Reference no: EM132380443
Question :
Journalize and Post; Unadjusted Trial Balance The following selected transactions were completed during 2001 by Rotan Corporation, a retailer of Scandinavian furniture.
a. Sold 20,000 shares of its own common stock, par SI, for 512 per share and received cash in full.
b. Borrowed $100,000 cash on a 9 percent. one-year note, interest payable at maturity on April 30, 2002.
c. Purchased equipment for use in operating the business at a net cash cost of $164,000: paid in full.
d. Purchased merchandise for resale at a cash cost of 5140.000; paid cash. Assume a periodic inventory sys¬tem; therefore, debit purchases.
e. Purchased merchandise for resale on credit terms 2/10, n/60. The merchandise will cost 59,800 if paid within 10 days; after 10 days, the payment will be $10,000. The company always takes the discount: there¬fore, such purchases are recorded net of discount.
f. Sold merchandise for $180,000; collected $165,000 cash, and the balance is due in one month.
g. Paid $40,000 cash for operating expenses.
h. Paid three-fourths of the balance for the merchandise purchased in (e) within 10 days; the balance remains unpaid.
i. Collected 50 percent of the balance due on the sale in (f); the remaining balance is uncollected.
j. Paid cash for an insurance premium, $600; the premium was for two years' coverage (debit prepaid insurance). k Purchased a tract of land for a future building for company operations, $63,000 cash.
l. Paid damages to a customer who was injured on the company premises, S10,000 cash.
1. Enter each of the above transactions in a general journal; use .11 for the first journal page number. Usc the letter of the transaction in place of the date.
2. Set up appropriate T accounts and post the journal entries. Use posting reference numbers in your posting. Assign each T account an appropriate title, and number each account in balance-sheet order followed by the income statement accounts; start with Cash, No. 101.
3. Prepare an unadjusted trial balance.