IV Journalize the following transactions according to the fo

IV. Journalize the following transactions according to the following descriptions: (45\') 1. Nov. 1, performed services for a Morris Ltd. on account, $4,900 and created a petty cash fund with $100. 2. Nov. 3, received goods from Oct. 30 sale of $2,000 that cost $800. (Oct. 30, sold $6,000 that cost $2,400, on credit terms of 2/10, n/30, FOB shipping point.) 3. Nov. 4, paid S120 for the freight that was arranged for the client in the Oct. 30 sale. 4. Nov. 10, received payment of the Oct. 30 sale. 5. Nov 15, received an additional capital from the owner Smith of $5,000 in cash. 6, Nov. 21, borrowed $2,000 from a bank for 3 month at a rate of 6% per year. 7. Nov. 25, $500 was withdraw by the owner Peter. 8. Nov. 30, it was found that the petty cash was spent on postage $15 for office use, stationery $55 for store use; and only $25 is now on hand 9. Nov. 30, prepared adjusting entries: 1) interest expense incurred on Nov. 21; 2) the beginning balance of supplies is $300, the new purchase during November is $200 and at the end of the Nov. the physical check showed a $150 supplies on hand; 3) accrued salaries $900; 4) depreciation for equipment which was purchased for $510,000 with an estimated residual value of $30,000 and an expected operating hours of 160,000 hours: the equipment operates 2,000 hours during November (the company uses units-of-production method). 10. Nov. 30, prepared the closing entries: 1) Revenues: S120,000, 2) wage expenses: $12,000, 3) cost of merchandise sold: $40,000; 4) the drawing account. 11. Dec. 5, a furniture that was acquired at a cost of $4,000 and has depreciated for $3,600 was sold for $800.

Solution

Journal Entries Ref Date Account Title Debit Credit 1 Nov.1 Accounts receivable 4900 Revenues 4900 (Service performed for Morris Ltd.) Pettycash 100 Cash 100 (Pettycash fund established) 2 Nov.3 Revenues 2000 Accounts receivable 2000 (Credit for goods returned) Inventory 800 Cost of goods sold 800 (Cost of goods returned accounted) 3 Nov.4 Accounts receivable 120 Cash 120 (Freight paid on account of customer) 4 Nov.10 Cash 3920 Sales discount 80 Accounts receivable 4000 (Payment received against Oct.30 sale) 5 Nov.15 Cash 5000 Smith, Capital 5000 (Additional investment received from Smith, owner) 6 Nov.21 Cash 2000 Loan from bank 2000 (Borrowing from bank) 7 Nov.25 Peter, Drawings 500 Cash 500 (Cash withdrawn by Peter, owner) 8 Nov.30 Postage 15 Stationery 55 Cash short and excess 5 Petycash 75 (Pettycash expenses accounted) 9 Nov.30 Interest expense 3 Interest payable 3 (Interest @6% on $2,000 for 10 days) Nov.30 Supplies expense 350 Supplies 350 (Supplies expense 300+200-150 for the month accounted) Nov.30 Wages expense 900 Wages payable 900 (Salaries accrued and unpaid ) Nov.30 Dpreciation expense 6000 Accumulated depreciation - equipment 6000 (Depreciation for the month accounted) 10 Nov.30 Revenues 120000 Peter, Capital 500 Cost of goods sold 40000 Wages expense 12000 Peter, Drawings 500 11 Dec.5 Cash 800 Accumulated depreciation - furniture 3600 Furniture 4000 Gain on sale of furniture 400 (Sale of furniture with WDV of $400 for $800) Depreciation: Cost of the equipment 510000 Salvage value 30000 Depreciable value 480000 Estimated life (hours) 160000 Depreciation per hour 3.00 Running hours for November 2000 Depreciation expense for November 6000