Adjustment data:

1.		Interest is recorded for the month on the note from January 1.
2.		Bad debts are expected to be 6% of January 31, 2022, accounts receivable.
3.		A count of advertising supplies on January 31, 2022, reveals that $550 remains unused.
4.		The income tax rate is 30%. (Hint: Prepare the income statement up to Income before taxes and multiply by 30% to compute the amount; round to whole dollars.)

(You may want to set up T-accounts to determine ending balances.)

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Transcribed Image Text:

Sunland Company's balance sheet at December 31, 2021, is presented below. Sunland Company Balance Sheet December 31, 2021 Cash $13.380 Accounts payable $8,160 Accounts receivable 19,800 Common stock 21,000 Allowance for doubtful accounts (800) Retained earnings 12,770 Inventory 9,550 $41,930 $41,930 During January 2022, the following transactions occurred. Sunland uses the perpetual inventory method. Jan. 1 Sunland accepted a 4-month, 8% note from Betheny Company in payment of Betheny's $3,600 account. 3 Sunland wrote off as uncollectible the accounts of Walter Corporation ($500) and Drake Company ($200). 8 Sunland purchased $15,780 of inventory on account. 11 Sunland sold for $25,600 on account inventory that cost $16,550. 15 Sunland sold inventory that cost $650 to Jack Rice for $1,000. Rice charged this amount on his Visa First Bank card. The service fee charged Sunland by First Bank is 3%. 17 Sunland collected $21,100 from customers on account. 21 Sunland paid $15,360 ona s payable. 24 Sunland received payment in full ($200) from Drake Company on the account written off on January 3. 27 Sunland purchased advertising supplies for $1,450 cash. 31 Sunland paid other operating expenses, $3,230. Sunland Company's balance sheet at December 31, 2021, is presented below. Sunland Company Balance Sheet December 31, 2021 Cash $13.380 Accounts payable $8,160 Accounts receivable 19,800 Common stock 21,000 Allowance for doubtful accounts (800) Retained earnings 12,770 Inventory 9,550 $41,930 $41,930 During January 2022, the following transactions occurred. Sunland uses the perpetual inventory method. Jan. 1 Sunland accepted a 4-month, 8% note from Betheny Company in payment of Betheny's $3,600 account. 3 Sunland wrote off as uncollectible the accounts of Walter Corporation ($500) and Drake Company ($200). 8 Sunland purchased $15,780 of inventory on account. 11 Sunland sold for $25,600 on account inventory that cost $16,550. 15 Sunland sold inventory that cost $650 to Jack Rice for $1,000. Rice charged this amount on his Visa First Bank card. The service fee charged Sunland by First Bank is 3%. 17 Sunland collected $21,100 from customers on account. 21 Sunland paid $15,360 ona s payable. 24 Sunland received payment in full ($200) from Drake Company on the account written off on January 3. 27 Sunland purchased advertising supplies for $1,450 cash. 31 Sunland paid other operating expenses, $3,230.

Answer rating: 100% (QA)

Sunland Company Journal Entry Date Particulars Debit in Credit in 112022 Note Receivable ac Dr 1200 ... View the full answer