On November 30, 2010, the Zu Company had the following account balances:
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During the month of December, the Zu Company entered into the following transactions:
Date Transaction
Dec. 4 Made cash sales of $3,000; the cost of the inventory sold was $1,800.
7 Purchased $2,400 of inventory on credit.
11 Customer returned $600 (retail price) of inventory for credit to its account; the cost of the inventory returned was $360.
14 Collected $900 of accounts receivable.
18 Sold land for $7,800; the land originally had cost $5,000.
20 Made credit sales of $4,000; the cost of the inventory sold was $2,400.
21 Returned $360 of defective inventory to supplier for credit to the Zu Company's account and reduced the inventory account.
27 Purchased $1,250 of inventory for cash.
28 Paid $1,100 of accounts payable.
31 Purchased land at a cost of $6,000; made a $1,000 down payment and signed a 12%, two year note for the balance.
Required:
1. Prepare general journal entries to record the preceding transactions.
2. Post to the general ledger accounts.
3. Prepare a year end trial balance on a worksheet and complete the worksheet using the following information: (a) accrued salaries at year end total $1,200; (b) for simplicity, the building and equipment are being depreciated using the straight line method over an estimated life of 20 years with no residual value; (c) supplies on hand at the end of the year total $630; (d) bad debts expense for the year totals $830; and (e) the income tax rate is 30%; income taxes are payable in the first quarter of 2011.
4. Prepare the company's financial statements for 2010.
5. Prepare the 2010 (a) adjusting and (b) closing entries in the generaljournal.