80.2K

Verified Solution

Link Copied!

JPM Company engages in the following activities during 20X1:

1/1/20X1: JPM issues 10,000 shares of stock at $20 par-value.

1/20/20X1: JPM purchases a building for $50,000 and purchases equipment for $20,000. It pays half the price in cash and the other half through a bank loan.

3/1/20X1: JPM acquires finished goods for $120,000. JPM pays cash for $10,000 of the merchandise, and the remainder is purchased on account.

3/30/20X1: JPM pays $25,000 in employee salaries.

7/1/20X1: JPM decides to rent additional building space and pays for six months rent, at $2000 a month, in advance.

8/22/20X1 : JPM sells all of the finished goods for $400,000, of which $200,000 is on account and the remainder is received in cash. JPM expects to collect 95% of its credit sales.

On the sales made on August 22, JPM also offers certain warranty services on the sold merchandise for the first three months. JPM estimates these warranty services will amount to $5,000.

10/3020X1: JPM collects $100,000 in cash from its accounts receivable, and uses this money to pay down its accounts payable.

11/23/20X1 : JPM Company performs warranty services on sold merchandise at cost of $5000 to date.

12/30/20X1: Depreciation for the year is $2000 on the building and $2400 on the equipment.

12/30/20X1: JPM pays $250,000 in dividends.

Make journal entries to record the above transactions and then answer the question below:

What is the ending balance in the Cash account?

$	unanswered

Answer & Explanation Solved by verified expert

See Answer