Question

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Comprehensive Problem 3 Part 1: Selected transactions completed by Kornett Company during its first fiscal year ended December 31, 2015, 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. If an amount box does not require an entry, leave it blank Jan. 3: Issued a check to establish a petty cash fund of $4,500. Date Description Debit Credit Jan. 3 Feb. 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. Date Description Debit Credit Feb. 26 Apr. 14: Purchased $31,300 of merchandise on account, terms n/30. The perpetual inventory system used to account for inventory. Date Description Debit Credit Apr. 14 Credit May 13: Paid the invoice of April 14. Date Description Debit May 13

Answer 1

Date	Description	Debit	Credit
Jan 3	Petty cash	$       4,500
	Cash		$        4,500
	To record establish petty cash.
Feb 26	Office supplies	$       1,680
	Miscellaneous selling expense	$           570
	Miscellaneous administrative expense	$           880
	Petty cash		$        3,130
	To record the replenishment of petty cash.
Apr 14	Inventory	$     31,300
	Accounts payable		$      31,300
	To record merchandise on account.
May 13	Accounts payable	$     31,300
	Cash		$      31,300
	To record cash paid to the vendor.
May 17	Cash	$     21,200
	Cash short	$             40
	Sales		$      21,240
	To record cash received and a shortage of cash.
June 2	Notes receivable	$ 180,000
	Accounts receivable		$    180,000
	To record notes received from the customer.
Aug 1	Cash	$ 182,400
	Interest revenue (180000*8%*60/360)		$        2,400
	Notes receivable		$    180,000
	To record the maturity of notes.
Aug 24	Cash	$       7,600
	Allowance of doubtful accounts (9000-7600)	$       1,400
	Accounts receivable		$        9,000
	To record cash collection from customer and remainder balance write off.
Sep 15	Accounts receivable	$       1,400
	Allowance of doubtful accounts		$        1,400
	To record reinstate of accounts receivable
Sep 15	Cash	$       1,400
	Accounts receivable		$        1,400
	To record cash received from the customer.
Sep 15	Land (670000-15075)	$ 654,925
	Discount on notes payable (670000*9%*90/360)	$     15,075
	Notes payable		$    670,000
	To record purchased on land.
Oct 17	Cash	$ 135,000
	Notes receivable	$ 100,000
	Accumulated depreciation	$     64,000
	Loss on sale of equipment (320000-135000-100000-64000)	$     21,000
	Office equipment		$    320,000
	To record the sale of office equipment.
Nov 30	Sales salaries expense	$ 135,000
	Office salaries expense	$     77,250
	Employee income tax payable		$      39,266
	Social security tax payable		$      12,735
	Medicare tax payable		$        3,184
	Salaries payable (135000+77250-39266-12735-3184)		$    157,065
	To record salaries expense.
Nov 30	Payroll taxes expense	$     16,229
	Social security tax payable		$      12,735
	Medicare tax payable		$        3,184
	State unemployment tax payable (5000*5.4%)		$            270
	Federal unemployment tax payable (5000*0.8%)		$              40
	To record payroll taxes expense.
Dec 14	Notes payable	$ 670,000
	Cash		$    670,000
	To record cash payment to notes payable.
Dec 14	Pension expense	$ 190,400
	Pension liability (190400-139700)		$      50,700
	Cash		$    139,700
	To record cash paid to pension expense.