Create Journal Entries for Each of the following: 10/1/2015 Luigi invested $180,000 cash to start up
Question:
Create Journal Entries for Each of the following:
10/1/2015 – Luigi invested $180,000 cash to start up the business. He received no-par value common stock in return.
10/1/2015 – DigiFun borrowed $40,000 in short-term notes to be repaid in 6 months @ at annual interest rate equal: %5
10/1/2015 – Purchased shelving units (furniture) for $22,000 cash and video game platforms and televisions (equipment) for $11,000. These will be used in the store. The shelves have an estimated $1,000 salvage value and the equipment has no estimated salvage value.
Estimated useful lives are as follows:
Furniture = 5 years, Equipment = 3 years
10/2/2015 – Paid rent of $2,400 in cash for the period of October 2014 – March 2015.
10/2/2015 – Purchased copies of several different new video game titles to be held for sale. The video games cost a total of $1,378 ($26 for each game) and half of this was paid in cash and the other half was on credit.
10/3/2015 – Purchase office supplies on credit for $265
10/3/2015 – Paid for television advertising to be run in the month of October in cash of $2,000
10/4/2015 – Returned 4 copies of a new video game title purchased on 10/2 to the manufacturer. This was an error in ordering.
10/5/2015 – Paid remaining balance of 10/2 inventory purchase in full with cash.
10/7/2015 – Recorded sales for the first week of business.
New Video Game Sales: 23 games for $1,495 before discounts
Sales Discounts: $147
All sales were for cash
10/9/2015 – Purchased additional new video game inventory for a total of $600 of cash ($25 per game).
10/10/2015 – Paid for supplies purchase on 10/3 in full with cash
10/11/2015 – Hired a local repairman to adjust the sight level of shelves in the store. This service was done on account for $300 with terms 2/10 net 15.
10/13/2015 – 1 video game that was purchased on 10/7 was returned to the store by a customer for cash. No discounts were taken on that original sale.
10/13/2015 – Entered into a sales agreement with a local daycare. DigiFun will provide them with 2 new game titles every week at a total cost of $110. The service start date will be November 1st and no cash will be exchanged until that date.
10/14/2015 – Recorded sales for the 2nd week of business.
New Video Game sales 30 games for $1,950
All inventory sales were for cash
10/16/2015 – Paid employee wages in cash for time worked from 10/1 until 10/15. Gross wages were $1,300. FICA taxes represent 7.65% of gross wages. Employee federal income taxes payable amounts to $80 while federal and state unemployment taxes amount to 0.8% and 2.9% of gross wages, respectively.
10/17/2015 – Purchased a large lot of vintage video games at a local auction. Total purchase price was $336 in cash and this purchased 100 games.
10/18/2015 – Purchased additional new video game inventory on credit for a total of $3,240 ($27 per game).
10/19/2015 – Counted the cash drawer at closing time and noticed $16 cash was missing.
10/20/2015 – Sorted through the vintage video game purchase and found that half of the games purchased on the 17th (50 games) had $0 in resale value. An employee did find 3 specific games that are incredibly rare and in excellent condition. The market value of these 3 games is $700 a piece. DigiFun applies the lower of cost or market rule on the basis of individual items.
10/21/2015 – Recorded sales for week 3.
New Video Game sales: 52 games for $3,380, before discounts
Vintage Video Game sales 15 games for $255, before discounts
Sales discounts: $49 (new games only)
All sales were for cash
10/22/2015 – Sold all three rare vintage video games to a collector for $1,700. The collector paid $1,400 in cash and agreed to pay the rest on 10/29.
10/24/2015 – Created a purchase reservation list for an upcoming video game release. The game will not be available for sale until November, but customers can pay now and guarantee a copy will be available to them on the release date. 12 customers put their names on the list and paid a total of $780.
10/25/2015 – Paid utility bill in cash for $72
10/26/2015 – Received notice that vintage video game collector who purchased merchandise on 10/22 had declared bankruptcy. Wrote off entire receivable as uncollectible
10/28/2015 – Recorded sales for week 4
New Video Game Sales: 39 games for $2,535
14 of the New Video Game Sales were on account to the local school district and the rest were for cash.
Vintage Video Game Sales: 8 games for $136
10/29/2015 – 2 customers who paid with checks on 10/28 did not clear the bank and were NSF. Invoices were sent to the customers requesting payment. The total amount was $130.
10/29/2015 – Paid bill in full with cash for services provided on 10/11 by local repairman
10/30/2015 – Purchased several new titles to be placed in New Video Game Inventory for a total of $2,080. A total of 80 games were purchased and all were paid for with cash.
10/31/2015 – Recorded depreciation on the furniture and equipment. Furniture is depreciated on a straight-line basis and Equipment is depreciated using the double declining balance method.
10/31/2015 – Sold one of the video game platforms (equipment) that were being used in the store and were purchased on 10/1 for $180. Original purchase price was $400.
10/31/2015 – Accrued wages for employee hours worked from 10/16 – 10/31. Gross wages were $1,300. FICA taxes represent 7.65% of gross wages. Employee federal income taxes payable amounts to $80 while federal and state unemployment taxes amount to 0.8% and 2.9% of gross wages, respectively. Wages are to be paid on November 1st.
10/31/2015 – Recorded an estimate for bad debt expense of 2.5% of total accounts receivable.
10/31/2015 – Counted office supplies at the end of the month and accounted for $210 worth of supplies
10/31/2015 – Depending on how you recorded a few of the other transactions earlier in the month you may be some more adjusting entries that are required due to the passage of time.
Expert Answer:
Journal Entry Date Particulars Dr Amt Cr Amt Oct 1 Cash Dr 180000 2015 To Common Stock 180000 Oct 1 Cash Dr 40000 2015 To Notes Payable 5 40000 Oct 1 Furniture Shelving Units Dr 22000 2015 Equipments ... View the full answer
