Question: Daniels Company engaged in the following transactions during 2012 a Purchased

Daniels Company engaged in the following transactions during 2012:
a. Purchased $25,000 of merchandise from XYZ Supplies on January 26. Amount due in full on February 28.
b. Paid for 40 percent of the purchased merchandise (transaction a) on February 26.
c. On February 28 negotiate a payment extension with XYZ for the remainder of the balance from the January 26 purchase by signing a one-year, 8 percent note.
d. Borrowed $300,000 on an eight-month, 9 percent interest-bearing note on July 31.
e. Purchased $150,000 of merchandise on August 2. Amount due in full on September 30.
f. Paid for the purchased merchandise (transaction e) on September 28.
g. Received from Martel, Inc., on October 4, a $40,000 deposit against a total selling price of $400,000 for services to be performed for Martel.
h. Paid quarterly installments of Social Security, Medicare and individual income tax withholdings, as shown below, on October 10. The Social Security and Medicare were recorded as expenses during the quarter and the amount paid represents both the employee and employer share (50 percent each).
Social Security taxes ......... $280,000
Medicare taxes ........... 65,484
Income taxes withheld ......... 730,000
i. On December 15 Richmond completed the services ordered by Martel on October 4.
Martel’s remaining balance of $360,000 is due on January 31.

1. Prepare journal entries for these transactions.
2. Prepare any adjusting entries necessary at December 31, 2012.

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  • CreatedSeptember 22, 2015
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