Excercise 12 - 1 ACCOUNTING Exercise 12 Godin Guitars 2...

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Unformatted text preview: 1 ACCOUNTING Exercise 12 Godin Guitars 2 ECONOMIC EVENTS 1. Spend $1,000,000 to make 1,000 electric guitars. 2. Sell 700 electric guitars, on credit, for $3,000 each, plus 8% sales tax. 3. Record $700,000 Cost of Sales. 4. Accrue $30,000 estimated one year warranty costs. 5. The customer returns 70 guitars. Record the sales return. 6. Record the inventory return. 7. The customer pays the balance within 10 days. Our payment terms are 2/10, N30. 8. Pay sales tax to the state. 9. Sell 200 electric guitars, on credit, for $3,000 each to a customer in Europe. We invoice the customer in Euros. The exchange rate is $1.00 = one Euro. 10. Record $200,000 Cost of Sales. 11. Pay $5,000 for warranty costs. 3 ECONOMIC EVENTS 12. Receive a 300,000 Euro invoice from a European advertising agency when the exchange rate is $1.00 = one Euro. 13. Pay $100,000 to buy back some of our companys stock. 14. The Europe customer sends us 600,000 Euros. We convert the Euros to dollars when the exchange rate is $1.00 = 2.00 Euros. 15. We buy 300,000 Euros to pay the European advertising agency when the exchange rate is $1.00 = 2.00 Euros. 16. Transfer 1,142,200 Net Income to Retained Earnings. 4 JOURNAL ENTRIES 1. 2. 3. 4. 5. 5 JOURNAL ENTRIES 6. 7. 8. 9. 10. 6 JOURNAL ENTRIES 11. 12. 13. 14. 15. 7 JOURNAL ENTRIES 16. 17. 18. 19. 20. 8 Cash Reference Transaction Current Balance Debit Credit Debit Credit 20,000,000 9 Common Stock Reference Transaction Current Balance Debit Credit Debit Credit 10,000,000 10 Paid in Capital Reference Transaction Current Balance Debit Credit Debit Credit 5,000,000 11 Retained Earnings Reference Transaction Current Balance Debit Credit Debit Credit 5,000,000 12 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 13 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 14 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 15 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 16 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 17 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 18 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 19 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 20 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 21 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 22 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 23 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 24 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 25 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 26 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 27 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 28 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 29 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 30 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 31 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 32 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 33 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 34 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 35 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 36 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 37 TRIAL BALANCEpage 1 Account Debit Credit 38 TRIAL BALANCEpage 2 Account Debit Credit Total 39...
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This note was uploaded on 11/03/2010 for the course ACCT 325 taught by Professor Anderson,p during the Winter '09 term at Azusa Pacific.

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Excercise 12 - 1 ACCOUNTING Exercise 12 Godin Guitars 2...

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