Winter Companys balance sheet at December 31, 2013, is presented below. During January 2014, the following transactions occurred. Winter uses
During January 2014, the following transactions occurred. Winter uses the perpetual inventory method.
Jan. 1 Winter accepted a 4-month, 8% note from Merando Company in payment of Merandos $1,200 account.
3 Winter wrote off as uncollectible the accounts of Inwood Corporation ($450) and Goza Company ($280).
8 Winter purchased $17,200 of inventory on account.
11 Winter sold for $28,000 on account inventory that cost $19,600.
15 Winter sold inventory that cost $700 to Mark Lauber for $1,000. Lauber charged this amount on his Visa First Bank card. The service fee charged Winter by First Bank is 3%.
17 Winter collected $22,900 from customers on account.
21 Winter paid $14,300 on accounts payable.
24 Winter received payment in full ($280) from Goza Company on the account written off on January 3.
27 Winter purchased supplies for $1,400 cash.
31 Winter paid other operating expenses, $3,718.
1. Interest is recorded for the month on the note from January 1.
2. Bad debts are expected to be 6% of the January 31, 2014, accounts receivable.
3. A count of supplies on January 31, 2014, reveals that $560 remains unused.
(You may want to set up T-accounts to determine ending balances.)
(a) Prepare journal entries for the transactions listed above and adjusting entries. (Include entries for cost of goods sold using the perpetual system.)
(b) Prepare an adjusted trial balance at January 31, 2014.
(c) Prepare an income statement and an owners equity statement for the month ending January 31, 2014, and a classified balance sheet as of January 31,2014.
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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