Record journal entries for the following purchase transactions of Apex Industries, assuming perpetual inventory system is used. Nov. 6 Purchased 24 computers on credit for $560 per computer. Terms of the purchase are 4/10, n/60, invoice dated November 6.
Answer the following questions:
1. Assume that Rolf Dorman invests $20,000 in cash in a new pool cleaning business on
January 1, 2020 and for the first month of operations, engaged in the following
transactions:
a. January 1, 2020 – invested $20,000 in cash
b. January 1, 2020 – paid $1,500 in cash for renting an office space downtown. The
payment covers one quarter’s rent from January to March 2020.
c. January 2, 2020 – received a contract to clean the public pool downtown for the
next six months. The contract will earn Rolf $650 per month and he is expected to
perform the service every 30th of the month.
d. January 5, 2020 – Rolf made some refurbishments in his rented space. He bought
furniture and fixtures amounting to $2,500 on credit. The credit terms is 2/10,
n/eom. He also bought some office equipment amounting to $3,000 on credit with
terms n/eom. Rolf has decided to
line method
equipment is to be depreciated for 8 years also assuming no salvage value and
using straight line method. (Note:straight line method considers equal depreciation
over the useful life of the fixed asset.)
e. January 5, 2020 – office supplies were bought for the business amounting to $850
and paid for in cash. Similarly, cleaning supplies were also bought in preparation
for the uptake of his business. Cleaning supplies amounted to $1,285 and were paid
for in cash.
f. January 10, 2020 – a private estate requested for Rolf’s services. As Rolf is just
starting, he does not have permanent employees except for a secretary in the
office. To complete the pool cleaning service of the private estate, Rolf had to hire
two manual labourers, costing him $120 per person. The service earned Ralf $450
and he paid the labourers immediately.
g. January 15, 2020 – Rolf avails of the discount on the furniture and fixtures that he
bought on credit.
h. January 15, 2020 – Rolf received four more job orders from private individuals that
were to be completed on the same day. This time, Rolf hired six labourers and
assigned them accordingly. The jobs would earn him $450 each and similarly, the
labourers were paid $120 immediately. One job was completed on account while
the other three were paid for in cash.
i. January 30, 2020 – Rolf paid his secretary her monthly wage amounting to $350.
j. January 31, 2020 – Rolf pays for the office equipment bought on credit.
k. January 31, 2020 – end of month office supplies inventory indicated that supplies
on hand amounted to $325. Similarly, cleaning supplies inventory indicated that onhand supplies amounted to $485. Necessary month-end adjustments were also
carried out at the end of the month.
Required:
2. Record
assuming perpetual inventory system is used.
3. Record the journal entries for the following sales transactions of Apache
Industries.
4. Calculate the cost of goods sold dollar value for A65 Company for the month,
considering the following transactions and using FIFO, LIFO and Weighted average
(consider perpetual inventory system).
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