- 0 -
$14,160 4,660 16,000 400 580 -0- 13,530
1. During 2015, the following transactions occurred. Prepare any necessary
purposes, you should set up T-accounts for the expenses, and owner withdrawals) as needed. I entries you think will require an adjusting
DO NOT PREPARE MONTHLY ADJUSTING AND CLOSING ENTRIES; wait until year-end to prepare these entries. Travis Auto Parts does not use reversing entries.
April 10 May 1
Sold store equipment for $7,200. The equipment originally cost $8,000 and had a book value of $4,800. (Given this information, you should be able to derive the accumulated depreciation on the equipment, and determine the gain or loss on the sale.)
Purchased inventory on account for $18,500. Travis Auto Parts uses a periodic system of inventory control.
Sold goods on account for $12,000. Made cash sales of $8,300.
Paid salaries owed to employees at the end of 2014. Travis personally invested $6,000 into the business.
Received $9,800 from customers for previous sales made on account.
Paid $10,000 to vendors for previous purchases of inventory made on account.
Sold goods for $16,800 on account. Made cash sales of $12,600.
Credited customer accounts for $1,420 of merchandise returned.
Received $21,400 from customers for sales made previously on account.
Paid the $16,000 note and all interest accrued to date. Travis had borrowed the $16,000 on October 1, 2014. Interest accrued on the note at a rate of 10% annually.
Paid the remaining amounts owed to vendors for all goods and services purchased on account.
Borrowed $20,000 from the bank by issuing a 12-month note. Interest accrues on the note at a rate of 12% annually. Interest is to be paid when the note is due next year.
May 22 June 1
Purchased $4,000 worth of store equipment for cash. Travis Auto Parts has a policy of taking a full year's depreciation on its equipment in the year of purchase. (Record the purchase of the equipment on May 15th, but wait until the end of the year to record the depreciation.)
Purchased $20,000 of inventory from suppliers on account.
Entered into a rental agreement with Pecos Rentals, Inc. Travis paid $1,800 for a 12-month lease of storage space. Travis debited a permanent (real) account at the time of the transaction.
Sold $19,600 worth of goods on account. Made cash sales of $11,200.
Incurred and paid salaries and utilities expenses of $8,000 and $1,500, respectively.
Received payment of $18,400 from customers for sales on account.
Purchased $12,000 worth of inventory on account.
The prior insurance policy on Travis's operating assets expired on this date; prepare a journal entry to record this event. Travis replaced this policy with a 12-month policy by paying $9,600. Travis debited a nominal (temporary) account to record the purchase of the new policy.
Purchased supplies from vendors for $5,000 on account. A permanent account was debited to record the transaction
Received $7,500 advance payment for products to be shipped to customers by year-end. Travis recognized this cash receipt by crediting a temporary account.
Paid all amounts owed to vendors for inventory and supplies purchased on account.
Sold goods for $22,000 to customers on account. Received payment of $17,500 for sales made on account.
Travis withdrew $2,000 for personal use. To record this transaction, debit a Drawing account and credit Cash. The Drawing account is a temporary account which will be closed out at the end of the year to the Capital account.
Incurred and paid salaries and utilities expenses of $10,000 and $1,800, respectively