Accounting Exercise, Week Six: ABC Co Journal Entries Create the following Journal Entries for ABC Co:

Jan 1, 2000 ABC Co. purchased $100,000 of inventory on account. Terms 2/10 net 30 (2% discount if paid in 10 days, balance is due in full on the 30th day). Jan 9, ABC Co. paid the January 1st invoice in full. Paid within the discount period. Jan 15, ABC Co. purchased 1,000 widgets of inventory for $50.00 each on account. Jan 20th, Return 20 widgets that ABC Co. purchased on January 15th. Jan 25th, ABC Co. sold 300 widgets for $75.00 each for Cash. Do not forget the second entry to record the cost of sale. Jan 26th ABC Co. received 10 units that the customer returned from the Jan25th sale. Jan 28th, ABC Company sold $20,000 and offered a 2% discount to customer XYZ Co. Received cash.

Date Jan 1

Jan 9

Jan 15

Jan 20

Jan 25

Jan 25

Jan 26

Jan 26

Jan 28

Account Inventory Accounts Payable Purchased Inventory on Account Accounts Payable Cash (100,000 x 0.98) Inventory (100,000 x 0.02) Paid within discount period Inventory Accounts Payable Purchased Inventory on Account Accounts Payable Inventory Return 20 Widgets Cash Sales Revenue Cash Sale Cost of Goods Sold Inventory Recorded the Cost of Goods Sold Sales Returns and Allowances Accounts Receivable Received Returned Goods Inventory Cost of Goods Sold Placed Goods back in Inventory Cash Sales Discounts (20,000 x 0.02) Accounts Receivable Cash Collection with discount to XYZ Co.

Debit 100,000

Credit 100,000

100,000 98,000 2,000 50,000 50,000 1,000 1,000 22,500 22,500 15,000 15,000 750 750 500 500 19,600 400 20,000

Jan 31st ABC has the following balance in the Trial Balance at the end of the month. Create the 4 closing entries: Sales$250,000 Expenses: Cost of Sales- 100,000 Travel Expense 25,000 Salary Expense 20,000 Rent Expense 5,000 Profit $100,000 Dividends Paid = $5,000

Closing entries: 1. Jan 31 Sales Revenue Income Summary 2. Jan 31 Income Summary Cost of Sales Travel Expense Salary Expense Rent Expense 3. Jan 31 Income Summary ABC Capital 4. Jan 31 ABC Capital Dividends Paid 5,000 5,000 100,000 100,000 150,000 100,000 25,000 20,000 5,000 250,000 250,000