Selected balance sheet information for the Wolf Company at November 30, and December 31, 2018, is presented below. The company uses the perpetual inventory system and all sales to customers are made on credit. Nov. 30 Dec. 31
Debits Credits Debits Credits
Accounts receivable 9,900 2,900
Prepaid insurance 4,900 7,400
Inventory 6,900 5,900
Accounts payable 11,900 14,900
Salaries and wages payable 4,900 2,900
The following cash flow information also is available:
A. Cash collected from credit customers, $79,000.
B. Cash paid for insurance, $4,900.
C. Cash paid to suppliers of inventory, $59,000 (the entire accounts payable amounts relate to inventory purchases).
D. Cash paid to employees for salaries and wages, $9,900.
Required:
1. Determine the following for the month of December:
2. Prepare summary journal entries to record the month’s sales and cost of those sales.
Determine the following for the month of December:
a. Sales revenue
b. Cost of goods sold
c. Insurance expense
d. Salaries and wages expense

Wolf Company

1. Determining the following for the month of December:

a. Sales Revenue = $72,000

b. Cost of goods sold = $63,000

c. Insurance Expense = $2,400

d. Salaries & Wages Expense = $11,900

2. Journal Entries to record the month's sales and cost of sales:

Debit Accounts Receivable $72,000

Credit Sales Revenue $72,000

To record the sales for the month of December.

Debit Cost of Goods Sold $63,000

Credit Inventory $63,000

To record the cost of goods sold for the month of December.

Explanation:

a) Data and Calculations:

List of balances:

                                             Nov. 30                  Dec. 31

                                       Debits    Credits       Debits    Credits

Accounts receivable       9,900                       2,900

Prepaid insurance           4,900                       7,400

Inventory                         6,900                       5,900

Accounts payable                         11,900                        14,900

Salaries and wages payable        4,900                          2,900

Transactions:

A. Cash  $79,000 Accounts Receivable $79,000

B. Prepaid insurance $4,900 Cash $4,900

C. Accounts payable $59,000 Cash $59,000

D. Salaries & Wages Payable $9,900 Cash $9,900

T-accounts:

a. Sales Revenue:

Accounts receivable

Accounts Titles            Debit    Credit

Beginning balance       9,900

Sales revenue            72,000

A. Cash                                   79,000

Ending balance                        2,900

b. Cost of goods sold

Accounts Payable

Accounts Titles            Debit    Credit

Beginning balance                  11,900

Cash                          59,000

Purchases                             62,000

Ending balance         14,900

Cost of goods sold:

Inventory

Accounts Titles            Debit    Credit

Beginning balance      6,900

Purchases                 62,000

Cost of goods sold                 63,000

Ending balance                        5,900

c. Insurance Expense:

Prepaid Insurance

Accounts Titles            Debit    Credit

Beginning balance     4,900

Cash                           4,900

Insurance expense                 2,400

Ending balance                       7,400

Salaries & Wages Expense

Salaries & Wages Payable

Accounts Titles            Debit    Credit

Beginning balance      4,900

Cash                            9,900

Salaries and Wages                   11,900

Ending balance                          2,900

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