Liability transactions The following items were selected from among the transactions completed by Sherwood Co. during the current year: Mar. 1. Purchased merchandise on account from Kirkwood Co., $225,000, terms n/30. 31. Issued a 30-day, 8% note for $225,000 to Kirkwood Co., on account. Apr. 30. Paid Kirkwood Co. the amount owed on the note of March 31. June 1. Borrowed $600,000 from Triple Creek Bank, issuing a 45-day. 6% note. July 1. Purchased tools by issuing a $50,000, 60-day note to Poulin Co., which discounted the note at the rate of 6%. 16. Paid Triple Creek Bank the interest due on the note of June 1 and renewed the loan by issuing a new 30-day, 7% note for $600,000. (Journalize both the debit and credit to the notes payable account.) Aug. 15. Paid Triple Creek Bank the amount due on the note of July 16. 30. Paid Poulin Co. the amount due on the note of July 1. Dec 1. Purchased equipment from Greenwood Co. for $280,000, paying $80,000 cash and issuing a series of ten 9% notes for $20,000 each, coming due at 30-day intervals. 22. Settled a product liability lawsuit with a customer for $40,000, payable in January. Accrued the loss in a litigation claims payable account. 31. Paid the amount due to Greenwood Co. on the first note in the series issued on December 1. Instructions 1. Journalize the transactions. 2. Journalize the adjusting entry for each of the following accrued expenses at the end of the current year: a. Product warranty cost, $65,000. b. Interest on the nine remaining notes owed to Greenwood Co.

BuyFind

Corporate Financial Accounting

15th Edition
Carl Warren + 1 other
Publisher: Cengage Learning
ISBN: 9781337398169
BuyFind

Corporate Financial Accounting

15th Edition
Carl Warren + 1 other
Publisher: Cengage Learning
ISBN: 9781337398169
Chapter 10, Problem 10.1APR
Textbook Problem

Liability transactions

The following items were selected from among the transactions completed by Sherwood Co. during the current year:

  1. Mar. 1.    Purchased merchandise on account from Kirkwood Co., $225,000, terms n/30.
  2.     31.    Issued a 30-day, 8% note for $225,000 to Kirkwood Co., on account.
  3. Apr. 30.    Paid Kirkwood Co. the amount owed on the note of March 31.
  4. June 1.    Borrowed $600,000 from Triple Creek Bank, issuing a 45-day. 6% note.
  5.     July 1.    Purchased tools by issuing a $50,000, 60-day note to Poulin Co., which discounted the note at the rate of 6%.
  6.     16.    Paid Triple Creek Bank the interest due on the note of June 1 and renewed the loan by issuing a new 30-day, 7% note for $600,000. (Journalize both the debit and credit to the notes payable account.)
  7. Aug. 15.    Paid Triple Creek Bank the amount due on the note of July 16.
  8.   30.    Paid Poulin Co. the amount due on the note of July 1.
  9.     Dec 1.    Purchased equipment from Greenwood Co. for $280,000, paying $80,000 cash and issuing a series of ten 9% notes for $20,000 each, coming due at 30-day intervals.
  10.     22.    Settled a product liability lawsuit with a customer for $40,000, payable in January. Accrued the loss in a litigation claims payable account.
  11.     31.    Paid the amount due to Greenwood Co. on the first note in the series issued on December 1.

Instructions

  1. 1.    Journalize the transactions.
  2. 2.    Journalize the adjusting entry for each of the following accrued expenses at the end of the current year:
  3.   a.    Product warranty cost, $65,000.
  4.   b.    Interest on the nine remaining notes owed to Greenwood Co.

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Chapter 10 Solutions

Corporate Financial Accounting
Ch. 10 - Proceeds from notes payable On January 26, Nyree...Ch. 10 - Employee net pay Lindsey Vaters weekly gross...Ch. 10 - Journalize period payroll The payroll register of...Ch. 10 - Journalize payroll tax The payroll register of...Ch. 10 - Vacation pay and pension benefits Regling Company...Ch. 10 - Journalizing installment notes On the first day of...Ch. 10 - Estimated warranty liability Quantas Industries...Ch. 10 - Quick ratio Adieu Company reported the following...Ch. 10 - Current liabilities Bon Nebo Co. sold 30,000...Ch. 10 - Entries for notes payable Bennett Enterprises...Ch. 10 - Evaluating alternative notes A borrower has two...Ch. 10 - Entries for notes payable A business issued a...Ch. 10 - Entries for discounted note payable A business...Ch. 10 - Fixed asset purchases with note On June 30,...Ch. 10 - Current portion of long-term debt PepsiCo, Inc.,...Ch. 10 - Calculate payroll An employee earns 30 per hour...Ch. 10 - Calculate payroll K. Mello Company has three...Ch. 10 - Summary payroll data In the following summary of...Ch. 10 - Payroll tax entries According to a summary of the...Ch. 10 - Payroll entries The payroll register for D. Salah...Ch. 10 - Payroll entries Widmer Company had gross wages of...Ch. 10 - Payroll internal control procedures Big Howies Hot...Ch. 10 - Internal control procedures Daves Scooters is a...Ch. 10 - Accrued vacation pay A business provides its...Ch. 10 - Pension plan entries Yuri Co. operates a chain of...Ch. 10 - Defined benefit pension plan terms In a recent...Ch. 10 - Entries for installment note transactions On the...Ch. 10 - Entries for installment note transactions On...Ch. 10 - Entries for installment note transactions On...Ch. 10 - Accrued product warranty Fosters Manufacturing Co....Ch. 10 - Accrued product warranty General Motors Company...Ch. 10 - Contingent liabilities Several months ago, Ayers...Ch. 10 - Liability transactions The following items were...Ch. 10 - Entries for payroll and payroll taxes The...Ch. 10 - Wage and tax statement data on employer FICA tax...Ch. 10 - Payroll summary The following data for Throwback...Ch. 10 - Payroll accounts and year-end entries The...Ch. 10 - liability transactions The following items were...Ch. 10 - Entries for payroll and payroll taxes The...Ch. 10 - Wage and tax statement data and employer FICA tax...Ch. 10 - Payroll summary The following data for Flexco Inc....Ch. 10 - Payroll accounts and year-end entries The...Ch. 10 - Selected transactions completed by Kornett Company...Ch. 10 - Analyze and compare Amazon.com to Best Buy...Ch. 10 - Analyze and compare Abercrombie Fitch and The Gap...Ch. 10 - Analyze Hershey The Hershey Company (HSY) is the...Ch. 10 - Analyze and compare Neiman Marcus and Kohls Neiman...Ch. 10 - Analyze and compare Cabelas and Dicks Sporting...Ch. 10 - Ethics in Action Tonya Latirno is a staff...Ch. 10 - Communication WBM Motorworks is a manufacturer of...Ch. 10 - Recognizing pension expense The annual examination...

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