Comprehensive Problem 8 Part Level Submission Victoria Compa

Comprehensive Problem 8 (Part Level Submission) Victoria Company balance sheet at December 31, 2013, is presented below VICTORIA COMPANY Balance Sheet December 31, 201:3 Cash Accounts receivable Allowance for doubtful accounts Inventory $8,890 16,900 17,210 $13,070 Accounts payable 21,400 Common stock (850) Retained earnings 9,380 $43,000 $43,000 During January 2014, the following transactions occurred. Victoria uses the perpetual inventory method Jan. 1 Victoria accepted a 4-month, 8% note from Leon Company in payment of Leon\'s $2,400 account. 3 Victoria wrote off as uncollectible the accounts of Barker Corporation ($500) and Elmo Company ($100) 8 Victoria purchased $16,540 of inventory on account 11 Victoria sold for $25,400 on account inventory that cost $17,720 15 Victoria sold inventory that cost $770 to Joe Haribo for $1,000. Haribo charged this amount on his Visa First Bank card. The service fee charged Victoria 17 21 24 27 31 by First Bank is 396 Victoria collected $22,800 from customers on account. Victoria paid $16,280 on accounts payable Victoria received payment in full ($100) from Elmo Company on the account written off on January 3 Victoria purchased advertising supplies for $1,410 cash Victoria paid other operating expenses, $3,230

Solution

Adjusting Entries DR CR Cash 18420 Account Receivable 23400 Inventory 7430 Cost of Goods Sold 18490 Service Charge 30 Advertisement Supplies 600 Advertisement Supplies Expense 810 Bad debt Expense 1170 Interest Expense 16 Operating Expense 3230 Common Stock 16900 Retained Earnings 17210 Note Payable 2400 Allowance For Doubtfull accout 1520 Account Payable 9150 Sales 26400 Interest Payable 16 73596 73596 DR CR Cash 2400 Note Payable 2400 (Bond Issue) Allowance For Doubtfull accout 600 Account Receivable 600 Inventory 16540 Account Payable 16540 Account Receivable 25400 Sales 25400 Cost of Goods Sold 17720 Inventory 17720 Cash 1000 Sales 1000 Cost of Goods Sold 770 Inventory 770 Service Charge 30 Cash 30 Cash 22800 Account Receivable 22800 Account Payable 16280 Cash 16280 Account Receivable 100 Allowance For Doubtfull accout 100 Cash 100 Account Receivable 100 Advertisement Supplies 1410 Cash 1410 Operating Expense 3230 Cash 3230 Adjustment Entries Interest Expense 16 Interest Payable 16 Bad debt Expense 1170 Allowance For Doubtfull account 1170 Advertisement Supplies Expense 810 Advertisement Supplies 810