Question

Happy Harry Pets was incorporated on January 1st. The business maintains a retail pet store, providing gourmet dog food and treats, and also provides a full range of pet care services, including grooming, dog-walking, and boarding. The following transactions occurred during the first twelve months of operations: January 1st Common stock is issued in exchange for cash in the amount of ………….………….……………………… 295,000 February 8th The company purchases and pays for 160 units of gourmet dog food at a price of $25 per unit ………….. 4,000 March 1st The company pays cash for a one-year insurance policy in the amount of ……………….………………………..….. 9,300 March 31st Rent on a retail space for 12 months is paid in the amount of …..……….……………………………………… 12,480 April 1st Grooming and boarding equipment with a useful life of 2 years is purchased for cash in the amount of …… 18,000 April 10th Grooming supplies purchased on account in the amount of …………..…………………………………………… 1,450 May 15th The company purchases and pays for another 370 units of gourmet dog food at a price of $29 per unit ….. 10,730 May 30th Grooming services are performed on account in the amount of …………………………………………………………..………… 13,625 June 1st The company pays for advertisements to be run for the next 12 months in the amount of ………………………. 864 June 30th The company issues a 5-year bond with a face value of $100,000 and a stated annual rate of 6%. Interest is due on June 30th each year. The market rate is 8% on the date of issuance ……………………………. 100,000 July 25th Dog-walking services are performed on account in the amount of …...……………………………..………… 14,225 July 31st 95 units of gourmet dog food are sold for $70 per unit with terms 2/10, n/30. The sale is recorded using the gross method in the amount of (see note c for cost flow assumptions) ……………………………………………………………………………………. 6,650 August 2nd Boarding services are provided on account in the amount of ………………………………………………………………. 6,280 August 6th The company receives full payment from the customer for the July 31st sale ……………………………………… 6,517 September 15th Pet sitting services are performed on account in the amount of ……………………..…………………………….………….. 6,245 September 29th Customer payments are received for services previously provided in the amount of ……………………………….. 1,250 October 13th 100 units of gourmet dog food are sold for $73 per unit with terms 2/10, n/30. The sale is recorded using the gross method in the amount of ………………………………………………………………………………………. 7,300 October 29th The company receives payment for half of the October 13th sale ……………………………………………………… 3,650 November 1st Equipment originally purchased on April 1st for $2400 is sold for $2000 cash November 15th A bookkeeper is hired to help the company with daily accounting taxes and annual tax preparation December 15th The bookkeeper is paid $3,500 for the previous month's services 3,500 Additional information: a. Grooming supplies on hand at the end of the month are as follows: ……………………………………. 870 b. The year-end balance reported at the end of the year for the Allowance for Doubtful Accounts is estimated as 4% of outstanding receivables at the end of the year c. The Company uses a perpetual inventory system and accounts for costs using the First-In-First-Out cost flow assumption. On December 31st, a count of ending inventory reveals that there are 335 bags of dog food on hand. d. All revenue is recorded in the "Sales Revenue" account and reported net of cash discounts on the income statement. e. The effective interest method is used to amortize bond premiums and discounts f. Adjustments are made at the end of the year for prepaid insurance, rent, advertising, depreciation, and interest expense. g. The bookkeeper is paid a salary of $3,500 on the 15th of every month. h. The company declared dividends of $650 for the year i. Assume selling expenses include advertising and supplies expense. All other expenses, other than depreciation and interest expense, are considered general & administrative. REQUIRED: 1. Prepare journal entries for each transaction listed above (with descriptions). 2. Post journal entries to the general ledger accounts. 3. 4. 5. 6. 7. Prepare an unadjusted trial balance. Prepare all necessary adjusting journal entries (with descriptions)

WRITE GENERAL JOURNAL - T CHART ACCOUNTS

Answer 1

Happy Harry Pets was incorporated on January 1st. The business maintains a retail pet store, providing gourmet dog food and treats, and also provides a full range of pet care services, including grooming, dog-walking, and boarding. The following transactions occurred during the first twelve months of operations: