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Acct11 1hw
Acct11 1hw
Instructions
The following items were selected from among the transactions completed by Sherwood Co. during the current year:
Mar. 1 Purchased merchandise on account from Kirkwood Co., $175,000, terms n/30.
31 Issued a 30-day, 6% note for $175,000 to Kirkwood Co., on account.
Apr. 30 Paid Kirkwood Co. the amount owed on the note of March 31.
Jun. 1 Borrowed $400,000 from Triple Creek Bank, issuing a 45-day, 5% note.
Jul. 1 Purchased tools by issuing a $45,000, 60-day note to Poulin Co., which discounted the
issuing a new 30-day, 6% note for $400,000. (Journalize both the debit and credit to
Dec. 1 Purchased equipment from Greenwood Co. for $260,000, paying $40,000 cash and
issuing a series of ten 9% notes for $22,000 each, coming due at 30-day intervals.
22 Settled a product liability lawsuit with a customer for $50,000, payable in January.
Accrued the loss in a litigation claims payable account.
31 Paid the amount due to Greenwood Co. on the first note in the series issued on
December 1.
Required:
1. Journalize the transactions. Refer to the Chart of Accounts for exact wording of account titles. Assume a 360-day year.
2. Journalize the adjusting entry for each of the following accrued expenses at the end of the current year (refer to the Chart of
Accounts for exact wording of account titles):
a. Product warranty cost, $80,000.
b. Interest on the nine remaining notes owed to Greenwood Co. Assume a 360-day year.
Chart of Accounts
CHART OF ACCOUNTS
Sherwood Co.
General Ledger
ASSETS REVENUE
EQUITY
312 Dividends
Journal
1. Journalize the transactions. Refer to the Chart of Accounts for exact wording of account titles. Assume a 360-day year. Scroll down to access page 12 of the journal.
PAGE 11
2. Journalize the adjusting entry for each of the following accrued expenses at the end of the current year (refer to the Chart of
b. Interest on the nine remaining notes owed to Greenwood Co. Assume a 360-day year.
PAGE 12
1 Adjusting Entries
2 Dec. 31 Product Warranty Expense 80,000.00
3 Product Warranty Payable 80,000.00
4 Dec. 31 Interest Expense 1,485.00
5 Interest Payable 1,485.00