Explain #14, 17, and 19

Great Adventures, Inc.
General Journal
31-Mar-22
#	Date	Description	Debit	Credit
1	1/1/22	Cash	30000
		Bank Loan Notes Receivable		30000
2	1/20/22	Land	11500
		Paid-In Capital		500
		Common Stock		11000
3	2/1/22	Cash	95760
		Paid-In Capital		5000
		Common Stock		90760
4	January	Cash	45000
		Accounts Receivable		45000
	February	Cash	30000
		Accounts Receivable		30000
5	1/28/22	Accounts Payable	29630
		Cash		29630
6	2/1/22	operating Expense - Advertising	1660
		Cash		1660
7	2/15/22	Buildings	8800
		Cash		8800
8	2/28/22	Cash	4580
		Accumulated Depreciation	3210
		Buildings		5675
		Gain		2115
9	2/28/22	Accounts Payable	10000
		Cash		10000
10	3/1/22	Prepayments-Insurance	12435
		Cash		12435
11	3/1/22	Treasury Stock	7200
		Cash		7200
12	3/30/33	Dividend	5040
		Cash		5040
13		Accounts Receivable	515000
		Sales		515000
14	January	Cash	148000
		Accounts Receivable		148000
	February	Cash	138000
		Accounts Receivable		138000
	March	Cash	106000
		Accounts Receivable		106000
15	3/31/33	Cash	392000
		Accounts Receivable		392000
16		Purchase	335000
		Accounts Payable		335000
17	January	Operating Expense - Salary	106000
		Cash		106000
	February	Accounts Payable	99000
		Cash		99000
	March	Accounts Payable	87000
		Cash		87000
18		Interest Expense	563
		Cash		563
		Interest Payable	1750
Adjusting Entries
19	A	Operating Expense - Salary	6500
		Salary Payable		6500
	B	Unearned Revenue	38846
		Sales Revenue		38846
		Sales Revenue	57000
		Unearned Revenue		57000
	C	Depreciation Expense	6800
		Accumulated Depreciation		6800
	D	Prepayment-Advertising	553
		Operating Expense- Advertising		553
	E	Operating Expense - Insurance	2300
		Prepayments		2300
		Operating Expense - Insurance	1036
		Prepayments - Insurance		1036
	F	Interest Expense	900		900
		Interest Payable		900
	G	Cost Of Goods Sold	301836
		Ending Inventory	145000
		Merchandise Inventory		111836
		Purchase		335000
	H	Income Tax Expense	23839
		Income Tax Payable		23839

4. In January, the company received $45,000 in cash from customers who bought merchandizes last year. The remaining $30,000 was received in February. 5. On January 28, the company paid its suppliers for a total of $29,630 in cash through its bank for the purchases made last year. 6. On February 1, the company signed an agreement with a national TV station to run the company's infomercial between 11:00 am - 12:00 pm each day for three months and paid a total cost of $1,660. 7. On February 15, the company closed a deal to purchase a new warehouse building in a suburban area outside Boston for $8,800 in cash. The warehouse was placed in use immediately. 8. On February 28, the company closed a deal to sell an office building for $4,580 in cash at a significant gain of $2,115. The building was temporarily rented to another company before it was sold. The building was purchase in 1980 for a total cost of $5,675. 9. On February 28, the company paid its suppliers for the remaining unpaid purchases made last year. 10. On March 1, the company paid the employer's portion of health insurance premium to the insurance provider. The total amount paid was $12,435 which would cover a period of 12 months. The remainder of the premium was paid by the employees through salaries withholding, according to the employment contract. 11. On March 1, the company purchased 300,000 shares of its own common stock at $24 per share. These shares were needed to issue to top executives for their employee stock option plan. 12. On March 30, the company declared and paid a quarterly cash dividend of 80.20 for shares outstanding on March 28. 13. Company's total sales for the quarter are listed below. All sales were credit sales. Total Net Sales Revenue January $ 148,000 February 168,000 March 199,000 Total $ 515,000 The amount was net of sales return and sales discount. 14. The collection for sales was as follows: January sales were received in full by the end of March. The total amount received for February and March sales was $138,000 and $106,000, respectively. 15. Company's total salary and other operating expenses each month were as follows: Salary & Payroll Other Operating Tax Expenses Expenses January $ 26,410 $ 5,630 February 28,230 6,430 March (First 3 weeks) 21.620 4.460 Total $ 76,260 $ 16,520 Salaries were paid in the form of direct deposits to employees' bank accounts biweekly; the employees' portion of health insurance premium was withheld from salaries and paid to the insurance provider at the same time when salaries were paid; the estimated personal income taxes were withheld and paid to the government agencies before the end of each month. Employer's payroll taxes which included the unemployment tax and social security tax were remitted to the government agencies immediately as they were recorded. Other operating expenses which included utility, property taxes, freight-out, and other miscellaneous expenses were all paid in cash via online banking. 16. Company's merchandize purchases were as follows: Total Merchandise Purchase Costs January $ 106,000 February 108,000 March 121,000 Total $ 335,000 The company's purchase agreement specifies that the suppliers ship merchandizes and send invoices, and the company inspects merchandizes after receiving them and pay the invoices after inspection. The purchase amount listed included purchase price, tax, tariff, shipping, and insurance, net of purchase returns and discounts. 17. Payment for purchases were as follows: January purchases were fully paid by the end of March. The amount paid for February and March purchases was S99,000 and $87,000, respectively. The remaining unpaid purchases would be paid in the future months in April and May. 18. Company paid in cash for the interest on the 2-year commercial note for the current quarter as well as the amount owed from last year. The note is not due until June 30, 2023. 19. The CFO also identified the following areas that need to be adjusted: A. Employee salary for the 4th week in March totaled $6,500 and will be paid biweekly on April 5th through direct deposit. Pure 13 B. Goods ordered by customers in the past year but not delivered were all delivered on time in January. However, the delivery of goods to some customers in the northeast region of the U.S. for sales made in March was delayed because of an unexpected snowstorm. As a result, sales totaled $57,000 were not delivered and the merchandize remained in the company's warehouse. C. The depreciation for equipment and buildings totaled $6,800 for the quarter. D. The cost for the three-month informercial paid on February 1 requires a proper adjustment. E. Health insurance premium for January and February, totaled $2,300, was prepaid last year. The health insurance premium paid on March 1 covers a period of 12 months. Proper adjustments are required. F. Interest expense on the new 3-year 12% loan borrowed in January needs to be recognized although not yet paid. G. Company's inventory system shows the total costs of inventory on hand at the end of the quarter, based on LIFO, totaled $145,000. The number has been confirmed by a companywide inventory count completed at the end of March. H. Company's income tax rate is 28%. Balance Sheet for Great Adventures at 12/31/2021 Great Adventures, Inc. Balance Sheet (In USD 1,000) December 31, 2021 Assets Liabilities Current assets: Current liabilities: Cash $138,800 Accounts payable Accounts Receivable - Net $75,000 Interest payable Merchandise Inventory $111,836 Unearned Revenues Prepayments $2,300 Income tax payable Total current assets $327,936 Total current liabilities Notes payable (2 year, 9%) Long-term assets: Total Long-term Liabilities Land $34,290 Stockholders' Equity Buildings $85,000 Common stock ($1 Par) Equipment $56,650 Additional Paid-in Capital Accumulated Depreciation ($25,225) Retained earnings Total Long-term asset $150 715 Total stockholders' equity Total assets $478,651 Liabilities & stockholders' equity $39,630 $1,750 $38,846 $48,680 $128,906 $25,000 $25,000 $20,000 $157,965 $146,780 $324 745 $478,651 Page 4