Question;Monthly Accounting Transactions;Next, you will be reviewing a series of events that;have occurred during the month of January 20YY and recording and posting as;appropriate the necessary journal entries.;DESCRIPTION OF EVENTS OCCURRING during January, 20YY;#;Date;Description of Event;1;January;2, 20YY;Employees are paid on the first day of the month for work performed;during the previous month (because of the New Year?s holiday, this month they;are paid on the 2nd). Total wages paid on this date were $38,000.;(Ignore payroll taxes for this assignment.);2;January;2, 20YY;Cottonwood;paid rent for the current month. The;amount of the payment was $10,000.;3;January;4, 20YY;Cottonwood signed and paid for an annual advertising agreement with;the PRCA for banner ads on the PRCA website. Cottonwood?s advertisements will;be posted to the website starting in April 20YY and run until March 31;20YY+1. The amount of the agreement is $7,000.;4;January;7, 20YY;Cottonwood receiveda;shipment of event merchandise from the Rodeo Outfitters Company. This merchandise was ordered on December 15th;and was delivered by Viking Freight.;Rodeo Outfitters paid Viking for the shipping charge of $812. Cottonwood is to pay Rodeo Outfitters $96,000;based on terms of net 30.;5;January;8, 20YY;Cottonwood received an order from the FFA rodeo in LaJunta Colorado;(LJ FFA), for $17,000 in event merchandise. The Cottonwood customer service;representative confirmed that the LJ FFA Rodeo?s account was paid current and;they had sufficient credit available to cover the new sale. The order was;then sent to the warehouse where it was picked and prepared for shipping. The;merchandise was shipped via UPS at;a cost of $215, which was paid by Cottonwood. Cost of the merchandise shipped;was $12,500. Terms of the sale are net 30.;6;January;12, 20YY;Alamo;Conference Center in Texas placed an order with Cottonwood via email.;Cottonwood?s sales rep wrote up the order, checked their credit and sent the;order information to the warehouse for shipping. The sale amount was $108,100;which included $90,320 in resale merchandise and $17,780 in event;merchandise. The cost of the resale merchandise was $60,418 and the cost of;the event merchandise was $13,953. The goods were shipped that day.;Cottonwood paid the shipping expense of $897. Payment terms for the order are net 15.;7;January;14, 20YY;Cottonwood paid the invoice for the items from Rodeo Outfitters;received on January 7th.;8;January;16, 20YY;After;extensive collection effort including having a collection agency contact the;party, Cottonwood was notified today that the Fly-by-Knight Rodeo has gone;out of business. They owed Cottonwood;$2,000 on account. Cottonwood now;deems that debt as being uncollectible and removes it from their books. Note the company uses an Allowance for;Doubtful Accounts account.;9;January;19, 20YY;Cottonwood;received customer checks totaling $13,110 for payment on outstanding;accounts.;10;January;20, 20YY;Cottonwood;remitted (paid) any sales tax collected in the prior quarter to the State of;California. (Note: Sales tax is collected and paid quarterly).;11;January;23, 20YY;The;FFA Rodeo in LaJunta Colorado (January 8th) returned $5,000 in event;merchandise as excess merchandise. The;merchandise was inspected and restocked.;FFA is given a credit to their account for the returned merchandise. The credit is for the $5,000 minus a 10%;restocking fee. The cost of the goods;is $2,500. FFA LaJunta paid the return;shipping of $58. (Note: Restocking Fees are accounted for as Misc. Revenue.);12;January;31, 20YY;Employee?s;payroll is calculated for the month.;The January salary expense 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 journal entries. 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, 20YY-5;and is expected to last 10 years and has no salvage value. Cottonwood depreciates fixed assets on a;straight-line Depreciation 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 January and 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. Liability insurance is assumed to be utilized uniformly;monthly over the one-year policy period.
Paper#43643 | Written in 18-Jul-2015Price : $24