more co is a merchandising business the account balances for more co as of november 502354 | Homework Solutions
More Co.is a merchandising business. The account balances for More Co. as of November 30, 2008 (unless otherwise indicated), are as follows:
|
110 |
Cash |
$ 13,920 |
|
112 |
Accounts Receivable |
34,220 |
|
115 |
Merchandise Inventory |
133,900 |
|
116 |
Prepaid Insurance |
3,750 |
|
117 |
Store Supplies |
2,550 |
|
123 |
Store Equipment |
114,300 |
|
124 |
Accumulated Depreciation-Store Equipment |
12,600 |
|
210 |
Accounts Payable |
21,450 |
|
211 |
Salaries Payable |
0 |
|
220 |
Note Payable (Due 2013) |
10,000 |
|
310 |
P. Williams, Capital (January 1, 2008) |
103,280 |
|
311 |
P. Williams, Drawing |
10,000 |
|
312 |
Income Summary |
0 |
|
410 |
Sales |
715,800 |
|
411 |
Sales Returns and Allowances |
20,600 |
|
412 |
Sales Discounts |
13,200 |
|
510 |
Cost of Merchandise Sold |
360,500 |
|
520 |
Sales Salaries Expense |
74,400 |
|
521 |
Advertising Expense |
18,000 |
|
522 |
Depreciation Expense |
0 |
|
523 |
Store Supplies Expense |
0 |
|
529 |
Miscellaneous Selling Expense |
2,800 |
|
530 |
Office Salaries Expense |
40,500 |
|
531 |
Rent Expense |
18,600 |
|
532 |
Insurance Expense |
0 |
|
539 |
Miscellaneous Administrative Expense |
1,650 |
|
550 |
Interest Expense |
240 |
During December, the last month of the accounting year, the following transactions were completed:
Dec. 1. Issued check number 2632 for the December rent, $1,600.
3. Purchased merchandise on account from Prince Co., terms 2/10, n/30, FOB shipping point, $15,000.
4. Issued check number 2633 to pay the transportation changes on purchase of December 3, $400.
6. Sold merchandise on account to Albert Co., invoice 891, terms 2/10, n/30, FOB shipping point, $8,500. The cost of the merchandise sold was $5,000.
7. Received $7,500 cash from Marie Co. on account, no discount.
10. Sold merchandise for cash, $18,300. The cost of the merchandise sold was $11,000.
11. Purchased store supplies on account from Matt Co., terms 1/10, n/30, $620.
13. Issued check number 2634 for merchandise purchased on December 3, less discount.
14. Issued credit memo for merchandise returned on sale of December 6, $1,500. The cost of the merchandise returned was $900.
15. Issued check number 2635 for advertising expense for last half of December, $1,500.
16. Received cash from sale of December 6, less return of December 14 and discount.
19. Issued check number 2636 for merchandise, $8,100.
19. Issued check number 2637 for $6,100 to Joseph Co. on account.
20. Sold merchandise on account to Cameron Co., invoice number 892, terms 1/10, n/30, FOB shipping point, $16,000. The cost of the merchandise sold was $9,600.
21. For the convenience of the customer, issued check number 2638 for shipping charges on sale of December 20, $600.
21. Received $11,750 cash from McKenzie Co. on account, no discount.
21. Purchased merchandise on account from Elisha Co., terms 1/10, n/30, FOB destination, $15,000.
24. Issued a debit memo for return of $3,500 of damaged merchandise purchased on December 21, receiving credit from the seller.
26. Issued check number 2639 for refund of cash on sales made for cash, $720. (Customer was going to return goods until partial refund was arranged.)
28. Issued check number 2640 for sales salaries of $1,750 and office salaries of $950.
27. Purchased store equipment on account from Matt Co., terms 2/10, n/30, FOB destination, $800.
29. Issued check number 2641 for store supplies, $550.
30. Sold merchandise on account to Randall Co., invoice number 893, terms 2/10, n/30, FOB shipping point, $18,750. The cost of the merchandise sold was $11,250.
30. Received cash from sale of December 20, less discount, plus transportation paid on December 21.
30. Issued check number 2642 for purchase of December 21, less return of December 24 and discount.
31. Issued a debit memo for $200 of the purchase returned from December 27.
Instructions:
1. Enter the balances of each of the accounts in the appropriate balance column of a four-column account (General Ledger). Write Balance in the item section, and place a check mark (v) in the Post Reference column.
2. Journalize the transactions in a sales journal, purchases journal, cash receipts journal, cash payments journal, or general journal as illustrated in chapter 7. Also post to the Accounts Receivable and Accounts Payable Subsidiary ledgers. Assume a perpetual inventory system.
3. Total each column on the special journals and prove the journal.
4. Post the totals of the account columns and individually post the other columns as well as the general journal.
5. Prepare the Schedule of Accounts Receivable and the Schedule of Accounts Payable (their total amount must equal the amount in their controlling general ledger account).
6. Prepare the unadjusted trial balance on the worksheet.
7. Complete the worksheet for the year ended December 31, 2008, using the following adjustment data:
|
a. Merchandise inventory on December 31 |
$124,115 |
|
|
b. Insurance expired during the year |
1,250 |
|
|
c. Store supplies on hand on December 31 |
975 |
|
|
d. Depreciation for the current year |
7,400 |
|
|
e. Accrued salaries on December 31: |
||
|
Sales salaries |
$350 |
|
|
Office salaries |
180 |
530 |
8. Prepare a multiple-step income statement, a statement of owners equity, and a report form classified balance sheet.
9. Journalize and post the adjusting entries.
10. Journalize and post the closing entries. Indicate closed accounts by inserting a line in
both balance columns opposite the closing entry.
11. Prepare a post-closing trial balance.
