The following balances are from the beginning of the year for Sam's Town Company as of...

 

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The following balances are from the beginning of the year for Sam's Town Company as of December 31, 20X0: Cash Accounts Receivable Allowance for Doubtful Accts Inventory Prepaid Rent Equipment Accumulated Depreciation Security Deposit Accounts Payable Wages Payable Interest Payable Taxes Payable Note Payable Common Stock ($1 each) Retained Earnings 125,000 40,000 2,000 45,000 (3 junkets) 3,000 240,000 100,000 10,000 92,000 5,000 5,000 8,000 100,000 60,000 91,000 For 20X1: Received all beginning accounts receivable and paid all beginning accounts payable Bought five Junkets at $25,000 each, 20% down, rest next year Sold six Junkets, $50,000 each, 60% down, 40% next year Paid cash wages of $40,000 and at the end of the year owed employees $2,000 Paid utilities of $12,000 and advertising of $10,000. On June 30, they paid the annual payment of $10,000 principal plus interest on the Note Payable. The note was taken out on June 30th of the previous year. (Can you figure out the interest rate?) On August 1, purchased a new wagon for delivery of the junkets for $20,000. On December 1, they declared and paid a dividend of $5,000. On December 31, the company borrowed $75,000 from the bank and used the proceeds to purchase a piece of land. The note is payable in five years. The interest at 6% is payable annually on December 31 of each year starting in 20X1. During the year they paid $8,000 in rent (rent is $1,000 per month) The company uses the FIFO inventory flow assumption The depreciation for the year was $40,000 The company estimates that 4% of its accounts receivable will never be collected. During the year the company wrote off $1,500 in bad accounts. The tax rate is 30%. During the year the company paid all of last year's taxes and 50% of 20X1 taxes. Prepare journal entries, T-accounts and Financial statements for the year of 20X1. The following balances are from the beginning of the year for Sam's Town Company as of December 31, 20X0: Cash Accounts Receivable Allowance for Doubtful Accts Inventory Prepaid Rent Equipment Accumulated Depreciation Security Deposit Accounts Payable Wages Payable Interest Payable Taxes Payable Note Payable Common Stock ($1 each) Retained Earnings 125,000 40,000 2,000 45,000 (3 junkets) 3,000 240,000 100,000 10,000 92,000 5,000 5,000 8,000 100,000 60,000 91,000 For 20X1: Received all beginning accounts receivable and paid all beginning accounts payable Bought five Junkets at $25,000 each, 20% down, rest next year Sold six Junkets, $50,000 each, 60% down, 40% next year Paid cash wages of $40,000 and at the end of the year owed employees $2,000 Paid utilities of $12,000 and advertising of $10,000. On June 30, they paid the annual payment of $10,000 principal plus interest on the Note Payable. The note was taken out on June 30th of the previous year. (Can you figure out the interest rate?) On August 1, purchased a new wagon for delivery of the junkets for $20,000. On December 1, they declared and paid a dividend of $5,000. On December 31, the company borrowed $75,000 from the bank and used the proceeds to purchase a piece of land. The note is payable in five years. The interest at 6% is payable annually on December 31 of each year starting in 20X1. During the year they paid $8,000 in rent (rent is $1,000 per month) The company uses the FIFO inventory flow assumption The depreciation for the year was $40,000 The company estimates that 4% of its accounts receivable will never be collected. During the year the company wrote off $1,500 in bad accounts. The tax rate is 30%. During the year the company paid all of last year's taxes and 50% of 20X1 taxes. Prepare journal entries, T-accounts and Financial statements for the year of 20X1.

Answer rating: 100% (QA)

Journal Entries To record purchase of five Junkets Inventory 125000 Cash 25000 Note Payable 100000 To record sale of six Junkets Accounts Receivable 300000 Inventory 150000 Sales 150000 To record paym... View the full answer