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$ 5.350 $ 3.300 $16,000 $ 7000 3,520 $ 21620 Unearned Revenue (30 units) $12650 Accounts Payable (Jan Rent) Accounts Receivable Allowance for Doubtful Accounts (1,900) Notes Payable Inventory (35 units) $ 2,800 Contributed Capital Retained Earnings- Feb 1, 2012 WWC establishes a policy that it will sell inventory at $180 per unit In January, WWC received a $5,350 advance for 30 units, as reflected in Unearned Revenue. WWC's February 1 inventory balance consisted of 35 units at a total cost of $2.800. WWC's note payable accrues interest at a 12% annual rate WWC will use the FIFO inventory method and record COGS on a perpetual basis. 2Prepare all February 29 closing entries for WWC. Post to the T-Accounts in requirement 1-b. f n entry is required for a transaction event, select "No Journal Entry Required in the first account field. 02/01 Included in WWC's February 1 Accounts Receivable balance is a $1.400 account due from Kit Kat, a WWC customer. Kit Kat is having cash flow problems and cannot pay its balance at this time. wwc arranges with Kit Kat to convert the $1.400 balance to a note, and Kit Kat signs a 6-month note, at 12% annual interest. The principal and all interest will be due and payable to WWC on August 1, ew transaction list View journal entry worksheet 02/02 wWC paid a s650 insurance premium covering the month of February. The amount paid is recorded 02105 An additional 180 units of inventory are purchased on account by WWC for $13,500-terms 2/15, 02/05 wWC paid Federal Express $360 to have the 180 units of inventory delivered ovenight. Delivery 02 10 Sales of 150 units of inventory occurred during the period of 02107- 02/10. The sales terms are 02/15 The 30 units that were paid for in advance and recorded in January are delivered to the customer directly as an expense. No Transaction General Joumal Debit Credit /11Sales Revenue occurred on 02/06 terest Revenue Sales Retums and Allowance 2/10, net 30 02/15 25 units of the inventory that had been sold on 2/10 are retumed to WWC. The units are not damaged and can be resold. Therefore, they are returned to inventory. Assume the units returned are from the 2/05 purchase 22 Wages Epense Sales Retums and Allowances Bad Det Expense nterest Expense Insurance Expense Rent Expence 02/16 wWC pays the first 2 weeks wages to the employees. The total paid is $2,800 Paid in full the amount owed for the 2/05 purchase of inventory. WWC records purchase discounts in the current period rther than as a reduction of inventory costs 02/17 02/18 Wrote off a customers account in the amount of $2.000 02/19 $6,600 of rent for January and February was paid. Because all of the rent will soon expire, the 02/19 Collected $10,000 of customers Accounts Recelvable. Of the $10,000, the discount was taken by 02/26 wWC recovered $600 cash from the customer whose account had previously been written off (see 02/27 A$950 utility bill for February arrived. It is due on March 15 and will be paid then. February portion of the payment is charged directly to expense customers on $8.000 of account balances; therefore WWC received less than $10,000. 02/18) 3 3 Retained Eamings Dvidends Dedared 02/28 wWC declared and paid a $950 cash dividend. Adjusting Entries 02/29 Record the $2,800 employee salary that is owed but wil be paid March 1 02:29 wwC decides to use the aging method to estimate uncollectible accounts. WWC determines 8% of the ending balance is the appropriate end of February estimate of uncollectible accounts. 02/29 Record February interest expense accrued on the note payable $ 5.350 $ 3.300 $16,000 $ 7000 3,520 $ 21620 Unearned Revenue (30 units) $12650 Accounts Payable (Jan Rent) Accounts Receivable Allowance for Doubtful Accounts (1,900) Notes Payable Inventory (35 units) $ 2,800 Contributed Capital Retained Earnings- Feb 1, 2012 WWC establishes a policy that it will sell inventory at $180 per unit In January, WWC received a $5,350 advance for 30 units, as reflected in Unearned Revenue. WWC's February 1 inventory balance consisted of 35 units at a total cost of $2.800. WWC's note payable accrues interest at a 12% annual rate WWC will use the FIFO inventory method and record COGS on a perpetual basis. 2Prepare all February 29 closing entries for WWC. Post to the T-Accounts in requirement 1-b. f n entry is required for a transaction event, select "No Journal Entry Required in the first account field. 02/01 Included in WWC's February 1 Accounts Receivable balance is a $1.400 account due from Kit Kat, a WWC customer. Kit Kat is having cash flow problems and cannot pay its balance at this time. wwc arranges with Kit Kat to convert the $1.400 balance to a note, and Kit Kat signs a 6-month note, at 12% annual interest. The principal and all interest will be due and payable to WWC on August 1, ew transaction list View journal entry worksheet 02/02 wWC paid a s650 insurance premium covering the month of February. The amount paid is recorded 02105 An additional 180 units of inventory are purchased on account by WWC for $13,500-terms 2/15, 02/05 wWC paid Federal Express $360 to have the 180 units of inventory delivered ovenight. Delivery 02 10 Sales of 150 units of inventory occurred during the period of 02107- 02/10. The sales terms are 02/15 The 30 units that were paid for in advance and recorded in January are delivered to the customer directly as an expense. No Transaction General Joumal Debit Credit /11Sales Revenue occurred on 02/06 terest Revenue Sales Retums and Allowance 2/10, net 30 02/15 25 units of the inventory that had been sold on 2/10 are retumed to WWC. The units are not damaged and can be resold. Therefore, they are returned to inventory. Assume the units returned are from the 2/05 purchase 22 Wages Epense Sales Retums and Allowances Bad Det Expense nterest Expense Insurance Expense Rent Expence 02/16 wWC pays the first 2 weeks wages to the employees. The total paid is $2,800 Paid in full the amount owed for the 2/05 purchase of inventory. WWC records purchase discounts in the current period rther than as a reduction of inventory costs 02/17 02/18 Wrote off a customers account in the amount of $2.000 02/19 $6,600 of rent for January and February was paid. Because all of the rent will soon expire, the 02/19 Collected $10,000 of customers Accounts Recelvable. Of the $10,000, the discount was taken by 02/26 wWC recovered $600 cash from the customer whose account had previously been written off (see 02/27 A$950 utility bill for February arrived. It is due on March 15 and will be paid then. February portion of the payment is charged directly to expense customers on $8.000 of account balances; therefore WWC received less than $10,000. 02/18) 3 3 Retained Eamings Dvidends Dedared 02/28 wWC declared and paid a $950 cash dividend. Adjusting Entries 02/29 Record the $2,800 employee salary that is owed but wil be paid March 1 02:29 wwC decides to use the aging method to estimate uncollectible accounts. WWC determines 8% of the ending balance is the appropriate end of February estimate of uncollectible accounts. 02/29 Record February interest expense accrued on the note payable

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