You paid the amounts owed for Fluffs at the end of year 20X2 and collected all...

  

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You paid the amounts owed for Fluffs at the end of year 20X2 and collected all of the amounts owed by customers at the end of last year. You purchased 14 more Fluffs for $3,500 each and at the same terms as last year. During the year you sold 15 Fluffs for $7,500 each at the same terms as last year. On January 1, you purchased furniture & fixtures for $45,000. You put $15,000 down and financed the balance at 10%. You will make annual payments on December 31st for three years of the interest plus $10,000 on the principal. You estimate that you will use them for 10 years and then they will be worth $5,000. On June 30, you paid $2,400 for a one- year insurance policy. You paid your worker $10,000 and owed her $2,000 more at the end of the year. You also paid $13,000 for 13 months of rent. This year you declared and paid a dividend of $5,000 to your shareholders. On October 1st you issued 10 shares of common stock for $3,000. On December 31", you paid the first payment on the furniture & fixtures loan. Also on December 31, you paid Mike his interest. You paid the taxes owed at the end of last year. The tax rate is 30%. This year's taxes will be paid next year. You use the FIFO inventory system. Prepare Journal Entries, T-accounts, an Income Statement, a Statement of Owners' Equity and a Balance Sheet. You paid the amounts owed for Fluffs at the end of year 20X2 and collected all of the amounts owed by customers at the end of last year. You purchased 14 more Fluffs for $3,500 each and at the same terms as last year. During the year you sold 15 Fluffs for $7,500 each at the same terms as last year. On January 1, you purchased furniture & fixtures for $45,000. You put $15,000 down and financed the balance at 10%. You will make annual payments on December 31st for three years of the interest plus $10,000 on the principal. You estimate that you will use them for 10 years and then they will be worth $5,000. On June 30, you paid $2,400 for a one- year insurance policy. You paid your worker $10,000 and owed her $2,000 more at the end of the year. You also paid $13,000 for 13 months of rent. This year you declared and paid a dividend of $5,000 to your shareholders. On October 1st you issued 10 shares of common stock for $3,000. On December 31", you paid the first payment on the furniture & fixtures loan. Also on December 31, you paid Mike his interest. You paid the taxes owed at the end of last year. The tax rate is 30%. This year's taxes will be paid next year. You use the FIFO inventory system. Prepare Journal Entries, T-accounts, an Income Statement, a Statement of Owners' Equity and a Balance Sheet.

Answer rating: 100% (QA)

Journal Entries 1 On January 1 Debit Furniture fixtures 45000 Credit Cash 15000 Credit Loan payable ... View the full answer