Intermediate Accounting
3rd Edition
ISBN: 9780136912644
Author: Elizabeth A. Gordon; Jana S. Raedy; Alexander J. Sannella
Publisher: Pearson Education (US)
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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 January 1, Year 1 trial balance for the Wright Company is found on the trial balance tab. The beginning balances are
assumed.
Wright Company entered into the following transactions involving short-term liabilities.
Note: Use 360 days a year.
Year 1
April 20 Purchased $49,250 of merchandise on credit from Walsh, terms n/30.
May 19 Replaced the April 20 account payable to Walsh with a 90-day, 14%, $37,000
note payable along with paying $12,250 in cash.
July 8 Borrowed $99,000 cash from NJR Bank by signing a 120-day, 9%, $99,000 note
payable.
August 17 Paid the amount due on the note to Walsh at the maturity date.
November 5 Paid the amount due on the note to NJR Bank at the maturity date.
November 28 Borrowed $57,000 cash from Fargo Bank by signing a 60-day, 8%, $57,000
note payable.
December 31 Recorded an adjusting entry for accrued interest on the note to Fargo
Bank.
Year 2
January 27 Paid the amount due on the note to Fargo Bank at the maturity date.
General General Trial…
Chapter 13 Solutions
Intermediate Accounting
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 - Prob. 13.12ECh. 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 - Prob. 1FSCCh. 13 - Surfing the Standards Case 1: Environmental...Ch. 13 - Prob. 2SSCCh. 13 - Prob. 1BCC
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