - Prob. 13.14BECh. 13 - Prob. 13.15BECh. 13 - Prob. 13.16BECh. 13 - Prob. 13.17BECh. 13 - Warranty Liability, Assurance-Type Warranty,...Ch. 13 - Prob. 13.19BECh. 13 - Prob. 13.20BECh. 13 - Trade Notes Payable. On November 1, Barcelona...Ch. 13 - Unearned Revenues. On May 1 of the current year,...Ch. 13 - Gift Cards. Diamond Depot sold 57,000 of gift...Ch. 13 - Sales Taxes Payable. Eaton Technology operates...Ch. 13 - Prob. 13.5ECh. 13 - Asset Retirement Obligation. On January 1,...Ch. 13 - Prob. 13.7ECh. 13 - Prob. 13.8ECh. 13 - Prob. 13.9ECh. 13 - Prob. 13.10ECh. 13 - Prob. 13.11ECh. 13 - Accounting for Premiums. Supergreen Grocers, Inc....Ch. 13 - Prob. 13.13ECh. 13 - Payroll Taxes Payable, Pay Exceeds. Wage Base....Ch. 13 - Current Operating Liabilities. James Stores, Inc....Ch. 13 - Prob. 13.2PCh. 13 - Prob. 13.3PCh. 13 - Prob. 13.4PCh. 13 - Prob. 13.5PCh. 13 - Prob. 13.6PCh. 13 - Prob. 13.7PCh. 13 - Payroll Taxes Payable. Jackson Corporation employs...Ch. 13 - Prob. 1JCCh. 13 - Prob. 2JCCh. 13 - Prob. 3JCCh. 13 - Financial Statement Analysis Case You are...Ch. 13 - Surfing the Standards Case 1: Environmental...Ch. 13 - Prob. 2SSCCh. 13 - Prob. 1BCC
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