Problem 1 Assume The Following Transactions Occurred During

Question

Problem 1assume The Following Transactions Occurred During The Year T Assume the following transactions occurred during the year. The annual accounting period ends on December 31. Jan. 15 Purchased and paid for merchandise for resale at an invoice cost of $15,600. A periodic inventory system is used. Apr. 1 Borrowed $800,000 from a bank for general use, executing a one-year, 5% note payable June 14 Received a $12,000 customer deposit for services to be performed in the future. July 15 Performed $4,250 of the services paid for on June 14. Dec. 15 Received an electric bill for $25,680. The bill will be paid in early January. Dec. 31 Determined wages owed to employees to be $13,500 that will be paid on January 2. Required: Prepare journal entries for each of the transactions listed. Prepare any required adjusting entries on December 31.

Dr. Jack HW Helper · Accepted Answer

Introduction The accounting transactions for any business during a fiscal year require careful recording to ensure accurate financial statements. The compilation of journal entries and year-end adjustments reflects the company’s financial position and operational results. This paper provides a detailed journal entry process for the given transactions of the year, including necessary adjusting entries as of December 31. Journal Entries for Each Transaction January 15 – Purchase of Merchandise Debit: Merchandise Inventory $15,600 Credit: Accounts Payable $15,600 This records the purchase of inventory on credit under a periodic inventory system. April 1 – Borrowing Funds Debit: Cash $800,000 Credit: Notes Payable $800,000 This records the issuance of a one-year note payable. June 14 – Customer Deposit Received Debit: Cash $12,000 Credit: Customer Deposits (Liability) $12,000 This records a deposit received for services to be performed later. July 15 – Services Performed Debit: Customer Deposits (Liability) $4,250 Credit: Service Revenue $4,250 This recognizes revenue earned from the previously received deposit. December 15 – Electric Bill Receipt Debit: Utilities Expense $25,680 Credit: Accounts Payable $25,680 This records the utility expense accrued but unpaid at year-end. December 31 – Wages Owed Debit: Wages Expense $13,500 Credit: Wages Payable $13,500 This accrues wages payable at year-end. Adjusting Entries at Year-End (December 31) The main adjusting entries involve accruing expenses that have been incurred but not paid or recorded, which includes the wages payable and utilities expense. The utility bill is already recorded, so no further adjustment is necessary unless there are accrued interest or depreciation considerations. Conclusion Accurate journal entries and proper year-end adjustments are crucial for reflecting the true financial position and performance of a business. Recognizing expenses and revenue at the appropriate times ensures compliance with ac

Problem 1 Assume The Following Transactions Occurred During

Problem 1assume The Following Transactions Occurred During The Year T

Paper For Above instruction

Introduction

Journal Entries for Each Transaction

Adjusting Entries at Year-End (December 31)

Conclusion

References