Payable TransactionsRichmond Company engaged in the following transactions during 2013:Purchased $160,000 of supplies from ABC Supplies on February 16. Amount due in full on March 31.Paid for 25% of the purchased merchandise (Transaction a) on February 26.On March 31 negotiated a payment extension with ABC for the remainder of the balance from the February 16 purchase by signing a 1-year, 10% note.Borrowed $300,000 on a 10-month, 8% interest-bearing note on April 30.Purchased $78,000 of merchandise on June 4. Amount due in full on June 30.Paid for the purchased merchandise (Transaction e) on June 24.Received from Haywood Inc. on August 19, a $22,000 deposit against a total selling price of $220,000 for services to be performed for Haywood.Paid quarterly installments of Social Security and Medicare and individual income tax withholdings, as shown below, on October 15. The Social Security and Medicare were previously recorded as expenses during the quarter and the amounts paid represent both the employee and employer shares (50% each): On December 15, Richmond completed the services ordered by Haywood on August 19. Haywood's remaining balance of $198,000 is due on January 31.Required: Hide  1.  Prepare journal entries for these transactions. If an amount box does not require an entry, leave it blank.      a. Feb. 16        (Record purchase of supplies on account)      b. Feb. 26        (Record partial payment of supplier)      c. Mar. 31        (Record issuance of note to cover unpaid portion of account payable)      d. Apr. 30        (Record issuance of note)      e. June 4        (Record purchase of inventory on account)      f. June 24        (Record payment of supplier)      g. Aug. 19        (Record receipt of deposit for services not yet performed)      h. Oct. 15                        (Record employer payroll taxes)      i. Dec. 15            (Record recognition of revenue)         Hide  2.  Prepare any adjusting entries necessary at December 31, 2013.      Dec. 31        (Record accrued interest)

Question
Asked Oct 27, 2019

Payable Transactions

Richmond Company engaged in the following transactions during 2013:

  1. Purchased $160,000 of supplies from ABC Supplies on February 16. Amount due in full on March 31.
  2. Paid for 25% of the purchased merchandise (Transaction a) on February 26.
  3. On March 31 negotiated a payment extension with ABC for the remainder of the balance from the February 16 purchase by signing a 1-year, 10% note.
  4. Borrowed $300,000 on a 10-month, 8% interest-bearing note on April 30.
  5. Purchased $78,000 of merchandise on June 4. Amount due in full on June 30.
  6. Paid for the purchased merchandise (Transaction e) on June 24.
  7. Received from Haywood Inc. on August 19, a $22,000 deposit against a total selling price of $220,000 for services to be performed for Haywood.
  8. Paid quarterly installments of Social Security and Medicare and individual income tax withholdings, as shown below, on October 15. The Social Security and Medicare were previously recorded as expenses during the quarter and the amounts paid represent both the employee and employer shares (50% each):

  9. On December 15, Richmond completed the services ordered by Haywood on August 19. Haywood's remaining balance of $198,000 is due on January 31.

Required:


  Hide    

1.  Prepare journal entries for these transactions. If an amount box does not require an entry, leave it blank.



 
 
       
a. Feb. 16
 
 
 
 
 
 
 
 
(Record purchase of supplies on account)
   
       
b. Feb. 26
 
 
 
 
 
 
 
 
(Record partial payment of supplier)
   
       
c. Mar. 31
 
 
 
 
 
 
 
 
(Record issuance of note to cover unpaid portion of account payable)
   
       
d. Apr. 30
 
 
 
 
 
 
 
 
(Record issuance of note)
   
       
e. June 4
 
 
 
 
 
 
 
 
(Record purchase of inventory on account)
   
       
f. June 24
 
 
 
 
 
 
 
 
(Record payment of supplier)
   
       
g. Aug. 19
 
 
 
 
 
 
 
 
(Record receipt of deposit for services not yet performed)
   
       
h. Oct. 15
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Record employer payroll taxes)
   
       
i. Dec. 15
 
 
 
 
 
 
 
 
 
 
 
 
(Record recognition of revenue)
   
       

 

 


  Hide    

2.  Prepare any adjusting entries necessary at December 31, 2013.



 
 
       
Dec. 31
 
 
 
 
 
 
 
 
(Record accrued interest)
   
       

 

 
 

 

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Expert Answer

Step 1

1. Prepare journa...

Date Account Titles and Explanation Debit (S) Credit (S)
16-Feb Supplies
$160,000
Accounts payable
$160,000
26-Feb Accounts payable
$40,000
$40,000
Cash
31-Mar Accounts payable
Notes payable
$120,000
$120,000
30-Apr Cash
$300,000
Notes payable
$300,000
4-Jun Merchandise inventory
Accounts payable
$78,000
$78,000
24-Jun Accounts payable
$78,000
$78,000
Cash
24-Aug Cash
$22,000
unearned service revenue
$22,000
15-Oct Social security taxes payable
Medicare taxes payable
Income tax withheld
$185,000
$43,266
$319,000
$547,266
Cash
15-Dec Unearned Service revenue
Accounts receivable
$22,000
$198,000
$220,000
Service revenue
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Date Account Titles and Explanation Debit (S) Credit (S) 16-Feb Supplies $160,000 Accounts payable $160,000 26-Feb Accounts payable $40,000 $40,000 Cash 31-Mar Accounts payable Notes payable $120,000 $120,000 30-Apr Cash $300,000 Notes payable $300,000 4-Jun Merchandise inventory Accounts payable $78,000 $78,000 24-Jun Accounts payable $78,000 $78,000 Cash 24-Aug Cash $22,000 unearned service revenue $22,000 15-Oct Social security taxes payable Medicare taxes payable Income tax withheld $185,000 $43,266 $319,000 $547,266 Cash 15-Dec Unearned Service revenue Accounts receivable $22,000 $198,000 $220,000 Service revenue

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