Question: The following transactions of Handy Andy s stores occurred during 2012

The following transactions of Handy Andy’s stores occurred during 2012 and 2013:
Feb 3 Purchased equipment for $10,000, signing a six-month, 11% note payable.
28 Recorded the week’s sales of $48,000, one-third for cash, and two-thirds on account. All sales amounts are subject to a 7% sales tax. Ignore cost of goods sold.
Mar 7 Sent last week’s sales tax to the state.
Apr 30 Borrowed $120,000 on a four-year, 6% note payable that calls for annual
payment of interest each April 30.
Aug 3 Paid the six-month, 11% note at maturity.
Nov 30 Purchased inventory at a cost of $6,000, signing a three-month, 5% note payable
for that amount.
Dec 31 Accrued warranty expense, which is estimated at 6% of total sales of $580,000.
31 Accrued interest on all outstanding notes payable. Accrued interest for each note separately.
Feb 28 Paid off the 5% note, plus interest, at maturity. Paid the interest for one year on Apr 30 the long-term note payable.

1. Record the transactions in the company’s journal. Explanations are not required.

View Solution:

Sale on SolutionInn
  • CreatedApril 29, 2014
  • Files Included
Post your question