Whitelands, Inc. had $100 of cash and shareholders’ equity as the result of its initial sale...

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Accounting

Whitelands, Inc. had $100 of cash and shareholders’ equity as theresult of its initial sale of stock on January 1, 2012. During itsfirst month of operations, Whitelands had the following operatingtransactions:
Date
Transaction
1/1
Paid $24 cash in advance to rent a store for one year
1/1
Purchased 2 units of inventory on credit costing $4 each
1/3
Purchased 3 units of inventory on credit costing $5 each
1/10
Purchased 4 units of inventory on credit costing $6 each
1/21
Paid for the January 1 inventory purchase
1/23
Paid for the January 3 inventory purchase
1/30
Sold 7 units of inventory at $10 each on credit
1/30
Matched the inventory cost to January 30 sales on aFIFO basis
1/31
Estimated that 10% of credit sales will not be realized incash
1/31
Adjusted the prepaid rent account

Required:
Record the journal entries for the above transactions.
Present Whitelands’ income statement for January 2014.
Report Whitelands’ balance sheet on January 31, 2014.
Close the revenue and expense accounts to retained earnings.

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3.8 Ratings (363 Votes)

Requirement 1 Date Accounts title Debit Credit 01Jan Prepaid Rent 24 Cash 24 01Jan Inventory 8 Accounts Payable 8 03Jan Inventory 15 Accounts Payable 15 10Jan Inventory 24 Accounts Payable 24 21Jan Accounts Payable 8 Cash 8 23Jan Accounts Payable See Answer

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Date	Transaction
1/1	Paid $24 cash in advance to rent a store for one year
1/1	Purchased 2 units of inventory on credit costing $4 each
1/3	Purchased 3 units of inventory on credit costing $5 each
1/10	Purchased 4 units of inventory on credit costing $6 each
1/21	Paid for the January 1 inventory purchase
1/23	Paid for the January 3 inventory purchase
1/30	Sold 7 units of inventory at $10 each on credit
1/30	Matched the inventory cost to January 30 sales on aFIFO basis
1/31	Estimated that 10% of credit sales will not be realized incash
1/31	Adjusted the prepaid rent account