prepare journal entries accounting – www.savvyessaywriters.net
prepare journal entries accounting – www.savvyessaywriters.net
In 2017, Bill Baker’s business increased dramatically when he begins delivering bagels and other baked goods to area universities and businesses for meetings and other functions.Bill is very happy with the increase in business, but you become concerned when you review his receivables.Bill has also started selling gift cards and accepting credit cards and is collecting and remitting sales tax and calculating payroll, but is unsure how to account for everything so he asks you to take care of the following transactions.
01/10/17 Had cash sales of $200,000 and collected an additional 8% sales tax
02/18/17 Purchased $180,000 of inventory of baking supplies from various vendors terms 2/10 net 30
02/27/17 Paid $100,000 of the supplies purchased on 01/18, remainder will be paid when due.***
03/12/17 Earned $100,000 in sales on account to universities and other area businesses
he has extended credit to and offered new customer discounts, no sales tax was charged.
04/1/17 Prepaid 12 months insurance of $6,000
05/15/17 Sold $50,000 of gift cards for cash.
06/06/17 Paid Rent of $24,000, Utilities of $16,000, Advertising & Promotion of $3,000 and
Maintenance and Repairs of $2,000
07/15/17 Received payments of $41,000 cash on account net of $2,000 sales discounts.
08/01/17 Bill and his employees earned total gross salaries of $100,000 on which $10,000 of federal withholding, $6,000 of RI withhold and FICA at a rate of 7.65% were deducted and FICA matching and State Unemployment tax of 2.35% was calculated and net payroll was paid.
09/15/17 Earned an additional $80,000 in sales and sales tax. Of the sales, $30,000 were from customers redeeming gift cards and $50,000 were from customers using credit cards. (You will need to calculate the amount of sales tax included in the sales)
09/18/17 The credit card company transmits payment to checking account after deducting a 2% fee.
11/30/17 Paid all payroll liabilities***
Year End Adjustments at 12/31/17:
(1)There was $78,000 of inventory of food and supplies remaining at year end
(2)Record depreciation expense on the Equipment for the year
(3)Recognized insurance expense
(4)Based on past history, Bill estimates that 5% of sales on account would
probably not be collected even with diligent collection efforts.
(5)Later Bill tells you that he is sure that 2 of his customers with balances totaling
$3,000 will definitely not be able to pay him and should be written off.
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