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 asthe result of its initial sale of stock on January 1, 2012. Duringits first month of operations, Whitelands had the followingoperating transactions: Date Transaction 1/1 Paid $24 cash inadvance to rent a store for one year 1/1 Purchased 2 units ofinventory on credit costing $4 each 1/3 Purchased 3 units ofinventory on credit costing $5 each 1/10 Purchased 4 units ofinventory on credit costing $6 each 1/21 Paid for the January 1inventory purchase 1/23 Paid for the January 3 inventory purchase1/30 Sold 7 units of inventory at $10 each on credit 1/30 Matchedthe inventory cost to January 30 sales on a FIFO basis 1/31Estimated that 10% of credit sales will not be realized in cash1/31 Adjusted the prepaid rent account Required: 1. Record thejournal entries for the above transactions. 2. Present Whitelands’income statement for January 2014. 3. Report Whitelands’ balancesheet on January 31, 2014. 4. Close the revenue and expenseaccounts to retained earnings. ?

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1 Journal entries Date Particulars Debit Credit 01Jan Prepaid rent 2400 cash 2400 01Jan inventory 800 accounts payable 800 01Mar inventory 1500 accounts payable 1500 01Oct inventory 2400 accounts payable 2400 Jan21 accounts payable See Answer

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