Problem:
Journalize the following accrued Expense transactions:
XYZ Company purchased a one-year insurance policy on August 1, 2012 and paid $280,000 cash to MetLife insurance company. Journalize the insurance transactions on the following dates:
August 1, 2012
December 31, 2012
July 31, 2013
ABC Co. borrowed $420,000 at 6% rate on June 1, 2012 payable in 12 months, and signing a note payable (N/P). Journalize on: Jun 1, 2012, December 31, 2012 and may 31, 2013.
Office Supplies inventory account of VCX Co. had a beginning balance of $72,000 on January 1, 2013. During 2013 the VCX Company purchased $450,000 of supplies. The ending supplies inventory of 2013 is $88,000 on December 31, 2013.
Question 1) Determine the cost of supplies in 2013 and journalize purchase and use of supplies transactions on December 31, 2013.
Solve the given numerical problem and show step by step calculation.