Listed below are selected transactions of Ben’s HomeGoods Store for the current year ending December 31, 2022. a) During December, credit card sales totaled $675,000, which includes the 8% sales tax that must be remitted to the state by the fifteenth day of the following month. (At time of sale, the total amount is recorded in Sales.) b) On December 1, the store received $5,000 from the local community theater for the rental of certain furniture to be used in a stage production during December and January. The furniture will be returned on February 1. c) On December 31 the store was notified it will be required to restore the area (considered a land improvement) surrounding one of its parking lots, when the store moves in 5 years. Ben determined it will cost $78,000 in 2027. Ben estimates the fair value of the asset retirement obligation on December 31, 2022 is $61,500. Prepare the necessary journal entries necessary to record the above transactions as they occurred and any adjusting entries relative to the transactions that would be required on December 31, 2022

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

Listed below are selected transactions of Ben’s HomeGoods Store for the current year ending December 31,
2022.

a) During December, credit card sales totaled $675,000, which includes the 8% sales tax that must be
remitted to the state by the fifteenth day of the following month. (At time of sale, the total amount is
recorded in Sales.)
b) On December 1, the store received $5,000 from the local community theater for the rental of certain
furniture to be used in a stage production during December and January. The furniture will be returned
on February 1.
c) On December 31 the store was notified it will be required to restore the area (considered a land
improvement) surrounding one of its parking lots, when the store moves in 5 years. Ben determined it
will cost $78,000 in 2027. Ben estimates the fair value of the asset retirement obligation on December
31, 2022 is $61,500.

Prepare the necessary journal entries necessary to record the above transactions as they occurred and any
adjusting entries relative to the transactions that would be required on December 31, 2022. 

Expert Solution
Step 1

The amount of revenue which is received in cash for deferred period in which services will be performed or products will delivered is credited to "Unearned Revenue". It is because the amount received is a liability which will be returned in case of non-performance of committed business activity.

trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Income Statement Analysis
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education