Reference no: EM13482995

Prepare all February journal entries and adjusting entries 02/01 Included in WWC's February 1 Accounts Receivable balance is a $1,500 account due from Kit Kat, a WWC customer. Kit Kat is having cash flow problems and cannot its balance at this time. WWC arranges with Kit Kat to convert the $1,500 balance to a note, and Kit Kat signs a 6-month note, at 10% annual interest. The principal and all interest will be due and payable to WWC on August 1, 2008. 02/02 WWC paid a $500 insurance premium covering the month of February. The amount paid is recorded directly as an expense. 02/05 An additional 150 units of inventory are purchased on account by WWC for $9,000 - terms 3/15, n30. 02/05 WWC paid Federal Express $300 to have the 150 units of inventory delivered overnight. Delivery occurred on 02/06. 02/10 Sales of 150 units of inventory occurred during the period of 02/07 - 02/10. The sales terms are 2/10, net 30. 02/15 The 30 units that were paid for in advance and recorded in January are delivered to the customer. 02/15 15 units of the inventory that had been sold on 2/10 are returned to WWC.

The units are not damaged and can be resold. Therefore, they are returned to inventory. Assume the units returned are from the 2/05 purchase. 02/16 WWC pays the first 2 weeks wages to the employees. The total paid is $2,200. 02/17 Paid in full the amount owed for the 2/05 purchase of inventory. 02/18 Wrote off a customer's account in the amount of $1,000. 02/19 $32,600 of rent for January, February, and March was paid. Because all of the rent will soon expire, the February portion of the payment is charged directly to expense. 02/19 Collected $8,000 of customers' Accounts Receivable. Of the $8,000, the discount was taken by customers on $6,000 of account balances, therefore WWC received less than $8,000. 02/26 WWC recovered $400 cash from the customer whose account had previously been written off . 02/27 A $500 utility bill for February arrived. It is due on March 15 and will be paid then. 02/28 WWC declared and paid a $600 cash dividend. 02/29 Record the $2,200 employee salary that is owed but will be paid March 1. 02/29  WWC decides to use the aging method to estimate uncollectible accounts. WWC determines 8% of the ending accounts receivable balance is the appropriate end of February estimate of uncollectible accounts. 02/29 Record February interest expense accrued on the note payable. 02/29.