The followving items were selected from among the transactions completed by Sherwood Co. during the current year. 1 Purchased merchandise on account from Kirkwood Co., $366,000, terms n/30. 31 Issued a 30-day, 6% note for $366,000 to Kirkwood Co., on account. Mar. Apr. 30 Paid Kirkwood Co. the amount owed on the note of March 31. 1 Borrowed $198,000 from Triple Creek Bank, issuing a 45-day, 8% note. 1 Purchased tools by issuing a $270,000, 60-day note to Poulin Co., which discounted the note at the Jun. Jul. 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, 6.5% note for $198,000. (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. 1 Purchased equipment from Greenwood Co. for $400,000, paying $108,000 cash and issuing a series of Dec. ten 8% notes for $29,200 each, coming due at 30-day intervals. 22 Settled a product liabililty lawsult with a customer for $320,000, payable in January. Accrued the loss in a ltigation caims 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 titiles. Assume a 360-day year. Round your answers to the nearest dollar. 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): a. Product warranty cost, $29,000.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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The following items were selected from among the transactions completed by Sherwood Co. during the current year:

Required:
1. Journalize the transactions. Refer to the Chart of Accounts for exact wording of account titles. Assume a 360-day year. Round your answers to the nearest dollar.
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):
a. Product warranty cost, $29,000.
b. Interest on the nine remaining notes owed to Greenwood Co. Assume a 360-day year.

Instructions
Chart of Accounts
The following items were selected from among the transactions completed by Sherwood Co. during the current year:
CHART OF ACCOUNTS
Mar.
1
Purchased merchandise on account from Kirkwood Co., $366,000, terms n/30.
Sherwood Co.
31
Issued a 30-day, 6% note for $366,000 to Kirkwood Co., on account.
General Ledger
Apr.
30
Paid Kirkwood Co. the amount owed on the note of March 31.
Jun.
1
Borrowed $198,000 from Triple Creek Bank, issuing a 45-day, 8% note.
ASSETS
REVENUE
Jl.
1
Purchased tools by issuing a $270,000, 60-day note to Poulin Co., which discounted the note at the
110 Cash
410 Sales
rate of 6%
111 Accounts Receivable
610 Interest Revenue
16
Paid Triple Creek Bank the interest due on the note of June 1 and renewed the loan by issuing a new
112 Interest Receivable
30-day, 6.5% note for $198,000. (Journalize both the debit and credit to the notes payable account.)
113 Notes Receivable
EXPENSES
Aug.
15
Paid Triple Creek Bank the amount due on the note of July 16.
115 Inventory
510 Cost of Goods Sold
30
Paid Poulin Co. the amount due on the note of July 1.
116 Supplies
520 Salaries Expense
Dec.
1
Purchased equipment from Greenwood Co. for $400,000, paying $108,000 cash and issuing a series of
118 Prepaid Insurance
524 Depreciation Expense-Building
ten 8% notes for $29,200 each, coming due at 30-day intervals.
120 Land
525 Delivery Expense
22
Settled a product liability lawsuit with a customer for $320,000, payable in January. Accrued the loss in
123 Building
526 Repairs Expense
a litigation claims payable account.
124 Accumulated Depreciation-Building
529 Selling Expenses
31
Paid the amount due to Greenwood Co. on the first note in the series issued on December 1.
125 Office Equipment
531 Rent Expense
126 Accumulated Depreciation-Office
532 Depreciation Expense-Office
Required:
Equipment
Equipment
1. Journalize the transactions. Refer to the Chart of Accounts for exact wording of account titles. Assume a 360-day year. Round your answers to
127 Tools
533 Depreciation Expense-Tools
the nearest dollar,
128 Accumulated Depreciation-Tools
534 Insurance Expense
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
535 Supplies Expense
wording of account titles):
a. Product warranty cost, $29.000.
LIABILITIES
536 Payroll Tax Expense
210 Accounts Payable-Kirkwood Co.
537 Vacation Pay Expense
211 Accounts Payable-Greenwood Co.
538 Pension Expense
212 Accounts Payable-Poulin Co.
539 Cash Short and Over
213 Interest Payable
540 Product Warranty Expense
214 Notes Payable
541 Miscellaneous Expense
215 Salaries Payable
710 Interest Expense
216 Social Security Tax Payable
720 Litigation Loss
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 Unemployment Tax Payable
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 Retained Eamings
312 Dividends
Transcribed Image Text:Instructions Chart of Accounts The following items were selected from among the transactions completed by Sherwood Co. during the current year: CHART OF ACCOUNTS Mar. 1 Purchased merchandise on account from Kirkwood Co., $366,000, terms n/30. Sherwood Co. 31 Issued a 30-day, 6% note for $366,000 to Kirkwood Co., on account. General Ledger Apr. 30 Paid Kirkwood Co. the amount owed on the note of March 31. Jun. 1 Borrowed $198,000 from Triple Creek Bank, issuing a 45-day, 8% note. ASSETS REVENUE Jl. 1 Purchased tools by issuing a $270,000, 60-day note to Poulin Co., which discounted the note at the 110 Cash 410 Sales rate of 6% 111 Accounts Receivable 610 Interest Revenue 16 Paid Triple Creek Bank the interest due on the note of June 1 and renewed the loan by issuing a new 112 Interest Receivable 30-day, 6.5% note for $198,000. (Journalize both the debit and credit to the notes payable account.) 113 Notes Receivable EXPENSES Aug. 15 Paid Triple Creek Bank the amount due on the note of July 16. 115 Inventory 510 Cost of Goods Sold 30 Paid Poulin Co. the amount due on the note of July 1. 116 Supplies 520 Salaries Expense Dec. 1 Purchased equipment from Greenwood Co. for $400,000, paying $108,000 cash and issuing a series of 118 Prepaid Insurance 524 Depreciation Expense-Building ten 8% notes for $29,200 each, coming due at 30-day intervals. 120 Land 525 Delivery Expense 22 Settled a product liability lawsuit with a customer for $320,000, payable in January. Accrued the loss in 123 Building 526 Repairs Expense a litigation claims payable account. 124 Accumulated Depreciation-Building 529 Selling Expenses 31 Paid the amount due to Greenwood Co. on the first note in the series issued on December 1. 125 Office Equipment 531 Rent Expense 126 Accumulated Depreciation-Office 532 Depreciation Expense-Office Required: Equipment Equipment 1. Journalize the transactions. Refer to the Chart of Accounts for exact wording of account titles. Assume a 360-day year. Round your answers to 127 Tools 533 Depreciation Expense-Tools the nearest dollar, 128 Accumulated Depreciation-Tools 534 Insurance Expense 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 535 Supplies Expense wording of account titles): a. Product warranty cost, $29.000. LIABILITIES 536 Payroll Tax Expense 210 Accounts Payable-Kirkwood Co. 537 Vacation Pay Expense 211 Accounts Payable-Greenwood Co. 538 Pension Expense 212 Accounts Payable-Poulin Co. 539 Cash Short and Over 213 Interest Payable 540 Product Warranty Expense 214 Notes Payable 541 Miscellaneous Expense 215 Salaries Payable 710 Interest Expense 216 Social Security Tax Payable 720 Litigation Loss 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 Unemployment Tax Payable 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 Retained Eamings 312 Dividends
Journal
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. Round your answers to the nearest dollar.
PAGE 11
JOURNAL
ACCOUNTING EQUATION
DATE
DESCRIPTION
POST. REF.
DEBIT
CREDIT
ASSETS
LIABILITIES
EQUITY
1
2
4
5
6
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
25
24
25
26
27
28
29
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):
A. Product warranty cost, $29,000.
B. Interest on the nine remaining notes owed to Greenwood Co. Assume a 360-day year.
PAGE 12
JOURNAL
ACCOUNTING EQUATION
DATE
DESCRIPTION
POST. REF.
DEBIT
CREDIT
ASSETS
LIABILITIES
EQUITY
Adjusting Entries
2
3
4
5
Transcribed Image Text:Journal 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. Round your answers to the nearest dollar. PAGE 11 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 2 4 5 6 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 25 24 25 26 27 28 29 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): A. Product warranty cost, $29,000. B. Interest on the nine remaining notes owed to Greenwood Co. Assume a 360-day year. PAGE 12 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY Adjusting Entries 2 3 4 5
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