Winter Company's balance sheet at December 31, 2016 is presented below:

During January 2017, the following transactions occurred. Winter uses the perpetual inventory method.

Jan 1 Accepted a 4-month, 8% note from Merando Company in payment of Merando's $1,200 account.

3 Wrote off as uncollectible the accounts of Inwood Corporation ($4501 and Goza Company ($280)

11 Sold inventory that cost 19,600 for $28,000 on account

15 Sold inventory that cost $700 to Mark Lauber for $1,000. Lauber charged this amount on his Visa First Bank credit card. The service fee charged to winter by First Bank is 3%.

17 Collected $22,900 from customers on account 21 Paid 514.300 on accounts payable

24 Received payment in full ($280) from Goza Company on the account written off on January 3

27 Purchased supplies for $1.400 cash

Required:

1. Prepare journal entries for the above transactions.

2. Prepare adjusting entries for the following data:

a. Interest is recorded for the month on the note from January 1

b. Bad debts are expected to be 6% of the January 31, 2017 accounts receivable.

c. A count of supplies on January 31, 2017 reveals that $560 remains unused.

Transcribed Image Text:

Cash Accounts receivable Allowance for doubtful account Inventory Total assets Winter Company Balance Sheet December 31, 2016 $ 13,100 19,780 (800) 26,600 $ 58,680 Accounts payable Owner's capital Total liabilities & equity $ 25,950 32,730 $ 58,680 Cash Accounts receivable Allowance for doubtful account Inventory Total assets Winter Company Balance Sheet December 31, 2016 $ 13,100 19,780 (800) 26,600 $ 58,680 Accounts payable Owner's capital Total liabilities & equity $ 25,950 32,730 $ 58,680

Answer rating: 100% (QA)

Date Account Title explanation Debit Credit Jan01 Accounts Payable 1200 Notes pay... View the full answer