1. Prepare general journal entries to record the preceding transactions.

Cash	$3,090
Account Receivable	9,900
Alowance for Doubtfull Account		$100
Inventtory	17,750
Supplies	1,400
Land	9,000
Building and Equipment	42,000
Accumulated Depreciation		4,200
Accounts Payable		10,700
Common Stock (2,000 shares)		20,000
Retained Earning (1/1/2016)		42,400
Dividend	2,000
Sales Revenue		69,700
Costo of Good Sold	36,860
Salaries Expense	12,500
Advertising Expense	8,100
Other Expense	4,500
	$147,100	$147,100

Dec.	Transaction
4	Made cash sales of $7,000; the cost of the inventory sold was $3,500.
7	Purchased $3,500 of inventory on credit.
14	Collected $2,000 of accounts receivable.
18	Sold land for $8,000; the land originally cost $5,000.
20	Made credit sales of $6,000; the cost of the inventory sold was $3,000.
21	Returned $500 of defective inventory to supplier for credit to the Davis Company’s account
27	Purchased $2,500 of inventory for cash.
28	Paid $1,500 of accounts payable.
31	Purchased land at a cost of $7,000; made a $1,000 down payment and signed a 12%, 2-year note for the balance.
31	Made cash sales of $5,000; the cost of the inventory sold was $2,000.

Required:

1. Prepare general journal entries to record the preceding transactions.

2. Post to general ledger T-accounts.

3. Prepare a year-end trial balance using the following information:

(a) accrued salaries at year-end total $2,000.

(b) for simplicity, the building and equipment are being depreciated using the straight-line method over an estimated life of 20 years with no residual value. (Only for one month)

(c) supplies on hand at the end of the year total $500.

(d) bad debts expense for the year totals $1,000; and

(e) the income tax rate is 30%; income taxes are payable in the first quarter of 2017.

4. Prepare the company’s financial statements for 2016.

• Adjusted Trial Balance
• Income Statement
• Retained Earnings
• Balance Sheet

5. Prepare the 2016.

(a) adjusting and

(b) closing entries in the general journal.

Answer rating: 100% (QA)

Step 1 Notes 1 Journal Entries Journal Entries are the organizations transaction records Its split into two categories debit and credit All transactions are documented in the form of debit and credit ... View the full answer