Record the sales that include the sales tax

Assignment Help Accounting Basics

Reference no: EM131761155

Question:

Need help on these adjusting entries please.	Unadjusted				Adjusted
Account Title	Trial Balance		Adjustments		Trial Balance
	DR	CR	DR	CR	DR	CR
Cash	240,300	-
Accounts Receivable	925,000	-
Allowance for Doubtful Accounts	-	49,000
Interest Receivable	-
Merchandise Inventory	187,500	-
Prepaid Insurance	9,000	-
Prepaid Advertising	-	-
Prepaid Rent	-	-
Office Supplies	7,800	-
Note Receivable	75,000	-
Available for Sale Securities	380,000	-
Office Building	4,250,000	-
Accumulated Depreciation - Office Building	-	221,500
Storage Building	1,650,000	-
Accumulated Depreciation - Storage Building	-	-
Land	450,000	-
Leasehold Improvements	190,000	-
Accumulated Depreciation - Leasehold Improvements	-	-
Office Equipment	125,000	-
Accumulated Depreciation - Office Equipment	-	42,000
Patent	250,000	-
Accounts Payable	-	145,000
Sales Tax Payable	-	-
Salaries Payable	-	-
Payroll Taxes Payable	-	-
Interest Payable	-	-
Income Tax Payable	-	-
Unearned Rent Revenue	-	96,000
Loan Payable - Onstar Bank	-	500,000
Loan Payable - Coldstar Bank	-	2,250,000
Common Stock	-	425,000
Additional Paid in Capital	-	2,800,000
Retained Earnings	-	1,379,420
Accumulated Other Comprehensive Income	-	8,500
Dividends	280,000	-
Sales	-	4,380,250
Sales Returns and Allowances	19,500	-
Sales Discounts	14,600	-
Cost of Goods Sold	1,817,900	-
Sales Salaries Expense	676,400	-
Office Salaries Expense	434,000	-
Advertising Expense	54,000	-
Depreciation Expense - Office Building	-	-
Depreciation Expense - Leasehold Improvements	-	-
Depreciation Expense - Office Equipment	-	-
Leasing Expense - Stores	132,000	-
Miscellaneous Selling Expense	16,950	-
Rent Expense - Storage Facility	18,000	-
Insurance Expense	2,000	-
Office Supplies Expense	28,500	-
Warranty Expense	5,000
Miscellaneous Administrative Expense	9,220	-
Rent Revenue	-	-
Interest Revenue on Note Receivable	-	-
Dividend Revenue on AFS Securities	-	18,000
Bad Debt Expense	67,000	-
	12,314,670	12,314,670

1. After reviewing details of sales, you note that the sales taxes collected on the last week of December's sales were included in sales revenue. Sales recorded the last week of December that included the sales tax of 12% (enter your birthday month plus 1) amounted to $185,000.

2. On November 1, 2017 (enter your birthday month), DeeDee recorded a patent in the amount of $250,000. The company paid outside legal fees of $120,000 to have the patent registered. The other $130,000 represents internal costs in developing the patent. The patent is good for 20 years, but the company estimates that the patent will have a useful life of 8 years with no residual value. No one knows what to do with this information so no amortization has been recorded for 2017. Amortization is straight line and the company depreciates using partial years for intangible assets.

3. The storage building was self-constructed this year by DeeDee. The Company had their initial expenditure of $700,000 on January 1. They paid an additional $500,000 on March 1^st , $300,000 on June 1^st, and then the final payment of $150,000 on August 1^st. when the building was completed and occupancy occurred. Payments to contractor were properly capitalized. The company has decided to use S/L method for depreciation. The storage building is estimated to have a life of 30 years and a savage value of $250,000. The company will take a full year of depreciation in year of acquisition.

4. You note that Leasehold Improvements have not been depreciated for this year. DeeDee started to lease some new retail space in 2017 and added shelving and fixtures to this leased space. Based on your review of invoices, the previous accountant capitalized the cost of fixtures but did not capitalize the shipping and installation costs of $5,459 ((enter the last three digits of your student number in place of the XXX). These costs were expensed and recorded as a miscellaneous administrative expense. DeeDee has decided to use double declining balance (DDB) depreciation for this item and to take a full year of depreciation in the year of acquisition. The leasehold improvements have a useful life of 15 years with a salvage value of $10,000.

Reference no: EM131761155

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