2023 Project 3 Recording Daily and Adjusting Entries and Preparing and Evaluating Financial | Assignments Online
2023 Project 3 Recording Daily and Adjusting Entries and Preparing and Evaluating Financial | Assignments Online
Assignments Online 2023 Business Finance
Project 3: Recording Daily and Adjusting Entries, and Preparing and Evaluating Financial Statements
[The following information applies to the questions displayed below.]
| Introduction |
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Jones Widget Company (JWC) incorporated at the beginning of 2014. Below is the post closing trial balance as of 12/31/2014. |
| Account Title | Balance | ||
| Cash | 9,600 | ||
| Accounts Receivable | 8,300 | ||
| Allowance for Doubtful Accounts | 900 | ||
| Inventory | 12,060 | ||
| Prepaid Rent | 1,700 | ||
| Equipment | 26,000 | ||
| Accumulated Depreciation | 2,500 | ||
| Accounts Payable | 0 | ||
| Sales Tax payable | 550 | ||
| FICA Taxes Payable | 700 | ||
| Federal Income Tax (FIT) Payable | 550 | ||
| Wages Payable | 1,600 | ||
| Unemployment taxes payable | 350 | ||
| Unearned Revenue | 6,400 | ||
| Interest Payable | 300 | ||
| Notes Payable | 15,000 | ||
| Common Stock | 13,800 | ||
| Add’l PIC | 9,710 | ||
| RE – December 31, 2014 | 8,900 | ||
| Treasury Stock | 3,600 | ||
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| Additional Information: |
| • |
JWC establishes a policy that it will sell inventory at $160 per unit. Sales taxes are 6%. JWC will use the FIFO method and record COGS on a perpetual basis. |
| • |
Employee wages are $4,100 per month. Employees are paid on the 16th for the first half of the month and on the first of the following month for the second half of each month. The income taxes withheld are $275 each paycheck, and the FICA taxes are $175 per paycheck. The withholding and the employer’s matching contribution are paid monthly on the second day of the month. In addition, unemployment taxes of $55 are accrued with each payroll. The taxes are paid on March 31. |
| • |
The Beginning inventory of $12,060 consists of 180 units. |
| • | The Prepaid Rent balance is for January 2015. |
| • |
The equipment was purchased on July 1, 2014. It is being depreciated using the straight line method. |
| • |
Unearned Revenue is for 40 units ordered and paid for in advance by two customers in late December. One order will be filled in January, the remainder in early February. |
| • |
The Notes payable represents a $15,000 bank loan received on October 1, 2013 at 8% annual interest. |
| • | The par value on the common stock is $2. |
| • | The treasury stock account has 600 shares. |
| • | Record all transactions to the nearest dollar. |
| Below are transactions for January 2015 |
| Jan 1 | Paid December 31 payroll previously accrued. |
| Jan 2 | A $91,000 6% six year bond is issued. The effective yield is 7%. |
| 6% | 7% | ||
| Present Value of $1 factors | .7050 | .6663 | |
| Present Value of an Annuity of $1 factors | 4.9173 | 4.7665 | |
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| Jan 2 |
A truck is purchased for $10,500 cash. It is estimated the truck will be used for 50,000 miles and will have no salvage value. (Record the purchase to the account “Vehicles”). |
| Jan 2 |
Payroll taxes payable (FIT & FICA) recorded in December are remitted to the IRS. |
| Jan 5 | A $900 customer account is written off as uncollectible. |
| Jan 6 |
Sales on account of 175 units of inventory occur during January. Include sales tax of 6%. |
| Jan 10 |
Sales taxes of $550 which had been collected and recorded in December are paid to the state. |
| Jan 11 | An additional 75 units of inventory are purchased on account for $4,800. |
| Jan 12 |
The equipment purchased in 2014 for $26,000 is sold for $24,000. No additional depreciation is recorded for January. |
| Jan 14 |
Having sold the equipment, JWC pays off the note in full. The amount paid is $15,345 which includes an additional $45 interest through Jan 14. |
| Jan 15 |
A portion of the advance order from December (35 units) is delivered. There is no sales tax on this order. |
| Jan 16 |
Record and pay payroll for January 1-15. Record the employer’s matching share of FICA taxes And the unemployment taxes also. |
| Jan 20 | 400 shares of the treasury stock are sold for $4,800. |
| Jan 21 | Collections from sales on account totaled $8,600. |
| Jan 27 | Sold the other 200 shares of the treasury stock for $1,000. |
| Jan 28 |
JWC declares and distributes a 10% Stock dividend. The market price of the stock at the time is $5 per share. (Hint on the statement of retained earnings, this amount will should be shown as a dividend). |
| Jan 31 |
(Adjusting 1) Record depreciation on the truck. During January, the truck is driven 2,000 miles. |
| Jan 31 |
(Adjusting 2) It is estimated that 3% of the ending accounts receivable balance will be uncollectible. |
| Jan 31 | (Adjusting 3) Record January rent expired. |
| Jan 31 |
(Adjusting 4) Accrue January 31 payroll, which will be payable on February 1. Record the employer’s matching share of FICA taxes also. |
| Jan 31 |
(Adjusting 5) Record ONE MONTH’S interest expense and amortization of premium or discount on the bond. Round to the nearest dollar. |
10.00 points
You did not receive credit for this question in a previous attempt
Project 3: Part 1a
| Required: |
| 1-a. |
Prepare all January journal entries and adjusting entries. (If no entry is required for a transaction/event, select “No Journal Entry Required” in the first account field.) |
10.00 points
You did not receive credit for this question in a previous attempt
Project 3: Part 1b
| 1-b. |
Post all January entries (transactions and adjustments) to the T-accounts and complete the adjusted trial balance. (Please enter 0 in the adjusted trial balance for zero-balance accounts.) |
10.00 points
You did not receive credit for this question in a previous attempt
Project 3: Part 1c
| 1-c. |
Prepare the financial statements at the end of January, 2015. (Balance Sheet only, items to be deducted must be indicated with a negative amount.) |
10.00 points
You did not receive credit for this question in a previous attempt
Project 3: Part 2
| 2-1. |
Did the carrying value of the bond increase or decrease after the recording of interest expense? |
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