How do make journal entries for the transactions

Assignment Help Financial Accounting

Reference no: EM132714277

Sol-Electronics Company starts from November 1, 2019. The company's accounting yearend is December 31.2019

1. On Nov. 1, two shareholders contributed $20,000 to the company in exchange for ordinary shares

2. On Nov. 1, Company purchased an automobile for $30,000 by writing a note payable to the bank. The note is due on Nov. 1 2020 with an annual interest rate is 6%. The truck has a useful life of 5 years and residual value is estimated to be $5,000. The company is using double declining depreciation method.

3. On Nov. 5, Company purchased 50 laptops for sale to customers at $500 each from Dell on credit. The payment is due in 60 days.

4. On Nov. 10, Company sold 30 laptops to WS University at $800 per unit. The payment term is 3/10, n/30.

5. On Nov 10, Company sold 5 laptops to Daejeon Electronics at $800 per unit. The payment term is 3/10, n/30.

6. On Nov. 15, WS University returned 5 laptops.

7. On Nov. 20, WS University paid the remaining balance.

8. On Dec. 1, Company hired an employee at monthly wage of $3,000. The wage is payable on the fifth day after the end of the month.

9. On Dec 1, Company purchased 50 laptops at $550 each from Del on credit. The payment is due in 60 days.

10. On Dec. 5, Company sold 40 laptops to CN University at $900 per unit. The payment term is 2/10, n/30. Company uses first-in first-out (FIFO) method for inventory accounting.

11. On Dec 10, Company paid Nov. utilities bill of $500 and Nov. rent of $2000 in cash.

12. On Dec 31, Company chose allowance method for uncollectible accounts receivable. It is estimated that 10% of accounts receivable on December 31 will be uncollectible.

Question 1: Prepare journal entries for the transactions (if necessary) in 2019 and all necessary adjusting journal entries to prepare 2019 financial statements. Please refer to some 2019 related transactions occurred in 2020 below.

Question 2: Determine the following amount:A. 2019 net income (please prepare simple income statement)B. Inventory reported on the balance sheet on December 31, 2019

2020

13. On Jan. 5, Dec 2019 wage was paid to the employee

14. On Jan. 5, CN University paid for the purchase of 40 laptops.

15. On Jan. 10, Dec 2019 rent $ 2,000 and utilities $400 were paid

16. On Jan. 30, Company collected $3,000 from Daejeon Electronics.

17. On Feb 15, Daejeon Electronics filed bankruptcy and it is determined that the remaining uncollected accounts receivable needs to be written off.

18. On March 31, Company sold the automobile for $22,000 cash.

Question 3: Prepare journal entries for the transactions in 2020.

Reference no: EM132714277

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