Question

Beginning balances of Express Lane Company’s accounts as of January 1, 2017 as given below:

	Beg Balance
Account Title	Debit	Credit
Cash	242,600
Accounts Receivable	24,800
Supplies	13,000
Prepaid Insurance	0
Inventory	18,000
Equipment	46,000
Accumulated Depreciation-Equipment		20,000
Accounts Payable		42,500
Salary Payable		16,000
Unearned Sales Revenue		15,000
Capital		250,900
Withdrawals	0
Sales Revenue
Sales Returns& Allowances
Sales Discounts
Cost of Goods Sold
Insurance Expense
Depreciation Expense-Equipment
Supplies Expense
Salary Expense
Total	344,400	344,400

During January 2017, Express Lane Company completed the following transactions:

• Jan 1: Paid 12 months insurance in advance for $10,800.
• Jan 2: Purchased 400 units of inventory for 34,000$ from Great Company, on terms, 3/10, n/eom.
• Jan 4: Purchased 150 units of inventory from Deluxe Company on account with terms 2/5, n/30. Total invoice is $13,500 which includes also freight charges.
• Jan 5: Paid accrued salary of the December 2016, $16,000.
• Jan 13: Paid to Great Company.
• Jan 15: Sold 600 units of goods to Shine Company for $90,000 ($150 each) on account with terms 2/10, n/30.
• Jan 17: Received 50 units of goods back from Shine Company (Returned goods are from $80 of cost each).
• Jan 20: Received payment from Shine Company, settling the amount due in full.
• Jan 23: Sold 40 units on account, $6,000 ($150 each) for cash to Bridget Company.
• Jan 26: Owner withdrew cash of 18,000$
• Jan 27: Purchased supplies for cash of $7,000.

On January 31, 2017 Express Lane Company completed following adjusting entries:

• Expiration of prepaid insurance for one month
• Depreciation of equipment for the month, $4,500
• Supplies on hand, $12,000
• Unearned sales revenue earned is, $12,000.
• Accrued salary of the January 2017 is $16,000 which will be paid on the 5^th of February.

Requirements:

1. Journalize and post the January transactions. (Open T-accounts for each of the accounts given in trial balance, do not forget to write beginning balances)
2. Prepare LIFO schedule to calculate the Cost of Goods Sold (COGS) on the Jan 15^th, and 23^th. (Beginning inventory as of January 1 include 225 units $80 each which totals $18,000 as given)
3. Prepare unadjusted trial balance as of January 31, 2017.
4. Journalize and post the adjusting entries.
5. Prepare adjusted trial balance as of January 31, 2017.

Answer 1

Transaction Journal Entries

LIFO Schedule

Adjustment Journal Entries

T - Accounts

Trial Balance - Opening , Unadjusted and Adjusted