Reference no: EM132472556

Question 1: Determine The activities pertain to Entrée Co. for the current year. Prepare the journal entry that should be made on Entrée's books for each activity.

Point 1. All sales were made on account and totaled $650,000. The cost of merchandise sold amounted to $407,000.

Point 2. Collections on accounts receivable totaled $585,000.

Point 3. Accounts receivable written off as uncollectible totaled $9,000.

Point 4. Entrée collected $50,000 as prepayment for services to be performed by Entrée at a later date.

Point 5. Merchandise inventory purchased on account totaled $420,000. Entrée Co. uses the perpetual method to account for inventory and thus debits Inventory (rather than Purchases) for purchases of merchandise.

Point 6. Payments to merchandise suppliers totaled $378,000.

Point 7. Equipment having an original cost of $80,000 was sold for $35,000. The accumulated depreciation on this equipment at the date of sale was $50,000.

Point 8. Salaries earned by employees totaled $160,000. Entrée records employee salaries by crediting Salaries Payable.

Point 9. Payments to employees for salaries recorded in entry #8 totaled $148,000.

Point 10. During the year, 50,000 shares of Entrée's previously unissued $10 par value common stock were issued for $27 per share.

Point 11. Cash dividends of $60,000 were declared by Entrée in December and will be paid to shareholders in the first quarter of next year.

Point 12. Patents were purchased for $40,000 cash.

Point 13. Entrée made an end-of-period adjusting entry to recognize that $34,000 of the amount collected in entry #4 was earned in the current year.

Point 14. The balance in the allowance for doubtful accounts was increased by $12,000 in an end-of-period adjusting entry.

Point 15. Patent amortization in the amount of $8,000 was recognized in an end-of-period adjusting entry. Entrée Co. credits the Patent account directly (rather than accumulated amortization) for patent amortization.