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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.

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
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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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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