Comprehensive Problem 3Part 1:
Selected transactions completed by Kornett Company during its first fiscal year ended December 31, 2014, were as follows:
1. Journalize the selected transactions. Assume 360 days per year.
If no entry is required, select “No entry required” from the dropdown and leave the amount boxes blank. For a compound transaction, if an amount box does not require an entry, leave it blank.
January 3: Issued a check to establish a petty cash fund of $4,500.
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February 26: Replenished the petty cash fund, based on the following summary of petty cash receipts: office supplies, $1,680; miscellaneous selling expense, $570; miscellaneous administrative expense, $880.
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April 14: Purchased $31,300 of merchandise on account, terms 1/10, n/30. The perpetual inventory system is used to account for inventory.
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May 13: Paid the invoice of April 14 after the discount period had passed.
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May 17: Received cash from daily cash sales for $21,200. The amount indicated by the cash register was $21,240.
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June 2: Received a 60-day, 8% note for $180,000 on the Ryanair account.
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August 1: Received amount owed on June 2 note, plus interest at the maturity date.
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August 24: Received $7,600 on the Finley account and wrote off the remainder owed on a $9,000 accounts receivable balance. (The allowance method is used in accounting for uncollectible receivables.)
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September 15: Reinstated the Finley account written off on August 24 and received $1,400 cash in full payment.
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September 15: Purchased land by issuing a $670,000, 90-day note to Zahorik Co., which discounted it at 9%.
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October 17: Sold office equipment in exchange for $135,000 cash plus receipt of a $100,000, 90-day, 9% note. The equipment had a cost of $320,000 and accumulated depreciation of $64,000 as of October 17.
Description
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November 30: Journalized the monthly payroll for November, based on the following data:
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November 30: Journalized the employer’s payroll taxes on the payroll.
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December 14: Journalized the payment of the September 15 note at maturity.
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December 31: The pension cost for the year was $190,400, of which $139,700 was paid to the pension plan trustee.
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