Accounting Information Systems
Panda Power Inc. began operations in 2016. You are the new bookkeeper, and you'll record the appropriate journal entries for the company's transactions.
January 1
Chris Panda, the owner of Panda Power Inc., invested $60,000.00 in the corporation to purchase 10,000 shares of stock with a $1.00 par value.
February 1
On February 1, the company purchased land for $8,500 in cash.
Inventory purchases of $12,000 were made on account to the Super Company. The invoice was paid on
April 1
On April 1, the company had cash sales of $1,400.
On April 1, the company had credit sales of $6,700. The total amount of these sales was collected in cash on April 15.
On April 1, Panda Power purchased a 12-month insurance policy for $240.00 in cash.
A check for $800.00 was sent to Smithson Tax Accounting for professional services.
On April 1, Panda Power purchased 50 shares of Sweetheart Co. stock as an investment in marketable securities, and paid cash of $2400.
May 1
On May 1, the company loaned $4,400.00 to another company on a 9%, one-year note.
On May 1, Panda Power borrowed $10,000.00 on an 8%, one-year note.
On May 1, the company sold 1,000 more shares of its $1.00 par value stock for $9,200.
On May 1, the company bought $380.00 of office supplies with cash and debited the Office Supplies account.
An invoice for maintenance and repairs of $367.00 was paid.
Utilities expense of $67.00 was paid on May 1
August 1
Inventory purchases of $11,500 were made on account to the Super Company on August 1. The invoice was paid on August 15.
On August 1, the company sold land that had originally cost $8,500.00 for $10,000.00 cash.
On August 1, the company had cash sales of $1,200.
On August 1, the company had credit sales of $4,600. The total amount of these sales was collected in cash on August 15.
December
On December 1, the company paid $2000.00 for 2 months' rent on a new office space. This payment reflects rent expense for December and January. The payment was debited to Rent Expense.
On December 1, a customer paid $1,000.00 in advance for merchandise that will be shipped in 2015, and this payment was credited to Sales.
On December 1, the company received and deposited a check for $52.00 in dividend income from the Sweetheart Co.
On December 20, Panda had credit sales of $9,600. Of the total amount of these sales, $2,900.00 was collected in cash on December 30.
On December 30, goods in the amount of $4,700 were sold on account. This invoice is unpaid as of December 31.
December 31
The inventory value at December 31, 2014 is $5,100.
$520.00 of liabilities have accrued as of December 31.
Panda Power estimates its bad debts to be 1% of net credit sales.
The Sweetheart Co. stock has a value of $3,500.00 at 12/31.
Notes:
There are 50,000 shares of common stock that are authorized.
For the loans, interest and principal are to be paid on the due date.
The company uses the periodic inventory system.
Required: Using a general journal format, prepare:
a. Journal entries
b. Adjusting journal entries
c. Adjusted trial balance
d. Closing entries.