Wallys Widget Company (WWC) incorporated near the end of 2011. Operations began in January of 2012. WWC prepares adjusting entries and financial statements at the end of each month. Balances in the accounts at the end of January are as follows:

Cash	$	18,920		Unearned Revenue (30 units)	$	4,450
Accounts Receivable	$	9,950		Accounts Payable (Jan Rent)	$	1,500
Allowance for Doubtful Accounts	$	(1,000)		Notes Payable	$	14,500
Inventory (35 units)	$	2,800		Contributed Capital	$	5,200
				Retained Earnings Feb 1, 2012	$	5,020

	WWC establishes a policy that it will sell inventory at $165 per unit.
	In January, WWC received a $4,450 advance for 30 units, as reflected in Unearned Revenue.
	WWCs February 1 inventory balance consisted of 35 units at a total cost of $2,800.
	WWCs note payable accrues interest at a 12% annual rate.
	WWC will use the FIFO inventory method and record COGS on a perpetual basis.

February Transactions
02/01	Included in WWCs February 1 Accounts Receivable balance is a $1,700 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 $1,700 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, 2012.
02/02	WWC paid a $600 insurance premium covering the month of February. The amount paid is recorded directly as an expense.
02/05	An additional 130 units of inventory are purchased on account by WWC for $9,750 terms 2/15, n30.
02/05	WWC paid Federal Express $260 to have the 130 units of inventory delivered overnight. Delivery occurred on 02/06.
02/10	Sales of 100 units of inventory occurred during the period of 02/07 02/10. The sales terms are 2/10, net 30.
02/15	The 30 units that were paid for in advance and recorded in January are delivered to the customer.
02/15	15 units of the inventory that had been sold on 2/10 are returned 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.
02/16	WWC pays the first 2 weeks wages to the employees. The total paid is $2,400.
02/17	Paid in full the amount owed for the 2/05 purchase of inventory. WWC records purchase discounts in the current period rather than as a reduction of inventory costs.
02/18	Wrote off a customers account in the amount of $1,100.
02/19	$3,000 of rent for January and February was paid. Because all of the rent will soon expire, the February portion of the payment is charged directly to expense.
02/19	Collected $8,200 of customers Accounts Receivable. Of the $8,200, the discount was taken by customers on $4,500 of account balances; therefore WWC received less than $8,200.
02/26	WWC recovered $420 cash from the customer whose account had previously been written off (see 02/18).
02/27	A $600 utility bill for February arrived. It is due on March 15 and will be paid then.
02/28	WWC declared and paid a $800 cash dividend.

Adjusting Entries:

02/29	Record the $2,400 employee salary that is owed but will 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.
02/29	Record one months interest earned Kit Kats note (see 02/01).

Required:

1-a.	Prepare all February journal entries and adjusting entries. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

1-b.	Post all February entries (transactions and adjustments) to the T-accounts.

1-c.	Prepare the financial statements at the end of February. (Balance Sheet only, items to be deducted must be indicated with a negative amount.)

2.	Prepare all February 29 closing entries for WWC. Post to the T-Accounts in requirement 1-b. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Cash Accounts Receivable Beg. bal. Beg. bal. End. bal. End. bal. Inventory Allowance for Doubtful Accounts Beg. bal. Beg. bal. End. bal. End. bal. Notes Receivable Interest Receivable Beg. bal. Beg. bal. End. bal. End. bal. Accounts Payable Unearned Revenue Beg. bal. Beg. bal. End. bal. End. bal. Wages Payable Interest Payable Beg. bal. Beg. bal. End. bal. End. bal. Notes Payable Contributed Capital Beg. bal. Beg. bal. End. bal. End. bal. Retained Earnings Dividends Declared Beg. bal. Beg. bal. Sales Revenue Sales Returns & Allowances Beg. bal. Beg. bal. End. bal. End. bal. Sales Discounts Cost of Goods Sold Beg. bal. Beg. bal. End. bal. End. bal. Interest Revenue Bad Debt Expense Beg. bal. Beg. bal. End. bal. End. bal. Insurance Expense Interest Expense Beg. bal. Beg. bal. Rent Expense Utility Expense Beg. bal. Beg. bal. End. bal. End. bal. Wages Expense Beg. bal. WWC, Inc. Income Statement $ 0 WwC, Inc. Statement of Retained Earnings Retained Earnings, Beginning of Period Retained Earnings, End of Period WWW, Inc. Balance Sheet Assets Liabilities Current Assets Current Liabilities Total Current Assets Total Current Liabilities $ 0 Total liabilities Stockholders' Equity Total Stockholders' Equity Total Liabilities and Stockholders' Equity Total Assets No Transaction General Journal Debit Credit