Iron Man Corporation is a small private corporation that sells desktop printers to local businesses and...

Transcribed Image Text:

Iron Man Corporation is a small private corporation that sells desktop printers to local businesses and schools. On May 1, 2024, the following were the account balances of Iron Man Corporation: Cash Debits 40400 Credits Allowance for Doubtful Accounts 2400 Accounts Receivable 16000 Accumulated Depreciation (Van) 32000 Inventory (400 units) 76000 Accumulated Depreciation (Furniture & Fixture 4000 Van 36000 Accounts Payable 10000 Furniture & Fixtures 12000 Common Shares 16000 Retained Earnings 116000 Total Debits 180400 Total Credits 180400 During May 2024, the following transactions took place: May 1: Bought 136 desktop printers for $152 each on account. May 1: Bought a van, paying $7200 cash as a down payment and signed a 10 month $32000, 9% note payable for the balance. The company paid $640 to have its company logo printed on the side of the van. The residual value is $4000. The old van was sold for $4400; it cost $36000 and acculumated depreciation up to the date of disposal was $32000. May 10: Sold 112 printers to Okoye Inc. on account. May 12: Rand Enterprises agreed to sign a 90-day note receivable to replace a $1360 accounts receivable due that day. The interest rate on the note is 7.6%. May 20: Sold 3 printers to Captain Marvel Inc. using a VISA card to pay for the transaction. A 3.6% service fee is charged by VISA. May 22: Sold 80 printers to Carol Danvers Public School on account. May 24: Returned for credit 2 damaged printers from Okoye Inc., costing $152 each. May 28: Received payment in full from Okoye Inc. for the balance owing. May 28: Wrote off as uncollectable $2600 of accounts receivable. May 29: Paid accounts payable, $10400. May 30: Recovered an accounts receivable that was written off in April, $720. May 31: Paid operating expenses totalling $36400. May 31: Recorded depreciation on the van and the furniture & fixtures. The company uses straight-line depreciation for the van. The van is estimated to be used for 8 years. The furniture & fixtures are depreciated using the straight-line method over 4 years. There is no residual value on the furniture and fixtures. May 31: Recorded interest on the note payable. May 31: Recorded interest on the notes receivable. May 31: The company records the bad debt expense based on the aging of accounts receivables, which follows: Number of Days Outstanding 0-30 days 31-60 days 61-90 days 90+ days Other Information: Accounts Receivable Estinated Percentage Uncollectable $28000 0.8% $8800 3.2% $3200 $640 9.6% 20% 1) The selling price for each of the printers is $440. 2) Iron Man Corporation uses the FIFO method under the perpetual inventory system to account for inventory. 3) In the past, Iron Man Corporation has used the following accounts on their financial statements: Bad Debt Expense, Cost of Goods Sold, Credit Card Fee, Depreciation Expense, Gain on Sale, Interest Expense, Interest Payable, Interest Receivable, Interest Revenue, Loss on Sale, Notes Payable, Notes Receivable, Operating Expenses, Sales Returns, Sales Revenue. Not all accounts have been used each period. Required: 1) Prepare the journal entries for the transactions including any adjusting journal entries for the month of May 31, 2024. Place your answer under *Requirement 1" in the "Answer" tab. A reminder to round all final numbers to the nearest dollar. Do not round during calculations. Ensure your spelling is accurate. Do not use abbreviations for your accounts. Spell them out in their entirety. A reminder to only use the accounts given in the question. Explanations are not required. Iron Man Corporation is a small private corporation that sells desktop printers to local businesses and schools. On May 1, 2024, the following were the account balances of Iron Man Corporation: Cash Debits 40400 Credits Allowance for Doubtful Accounts 2400 Accounts Receivable 16000 Accumulated Depreciation (Van) 32000 Inventory (400 units) 76000 Accumulated Depreciation (Furniture & Fixture 4000 Van 36000 Accounts Payable 10000 Furniture & Fixtures 12000 Common Shares 16000 Retained Earnings 116000 Total Debits 180400 Total Credits 180400 During May 2024, the following transactions took place: May 1: Bought 136 desktop printers for $152 each on account. May 1: Bought a van, paying $7200 cash as a down payment and signed a 10 month $32000, 9% note payable for the balance. The company paid $640 to have its company logo printed on the side of the van. The residual value is $4000. The old van was sold for $4400; it cost $36000 and acculumated depreciation up to the date of disposal was $32000. May 10: Sold 112 printers to Okoye Inc. on account. May 12: Rand Enterprises agreed to sign a 90-day note receivable to replace a $1360 accounts receivable due that day. The interest rate on the note is 7.6%. May 20: Sold 3 printers to Captain Marvel Inc. using a VISA card to pay for the transaction. A 3.6% service fee is charged by VISA. May 22: Sold 80 printers to Carol Danvers Public School on account. May 24: Returned for credit 2 damaged printers from Okoye Inc., costing $152 each. May 28: Received payment in full from Okoye Inc. for the balance owing. May 28: Wrote off as uncollectable $2600 of accounts receivable. May 29: Paid accounts payable, $10400. May 30: Recovered an accounts receivable that was written off in April, $720. May 31: Paid operating expenses totalling $36400. May 31: Recorded depreciation on the van and the furniture & fixtures. The company uses straight-line depreciation for the van. The van is estimated to be used for 8 years. The furniture & fixtures are depreciated using the straight-line method over 4 years. There is no residual value on the furniture and fixtures. May 31: Recorded interest on the note payable. May 31: Recorded interest on the notes receivable. May 31: The company records the bad debt expense based on the aging of accounts receivables, which follows: Number of Days Outstanding 0-30 days 31-60 days 61-90 days 90+ days Other Information: Accounts Receivable Estinated Percentage Uncollectable $28000 0.8% $8800 3.2% $3200 $640 9.6% 20% 1) The selling price for each of the printers is $440. 2) Iron Man Corporation uses the FIFO method under the perpetual inventory system to account for inventory. 3) In the past, Iron Man Corporation has used the following accounts on their financial statements: Bad Debt Expense, Cost of Goods Sold, Credit Card Fee, Depreciation Expense, Gain on Sale, Interest Expense, Interest Payable, Interest Receivable, Interest Revenue, Loss on Sale, Notes Payable, Notes Receivable, Operating Expenses, Sales Returns, Sales Revenue. Not all accounts have been used each period. Required: 1) Prepare the journal entries for the transactions including any adjusting journal entries for the month of May 31, 2024. Place your answer under *Requirement 1" in the "Answer" tab. A reminder to round all final numbers to the nearest dollar. Do not round during calculations. Ensure your spelling is accurate. Do not use abbreviations for your accounts. Spell them out in their entirety. A reminder to only use the accounts given in the question. Explanations are not required.

Answer rating: 100% (QA)

Journal Entries for Iron Man Corporation May 2024 May 1 Debit Inventory 20672 152 136 Credit Account... View the full answer