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On January 1, 2021, Displays Incorporated had the following account balances: Accounts Debit Cash $ 41,000 Accounts receivable 38,000 Supplies 44,000 Inventory 77,000 246,000 Land Accounts payable Notes payable (5%, due next year) Common stock Retained earnings Totals Credit $ 56,000 39,000 205,000 146,000 $ 446,000 $ 446,000 From January 1 to December 31, the following summary transactions occurred: a. Purchased inventory on account for $349,000. b. Sold inventory on account for $665,000. The cost of the inventory sold was $329,000. c. Received $594,000 from customers on accounts receivable. d. Paid freight on inventory received, $43,000. e. Paid $339,000 to inventory suppliers on accounts payable of $347,000. The difference reflects purchase discounts of $8,000. f. Paid rent for the current year, $61,000. The payment was recorded to Rent Expense. g. Paid salaries for the current year, $169,000. The payment was recorded to Salaries Expense. Year-end adjusting entries: a. Supplies on hand at the end of the year are $8,000. b. Accrued interest expense on notes payable for the year. c. Accrued income taxes at the end of December are $37,000.

On January 1, 2021, Displays Incorporated had the following account balances: Accounts Debit Cash $ 41,000 Accounts receivable 38,000 Supplies 44,000 Inventory 77,000 246,000 Land Accounts payable Notes payable (5%, due next year) Common stock Retained earnings Totals Credit $ 56,000 39,000 205,000 146,000 $ 446,000 $ 446,000 From January 1 to December 31, the following summary transactions occurred: a. Purchased inventory on account for $349,000. b. Sold inventory on account for $665,000. The cost of the inventory sold was $329,000. c. Received $594,000 from customers on accounts receivable. d. Paid freight on inventory received, $43,000. e. Paid $339,000 to inventory suppliers on accounts payable of $347,000. The difference reflects purchase discounts of $8,000. f. Paid rent for the current year, $61,000. The payment was recorded to Rent Expense. g. Paid salaries for the current year, $169,000. The payment was recorded to Salaries Expense. Year-end adjusting entries: a. Supplies on hand at the end of the year are $8,000. b. Accrued interest expense on notes payable for the year. c. Accrued income taxes at the end of December are $37,000.

FINANCIAL ACCOUNTING
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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### Journal Entry Instructions #### 8. Salaries Payment - **Task:** Paid salaries for the current year amounting to $169,000. - **Action:** This payment was recorded as a Salaries Expense. #### 9. Supplies Adjustment - **Task:** Supplies on hand at the end of the year are valued at $8,000. - **Action:** Record the adjusting entry for supplies. #### 10. Interest Expense Adjustment - **Task:** Record the adjusting entry for accrued interest expense on notes payable. - **Action:** Make the necessary adjustments to reflect the accrued interest. #### 11. Income Taxes Adjustment - **Task:** Accrued income taxes at the end of December amount to $37,000. - **Action:** Record the adjusting entry for income taxes. #### 12. Revenue Closing Entry - **Task:** Record the closing entry for revenue accounts. - **Action:** Close all revenue accounts to prepare financials for the next period. #### 13. Expense Closing Entry - **Task:** Record the closing entry for expense accounts. - **Action:** Close all expense accounts to clear them for the next period. #### Note - **Legend:** A green circle (●) indicates that a journal entry has been entered. This explanation serves as guidance for students learning about financial accounting journal entries, emphasizing the importance of accurate adjustments and closings at the end of the financial year.
Transcribed Image Text:### Journal Entry Instructions #### 8. Salaries Payment - **Task:** Paid salaries for the current year amounting to $169,000. - **Action:** This payment was recorded as a Salaries Expense. #### 9. Supplies Adjustment - **Task:** Supplies on hand at the end of the year are valued at $8,000. - **Action:** Record the adjusting entry for supplies. #### 10. Interest Expense Adjustment - **Task:** Record the adjusting entry for accrued interest expense on notes payable. - **Action:** Make the necessary adjustments to reflect the accrued interest. #### 11. Income Taxes Adjustment - **Task:** Accrued income taxes at the end of December amount to $37,000. - **Action:** Record the adjusting entry for income taxes. #### 12. Revenue Closing Entry - **Task:** Record the closing entry for revenue accounts. - **Action:** Close all revenue accounts to prepare financials for the next period. #### 13. Expense Closing Entry - **Task:** Record the closing entry for expense accounts. - **Action:** Close all expense accounts to clear them for the next period. #### Note - **Legend:** A green circle (●) indicates that a journal entry has been entered. This explanation serves as guidance for students learning about financial accounting journal entries, emphasizing the importance of accurate adjustments and closings at the end of the financial year.
**Financial Overview of Displays Incorporated** On January 1, 2021, Displays Incorporated had the following account balances: **Accounts:** - **Assets:** - Cash: $41,000 - Accounts Receivable: $38,000 - Supplies: $44,000 - Inventory: $77,000 - Land: $246,000 - **Liabilities:** - Accounts Payable: $56,000 - Notes Payable (5%, due next year): $39,000 - **Equity:** - Common Stock: $205,000 - Retained Earnings: $146,000 - **Totals:** - Debits: $446,000 - Credits: $446,000 **Transactions from January 1 to December 31:** a. Purchased inventory on account for $349,000. b. Sold inventory on account for $665,000. The cost of the inventory sold was $329,000. c. Received $594,000 from customers on accounts receivable. d. Paid freight on inventory received, $43,000. e. Paid $339,000 to inventory suppliers on accounts payable of $347,000. The difference reflects purchase discounts of $8,000. f. Paid rent for the current year, $61,000. The payment was recorded to Rent Expense. g. Paid salaries for the current year, $169,000. The payment was recorded to Salaries Expense. **Year-end Adjusting Entries:** a. Supplies on hand at the end of the year are $8,000. b. Accrued interest expense on notes payable for the year. c. Accrued income taxes at the end of December are $37,000.
Transcribed Image Text:**Financial Overview of Displays Incorporated** On January 1, 2021, Displays Incorporated had the following account balances: **Accounts:** - **Assets:** - Cash: $41,000 - Accounts Receivable: $38,000 - Supplies: $44,000 - Inventory: $77,000 - Land: $246,000 - **Liabilities:** - Accounts Payable: $56,000 - Notes Payable (5%, due next year): $39,000 - **Equity:** - Common Stock: $205,000 - Retained Earnings: $146,000 - **Totals:** - Debits: $446,000 - Credits: $446,000 **Transactions from January 1 to December 31:** a. Purchased inventory on account for $349,000. b. Sold inventory on account for $665,000. The cost of the inventory sold was $329,000. c. Received $594,000 from customers on accounts receivable. d. Paid freight on inventory received, $43,000. e. Paid $339,000 to inventory suppliers on accounts payable of $347,000. The difference reflects purchase discounts of $8,000. f. Paid rent for the current year, $61,000. The payment was recorded to Rent Expense. g. Paid salaries for the current year, $169,000. The payment was recorded to Salaries Expense. **Year-end Adjusting Entries:** a. Supplies on hand at the end of the year are $8,000. b. Accrued interest expense on notes payable for the year. c. Accrued income taxes at the end of December are $37,000.
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