Question

Will’s Widget Company (WWC) incorporated near the end of 2017. Operations began in January of 2018. WWC prepares adjusting entries and financial statements at the end of each month. Balances in the accounts at the end of January are as follows:

Account Title	Dr	Cr
Cash	21,170
Accounts Receivable	12,200
Allowance for Doubtful Accounts		1,750
Inventory (45 units)	3,825
Unearned Revenue (40 units)		5,200
Accounts Payable		3,000
Notes Payable		14,500
Contributed Capital		6,700
Retained Earnings - Feb 1, 2018		6,045

Additional Information you need to know about WWC:

WWC establishes a policy that it will sell inventory at $165 per unit.

In January, WWC received a $5,200 advance for 40 units, as reflected in Unearned Revenue.

WWC’s February 1 inventory balance consisted of 45 units at a total cost of $3,825.

WWC’s note payable accrues interest at a 12% annual rate.

WWC will use the FIFO inventory method and record COGS on a perpetual basis.

Below are transactions for February 2018:

Record Journal Entries for following transactions:
02/01	Included in WWC’s February 1 Accounts Receivable balance is a $1,500 account due from Kit Kat, a WWC customer. Kit Kat is having cash flow problems and cannot pay its balance at this time. WWC arranges with Kit Kat to convert the $1,500 balance to a note, and Kit Kat signs a 6-month note, at 9% annual interest. The principal and all interest will be due and payable to WWC on August 1, 2012.
02/02	WWC paid a $900 insurance premium covering the month of February. The amount paid is recorded directly as an expense.
02/05	An additional 150 units of inventory are purchased on account by WWC for $11,250 – terms 2/15, n30.
02/05	WWC paid Federal Express $450 to have the 150 units of inventory delivered overnight. Delivery occurred on 02/06. (Hint--Recall company uses perpetual inventory system, record transportation fees as part of inventory costs—debit to inventory)
02/10	Sales of 120 units of inventory occurred during the period of 02/07 – 02/10. The sales terms are 2/10, net 30. (Hint --Recall company follows FIFO. What are the COGS of 120 sold units?)
02/15	The 40 units that were paid for in advance and recorded in January are delivered to the customer. (Hint --Recall WWC follows FIFO. What are the COGS of 40 sold units?)
02/15	10 units of the inventory that had been sold on 2/10 are returned to WWC. The units are not damaged and can be resold. Therefore, they are returned to inventory. Assume the units returned are from the 2/05 purchase.
02/16	WWC pays the first 2 weeks wages to the employees. The total paid is $2,500.
02/17	Paid in full the amount owed for the 2/05 purchase of inventory. WWC records purchase discounts as a reduction of inventory costs (credit to inventory).
02/18	Wrote off a customer’s account in the amount of $1,850.
02/19	$6,000 of rent for January and February was paid. Because all of the rent will soon expire, the February portion of the payment is charged directly to expense.
02/19	Collected $9,700 of customers’ Accounts Receivable. Of the $9,700, the discount was taken by customers on $6,500 of account balances; therefore WWC received less than $9,700.
02/26	WWC recovered $570 cash from the customer whose account had previously been written off (see 02/18).
02/27	A $800 utility bill for February arrived. It is due on March 15 and will be paid then.
02/28	WWC declared and paid a $650 cash dividend.

Record Adjusting Entries:

02/29	Record the $2,500 employee salary that is owed but will be paid March 1.
02/29	WWC decides to use the aging method to estimate uncollectible accounts. WWC estimates the bad debts expenses for this month is $568.
02/29	Record February interest expense accrued on the note payable (Hint—Recall company’s note payable accrues interest at a 12% annual rate and Note payable is $14,500)
02/29	Record one month’s interest earned Kit Kat’s note (see transaction on 02/01).

. Prepare all February journal entries and adjusting entries

Date	General Journal	Debit	Credit
Feb. 1	Notes Receivable	$1500
	Accounts Receivable- Kit Kat		$1500
Feb. 2	Insurance Expense	$900
	Cash		$900
Feb. 5	Inventory	$11,250
	Accounts Payable		$11,250
Feb. 6	Inventory	$450
	Cash		$450
Feb. 10a	Accounts Receivable	$19,800
Record Sales Revenue of 120 sold units	Sales Revenue		$19,800
Feb. 10b	Cost of Goods Sold	$9,450
Record COGS of 120 sold units	Inventory		$9,450
Feb. 15a	Unearned Revenue	$5,200
Record Sales Revenue of 40 sold units	Sales Revenue		$5,200
Feb. 15b	Cost of Goods Sold	$3,120
Record COGS of 40 sold units	Sales Revenue		$3,120
Feb. 15c	Inventory	$780
Record Returned 10 units (Inventory)	Cost of Goods Sold		$780
Feb. 15d	Sales Returns and Allowance	$1,650
Record Returned 10 units (Sales Returns and Allowance)	Accounts Receivable		$1,650
Feb. 16	Wages Expense	$2,500
	Cash		$2,500
Feb. 17	Accounts Payable	$11,250
	Inventory		$11,250
Feb. 18	Allowance for Doubtful Accounts	$1,850
	Accounts Receivable		$1,850
Feb. 19a	Accounts Payable	$3,000
Record Rent Payment	Rent Expense	$3,000
	Cash		$6,000
Feb. 19b	Cash	$6,500
Record Sales discount	Sales Discount	$3,200
	Accounts Receivable		$9,700
Feb. 26a	Accounts Receivable	$570
	Allowance for Doubtful             Accounts		$570
Feb. 26b	Cash	$570
	Accounts Receivable		$570
Feb. 27	Utility Expense	$800
	Accrued Utilities		$800
Feb. 28	Dividend	$650
	Cash		$650
AJE:
Feb. 29a	Wages Expense	$2500
Record Wages	Wages Payable		$2500
Feb. 29b	Bad Debt Expense	$568
Record Bad Debts	Allowance for Doubtful             Accounts		$568
Feb. 29c	Interest Expense	$ 145
Record Interests (on N/P)	Interest Payable		$145
Feb. 29d	Interest Receivable	$22.50
Record Interests (on N/R)	Interest Revenue		$22.50

	2.	Prepare the financial statements at the end of February.
WWC, Inc.
Income Statement
For the Month Ended February 29
Revenues
Sales Revenue			$28,120
Less: Sales Returns and Allowances			$1,650
Less: Sales Discounts			$3,200
Net Sales			$23,270
Cost of Goods Sold			$12,570
Gross Profit			$10,700
Expenses
Wages Expense			$2,500
Utility Expense			$800
Bad Debt Expense			$568
Insurance Expense			$900
Rent Expense			$3,000
Interest Expense			$145
Total Expenses			7913
Interest Revenue			$22.50
Net Income			$2,764.50

WWC, Inc.
Statement of Retained Earnings
For the Month Ended February 29
Retained Earnings, Beginning of Period	$6045
Add: Net Income	2,764.50
Less: Dividends	-650
Retained Earnings, End of Period	$8159.50

WWW, Inc.
Balance Sheet
At February 29
Assets			Liabilities
Current Assets			Current Liabilities
Cash	17,740		Accounts Payable	0
Accounts Receivable	17,300		Wages Payable	2500
Allowance for Doubtful Accounts	1038		Interest Payable	145
Inventory	-4395
Notes Receivable	1500
Interest Receivable	22.50
Total Current Assets	33,205.50		Total Current Liabilities	2645
			Notes Payable	14,500
			Total liabilities	17145
			Stockholders' Equity
			Contributed Capital	6700
			Retained Earnings	8159.50
			Total Stockholders' Equity	14859.50
Total Assets	33,205.50		Total Liabilities and Stockholders' Equity	32004.50

I NEED SOMEONE TO PLEASE HELP ME FIX THE ENTIRE DOCUMENT. I DO NOT KNOW WHAT I AM DOING WRONG. THANK YOU

Answer 1