The following transactions occurred during March 2024 for the Right Corporation. The company operates a wholesale warehouse. 1. Issued 37,000 shares of no-par common stock in exchange for $370,000 in cash. 2. Purchased equipment at a cost of $47,000. Cash of $13,500 was paid and a note payable to the seller was signed for the balance owed. 3. Purchased inventory on account at a cost of $92,000. The company uses the perpetual inventory system. 4. Credit sales for the month totaled $155,000. The cost of the goods sold was $77,000. 5. Paid $5,700 in rent on the warehouse building for the month of March. 6. Paid $6,700 to an insurance company for fire and liability insurance for a one-year period beginning April 1, 2024. 7. Paid $77,000 on account for the inventory purchased in transaction 3. 8. Collected $62,000 from customers on account. 9. Recorded depreciation expense of $1,700 for the month on the equipment. Post the above transactions to the below T-accounts. Assume that the opening balances in each of the accounts is zero. Prepare a trial balance from the ending account balances. Complete this question by entering your answers in the tabs below. T Accounts Trial Balance Prepare a trial balance from the ending account balances. Trial Balance Account Title Cash Common stock Equipment Notes payable Inventory Sales revenue Cost of goods sold Rent expense Prepaid insurance Accounts payable Accounts receivable Depreciation expense Totals $ Debits 0 $ Credits 0

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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Required information [The following information applies to the questions displayed below.] The following transactions apply to Ozark Sales for Year 1: 1. The business was started when the company received $50,000 from the issue of common stock. 2. Purchased merchandise inventory of $175,000 on account. 3. Sold merchandise for $206,500 cash (not including sales tax). Sales tax of 7 percent is collected when the merchandise is sold. The merchandise had a cost of $131,500. 4. Provided a six-month warranty on the merchandise sold. Based on industry estimates, the warranty claims would amount to 3 percent of sales. 5. Paid the sales tax to the state agency on $156,500 of the sales. 6. On September 1, Year 1, borrowed $20,000 from the local bank. The note had a 5 percent interest rate and matured on March 1, Year 2. 7. Paid $6,000 for warranty repairs during the year. 8. Paid operating expenses of $55,000 for the year. 9. Paid $124,000 of accounts payable. 10. Recorded accrued interest on…
B. Koi Inc., a Manitoba-based retail business, began operations on February 1, 2024. During February, Koi purchased a company vehicle for $50,000 cash and $60,000 of inventory for resale on account. In February, Koi also sold 33 1/3% (i.e., one third) of its inventory for $40,000. As a Manitoba company, all of Koi's purchases and sales were subject to 5% GST. Koi is required to file a GST return with the Canada Revenue Agency quarterly. Koi's first GST return covering the period from February 1 to April 30 will be due on May 31st. Koi is also registered as a vendor under Manitoba's Retail Sales Tax (RST), which requires Koi to charge 7% on the selling price (not including GST) of all its sales, and remit the RST collected to the Manitoba government the following month. Koi also must pay Manitoba RST on all its purchases, except those that are exempt from the tax. The inventory purchased for resale was exempt from Manitoba Retail Sales Tax. Koi uses a perpetual inventory costing system.…
The following transactions were completed by Emmanuel Company during the current fiscal year ended December 31: Jan. 29 Received 40% of the $17,000 balance owed by Jankovich Co., a bankrupt business, and wrote off the remainder as uncollectible. Apr. 18 Reinstated the account of Vince Karm, which had been written off in the preceding year as uncollectible. Journalized the receipt of $7,560 cash in full payment of Karm’s account. Aug. 9 Wrote off the $22,380 balance owed by Golden Stallion Co., which has no assets. Nov. 7 Reinstated the account of Wiley Co., which had been written off in the preceding year as uncollectible. Journalized the receipt of $13,220 cash in full payment of the account. Dec. 31 Wrote off the following accounts as uncollectible (one entry): Claire Moon Inc., $22,860; Jet Set Co., $15,320; Randall Distributors, $41,460; Harmonic Audio, $18,890. 31 Based on an analysis of the $2,740,000 of accounts receivable, it was estimated that $113,330 will…

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