Chapter 10 Sample Problems

Chapter 10 Sample Problems - P 10-19B Req. 1 DATE Jan Jan...

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P 10-19B Req. 1 Journal Entry DATE ACCOUNTS AND EXPLANATIONS DEBIT CREDIT 2011 Jan 9 Computer equipment 7,000 Short-term notes payable 7,000 Records the purchase of the computer with a short term notes payable Jan 29 Cash ($67,000 × 1/4 × 1.06) 17,755 Accounts receivable ($67,000 × 3/4 × 1.06) 53,265 Sales revenue 67,000 Sales tax payable ($67,000 × .06) 4,020 Divides the sales between the cash and accounts receivable. All sales are subject to the 6% sales tax. Sales tax payable is recorded as a liability – this amount does not affect the sales of the company. Feb 5 Sales tax payable 4,020 Cash 4,020 Records the payment of the liability. Feb 28 Cash 210,000 Long-term notes payable 157,500 Current portion of long-term notes payable 52,500 The $52,500 is the current portion of the long term debt. This is the amount that must be paid within 12 months. It is disclosed separately from the long term portion of the debt. Jul 9 Short-term notes payable 7,000 Interest expense ($7,000 × .09 × 6/12) 315 Cash 7,315 This records the payment of the short term note for
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computer equipment plus interest at the due date. Aug 31 Inventory 6,000 Short-term notes payable 6,000 Records the purchase of inventory financed through a short term note. Dec 31 Warranty expense ($608,000 × .04) 24,320 Estimated warranty payable 24,320 This is the journal entry necessary to record the estimated warranty expenses for the period on sales of
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This note was uploaded on 12/11/2011 for the course ECON 1 taught by Professor Farin during the Spring '10 term at Foothill College.

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Chapter 10 Sample Problems - P 10-19B Req. 1 DATE Jan Jan...

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