IV Journalize the following transactions according to the fo

IV. Journalize the following transactions according to the following descriptions: (45\') 1. Nov. I, 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 $120 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 of6% 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: $120,000, 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 Entry S.No. Date Particulars Dr. Amt. Cr. Amt. 1 1-Nov Accounts Receivable        4,900.00 Service Revenue      4,900.00 (record the services on account to Morris Ltd) 1-Nov Petty Cash            100.00 Cash          100.00 (record the petty cash fund made) 2 3-Nov Sales Return & Allowance        2,000.00 Accounts Receivable      2,000.00 (record the sale return) 3-Nov Inventory            800.00 Cost of Goods Sold          800.00 (record the inventory received diue to sales return) 3 4-Nov Freight Outwards            120.00 Cash          120.00 (record the freight paid for goods sold) 4 10-Nov Accounts receivable        4,000.00 Cash      4,000.00 (record the cash received from sale made on credit) 5 15-Nov Cash        5,000.00 Peter Smith, Capital      5,000.00 (record the additional capital received) 6 21-Nov Cash        2,000.00 Notes Payable      2,000.00 (receord the amount borrowed from bank) 7 25-Nov Peter Smith, Withdrawl            500.00 Cash          500.00 (record the drawings made by owner) 8 30-Nov Postage expenses              15.00 Stationary Expenses              55.00 Cash Short                 5.00    Cash            75.00 (record the expenses) 9-1 30-Nov Interest Expenses                 4.50 Interest Payable              4.50 (record the interest expenses) Interest Expenses = $2,000 X 6% X 9/360 = $4.50 9-2 30-Nov Supplies Expenses            350.00 Supplies          350.00 (record the supplies expenses) Supplies Expenses = $300 + $200 - $150 = $350 9-3 30-Nov Salaries Expesnes            900.00 Salary Payable          900.00 (record the salary due) 9-4 30-Nov Depreciation Expenses        6,000.00 Accumulated Dep. - Equipment      6,000.00 (Record the depreciation expenses) Dep. Exp. Per hour = ($510,000 - $30,000)/160,000 hrs Dep. Exp. Per hour = $3 per hr. Dep. Exp. = $3 X 2,000 hrs = $6,000 10-1 30-Nov Service Revenue    120,000.00    Income summary (record the closing entry) 10-2&3 30-Nov Income Summary      52,000.00 Wage Expenses    12,000.00 Cost of Goods Sold    40,000.00 (record the closing entry) 10-4 30-Nov Peter Smith, Capital            500.00 Peter Smith, Withdrawl          500.00 (record the closing entry) 11 5-Dec Cash            800.00 Accumulated dep. - Furniture        3,600.00 Furniture      4,000.00 Gain on Sale of furniture          400.00 (record the sale of furniture)