Reference no: EM132464932

Whitelands, Inc. had $100 of cash and shareholders' equity as the result of its initial sale of stock on January 1, 2012. During its first month of operations, Whitelands had the following operating transactions:

Date                                        Transaction

1/1                           Paid $24 cash in advance to rent a store for one year

1/1                             Purchased 2 units of inventory on credit costing $4 each

1/3                              Purchased 3 units of inventory on credit costing $5 each

1/10                              Purchased 4 units of inventory on credit costing $6 each

1/21                             Paid for the January 1 inventory purchase

1/23                            Paid for the January 3 inventory purchase

1/30                            Sold 7 units of inventory at $10 each on credit

1/30                             Matched the inventory cost to January 30 sales on a FIFO basis

1/31                              Estimated that 10% of credit sales will not be realized in cash

1/31                                Adjusted the prepaid rent account

Required:

Question 1. Record the journal entries for the above transactions.

Question 2. Present Whitelands' income statement for January 2014.

Question 3. Report Whitelands' balance sheet on January 31, 2014.

Question 4. Close the revenue and expense accounts to retained earnings.