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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

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BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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Comprehensive On November 30, 2019. Davis Company had the following account balance.

Chapter 3, Problem 12P, Comprehensive On November 30, 2019. Davis Company had the following account balance. During the , example  1

During the month of December, Davis entered into the following transactions:

Chapter 3, Problem 12P, Comprehensive On November 30, 2019. Davis Company had the following account balance. During the , example  2

Required:

  1. 1. Prepare general journal entries to record the preceding transactions.
  2. 2. Post to general ledger T accounts.
  3. 3. Prepare a year-end trial balance on a worksheet and complete the worksheet using the following information: (a) accrued salaries at year-end total $1,200; (b) for simplicity, the building and equipment are being depreciated using the straight-line method over an estimated life of 20 yean with no residual value; (c) supplies on hand at the end of the year total $630; (d) bad debts expense for the year totals $830; and (e)the income tax rate is 30%; income taxes are payable in the first quarter of 2020.
  4. 4. Prepare the company’s financial statements for 2019.
  5. 5. Prepare the 2019 (a) adjusting and (b) closing entries in the general journal.

1.

To determine

Prepare the journal entries to record the given transactions.

Explanation

Accounting rules for journal entries:

  • To record the increase of balance in account: Debit assets, expenses, losses and credit liabilities, capital, revenue and gains.
  • To record the decrease of balance in account: Credit assets, expenses, losses and debit liabilities, capital, revenue and gains.

Prepare the journal entries to record the given transactions:

DateAccount Title and ExplanationPost RefDebit($)Credit($)
December 4Cash 3,000 
     Sales Revenue  3,000
 (To record the cash sales)   
     
December 4Cost of Goods Sold 1,800 
     Inventory  1,800
 (To record  the cost of ale)   
     
December 7Inventory 2,400 
     Accounts Payable  2,400
 (To record the purchase of inventory on account)   
     
December 14Cash 900 
     Accounts Receivable  900
 (To record amount of accounts receivable collected)   
     
December 18Cash 7,800 
     Gain on sale of land  2,800
     Land  5,000
 (To recor...

2.

To determine

Post the part 1 entries to general ledger T-Accounts.

3.

To determine

Prepare the worksheet with the given information.

4.

To determine

Prepare the financial statements of Company D.

5 (a)

To determine

Prepare adjusting entries for the year 2019.

5 (b)

To determine

Prepare the closing entries for December 31, 2019.

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