60.1K

Verified Solution

Link Copied!

Instructions: 1. Prepare the journal entries for transactions A-T below and record them on the "Journal Entries" tab. 2. Once you have created the journal entries, post them to the "T-Accounts" tab. 3. Prepare journal entries for adjusting journal entries 1-6. 4. Post the adjusting entries to the correct T-Accounts in the "T-Accounts" tab. \begin{tabular}{ll} Transaction No. & Transaction \\ \hline A & January 1: Pane purchases imventory on account to make stained glass windows. The contract has terms of 2/10, n/30. The goods \\ were purchased under the shipping terms of FOB destination. \\ Inventory Purchased Shipping Cost & $9,750,000 \\ $5,050 \end{tabular} B January 3: Pane receives rent for the 2 years from a tenant who rents one of their empty warehouses. Total Rent Paid $63,000 C January 5: Pane pays for the imventory purchased in transaction A. D February 12: Pane purchased a one year insurance policy on account with coverage beginning on March 1. Insurance Policy $20,000 E March 1: Pane purchases additional inventory on account to make stained glass windows. The goods were purchased under the shipping terms of FOB shipping point. Inventory Purchased Shipping Cost $12,325,000$9,000 F May 31: Pane sells window panes to customers. Some customers paid in cash, others purchased their goods on account. Pane uses 6 the perpetual method to track their inventory. CashSalesSalesonaccountCostofGoodsSold5,367,00040,054,00013,250,000 J August 6: Pane purchases land with cash. At the time of purchase, Pane also had to pay for survey fees related to the land. Cost of Land Survey Fees $124,000$600 K November 1: Pane lends one of their employees $200,000 in exchange for a note receivable. The employee is required to pay Pane 11 back for the principal and interest on September 1, 2019. Principal Interest Rate $200,000 Maturity Date 9% 9/1/19 L November 15: Pane sales additional goods to customers on account. 7,8 Sales on account $20,000,000 Cost of Goods Sold $6,350,000 Transaction No. Transaction Chapter m December 1: Pane puchases a piece of machinery with cash that will assist in making "T-Panes" Cost of Machinery Installation Fees Transportation Costs $890,000$4,250$1,030 N December 10: Pane collects a portion of their accounts receivable Amount collected $43,758,000 0 December 18: Pane sold a piece of their equipment for $10,000 in exchange for cash. Sale Price Equipment Historical Cost Accumulated Depreciation for this equipment December 31: Pane paid the IRS their 2018 income tax. Income Tax Paid $2,000,000 Q The payroll information for the year is shown below. All salaries and wages were previously paid for in cash, however this activity 9 has not been recorded on Pane's books. Number of Employees Employee payment (daily) Days worked in the current year On December 31, Pane was notified that their one of their customers filed bankruptcy and would not be able to pay off their $3,000 account receivable. 8 S On December 31, Pane paid cash dividends of $8,000 to its shareholders. 11 Transaction No. Transaction Chapter R On December 31, Pane was notified that their one of their customers filed bankruptcy and would not be able to pay off their $3,000 account receivable. S On December 31, Pane paid cash dividends of $$,000 to its shareholders. 11 STOP: Post each of the preceding journal entries to the appropriate T-Accounts before preparing the adjusting journal entries. Year-End Adjusting Entries: 1 Recognize the revenue earned from the rent paid in transaction B. 2 Recognize the expiration of the prepaid insurance policy, purchased in transaction D. 3 Recognize the interest earned on the note receivable issued in transaction K 4,8 4 Record the bad debt expense for the year, assuming uses 3% of accounts receivable to estimate their uncollectible accounts. 8 5 Depreciation Expense for the year is 2,556,000 6 Amortization Expense for the year is 3,000 Post each of the adjusting journal entries to the appropriate T-Accounts- DO NOT prepare closing journal entries yet Adjusting Entries AJE 1 Dr. Cr. AJE 2 Dr. Cr. AJE 3 Dr. Cr. AJE 4 Dr. Cr. AJE 5 Dr. Cr AJE 6 Dr. Cr. Check figures: Total debits should equal total credits. Difference

Answer & Explanation Solved by verified expert

See Answer