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journal entries - Burns opened up his new company and dissolved the old one. The balances of the accounts

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Question;1. January 2: Mr. Burns opened up his new company and dissolved the old one. The balances of the accounts (with the exception of fixed assets and uncollectible) were transferred over from the old business. Mr. Burns decided that he needed to invest more money into the business in order to get operational. Mr. Burns invested $1,000,000 into his business.2. January 3: Mr. Burns bought a cookie making machine for $300,000 from Cookie Makers on account. The machine has a life of 10 years and a salvage value of $20,000. The machine will use the double decline depreciation method.3. January 4: Mr. Burns bought an oven from the Try-N-Save. He took out a note for five months at an interest rate of 8%. The amount of the note was $300,000. The oven has a useful life of 5 years and will use the straight line method of depreciation. The expected salvage value of the oven at the end of its useful life is $50,000.4. January 15: Mr. Burns bought cookie dough to make his cookies. Mr. Burns paid $220,000 for the cookie dough.5. January 17: Mr. Burns earned the rest of his unearned rent revenue of $281,250 from last year from his nuclear power plant.6. February 6: After promising to change his evil ways, Lisa Simpson agrees to help Mr. Burns sell his cookies. Lisa sells some cookies to Old Folks Home for $110,000 on account. The cost of selling the cookies was $60,000. For prompt payment, Mr. Burns offered the discount of 2/10, n30.7. February 20: Mr. Burns sold his delicious cookies to candy store on account $200,000. Mr. Burns offered terms 2/20, n30. The cost of merchandise sold was $100,000.8. February 28: Mr. Burns bought a new vehicle so he could sell more cookies. Mr. Burns paid $20,000 dollars for the truck. The truck was not expected to have salvage value. Mr. Burns decided to depreciate the truck by the miles. Each mile driven would depreciate the truck by $.20.9. February 28: Mr. Burns collected cash from Homer Simpson of $22,000. The note receivable was signed last December 15. He collected the face value of the note, $15,000 plus the interest receivable recorded last year. Since Homer allowed Lisa to work for him, he decided only to collect the interest accrued last year and not the interest for January and February.10. March 5: Mr. Burns bought more cookie dough (inventory) to continue to make his cookies. He bought $600,000 worth of inventory. There was also a $20,000 freight charge. The terms of the shipping agreement was FOB shipping. Mr. Burns paid for the whole amount.11. March 6: Since many families of the city of Springfield did not pay the Old Folks Home last month, Mr. Burns could only collect some of what he was owed on account from February 6. He was only able to collect $70,000 of what was owed. After consulting with Mr. Smithers, Mr. Burns agreed that he no choice to write off the rest of the amount as uncollectible.12. March 7: The Candy Store paid Mr. Burns what they owed him on account.13. March 15: Mr. Burns paid $60,000 of income tax payable owed from last year.14. April 1: Mr. Burns sold cookies to the Grocery Store on account $500,000. This amount included $15,000 of prepaid freight costs by Mr. Burns. The terms were FOB shipping point. The discount terms were 2/30, n/45. The cost of merchandise sold was $200,000.15. April 4: Because of cockroaches in some of the cookie dough, the store returned $100,000 worth of the cookie dough. The cost of the merchandise returned was $50,000.16. April 10: Mr. Burns paid for the following expenses: Advertising $120,000, Office Salaries $55,000, Wages $20,000, and Utility Expense $10,000.17. May 01: The Grocery Store paid Mr. Burns for the rest of the cookie dough it bought on account.18. June 1: After threatening revenge against all those who owed him money on account from when he owed the nuclear power plant, he was paid the full amount of what he was owed prior to going into the cookie business. This amounted to $350,000.19. June 2: After coming into some extra money, The Old Folks Home decided to pay $40,000 that they owed to Mr. Burns even though there account has been written off. Record the reinstatement of the account and the payment.20. June 3: Mr. Burns paid for the note he issued to the Try-N-Save on January 4. The payment included the full amount for the oven and the interest.21. July 5: The following expenses accrued and are to be paid in a later month: Pension Expense $50,000, Health Insurance Expense $40,000, and Professional Fees $30,000.22. July 25: Mr. Burns paid $100,000 on account he owed from the cookie machine he bought in January. Mr. Burns agreed to issue a note for the rest of the money he owed on account in transaction 2. The note is to be paid next year and has an interest rate of 12%.23. August 10: Mr. Burns sold cookies on account to Mayor Quimby for has nephew?s 18th birthday party. Mr. Burns sold $150,000 worth of cookies. The terms were n30 and the cost of merchandise sold was $50,000.24. September 8: Mr. Burns paid the expenses that accrued on account in transaction 21 (use Cash only once).25. October 5: Mr. Burns paid off his note from July 25.26 October 15: Mayor Quimby issued a note to Mr. Burns for transaction 23 due to the fact he had no money because he gave it to Fat Tony and the mob to fix the polls of Springfield so he could get reelected. Mayor Quimby promised to pay Mr. Burns? Cookies on December 1. The interest rate is 15%.27. November 1: After being advised by legal council and Mr. Smithers that killing off competition was considered murder, Mr. Burns decided to get a patent to keep his secrets from being used by his rivals. He paid $40,000 for his patent which will be amortized for 15 years.28. December 1: After holding his nephew hostage, Mayor Quimby agreed to pay the note he owed to Mr. Burns. Mayor Quimby raised taxes to get the funds.29. December 8: Mr. Burns bought office supplies on account from Staples for $30,000.30. Mr. Burns sold $450,000 of cookies on account to Shelbyville. The cost of sales was $250,00031. Mr. Burns withdrew $50,000 dollars to bribe judges and win the Miss Springfield contest.Adjusting Entries:At December 31, 2012, Mr. Burns Good Old Fashion Cookies made the following adjusting entries.A1. Mr. Burns recorded the depreciation for the fixed assets that he had bought through the year. The Vehicle had 40,000 miles at December 31.A2. All of Mr. Burns prepaid rent expired.A3. Balance in plant supplies at year end: $0. Balance in office supplies at year end: $7000A4. Income Taxes accrued $120,000. This is to be paid March 15, 2013.A5. Office Salaries accrued $20,000. Wages accrued $15,000A6. Mr. Burns uses the balance sheet approach (aging of the A/R) to estimate how much money he will lose in uncollectible accounts. Since the city of Springfield is in a severe recession, Mr. Smithers estimated for Mr. Burns that 10% of this year?s ending accounts receivable will be uncollectible.A7. Two months of the patent have expired.A8. Mr. Smithers discovered a sale on account earned by not yet recorded, $50,000. Since this amount was discovered after the estimate for uncollectible accounts, this amount WILL not be included in adjusting entry A6. There were no discount terms.Customer

 

Paper#44020 | Written in 18-Jul-2015

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