Reference no: EM132498793
The following transactions take place in the month of March 2020.
Jan 1 Purchased merchandise from Heaven Trade $3,500, FOB shipping point, 2/15, n/45.
1 Paid 12-month fire insurance $7,200, covering year 2020.
3 Received checks for $4,500 from Westly N.R. and paid $350 to Quick Delivery for the freight on merchandised purchased on January 1st.
5 Sent a credit memo of $200 to Fortune D.C. for the allowance granted on unsatisfied merchandise.
8 Sold merchandise of $3,600 to Zooick, terms FOB destination, 1/8, n/15. The relevant delivery charge, $400, was paid.
9 Sent a check of $4,900, after a 2% discount, to Heaven Trade. Also, paid DeeBeeDee in full.
9 Received payment in full from Apple Green and Fortune D.C..
12 Paid rent of $2,500 for January.
13 Sold merchandise on account to Apple Green $1,900 and Westly N. R. $900, terms 1/8, n/20.
15 Paid Heaven Trade for the Jan.1 purchase.
16 Purchased merchandise on account from DeeBeeDee $15,000, terms 5/5, n/30.
17 Paid $600 cash for office supplies.
18 Returned $1,000 of inferior quality merchandise to DeeBeeDee and receive credit.
20 Cash sales totaled $17,500.
22 Received payment from Apple Green and Zooick.
22 Paid Brothers Inc. $15,300, no discount taken. Also paid DeeBeeDee.
25 Paid salaries of $8,300.
26 Sold merchandise to SunWing, $16,800, terms 1/EOM, n/30.
31 Received from Zooick a down payment of $10,000 for merchandise specifically ordered to its request.
Other information available on January 31st, 2020
a. A count showed supplies on hand was $1,200.
b. Out of the $3,000 prepaid insurance on January 1st, $300 was expired.
c. Depreciation expense for the month totaled $225.
d. Ending inventory was $29,000, out of which $1,200 was found to be not sellable anymore. The management decided to recognize a loss separately.
e. Utility bill of $1,350 was received but not yet paid. A separate payable account is used.
Required:
Question 1. Journalize the January transactions in the general journal, no need to provide explanations to the entries. Use additional accounts when necessary.
Question 2. Prepare the Income Statement for the month ended January 31st, 2020, the Statement of Financial Position as of that date.