Newton Industries had the following transactions during the year: Newton purchased inventory on account (n/90)...
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Accounting
Newton Industries had the following transactions during the year: Newton purchased inventory on account (n/90) from a supplier for $12,000 on March 1. Assume that Appleton uses a periodic inventory system.
1. On May 1, land was purchased for $68,500. A 25% down payment was made, and a 9-month, 9% note was signed for the remainder. Interest is paid upon maturity.
2. Newton returned $545 worth of inventory purchased in (a), which was found broken when the inventory was received on May 15.
3. Newton paid the balance due on the purchase of inventory on May 20.
4. On June 1, Newton signed a one-year, $14,000 note to Plains State Bank and received $12,750.
5. Newton sold 350 gift certificates for $30 each for cash. At year-end, 40% of the gift certificates had been redeemed. Date as December 31.
6. Sales for the year were $100,000, of which 85% were for cash. State sales tax of 7% subjected to all sales must be remitted to the state by January 31. Date as December 31.
a. Record all necessary journal entries (omit explanations) relating to these transactions.
b. Assume that Newtons accounting year ends on December 31. Prepare any necessary adjusting journal entries (omit explanations).
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