Reference no: EM132680812

Question - Journal entries required

Snow, Sun and Fun Inc. is a business operating in Canada and several northern areas of the US. During the winter they sell snow removal equipment - shovels, ice melt etc. In the summer they sell pool maintenance equipment as well as gear for kayaks and canoes. They began their operations on January 1st, 2017.

1) Shareholders contributed $125,000 in exchange for their common stock.

2) SSF signed a lease for its warehouse and offices, paying $18,000 in advance for occupancy of six months.

3) SSF acquired a forklift and storage fixtures. They paid $20,000 in cash and agreed to pay another $28,000 in three years (ignore interest). The equipment is expected to last 4 years (48 months).

4) SSF paid $210,000 to purchase shovels and snow removal items for resale. All items were purchased on account with payment due in three months or less.

5) Sales of $260,000 were made on account. The merchandise had originally cost $180,000.

6) Collections of $150,000 were made from customers. Payments of $140,000 were made to suppliers.

7) Employees earned $5,000 in wages for the month of January. The company uses electronic deposits, so amounts for paychecks are transferred into the employee's accounts on the last day of the month when wages were earned.

8) Paid a dividend of $15,000 to the shareholders.