1Rite Shoes was involved in the transactions described below.Purchased $9,000 of inventory on account.Paid weekly salaries and wages, $1,000.Recorded sales for the first week: Cash: $7,900; On account: $6,100.Paid for inventory purchased in event (1).Placed an order for $7,000 of inventory. Required:Prepare the appropriate journal entry for each transaction. (If no entry is required for a transaction/event, select “No journal entry required” in the first account field.)2The following transactions occurred at the Daisy King Ice Cream Company.Started business by issuing 10,000 shares of common stock for $33,000.Signed a franchise agreement to pay royalties of 6% of sales.Leased a building for three years at $630 per month and paid six months’ rent in advance.Purchased equipment for $6,700, paying $3,000 down and signing a two-year, 12% note for the balance.Purchased $3,100 of supplies on account.Recorded cash sales of $2,100 for the first week.Paid weekly salaries and wages, $970.Paid for supplies purchased in item (5).Paid royalties due on first week’s sales.Recorded depreciation on equipment, $120. Required:Prepare journal entries to record each of the transactions listed above. (If no entry is required for a transaction/event, select “No journal entry required” in the first account field.)3Flint Hills, Inc. has prepared a year-end 2018 trial balance. Certain accounts in the trial balance do not reflect all activities that have occurred.The Supplies account shows a balance of $600, but a count of supplies reveals only $240 on hand.Flint Hills initially records the payments of all insurance premiums as expenses. The trial balance shows a balance of $450 in Insurance expense. A review of insurance policies reveals that $140 of insurance is unexpired.Flint Hills employees work Monday through Friday, and salaries of $2,700 per week are paid each Friday. Flint Hills’ year-end falls on Tuesday.On December 31, 2018, Flint Hills received a utility bill for December electricity usage of $220 that will be paid in early January of 2019. Required:Prepare adjusting journal entries, as needed, for the above items. (If no entry is required for a transaction/event, select “No journal entry required” in the first account field.)4The Yankel Corporation’s controller prepares adjusting entries only at the end of the fiscal year. The following adjusting entries were prepared on December 31, 2018:DebitCreditInterest expense1,870Interest payable1,870Insurance expense68,000Prepaid insurance68,000Interest receivable3,740Interest revenue3,740 Additional information:The company borrowed $34,000 on June 30, 2018. Principal and interest are due on June 30, 2019. This note is the company’s only interest-bearing debt.Insurance for the year on the company’s office buildings is $102,000. The insurance is paid in advance.On August 31, 2018, Yankel lent money to a customer. The customer signed a note with principal and interest at 6% due in one year. Required:1. What is the interest rate on the company’s note payable?2. The 2018 insurance payment was made at the beginning of which month?3. How much did Yankel lend its customer on August 31?5The adjusted trial balance for China Tea Company at December 31, 2018, is presented below:DebitCreditCash11,300Accounts receivable158,000Prepaid rent5,800Inventory33,000Equipment380,000Accumulated depreciation – equipment133,000Accounts payable38,000Notes payable – due in three months38,000Salaries payable4,800Interest payable1,800Common stock240,000Retained earnings67,600Sales revenue480,000Costs of goods sold220,000Salaries expense128,000Rent expense23,000Depreciation expense38,000Interest expense2,800Advertising expense3,300Totals1,003,2001,003,200 Required:Prepare the closing entries for China Tea Company for the year ended December 31, 2018. (If no entry is required for a transaction/event, select “No journal entry required” in the first account field.)6The adjusted trial balance for China Tea Company at December 31, 2018, is presented below:DebitCreditCash11,900Accounts receivable164,000Prepaid rent6,400Inventory39,000Equipment440,000Accumulated depreciation – equipment139,000Accounts payable44,000Notes payable – due in three months44,000Salaries payable5,400Interest payable2,400Common stock270,000Retained earnings80,800Sales revenue540,000Costs of goods sold250,000Salaries expense134,000Rent expense29,000Depreciation expense44,000Interest expense3,400Advertising expense3,900Totals1,125,6001,125,600 Required:Prepare an income statement for China Tea Company for the year ended December 31, 2018.7The adjusted trial balance for China Tea Company at December 31, 2018, is presented below:DebitCreditCash11,900Accounts receivable164,000Prepaid rent6,400Inventory39,000Equipment440,000Accumulated depreciation – equipment139,000Accounts payable44,000Notes payable – due in three months44,000Salaries payable5,400Interest payable2,400Common stock270,000Retained earnings80,800Sales revenue540,000Costs of goods sold250,000Salaries expense134,000Rent expense29,000Depreciation expense44,000Interest expense3,400Advertising expense3,900Totals1,125,6001,125,600 Required:Prepare a classified balance sheet for China Tea Company as of December 31, 2018. (Amounts to be deducted should be indicated by a minus sign.)8Silicon Chip Company’s fiscal year-end is December 31. At the end of 2018, it owed employees $36,000 in salaries and wages that will be paid on January 7, 2019. Required:1. Prepare an adjusting entry to record accrued salaries and wages, a reversing entry on January 1, 2019, and an entry to record the payment of salaries and wages on January 7, 2019. (If no entry is required for a transaction/event, select “No journal entry required” in the first account field.)2. Prepare journal entries to record the accrued salaries and wages on December 31, 2018 and the payment of salaries and wages on January 7, 2019, assuming a reversing entry is not recorded.(If no entry is required for a transaction/event, select “No journal entry required” in the first account field.)9Presented below is income statement information of the Nebraska Corporation for the year ended December 31, 2018.Sales revenue644,000Cost of goods sold365,000Salaries expense92,000Insurance expense22,000Dividend revenue3,200Depreciation expense20,000Miscellaneous expense14,000Income tax expense37,000Loss on sale of investments8,200Rent expense12,000 Required:Prepare the necessary closing entries at December 31, 2018. (If no entry is required for a transaction/event, select “No journal entry required” in the first account field.)
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