PROBLEM 1: The transactions of Dragon Company for December 2020 are shownbelow. Requirements: (a) Journalize each transaction and prepare the necessaryadjusting entries; and (b) Prepare the current liabilities section of the balancesheet for the month ended December 31, 2020.Dec 1Purchased P1,250,000 inventory on account.Received P200,000 from a lessee as an advance payment for rent over fivemonths starting December 2020.Billed a customer who bought 400 units at P4,500 each. It is expected that 6%of the units will be defective and that repair costs will average P1,350 per unitDec 3Dec 9Dec 15 Borrowed P900,000 from a bank by signing a 9-month, 10%, interest-bearingnote.Dec 21 Paid P820,000 on account for inventory purchased on December 1.Dec 27 Sued by a disgruntied employee. Legal counsel believes that it is possible thatthe company will have to pay P80,000 in damages next year.Dec 30 Purchased new equipment for P650,000, paying P200,000 cash and signing a3-year, 7% note for the remainder. The note will be paid in three equal, annualinstallments of P150,000 starting December 30, 2021.Dec 31 Honored warranty contracts on 22 units for a total cost of P27,000.

Basic Accounting Journal Entries Current Liabilities Extract from Balance sheet as required

Dec 1 Purchased P1,250,000 inventory on account. Dec 3 Received P200,000 from a lessee as an advance payment for rent over five months starting December 2020. Billed a customer who bought 400 units at P4,500 each. It is expected thate of the units will be defective and that repair costs will average P1,350 per u Dec 9 Dec 15 Borrowed P900,000 from a bank by signing a 9-month, 10%, interest-bearir note. Dec 21 Paid P820,000 on account for inventory purchased on December 1. Dec 27 Sued by a disgruntled employee. Legal counsel believes that it is possible t the company will have to pay P80,000 in damages next year. Dec 30 Purchased new equipment for P650,000, paying P200,000 cash and signin 3-year, 7% note for the remainder. The note will be paid in three equal, ann installments of P150,000 starting December 30, 2021. Honored warranty contracts on 22 units for a total cost of P27,000. Dec 31

Dec 1 Purchased P1,250,000 inventory on account. Dec 3 Received P200,000 from a lessee as an advance payment for rent over five months starting December 2020. Billed a customer who bought 400 units at P4,500 each. It is expected thate of the units will be defective and that repair costs will average P1,350 per u Dec 9 Dec 15 Borrowed P900,000 from a bank by signing a 9-month, 10%, interest-bearir note. Dec 21 Paid P820,000 on account for inventory purchased on December 1. Dec 27 Sued by a disgruntled employee. Legal counsel believes that it is possible t the company will have to pay P80,000 in damages next year. Dec 30 Purchased new equipment for P650,000, paying P200,000 cash and signin 3-year, 7% note for the remainder. The note will be paid in three equal, ann installments of P150,000 starting December 30, 2021. Honored warranty contracts on 22 units for a total cost of P27,000. Dec 31

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter3: Review Of A Company's Accounting System

Section: Chapter Questions

Problem 10P: Worksheet Victoria Company has the following account balances on December 31, 2019, prior to any...

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