College Coasters is a San Diego–based merchandiser specializing in logo-adorned drink coasters. The company reported the following balances in its unadjusted trial balance at December 1. Cash$ 8,400
Accounts Receivable1,640
Inventory320
Prepaid Rent540
Equipment890
Accumulated Depreciation90
Accounts Payable1,340
Salaries and Wages Payable300
Income Taxes Payable0
Common Stock5,700
Retained Earnings3,000
Sales Revenue12,440
Cost of Goods Sold7,300
Rent Expense990
Salaries and Wages Expense1,600
Depreciation Expense90
Income Tax Expense0
Office Expense1,100
The company buys coasters from one supplier. All amounts in Accounts Payable on December 1 are owed to that supplier. The inventory on December 1 consisted of 800 coasters, all of which were purchased in a batch on July 10 at a unit cost of $0.40. College Coasters records its inventory using perpetual inventory accounts and the FIFO cost flow method.
During December, the company entered into the following transactions. Some of these transactions are explained in greater detail below.
a. Purchased 800 coasters on account from the regular supplier on 12/2 at a unit cost of $0.45, with terms of n/60.
b. Sold 1,600 coasters on account on 12/3 at a unit price of $1.00.
c. Collected $910 from customers on account on 12/4.
d. Paid the supplier $1,280 cash on account on 12/18.
e. Paid employees $400 on 12/23, of which $290 related to work done in November and $110 was for wages up to December 22.
f. Loaded 90 coasters on a cargo ship on 12/31 to be delivered the following week to a customer in Kona, Hawaii. The sale was made FOB destination with terms of n/60.
g. Purchased 900 coasters on account from the regular supplier on 12/2 at a unit cost of $0.45, with terms of n/60.
Other relevant information includes the following at 12/31:
h. College Coasters has not yet recorded $160 of office expenses incurred in December on account.
i. The company estimates that the equipment depreciates at a rate of $8 per month. One month of depreciation needs to be recorded.
j. Wages for the period from December 23–31 are $100 and will be paid on January 15.
k. The $540 of Prepaid Rent relates to a six-month period ending on May 31 of next year.
l. The company incurred $700 of income tax but has made no tax payments this year.
m. No shrinkage or damage was discovered when the inventory was counted on December 31.
n. The company did not declare dividends and there were no transactions involving common stock.
Prepare the journal entries to record the transactions (a) through (n). Review the accounts as shown in the General Ledger and Trial Balance tabs.