Reference no: EM133157406
Question - Fit for Life (FFL) operates a fitness center and snack lounge. The following is a partial list of FFL transactions during its year ended December 31. FFL adjusts its records only at year-end.
January 6 Purchased and received 50 nutritional bars for $95, n/45.
January 8 FFL sold 60 nutritional bars to Big Jim for $284 cash, which includes $26 of sales tax.
April 30 FFL received $55,200 from Commerce Bank after signing a 24-month, 4 percent, promissory note.
August 31 FFL signed a 6-month contract to sublease a portion of its building. FFL also received a $12,600 check for six months' rent.
December 30 FFL paid employees' net pay through December 31, using direct deposits totaling $3,340, for 250 total hours at a $16 hourly wage. The company had withheld FICA of $270, United Way contributions of $40, and income tax of $350.
December 31 FFL adjusted the accounts at year-end, relating to (a) employer payroll taxes, including FICA and $50 of unemployment taxes, (b) interest, and (c) rent.
Required -
1. Calculate the cost of goods sold on January 8, assuming FFL began the year with an inventory of 50 nutritional bars at a unit cost of $1.80 ($90 total cost), had no other inventory transactions prior to January 6 and 8, and reports its inventory costs using FIFO.
2. For each of the above dates, prepare the required journal entries (using a perpetual inventory system) and the adjusting journal entries.