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ACCT 4342 Spring 2013 SAP Transactions




Question;Monthly Accounting TransactionsSAP AG 2009 / SAP University AlliancesNext, you will be reviewing a series of events that have occurred during the month of January 20YY andrecording and posting as appropriate the necessary journal entries.#DESCRIPTION OF EVENTS OCCURRING during January, 20YYDateDescription of Event1January 2, 20YYEmployees are paid on the first day of the month for work performedduring the previous month (because of the New Years holiday, this monththey are paid on the 2nd). Total wages paid on this date were $38,000.(Ignore payroll taxes for this assignment.)2January 2, 20YY3January 4, 20YYCottonwood paid rent for the current month. The amount of the paymentwas $10,000.Cottonwood signed and paid for an annual advertising agreement with thePRCA for banner ads on the PRCA website. Cottonwoods advertisementswill be posted to the website starting in April 20YY and run until March 31,20YY+1. The amount of the agreement is $7,000.4January 7, 20YYCottonwood received a shipment of event merchandise from the RodeoOutfitters Company. This merchandise was ordered on December 15thand was delivered by Viking Freight. Rodeo Outfitters paid Viking for theshipping charge of $812. Cottonwood is to pay Rodeo Outfitters $96,000based on terms of net 30.5January 8, 20YYCottonwood received an order from the FFA rodeo in LaJunta Colorado,(LJ FFA), for $17,000 in event merchandise. The Cottonwood customerservice representative confirmed that the LJ FFA Rodeos account waspaid current and they had sufficient credit available to cover the new sale.The order was then sent to the warehouse where it was picked andprepared for shipping. The merchandise was shipped via UPS at a cost of$215, which was paid by Cottonwood. Cost of the merchandise shippedwas $12,500. Terms of the sale are net 30.6January 12, 20YYAlamo Conference Center in Texas placed an order with Cottonwood viaemail. Cottonwoods sales rep wrote up the order, checked their credit andsent the order information to the warehouse for shipping. The sale amountwas $108,100, which included $90,320 in resale merchandise and $17,780in event merchandise. The cost of the resale merchandise was $60,418and the cost of the event merchandise was $13,953. The goods wereshipped that day. Cottonwood paid the shipping expense of $897.Payment terms for the order are net 15.7January 14, 20YYCottonwood paid the invoice for the items from Rodeo Outfitters receivedon January 7th.ACCT 4342-S13 Monthly TransactionsPage 2#DateDescription of Event8January 16, 20YYAfter extensive collection effort including having a collection agencycontact the party, Cottonwood was notified today that the Fly-by-KnightRodeo has gone out of business. They owed Cottonwood $2,000 onaccount. Cottonwood now deems that debt as being uncollectible andremoves it from their books. Note the company uses an Allowance forDoubtful Accounts account.9January 19, 20YY10January 20, 20YY11January 23, 20YYCottonwood received customer checks totaling $13,110 for payment onoutstanding accounts.Cottonwood remitted (paid) any sales tax collected in the prior quarter tothe State of California. (Note: Sales tax is collected and paid quarterly).The FFA Rodeo in LaJunta Colorado (January 8th) returned $5,000 inevent merchandise as excess merchandise. The merchandise wasinspected and restocked. FFA is given a credit to their account for thereturned merchandise. The credit is for the $5,000 minus a 10%restocking fee. The cost of the goods is $2,500. FFA LaJunta paid thereturn shipping of $58. (Note: Restocking Fees are accounted for as Misc.Revenue.)12January 31, 20YYEmployees payroll is calculated for the month. The January salaryexpense is $37,000. This amount is to be paid on February 1, 20YY.Ignore payroll taxes.Using these account balances and additional adjustment information below, record adjusting journalentries. Adjustment information as of January 31, 20YY not already given in the original transaction(s):1. Warehouse and office equipment was placed in service on January 1, 20 YY-5 and is expected to last10 years and has no salvage value. Cottonwood depreciates fixed assets on a straight-lineDepreciation is rounded to the nearest dollar and assets are depreciated on a monthly basis (i.e.number of days in the month is not of consequence).2. On February 2, Cottonwood received a $3,500 bill from PG&E for utilities consumed during Januaryand the January AT&T bill in the amount of $350. The items are both treated as utility expense.3. Liability insurance for the 20YY fiscal year was paid at the end of November 20YY-1. Liabilityinsurance is assumed to be utilized uniformly monthly over the one-year policy period.


Paper#39050 | Written in 18-Jul-2015

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