Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN: 9781305654174
Author: Gary A. Porter, Curtis L. Norton
Publisher: Cengage Learning
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Textbook Question
Chapter 9, Problem 9.4E
Transaction Analysis
Polly’s Cards $ Gifts Shop had the following transactions during the year:
- Polly’s purchased inventory on account from a supplier for $8,000. Assume that Polly’s uses a periodic inventory system.
- On May 1, land was purchased for $44,500. A 20% down payment was made, and an 18-month, 8% note was signed for the remainder.
- Polly’s returned $450 worth of inventory purchased in (a), which was found broken when the inventory was received.
- Polly’s paid the balance due on the purchase of inventory.
- On June 1, Polly signed a one-year, $15,000 note to First State Bank and received $13,800.
- Polly’s sold 200 gift certificates for $25 each for cash. Sales of gift certificates are recorded as a liability. At year-end, 35% of the gift certificates had been redeemed.
- Sales for the year were $120,000, of which 90% were for cash. State sales tax of 6% applied to all sales must be remitted to the state by January 31.
Required
- Record all necessary
journal entries relating to these transactions. - Assume that Polly’s accounting year ends on December 31. Prepare any necessary
adjusting journal entries. - What is the total of the current liabilities at the end of the year?
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Roger Company completed the following transactions during Year 1. Roger's fiscal year ends on December 31.
Jan. 8 Purchased merchandise for resale on account. The invoice amount was $14,860; assume
17 Paid January 8 invoice.
Apr. 1 Borrowed $35,000 from National Bank for general use; signed a 12-month, 8% annual interest-bearing note for the
a perpetual inventory system.
money.
June 3 Purchased merchandise for resale on account. The invoice amount was $17,420.
July 5 Paid June 3 invoice.
Aug. 1 Rented office space in one of Roger's buildings to another company and collected six months' rent in advance
amounting to $6,000.
Dec.20 Received a $100 deposit from a customer as
31 Determined wages of $9,500 were earned but not yet paid on December 31 (disregard payroll taxes).
a guarantee to return a trailer borrowed for 30 days.
Required:
1. For each transaction (including adjusting entries on December 31), indicate the effects (e.g., Cash + or -), using the following
schedule: (Indicate the…
The following are selected transactions of Vaughn Company. Vaughn prepares financial statements quarterly.
Jan.
2
Purchased merchandise on account from Nunez Company, $40,000, terms 2/10, n/30. (Vaughn uses the perpetual inventory system.)
Feb.
1
Issued a 9%, 2-month, $40,000 note to Nunez in payment of account.
Mar.
31
Accrued interest for 2 months on Nunez note.
Apr.
1
Paid face value and interest on Nunez note.
July
1
Purchased equipment from Marson Equipment paying $10,500 in cash and signing a 10%, 3-month, $68,400 note.
Sept.
30
Accrued interest for 3 months on Marson note.
Oct.
1
Paid face value and interest on Marson note.
Dec.
1
Borrowed $27,600 from the Paola Bank by issuing a 3-month, 8% note with a face value of $27,600.
Dec.
31
Recognized interest expense for 1 month on Paola Bank note.
1.Prepare journal entries for the listed transactions and even
Record journal entries for the following purchase transactions of Flower Company.
Oct. 13
Purchased 88 bushels of flowers with cash for $1,500.
Oct. 20
Purchased 300 bushels of flowers for $20 per bushel on credit. Terms of the purchase are 5/10, n/30, invoice dated October 20.
Oct. 30
Paid account in full from the October 20 purchase.
If an amount box does not require an entry, leave it blank. Assume the perpetual inventory system is used.
Oct. 13
- Select -
- Select -
- Select -
- Select -
Oct. 20
- Select -
- Select -
- Select -
- Select -
Oct. 30
- Select -
- Select -
- Select -
Chapter 9 Solutions
Financial Accounting: The Impact on Decision Makers
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