Prepare journal entries to record the transactions

Assignment Help Financial Accounting

Reference no: EM13137225

Joan’s Golf Shop had the following transactions involving current liabilities in its first year of operations:

1. The company ordered golf equipment from suppliers for $ 546,000, on credit. It paid $ 505,000 to suppliers during the year.

2. The shop has seven employees, who earned gross wages of $ 230,000 for the year. From this amount, Joan deducted 22% for income taxes, 5% for Canada Pension Plan deductions, and 2% for Employment Insurance contributions before giving the cheques to her staff. As an employer, she was also required to make additional contributions of 5% for Canada Pension Plan and 2.8% for Employment Insurance. Eleven- twelfths of the amounts due to the government ( i. e., all except for the last month) were paid before the end of the year.

3. Joan gives her customers a one- year warranty on golf clubs. She estimated that warranty costs would total 2% of sales. Sales of golf clubs for the year were $ 1,100,000. During the year, she spent $ 13,000 to replace faulty golf clubs under the warranty.

4. Some customers order very expensive, custom- made golf clubs. In these cases, Joan requires them to pay a deposit of 50% of the selling price when the order is placed. During the year, deposits totalling $ 20,000 were received for custom orders. None of these orders have been delivered yet.

Required:

a. Prepare journal entries to record the transactions.

b. Prepare the current liabilities section of the balance sheet as it would appear at the end of the year.

Reference no: EM13137225

Questions Cloud

Evaluating back charges : An engineering firm is evaluating their back charges, and from this they claim that their average back charge is $1800. They randomly select 42 customers, and calculate the sample mean back charge to be $2010.

Discuss why learning about interviews is important? : Discuss why learing about interviews is important? Explain the differnce between open open and closed questions. provide three of your own examples of each type of question?

What should be the carrying value of montana inventory : "Montana Co. has determined its year-end inventory on a FIFO basis to be $600,000. Information pertaining to that inventory is as follows: What should be the carrying value of Montana's inventory?

Adam hired a part time person : Discussion (This is where you will address the Case Questions, using your own words in a discussion style, but supported by your references. Use suitable headings and sub-headings.

Prepare journal entries to record the transactions : Prepare journal entries to record the transactions. Prepare the current liabilities section of the balance sheet as it would appear at the end of the year.

Determine a confidence interval for mean efficiency : Determine a 95% confidence interval for the mean efficiency of a given batch of motors. If we want to cut the confidence interval by 1/3, how many motors should be tested?

Explain the concept of regression analysis : Explain the concept of "Regression Analysis", its types (3 types at least), applications and usefulness. Provide real application of its usage.

Word story telling about the best or worst school/learning : Write a 650-750 word story telling about the best or worst school/learning experience you ever had.

Determine the cost of the machine : On December 31, 1999, after all adjusting journal entries are complete, Asset A has a book value of $196,000 as given above. Determine the cost of the machine.

User Account

All Pages