Reference no: EM132481285

Question 1: King Toot's music store sells musical instruments and other related merchandise to customers. The following is a list of King Toot's account balances at the beginning of December (i.e. as of December 1st, 2017): Cash: $18,750; Accounts Receivable (A/R): $11,980; Inventory: $20,800; Equipment: $34,400; Accounts Payable (A/P): $13,930; Notes Payable (N/P): $55,000; Common Stock: $17,000. Assume all other accounts had a balance of $0 as of 12/1/17. The accountant for King Toot's observed the following transactions which occurred during December 2017.

a. 12/3/17: Issued 400 shares of common stock for $10 per share.

b. 12/5/17: Sold merchandise inventory, which originally cost $900, for $2,200 to customers. Of the $2,200 in sales, $500 worth was purchased by customers using cash. The remaining $1,700 was purchased by customers on account. (HINT: don't forget there will be two parts to record here-one part to record the sales revenue and one part to record the cost of the merchandise inventory sold).

c. 12/8/17: Paid $4,250 in cash to creditors on outstanding accounts payable.

d. 12/20/17: Received $3,080 in cash from customers as payment on their accounts receivable.

e. 12/30/17: Paid $1,100 in cash for December's Rent.

f. 12/30/17: Paid $120 in cash dividends to stockholders.

Account Identification and transaction analysis: Complete the 'transaction worksheet' summarizing all of the December transactions for King Toot's.

Question 2. Record transactions using Journal Entries: Record all of the above transactions using journal entries. Assume King Toot's uses the following accounts: Cash, A/R, Inventory, Equipment, A/P, Notes Payable, Common Stock, Sales Revenue, Cost of Goods Sold (COGS), Rent Expense, and Dividends. I have completed transaction a. for you as an example. Be sure to include the date and a brief description of the entry.

a. 12/3/17 DEBIT CREDIT

Cash $4,000

Common Stock $4,000

To record issuance of 400 shares common stock, $10 par value.

Question 3. Post transactions to T-Accounts: First, make sure to enter beginning balances (as I have done for Cash and Common Stock) in the T-accounts below. If the beginning balance is $0, enter $0. Then, post all of the above transactions to the proper T-Accounts. have completed transaction a. (occurring on 12/3) for you as an example. After all entries have been posted, update all the T-accounts and calculate the ending balances for each T-account as of December 31, 2017.