The following items were selected from among the transactions completed by Sherwood Co. during the current year:
The following items were selected from among the transactions completed by Sherwood Co. during the current year:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
The following items were selected from among the transactions completed by Sherwood Co. during the current year:
Mar. | 1 | Purchased merchandise on account from Kirkwood Co., $225,000, terms n/30. |
31 | Issued a 30-day, 8% note for $225,000 to Kirkwood Co., on account. | |
Apr. | 30 | Paid Kirkwood Co. the amount owed on the note of March 31. |
Jun. | 1 | Borrowed $600,000 from Triple Creek Bank, issuing a 45-day, 6% note. |
Jul. | 1 | Purchased tools by issuing a $50,000, 60-day note to Poulin Co., which discounted the note at the rate of 6%. |
16 | Paid Triple Creek Bank the interest due on the note of June 1 and renewed the loan by issuing a new 30-day, 7% note for $600,000. (Journalize both the debit and credit to the notes payable account.) | |
Aug. | 15 | Paid Triple Creek Bank the amount due on the note of July 16. |
30 | Paid Poulin Co. the amount due on the note of July 1. | |
Dec. | 1 | Purchased equipment from Greenwood Co. for $280,000, paying $80,000 cash and issuing a series of ten 9% notes for $20,000 each, coming due at 30-day intervals. |
22 | Settled a product liability lawsuit with a customer for $40,000, payable in January. Accrued the loss in a litigation claims payable account. | |
31 | Paid the amount due to Greenwood Co. on the first note in the series issued on December 1. |
Required: | |||||
1. | Journalize the transactions. Refer to the Chart of Accounts for exact wording of account titles. Assume a 360-day year. | ||||
2. | Journalize the adjusting entry for each of the following accrued expenses at the end of the current year (refer to the Chart of Accounts for exact wording of account titles):
|
CHART OF ACCOUNTSSherwood Co.General Ledger
ASSETS | |
110 | Cash |
111 | |
112 | Interest Receivable |
113 | Notes Receivable |
115 | Inventory |
116 | Supplies |
118 | Prepaid Insurance |
120 | Land |
123 | Building |
124 | |
125 | Office Equipment |
126 | Accumulated Depreciation-Office Equipment |
127 | Tools |
128 | Accumulated Depreciation-Tools |
LIABILITIES | |
210 | Accounts Payable-Kirkwood Co. |
211 | Accounts Payable-Greenwood Co. |
212 | Accounts Payable-Poulin Co. |
213 | Interest Payable |
214 | Notes Payable |
215 | Salaries Payable |
216 | Social Security Tax Payable |
217 | Medicare Tax Payable |
218 | Employees Federal Income Tax Payable |
219 | Employees State Income Tax Payable |
220 | Group Insurance Payable |
221 | Bond Deductions Payable |
224 | Federal |
225 | State Unemployment Tax Payable |
226 | Vacation Pay Payable |
227 | Unfunded Pension Liability |
228 | Product Warranty Payable |
229 | Litigation Claims Payable |
EQUITY | |
310 | Common Stock |
311 | |
312 | Dividends |
REVENUE | |
410 | Sales |
610 | Interest Revenue |
EXPENSES | |
510 | Cost of Goods Sold |
520 | Salaries Expense |
524 | Depreciation Expense-Building |
525 | Delivery Expense |
526 | Repairs Expense |
529 | Selling Expenses |
531 | Rent Expense |
532 | Depreciation Expense-Office Equipment |
533 | Depreciation Expense-Tools |
534 | Insurance Expense |
535 | Supplies Expense |
536 | Payroll Tax Expense |
537 | Vacation Pay Expense |
538 | Pension Expense |
539 | Cash Short and Over |
540 | Product Warranty Expense |
541 | Miscellaneous Expense |
710 | Interest Expense |
720 | Litigation Loss |
1. Journalize the transactions. Refer to the Chart of Accounts for exact wording of account titles. Assume a 360-day year. Scroll down to access page 12 of the journal.
PAGE 11
JOURNAL
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2. | Journalize the adjusting entry for each of the following accrued expenses at the end of the current year (refer to the Chart of Accounts for exact wording of account titles):
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PAGE 12
JOURNAL
ACCOUNTING EQUATION
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