Gregarious Games sells board games to customers. The following are the beginning balances of its accounts for the month of March. Account Debit Credit Cash $ 80,000 Accounts Receivable 10,000 Allowance for Doubtful Accounts $ 300 Inventory 57,000 Equipment 60,000 Accumulated Depreciation 5,000 Accounts Payable 6,000 Common Stock 180,000 Retained Earnings 15,700 The beginning inventory has 1,500 units. Gregarious Games uses the perpetual inventory method for its inventory transactions and the LIFO method for calculating Cost of Goods Sold. March transactions: Sold 1,000 units of inventory for $60,000 to a customer in exchange for a note receivable. The note is due in eighteen months and the interest rate is 10%. Purchased 700 units of inventory for $28,000 on account with credit terms 2/10, n/30. Paid cash for our supplier for the inventory purchased on March 3rd. Sold 900 units of inventory at $60 each for cash. Purchased 500 units of inventory for $21,000 on account with credit terms 2/10, n/30. Sold 400 units of inventory for $24,000 on account. Paid employee salaries for the month totaling $4,400. Adjustments: Depreciation for the month is $1,000. One month of interest has accrued on the note receivable. Gregarious Games uses the percentage of receivables method to estimate bad debts and extimates that 3% of the month end receivables will be uncollectible. Create a general journal.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Gregarious Games sells board games to customers. The following are the beginning balances of its accounts for the month of March.

Account		Debit		Credit
Cash	$	80,000
Accounts Receivable		10,000
Allowance for Doubtful Accounts			$	300
Inventory		57,000
Equipment		60,000
Accumulated Depreciation				5,000
Accounts Payable				6,000
Common Stock				180,000
Retained Earnings				15,700

The beginning inventory has 1,500 units.

Gregarious Games uses the perpetual inventory method for its inventory transactions and the LIFO method for calculating Cost of Goods Sold.

March transactions:

Sold 1,000 units of inventory for $60,000 to a customer in exchange for a note receivable. The note is due in eighteen months and the interest rate is 10%.
Purchased 700 units of inventory for $28,000 on account with credit terms 2/10, n/30.
Paid cash for our supplier for the inventory purchased on March 3rd.
Sold 900 units of inventory at $60 each for cash.
Purchased 500 units of inventory for $21,000 on account with credit terms 2/10, n/30.
Sold 400 units of inventory for $24,000 on account.
Paid employee salaries for the month totaling $4,400.

Adjustments:

Depreciation for the month is $1,000.
One month of interest has accrued on the note receivable.
Gregarious Games uses the percentage of receivables method to estimate bad debts and extimates that 3% of the month end receivables will be uncollectible.

Create a general journal.

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