Reference no: EM132359930
Question
Prepare journal entries for the following transactions and events. Use the general journal format. Ignore GST. Unless told otherwise, all questions are independent of each other. For questions 19, 20, and 21, please use T accounts to calculate the relevant amounts.
1) Your company provided a service to a client and charged $2,000. The customer will pay next month.
2) Your company purchased $300 worth of inventory. Your company uses the periodic inventory system.
3) Your company purchased $300 worth of inventory on credit. Your company uses the perpetual inventory system.
4) At the end of the current year your company owes its workers $500 for wages. This will be paid early in the following year.
5) Your company accrued $600 for long service leave
6) Your company sold all the inventory in (3) to a client for $900. This was a cash sale.
7) During the year the company made credit sales of $10,000
8) At the end of the year the company estimated that 3% of the credit sales in (7) would not be collected.
9) The customer in (1) did not make any payments and went bankrupt. Your company does not expect to collect any of this customer's receivable.
10) The company paid $200 in long service leave
11) The company borrowed $5,000 from a bank.
12) The company bought some debentures in another company.
a. What are debentures? How would the issuer classify them? How would the buyer classify them?
13) At the end of the year the company owes the bank $250 in interest.
14) During the year, the company paid $560 in interest to the bank.
15) During the year, the company received $120 interest from the debentures.
16) At the end of the year, the company is owed $60 interest from the debentures.
17) The company paid for the inventory in (3).
18) At the end of the year the company recorded $550 depreciation of some equipment.
19) The opening balance in the allowance for doubtful debts is $100 (Cr). During the year the company wrote off a receivable of $20. At the end of the year the closing balance in the receivable is $150. What is the bad debt expense for this year?
20) The prepaid rent account had an opening balance of $100. During the year the company recorded an expense of $300. The closing balance of the prepaid rent account was $200. How much cash did the company pay for rent this year?
21) The unearned revenue account had an opening balance of $250. During the year the company recorded income of $500 in relation to this account. The closing balance of the unearned revenue account is $150. In relation to this account, how much cash did the company receive in the year?