How do I do the journal entries, adjusting entries, and closing entries ( assuming FIFO for inventory) Transactions and information for the year: Jan 1st. Spent $3,500 to improve the first piece of equipment purchased in Year 1. Revised useful life is 5 more years while the new salvage value is $2,000. Jan 2nd, ordered and received 200 units of inventory purchased on account for $13 each Jan 15th, paid $100 to settle a warranty claim from a customer. Feb 3rd, ordered and received 150 units of inventory purchased on account for $12 each Feb 22nd, sold 250 units of inventory at $65 each. $10,000 was on account. The inventory came with a 1 year warranty. The company expects that providing the warranty will cost 1% of the sales made. March 1st, incurred and paid $900 of wages expense Mar 30th, collected $5000 of accounts receivable April 1st, paid $50 to settle a warranty claim from a customer. May 2nd, Paid $4000 of accounts payable. June 1st, Paid $409 of taxes payable June 30th, made first interest payment on Note Payable (5% of $175,000 ). Aug 12th, wrote-off a $250 account receivable for a customer who filed for bankruptcy. Oct 12th, sold 100 units of inventory at $56 each. The inventory came with a 1 year warranty. The company expects that providing the warranty will cost 1% of the sales made. Dec 31st, spent $1,500 at end of year to repair equipment. Estimated that 2% of Year 2 sales on account would not be collected. Estimated tax rate is 35%

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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How do I do the journal entries, adjusting entries, and closing entries

( assuming FIFO for inventory)

Transactions and information for the year:

Jan 1^st. Spent $3,500 to improve the first piece of equipment purchased in Year 1. Revised useful life is 5 more years while the new salvage value is $2,000.
Jan 2^nd, ordered and received 200 units of inventory purchased on account for $13 each
Jan 15^th, paid $100 to settle a warranty claim from a customer.
Feb 3^rd, ordered and received 150 units of inventory purchased on account for $12 each
Feb 22nd, sold 250 units of inventory at $65 each. $10,000 was on account. The inventory came with a 1 year warranty. The company expects that providing the warranty will cost 1% of the sales made.
March 1^st, incurred and paid $900 of wages expense
Mar 30^th, collected $5000 of accounts receivable
April 1^st, paid $50 to settle a warranty claim from a customer.
May 2^nd, Paid $4000 of accounts payable.
June 1^st, Paid $409 of taxes payable
June 30^th, made first interest payment on Note Payable (5% of $175,000 ).
Aug 12^th, wrote-off a $250 account receivable for a customer who filed for bankruptcy.
Oct 12^th, sold 100 units of inventory at $56 each. The inventory came with a 1 year warranty. The company expects that providing the warranty will cost 1% of the sales made.
Dec 31^st, spent $1,500 at end of year to repair equipment.
Estimated that 2% of Year 2 sales on account would not be collected.
Estimated tax rate is 35%

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