SMCH 12

Completion of the Accounting Cycle For a Merchandise Company
ANSWERS TO DISCUSSION QUESTIONS 1. 2.
12
3. 4. 5. 6. 7.
8. 9.
Income Statement and Balance Sheet columns. Beginning Inventory + Net Purchases + Freight-In Ending Inventory = Cost of Goods Sold Selling and Administrative Expenses Current AssetsCash and assets converted into cash or used during normal operating cycle of the company or one year, whichever is longer. Plant and EquipmentLong-lived assets used in the production or sale of other assets or services. Time period it takes a company to buy and sell merchandise and then collect accounts receivable. To bring ledger up to date. A) Close all the balances on the income statement credit column of the worksheet, except Income Summary, and credit the Income Summary account. B) Close balance of accounts in the income statement debit column of the worksheet, except Income Summary, and debit the total to the Income Summary account. C) Transfer the balance of Income Summary to Owners Capital. D) Transfer the balance of Owners Withdrawals to Owners Capital account. Disagree. Only permanent accounts. Not mandatory. Reversing entries helps avoid potential errors involving specified adjusting entries. Done on Jan. 1 after adjusting and closing entries have been completed.
399
SOLUTIONS TO CHAPTER 12 MINI EXERCISES 1. Gross Sales $140 2. Beginning Inventory + Net Purchases + Freight-In Ending Inventory = Cost of Goods Sold 3. Net Sales Cost of Goods Sold = Gross Profit Operating Expenses = Net Income 4. A. B. C. D. E. F. G. H. I. J. 1 3 1 3 2 4 3 2 3 1 Salaries Payable Salaries Expense Salaries Expense Cash 300 300 900 900 Sales Ret. and Allow. $10 $20 50 5 15 $ 60 $125 60 $65 (A) 25 $40 (B) Sales Discounts $5 = Net Sales = $125
5. A. January 1 January 8 B. $600
400
SOLUTIONS TO EXERCISES 12-1. Merchandise Inv. 12/01/X1 Purchases Less: Purchases Disc. Purch. R. & A. Net Purchases Add: Freight-in Net Cost of Purchases Cost of Goods Available for Sale Less: Merchandise Inv. 12/31/X1 Cost of Goods Sold COST OF GOODS SOLD $ 4,000 $58,000 $ 900 1,000 $ 1,900 56,100 300 56,400 60,400 6,000 $54,400
12-2. A. Salaries Payable: Liability, Current Liability, Balance Sheet B. Accounts Payable: Liability, Current Liability, Balance Sheet C. Mortgage Payable: Liability, Long-term Liability, Balance Sheet D. Unearned Legal Fees: Liability, Current Liability, Balance Sheet E. SIT Payable: Liability, Current Liability, Balance Sheet F. Office Equipment: Asset, Plant and Equipment, Balance Sheet G. Land: Asset, Plant and Equipment, Balance Sheet 12-3.
Dec. 31 Sales Purchase Returns & Allowances Purchases Discount Income Summary Income Summary Sales Returns & Allowances Sales Discount Purchases Salaries Expense Insurance Expense Utilities Expense Plumbing Expense Advertising Expense Depreciation Expense, Office Equipment 31 Income Summary A. Slow, Capital 8 0 5 00 8 0 5 00 2 1 4 8 8 8 00 2 2 3 00 1 0 8 00 6 2 8 00 0 8 3 00 6 9 6 00 4 8 00 5 7 00 1 5 00 3 0 00 5 5 2 0 3 4 5 1 00 00 00 5 6 0 5 00
401
SOLUTIONS TO EXERCISES (CONTINUED) 12-4.

A. SLOW COMPANY PARTIAL BALANCE SHEET DECEMBER 31, 200X
Current Assets: Cash Merchandise Inventory Prepaid Advertising Prepaid Insurance Total Current Assets Plant and Equipment: Office Equipment Less: Acc. Dep., Office Equipment Total Assets
1 9 3 00 4 5 0 00 5 6 1 00 3 0 00 $1 2 3 4 00
$1
0 8 0 00 (2 1 0 00) $2
8 7 0 00 1 0 4 00
12-5. (A)
Dec. 31 Salaries Expense Salaries Payable 3 0 0 00 3 0 0 00
Salaries Expense 26,000 300
Salaries Payable 300 3 0 0 00 3 0 0 00
(B)
Jan. 1 Salaries Payable Salaries Expense
Salaries Expense 300
Salaries Payable 300 300
(C)
Feb. 3 Salaries Expense Cash 6 0 0 0 00 6 0 0 0 00
Salaries Expense 6,000 300
Cash 15,000 6,000
402
SOLUTIONS TO A PROBLEMS PROBLEM 12A-1

RING.COM INCOME STATEMENT FOR YEAR ENDED DECEMBER 31, 200X Revenue: Gross Sales Less: Sales Ret. & Allow. Sales Discount Net Sales Cost of Goods Sold: Merchandise Inventory, 1/1/0X Purchases Less: Purch. Ret & Allow. Purch. Discount Net Purchases Add: Freight-In Net Cost of Purchases Cost of Goods Avail. for Sale Less: Merch. Inv., 12/31/0X Cost of Goods Sold Gross Profit Operating Expenses: Salaries Expense Insurance Expense Advertising Expense Rent Expense Depreciation Exp., Store Equip. Total Operating Expenses Net Income from Operations Other Income: Rental Income: Net Income $2 8 0 0 00 $ 1 1 9 6 4 00 00 1 8 3 00 $2 6 1 7 00
$ $ $ 1 6 7 1 2 9 00 00 8 7 0 00 2 9 6 00 5 7 4 00 1 0 2 00 $1
3 7 0
00
6 7 6 0 4 6 2 6 0
00 00 00 7 8 6 00 $1 8 3 1 00
3 2 1 2 2
0 0 5 1 0
0 0 5 5 0
00 00 00 00 00 1 $ 0 7 0 00 7 6 1 00
2 0 0 00 9 6 1 00
403
PROBLEM 12A-2
JAMES CO. STATEMENT OF OWNERS EQUITY FOR YEAR ENDED DECEMBER 31, 200X
H. James, Capital, 1/1/0X Less: Net Loss Less: Withdrawals for December H. James, Capital, 12/31/0X
$12 4 0 0 00 ($3 7 1 0 00) (1 0 0 00) 3 8 1 0 00 $ 8 5 9 0 00
404
PROBLEM 12A-2 (CONCLUDED)

JAMES CO. BALANCE SHEET DECEMBER 31, 20XX Assets Current Assets: Cash Petty Cash Accounts Receivable Merchandise Inventory Supplies Prepaid Insurance Total Current Assets Plant and Equipment: Store Equipment Less: Acc. Depr., Store Equip. Automobile Less: Acc. Depr., Auto Total Assets Liabilities Current Liabilities: Mortgage Payable Accounts Payable Salaries Payable Taxes Payable Unearned Rent Total Liabilities Long-Term Liabilities: Mortgage Payable Total Liabilities Owners Equity H. James, Capital Total Liabilities & Owners Equity
$23 5 0 9 1 3 5 4 0 0 3 2 5 0
0 0 0 0 5 0
00 00 00 00 00 00 $29 7 6 5 00
$2 8 7 1 7 2
0 0 0 2
0 0 0 5
00 00 00 00
$2 1 0 0 1 4 7 5
00 00 3 5 7 5 00 $33 3 4 0 00
2 2 8 6 2 4 18 5
0 0 0 0 0
0 0 0 0 0
00 00 00 00 00 $24 5 0 0 00
2 5 0
00 $24 7 5 0 00
8 5 9 0 00 $33 3 4 0 00
405
JAYS SUPPLIES WORKSHEET FOR YEAR ENDED DECEMBER 31, 200X Trial Balance Debit Credit Adjustments Debit Credit Adjusted Trial Balance Debit Credit Income Statement Debit Credit Balance Sheet Debit Credi
PROBLEM 12A-3
Account Titles
2,000 3,000 11,000 1,880 3,400 (B) 10,400 (A) 11,000 (E) 500 (D) 400 1,480 5,080 1,800 1,200 10,560 4,280 11,000 3,200 2,600 63,600 13,600 3,200 2,680 11,400 10,000 13,600 132,640 (C) (D) 400 (E) 500 22,620 320 320 320 2,680 11,400 10,000 13,600 13,600 3,200 10,400 95,800 10,400 95,800 (B) 10,400 3,200 2,600 63,600 13,600 3,200 2,680 11,400 10,000 13,600 132,640 4,280 11,000 1,080 5,080 2,120 1,200 10,560 4,280 (A) 11,000 95,800 3,200 2,600 63,600 (C) 320
2,000 3,000 10,400 1,380 3,400
2,000 3,000 10,400 1,380 3,400 1,480 5,080 1,800 1,200 10,560
406 22,620 400 500 143,440 143,440
Cash Accounts Receivable Merch. Inv. 1/1/XX Prepaid Insurance Equipment Acc. Dep. Equip. Accounts Payable Unearned Training Fees Mortgage Payable P. Jay, Capital P. Jay, Withdrawals Income Summary Sales Sales Returns & Allow. Sales Discount Purchases Purch. Returns & Allow. Purchases Discounts Freight-In Advertising Expense Rent Expense Salaries Expense
Training Fees Earned Dep. Exp, Equipment Insurance Expense
123,320 123,320
24,460 24,460
Net Income
400 500 118,980 4,340 123,320
20,120 4,340 24,460
PROBLEM 12A-3 (CONTINUED)

JAYS SUPPLIES INCOME STATEMENT FOR YEAR ENDED DECEMBER 31, 200X Revenue: Gross Sales Less: Sales Ret. & Allow. Sales Discounts Net Sales Cost of Goods Sold Merch. Inventory, 1/1/0X Purchases Less: Purch. Ret. & Allow. Purchases Disc. Net Purchases Add: Freight-In Net Cost of Purchases Cost of Goods Avail for Sale Less: Merch. Inv. 12/31/0X Cost of Goods Sold Gross Profit Operating Expenses: Advertising Expense Rent Expense Salaries Expense Dep. Exp., Equipment Insurance Expense Total Operating Expenses Net Income from Operations Other Income: Training Fees Earned Net Income $95 8 0 0 00 $3 2 2 0 0 6 0 0 00 00 5 8 0 0 00 90 0 0 0 00
$11 $63 6 0 0 00 $13 6 0 0 3 2 0 0 00 00 16 8 0 0 00 $46 8 0 0 00 2 6 8 0 00 49 $60 10
0 0 0
00
4 8 0 4 8 0 4 0 0
00 00 00 50 0 8 0 00 $39 9 2 0 00
$11 10 13
4 0 6 4 5
0 0 0 0 0
0 0 0 0 0
00 00 00 00 00 35 9 0 0 00 $4 0 2 0 00 3 2 0 00 $4 3 4 0 00
407

JAYS SUPPLIES STATEMENT OF OWNERS EQUITY FOR MONTH ENDED DECEMBER 31, 200X
P. Jay, Capital, 1/1/0X Net Income Less Withdrawals for December Increase in Capital P. Jay, Capital, 12/31/0X
$10 5 6 0 00 $4 (4 3 4 0 00 2 8 0 00) 6 0 00 $10 6 2 0 00
408

JAYS SUPPLIES BALANCE SHEET DECEMBER 31, 200X
Assets Current Assets: Cash Accounts Receivable Merchandise Inventory Prepaid Insurance Total Current Assets Plant and Equipment: Equipment Less: Acc. Depreciation Total Assets Liabilities Current Liabilities Mortgage Payable Accounts Payable Unearned Training Fees Total Current Liabilities Long-Term Liabilities Mortgage Payable Total Liabilities Owners Equity P. Jay, Capital Total Liabilities and Owners Equity $2 3 10 1 0 0 4 3 0 0 0 8 0 0 0 0 00 00 00 00 $16 7 8 0 00 $3 4 0 0 00 1 4 8 0 00
1 9 2 0 00 $18 7 0 0 00
5 1
8 0 0 00 0 8 0 00 8 0 0 00 $7 6 8 0 00 4 0 0 00 $ 8 0 8 0 00
10 6 2 0 00 $18 7 0 0 00
409

GENERAL JOURNAL PAGE 2
Date Dec. 31 31 31 31 31
31
31
31 31
Account Titles and Description Adjusting Entries Income Summary Merchandise Inventory Merchandise Inventory Income Summary Unearned Training Fees Training Fees Earned Depreciation Expense, Equipment Accumulated Depreciated, Equipment Insurance Expense Prepaid Insurance Closing Entries Sales Training Fees Earned Purchases Returns and Allowance Purchases Discount Income Summary Income Summary Sales Returns and Allowances Sales Discount Purchases Freight-In Advertising Expense Rent Expense Salaries Expense Depreciation Expense, Equipment Insurance Expense Income Summary P. Jay, Capital P. Jay Capital P. Jay, Withdrawals
PR
Dr. 11 0 0 0 00
Cr.
11 0 0 0 00 10 4 0 0 00 10 4 0 0 00 3 2 0 00 3 2 0 00 4 0 0 00 4 0 0 00 5 0 0 00 5 0 0 00 95 8 3 13 6 3 2 0 2 0 0 0 0 0 0 00 00 00 00 112 9 2 0 00 107 9 8 0 00 3 2 63 2 11 10 13 2 6 6 6 4 0 6 4 5 0 0 0 8 0 0 0 0 0 0 0 0 0 0 0 0 0 0 00 00 00 00 00 00 00 00 00
4 3 4 0 00 4 3 4 0 00 4 2 8 0 00 4 2 8 0 00
410
CALLAHAN LUMBER WORKSHEET FOR YEAR ENDED DECEMBER 31, 200X
PROBLEM 12A-4
Account Titles
Trial Balance Debit Credit
Adjustments Debit Credit
Adjusted Trial Balance Debit Credit
Income Statement Debit Credit
Balance Sheet Debit Credit
1,340 1,300 4,550 269 218 3,000 (B) 4,900 (A) 4,550 (C) 194 (D) 150 (E) 250 740 1,160 7,352 490 1,160 7,352 3,000 (A) 4,550 22,800 200 14,800 285 300 2,480 400 830 32,387 32,387 (C) (D) (E) 194 150 250 (F) 10,139 95 10,139 194 150 250 37,632 95 37,632 194 150 250 (F) 95 2,575 400 830 200 14,800 285 300 2,575 400 830 (B) 4,900 3,000 4,550 4,900 22,800
1,340 1,300 4,900 75 68 3,000
1,340 1,300 4,900 75 68 3,000 740 1,160 7,352 3,000 4,550 200 14,800 285 300 4,900 22,800
411
Cash Accounts Receivable Merch. Inventory Lumber Supplies Prepaid Insurance Lumber Equipment Acc. Dep., Lumber Equip. Accounts Payable J. Callahan, Capital J. Callahan, Withdrawals Income Summary Sales Sales Returns & Allow. Purchases Purchases Discount Purch. Ret & Allow. Wages Expense Advertising Expense Rent Expense
Lumber Supplies Exp. Insurance Expense Dep. Exp., Lumber Equip. Wage Payable
28,285 28,285
13,683 13,683
Net Income
23,949 4,336 28,285
95 9,347 4,336 13,683

CALLAHAN LUMBER INCOME STATEMENT FOR YEAR ENDED DECEMBER 31, 200X
Revenue: Gross Sales Less: Sales Ret. and Allow. Net Sales Cost of Goods Sold Merchandise Inv. 1/1/XX Purchases Less: Purch. Discount Purch. Ret. and Allow. Net Cost of Purchases Cost of Goods Avail. for Sale Less: Merch. Inv. 12/31/XX Cost of Goods Sold Gross Profit Operating Expenses: Wages Expense Advertising Expense Rent Expense Lumber Supplies Expense Depreciation Expense, Equip. Total Operating Expenses Net Income from Operations
$22
8 0 0 2 0 0
00 00 $22 6 0 0 00
$4 5 5 0 $14 8 0 0 00 $ 2 8 5 3 0 0 00 00 5 8 5 00 14 2 1 5 $18 7 6 5 4 9 0 0
00
00 00 00 13 $8 8 6 5 00 7 3 5 00
$2 5 4 8 1 1 2
7 0 3 9 5 5
5 0 0 4 0 0
00 00 00 00 00 00 4 $4 3 9 9 00 3 3 6 00
412

CALLAHAN LUMBER STATEMENT OF OWNERS EQUITY FOR YEAR ENDED DECEMBER 31, 200X
J. Callahan, Capital, 1/1/0X Net Income Less: Withdrawals for December Increase in Capital J. Callahan, Capital, 12/31/0X
$7 $4 (3 3 3 6 00 0 0 0 00) 1 $8
3 5 2 00
3 3 6 00 6 8 8 00
413

CALLAHAN LUMBER BALANCE SHEET DECEMBER 31, 200X
Assets Current Assets: Cash Accounts Receivable Merchandise Inventory Lumber Supplies Prepaid Insurance Total Current Assets Plant and Equipment: Lumber Equipment Less: Acc. Depr., Lumber Equip. Total Assets Liabilities Current Liabilities Accounts Payable Wages Payable Total Current Liabilities Owners Equity J. Callahan, Capital Total Liabilities and Owners Equity
$1 3 4 0 1 3 0 0 4 9 0 0 7 5 6 8
00 00 00 00 00 $7 6 8 3 00
$3 0 0 0 00 7 4 0 00
2 2 6 0 00 $9 9 4 3 00
$1 1 6 0 00 9 5 00 $1 2 5 5 00
8 6 8 8 00 $9 9 4 3 00
414

Date Dec. 31 31 31 31 31
31
31
31 31 Jan. 1
Account Titles and Description Adjusting Entries Income Summary Merchandise Inventory Merchandise Inventory Income Summary Lumber Supplies Expense Lumber Supplies Insurance Expense Prepaid Insurance Depreciation Expense, Lumber Equipment Acc. Depreciation, Lumber Equipment Wages Expense Wages Payable Closing Entries Sales Purchases Discount Purchases Returns and Allowances Income Summary Income Summary Sales Returns and Allowances Purchases Wages Expense Advertising Expense Rent Expense Lumber Supplies Expense Insurance Expense Dep. Exp., Lumber Equipment Income Summary J. Callahan, Capital J. Callahan, Capital J. Callahan, Withdrawals Wages Payable Wages Expense (Reversing Entry)
PR 332 112 112 332 664 113 665 114 663 122 660 221 440 551 552 332 332 441 550 660 661 662 664 665 663 332 330 330 331 221 660
Dr. 4 5 5 0 00
Cr.
4 5 5 0 00 4 9 0 0 00 4 9 0 0 00 1 9 4 00 1 9 4 00 1 5 0 00 1 5 0 00 2 5 0 00 2 5 0 00 9 5 00 9 5 00 22 8 0 0 00 2 8 5 00 3 0 0 00 23 3 8 5 00 19 3 9 9 00 2 14 8 2 5 4 8 1 1 2 4 3 3 6 00 4 3 3 6 00 3 0 0 0 00 3 0 0 0 00 9 5 00 9 5 00 0 0 7 0 3 9 5 5 0 0 5 0 0 4 0 0 00 00 00 00 00 00 00 00
415

CALLAHAN LUMBER GENERAL LEDGER CASH ACCOUNT NO. 110
Balance Date 200X Explanation Dec. 31 Balance Post Ref. Debit Credit Debit 1 3 4 0 00 Credit
ACCOUNTS RECEIVABLE
ACCOUNT NO. 111
MERCHANDISE INVENTORY
ACCOUNT NO. 112
Balance Date 200X Explanation Dec. 31 Balance Adjusting Adjusting Post Ref. GJ2 GJ2 Debit 4 5 5 0 00 4 5 5 0 00 0 0 0 0 00 4 9 0 0 00 4 9 0 0 00 Debit Credit Credit
LUMBER SUPPLIES
ACCOUNT NO. 113
Balance Date 200X Explanation Dec. 31 Balance Adjusting Post Ref. GJ2 Debit Credit 1 9 4 00 Debit 2 6 9 00 7 5 00 Credit
416
PROBLEM 12A-4 (CONTINUED) PREPAID INSURANCE ACCOUNT NO. 114
Balance Date 200X Explanation Dec. 31 Balance Adjusting Post Ref. GJ2 Debit Credit 1 5 0 00 Debit 2 1 8 00 6 8 00 Credit
LUMBER EQUIPMENT
ACCOUNT NO. 121
ACCUMULATED DEPRECIATION, LUMBER EQUIPMENT
ACCOUNT NO. 122
Balance Date 200X Explanation Dec. 31 Balance Adjusting Post Ref. GJ2 Debit Credit 2 5 0 00 Debit Credit 4 9 0 00 7 4 0 00
ACCOUNTS PAYABLE
ACCOUNT NO. 220
Balance Date 200X Explanation Dec. 31 Balance Post Ref. Debit Credit Debit Credit 1 1 6 0 00
WAGES PAYABLE
ACCOUNT NO. 221
Balance Date 200X Explanation Dec. 31 Adjusting Jan. 1 Post Ref. GJ2 GJ2 Debit 9 5 00 Credit 9 5 00 Debit Credit 9 5 00
417

J. CALLAHAN, CAPITAL ACCOUNT NO. 330
Balance Date 200X Explanation Dec. 31 Balance Closing Closing Post Ref. GJ2 GJ2 Debit Credit 4 3 3 6 00 3 0 0 0 00 Debit Credit 7 3 5 2 00 11 6 8 8 00 8 6 8 8 00
J. CALLAHAN, WITHDRAWALS
ACCOUNT NO. 331
Balance Date 200X Explanation Dec. 31 Balance 31 Closing Post Ref. GJ2 Debit Credit 3 0 0 0 00 Debit 3 0 0 0 00 Credit
INCOME SUMMARY
ACCOUNT NO. 332
Date 200X Dec. 31 31 31 31 31
Explanation Adjusting Adjusting Closing Closing Closing
Balance Post Ref. Debit Credit Debit Credit GJ2 4 5 5 0 00 4 5 5 0 00 GJ2 4 9 0 0 00 3 5 0 00 GJ2 23 3 8 5 00 23 7 3 5 00 GJ2 19 3 9 9 00 4 3 3 6 00 GJ2 4 3 3 6 00
SALES
ACCOUNT NO. 440
Balance Date 200X Explanation Dec. 31 Balance 31 Closing Post Ref. Debit GJ2 22 8 0 0 00 Credit Debit Credit 22 8 0 0 00
SALES RETURNS AND ALLOWANCES
ACCOUNT NO. 441
Balance Date 200X Explanation Dec. 31 Balance 31 Closing Post Ref. GJ2 Debit Credit 2 0 0 00 Debit 2 0 0 00 Credit
418

PURCHASES ACCOUNT NO. 550
Balance Date 200X Explanation Dec. 31 Balance 31 Closing Post Ref. GJ2 Debit Credit 14 8 0 0 00
ACCOUNT NO. 551
Debit 14 8 0 0 00
Credit
PURCHASES DISCOUNT
Balance Date 200X Explanation Dec. 31 Balance 31 Closing Post Ref. GJ2 Debit 2 8 5 00
ACCOUNT NO. 552
Credit
Debit
Credit 2 8 5 00
PURCHASES RETURNS AND ALLOWANCES
Balance Date 200X Explanation Dec. 31 Balance 31 Closing Post Ref. GJ2 Debit 3 0 0 00 Credit Debit Credit 3 0 0 00
WAGES EXPENSE
ACCOUNT NO. 660
Balance Date 200X Explanation Dec. 31 Balance Adjusting Closing Jan. 1 Post Ref. GJ2 GJ2 Debit 9 5 00 2 5 7 5 00 9 5 00 Credit Debit 2 4 8 0 00 2 5 7 5 00 Credit
9 5 00
ACCOUNT NO. 661
ADVERTISING EXPENSE
Balance Date 200X Explanation Dec. 31 Balance Closing Post Ref. GJ2 Debit Credit 4 0 0 00 Debit 4 0 0 00 Credit
419

RENT EXPENSE ACCOUNT NO. 662
DEPRECIATION EXPENSE, LUMBER EQUIPMENT
ACCOUNT NO. 663
Balance Date 200X Explanation Dec. 31 Adjusting 31 Closing Post Ref. GJ2 GJ2 Debit 2 5 0 00 Credit 2 5 0 00 Debit 2 5 0 00 Credit
LUMBER SUPPLIES EXPENSE
ACCOUNT NO. 664
INSURANCE EXPENSE
ACCOUNT NO. 665
420

CALLAHAN LUMBER POST-CLOSING TRIAL BALANCE DECEMBER 31, 200X Dr. Cr.
Cash Accounts Receivable Merchandise Inventory Lumber Supplies Prepaid Insurance Lumber Equipment Acc. Depr., Lumber Equipment Accounts Payable Wages Payable J. Callahan, Capital
1 1 4
3 4 0 00 3 0 0 00 9 0 0 00 7 5 00 6 8 00 0 0 0 00 1 8 10 7 4 0 1 6 0 9 5 6 8 8 6 8 3 00 00 00 00 00
10
6 8 3 00
421
SOLUTIONS TO B PROBLEMS PROBLEM 12B-1

RING.COM INCOME STATEMENT FOR YEAR ENDED DECEMBER 31, 200X Revenue: Gross Sales Less: Sales Ret. & Allow. Sales Discount Net Sales Cost of Goods Sold: Merchandise Inventory, 1/1/0X Purchases Less: Purch. Ret. & Allow. Purch. Discount Net Purchases Add: Freight-In Net Cost of Purchases Cost of Goods Avail. for Sale Less: Merch. Inv., 12/31/0X Cost of Goods Sold Gross Profit Operating Expenses: Salaries Expense Insurance Expense Advertising Expense Rent Expense Depreciation Exp., Store Equip. Total Operating Expenses Net Income from Operations Other Income: Rental Income Net Income
$4 $ 1 4 5 1 7 5 00 00 $3
1 0 0 00 3 2 0 00 7 8 0 00
$ $2 $ 1 7 5 8 5 00 00 1 0 0 0 00 2 6 0 00 7 4 0 00 5 0 00 1 $2
3 0 0
00
7 9 0 0 9 0 2 9 5
00 00 00 1 $1 7 9 5 00 9 8 5 00
3 2 1 2 1
6 7 6 2 1
0 5 5 5 5
00 00 00 00 00 1 $ 1 4 0 00 8 4 5 00
$1
2 3 0 00 0 7 5 00
422
PROBLEM 12B-2
JAMES CO. STATEMENT OF OWNERS EQUITY FOR YEAR ENDED DECEMBER 31, 200X
H. James, Capital, 1/1/0X Less: Net Loss Less: Withdrawals for December H. James, Capital, 12/31/0X
$10 5 0 0 00 ($2 ( 4 8 5 6 00) 0 0 0 00) ( 6 8 5 6 00) $ 3 6 4 4 00
423
PROBLEM 12B-2 (CONCLUDED)

JAMES CO. BALANCE SHEET DECEMBER 31, 200X Assets Current Assets: Cash Petty Cash Accounts Receivable Merchandise Inventory Supplies Prepaid Insurance Total Current Assets Plant and Equipment: Store Equipment Less: Acc. Depr., Store Equip. Automobile Less: Acc. Depr., Auto Total Assets Liabilities Current Liabilities: Mortgage Payable Accounts Payable Salaries Payable Taxes Payable Unearned Rent Total Liabilities Long-Term Liabilites Mortgage Payable Total Liabilities Owners Equity H. James, Capital Total Liabilities & Owners Equity 3 6 4 4 00 $28 2 9 4 00 $ 3 0 0 3 4 5 1 0 2 1 0 11 0 0 0 0 0 0 0 00 00 00 00 00 $19 6 5 0 00
$ 2 5 0 5 1 3 0 4 2 5 3 4 6 0
0 0 0 0 4 0
00 00 00 00 00 00 $ 9 0 4 4 00
$ 18 0 7 $ 2 5 5
0 5 0 0
0 0 0 0
00 00 00 00
$17 2 5 0 2 0 0 0
00 00 19 2 5 0 00 $28 2 9 4 00
5 0 0 0
00 $24 6 5 0 00
424
JAYS SUPPLIES WORKSHEET FOR YEAR ENDED DECEMBER 31, 200X Trial Balance Debit Credit Adjustments Debit Credit Adjusted Trial Balance Debit Credit Income Statement Debit Credit Balance Sheet Debit Credit
PROBLEM 12B-3
Account Titles
3,000 3,000 11,700 1,000 5,000 (B) 8,000 (A) 11,700 (E) 350 (D) 500 2,400 2,100 1,050 2,400 27,750 1,900 2,100 1,450 2,400 27,750 4,000 (A) 11,700 100,800 4,100 2,800 70,000 2,000 1,400 2,700 8,000 8,500 16,000 139,800 139,800 (C) (D) (E) 500 350 20,950 400 400 400 2,700 8,000 8,500 16,000 4,100 2,800 70,000 2,000 1,400 2,700 8,000 8,500 16,000 (B) 8,000 4,000 11,700 8,000 100,800 (C) 400
3,000 3,000 8,000 650 5,000
3,000 3,000 8,000 650 5,000 2,400 2,100 1,050 2,400 27,750 4,000 11,700 4,100 2,800 70,000 2,000 1,400 8,000 100,800
425 20,950 500 350 148,300
Cash Accounts Receivable Merch. Inv. 1/1/XX Prepaid Insurance Equipment Acc. Dep., Equip. Accounts Payable Unearned Training Fees Mortgage Payable P. Jay, Capital P. Jay, Withdrawals Income Summary Sales Sales Returns & Allow. Sales Discount Purchases Purch. Returns & Allow. Purchases Discounts Freight-in Advertising Expense Rent Expense Salaries Expense
Training Fees Earned Dep. Exp., Equipment Insurance Expense
148,300
500 350 124,650 124,650
35,700 35,700
Net Loss
112,600 12,050 124,650
23,650 12,050 35,700
PROBLEM 12B-3 (CONTINUED)

JAYS SUPPLIES INCOME STATEMENT FOR YEAR ENDED DECEMBER 31, 200X Revenue: Gross Sales Less: Sales Ret. & Allow. Sales Discounts Net Sales Cost of Goods Sold Merch. Inventory, 1/1/0X Purchases Less: Purch. Ret. & Allow. Purchases Disc. Net Purchases Add: Freight-In Net Cost of Purchases Cost of Goods Avail for Sale Less: Merch. Inv. 12/31/0X Cost of Goods Sold Gross Profit Operating Expenses: Advertising Expense Rent Expense Salaries Expense Depreciation Expense, Equip. Insurance Expense Total Operating Expenses Net Loss from Operations Other Income: Training Fees Earned Net Loss
$100 8 0 0 00 $ 4 2 1 0 0 8 0 0 00 00 6 9 0 0 00 $ 93 9 0 0 00
$ 11 7 0 0 $ 70 0 0 0 00 $2 1 0 0 0 4 0 0 00 00 3 4 0 0 00 66 6 0 0 00 2 7 0 0 00 69 3 0 0 $ 81 0 0 0 8 0 0 0
00
00 00 00 73 0 0 0 00 $ 20 9 0 0 00
$ 8 8 16
0 5 0 5 3
0 0 0 0 5
0 0 0 0 0
00 00 00 00 00 33 3 5 0 00 $ 12 4 5 0 00 4 0 0 00 $ 12 0 5 0 00
426

JAYS SUPPLIES STATEMENT OF OWNERS EQUITY FOR YEAR ENDED DECEMBER 31, 200X
P. Jay, Capital, 12/1/0X Net Loss Less Withdrawals for December Decrease in Capital P. Jay, Capital, 12/31/0X
$27 7 5 0 00 ($12 0 5 0 00) (4 0 0 0 00) (16 0 5 0 00) $11 7 0 0 00
427

JAYS SUPPLIES BALANCE SHEET DECEMBER 31, 200X Assets Current Assets: Cash Accounts Receivable Merchandise Inventory Prepaid Insurance Total Current Assets Plant and Equipment: Equipment Less: Acc. Depreciation Total Assets Liabilities Current Liabilities Mortgage Payable Accounts Payable Unearned Training Fees Total Current Liabilities Long-Term Liabilities Mortgage Payable Total Liabilities Owners Equity P. Jay, Capital Total Liabilities and Owners Equity $ 2 1 8 0 0 1 0 0 0 5 0 00 00 00 $3 9 5 0 1 6 0 0 00 00 $ 5 5 5 0 00 $3 0 0 0 3 0 0 0 8 0 0 0 6 5 0 00 00 00 00 $ 14 6 5 0 00 $5 0 0 0 2 4 0 0 00 00
2 6 0 0 00 $ 17 2 5 0 00
11 7 0 0 00 $ 17 2 5 0 00
428

Date Dec. 31 31 31 31 31
31
31
31 31
Account Titles and Description Adjusting Entries Income Summary Merchandise Inventory Merchandise Inventory Income Summary Unearned Training Fees Training Fees Earned Depreciation Expense, Equipment Accumulated Depreciation, Equipment Insurance Expense Prepaid Insurance Closing Entries Sales Training Fees Earned Purchases Returns and Allowances Purchases Discount Income Summary Income Summary Sales Returns and Allowances Sales Discount Purchases Freight-In Advertising Expense Rent Expense Salaries Expense Depreciation Expense, Equipment Insurance Expense P. Jay, Capital Income Summary P. Jay, Capital P. Jay, Withdrawals
PR
Dr. 11 7 0 0 00
Cr.
11 7 0 0 00 8 0 0 0 00 8 0 0 0 00 4 0 0 00 4 0 0 00 5 0 0 00 5 0 0 00 3 5 0 00 3 5 0 00 100 8 4 2 0 1 4 0 0 0 0 0 0 0 0 00 00 00 00 104 6 0 0 00 112 9 5 0 00 4 2 70 2 8 8 16 1 8 0 7 0 5 0 5 3 0 0 0 0 0 0 0 0 5 0 0 0 0 0 0 0 0 0 00 00 00 00 00 00 00 00 00
12 0 5 0 00 12 0 5 0 00 4 0 0 0 00 4 0 0 0 00
429
CALLAHAN LUMBER WORKSHEET FOR YEAR ENDED DECEMBER 31, 200X Trial Balance Debit Credit Adjustments Debit Credit Adjusted Trial Balance Debit Credit Income Statement Debit Credit Balance Sheet Debit Credit
PROBLEM 12B-4
Account Titles
940 1,470 5,600 260 117 2,600 (B) 3,900 (A) 5,600 (C) 200 (D) 50 (E) 400 740 1,330 7,562 340 1,330 7,562 3,500 (A) 5,600 23,000 400 14,700 440 545 2,390 400 840 33,217 33,217 (C) (D) (E) (F) 10,325 200 50 400 175 10,325 200 50 400 37,692 175 37,692 200 50 400 27,885 27,885 (F) 175 2,565 400 840 400 14,700 440 545 2,565 400 840 (B) 3,900 3,900 23,000 3,500 5,600 5,600 400 14,700 440 545
940 1,470 3,900 60 67 2,600
940 1,470 3,900 60 67 2,600 740 1,330 7,562 3,500 3,900 23,000
430
Cash Accounts Receivable Merch. Inventory Lumber Supplies Prepaid Insurance Lumber Equipment Acc. Dep., Lumber Equip. Accounts Payable J. Callahan, Capital J. Callahan, Withdrawals Income Summary Sales Sales Returns & Allow. Purchases Purchases Discount Purch. Ret & Allow. Wages Expense Advertising Expense Rent Expense
Lumber Supplies Exp. Insurance Expense Dep. Exp., Lumber Equip. Wage Payable
12,537 12,537
Net Income
25,155 2,730 27,885
175 9,807 2,730 12,537

CALLAHAN LUMBER INCOME STATEMENT FOR YEAR ENDED DECEMBER 31, 200X Revenue: Gross Sales Less: Sales Ret. and Allow. Net Sales Cost of Goods Sold Merchandise Inv. 1/1/0X Purchases Less: Purch. Discount Purch. Ret. and Allow. Net Cost of Purchases Cost of Goods Avail. for Sale Less: Merch. Inv. 12/31/0X Cost of Goods Sold Gross Profit Operating Expenses: Wages Expense Advertising Expense Rent Expense Lumber Supplies Expense Insurance Expense Depreciation Expense, Equip Total Operating Expenses Net Income
$23
0 0 0 4 0 0
00 00 $ 22 6 0 0 00
$ 5 $14 7 0 0 00 $ 4 4 0 5 4 5 00 00 9 8 5 00
6 0 0
00
13 7 1 5 $19 3 1 5 3 9 0 0
00 00 00 15 4 1 5 00 $ 7 1 8 5 00
$ 2
5 4 8 2
6 0 4 0 5 4 0
5 0 0 0 0 0
00 00 00 00 00 00 4 4 5 5 00 $ 2 7 3 0 00
431

CALLAHAN LUMBER STATEMENT OF OWNERS EQUITY FOR YEAR ENDED DECEMBER 31, 200X
J. Callahan, Capital, 12/1/0X Net Income Less: Withdrawals for December Decrease Capital J. Callahan, Capital, 12/31/0X
$7 $2 7 3 0 00 (3 5 0 0 00)
5 6 2 00
(7 7 0 00) $6 7 9 2 00
432

CALLAHAN LUMBER BALANCE SHEET DECEMBER 31, 200X Assets Current Assets: Cash Accounts Receivable Merchandise Inventory Lumber Supplies Prepaid Insurance Total Current Assets Plant and Equipment: Lumber Equipment Less: Acc. Depr., Lumber Equip. Total Assets Liabilities Current Liabilities Accounts Payable Wages Payable Total Current Liabilities Owners Equity J. Callahan, Capital Total Liabilities and Owners Equity $1 3 3 0 1 7 5 00 00 $1 5 0 5 00
$ 1 3
9 4 0 4 7 0 9 0 0 6 0 6 7
00 00 00 00 00 $6 4 3 7 00
$2
6 0 0 7 4 0
00 00
1 $8
8 6 0 00 2 9 7 00
6 $8
7 9 2 00 2 9 7 00
433

Date Dec. 31 31 31 31 31 31
31
31
31 31 Jan. 1
Account Titles and Description Adjusting Entries Income Summary Merchandise Inventory Merchandise Inventory Income Summary Lumber Supplies Expense Lumber Supplies Insurance Expense Prepaid Insurance Depreciation Expense, Lumber Equipment Acc. Depreciation, Lumber Equipment Wages Expense Wages Payable Closing Entries Sales Purchases Discount Purchases Returns and Allowances Income Summary Income Summary Sales Returns and Allowances Purchases Wages Expense Advertising Expense Rent Expense Lumber Supplies Expense Insurance Expense Dep. Exp., Lumber Equipment Income Summary J. Callahan, Capital J. Callahan, Capital J. Callahan, Withdrawals Wages Payable Wages Expense (Reversing Entry)
PR 332 112 112 332 664 113 665 114 663 122 660 221 440 551 552 332 332 441 550 660 661 662 664 665 663 332 330 330 331 221 660
Dr. 5 6 0 0 00
Cr.
5 6 0 0 00 3 9 0 0 00 3 9 0 0 00 2 0 0 00 2 0 0 00 5 0 00 5 0 00 4 0 0 00 4 0 0 00 1 7 5 00 1 7 5 00 23 0 0 0 00 4 4 0 00 5 4 5 00 23 9 8 5 00 19 5 5 5 00 4 0 14 7 0 2 5 6 4 0 8 4 2 0 5 4 0 2 7 3 0 00 2 7 3 0 00 3 5 0 0 00 3 5 0 0 00 1 7 5 00 1 7 5 00 0 0 5 0 0 0 0 0 00 00 00 00 00 00 00 00
434

CALLAHAN LUMBER GENERAL LEDGER CASH ACCOUNT NO. 110
Balance Date 200X Explanation Dec. 31 Balance Post Ref. Debit Credit Debit 9 4 0 00 Credit
ACCOUNTS RECEIVABLE
ACCOUNT NO. 111
ACCOUNT NO. 112
Balance Date 200X Explanation Dec. 31 Balance 31 Adjusting 31 Adjusting Post Ref. GJ2 GJ2 Debit Credit 5 6 0 0 00 3 9 0 0 00 3 9 0 0 00
ACCOUNT NO. 113
Debit 5 6 0 0 00
Credit
LUMBER SUPPLIES
Balance Date 200X Explanation Dec. 31 Balance 31 Adjusting Post Ref. GJ2 Debit Credit 2 0 0 00 Debit 2 6 0 00 6 0 00 Credit
435

PREPAID INSURANCE ACCOUNT NO. 114
Balance Date 200X Explanation Dec. 31 Balance Adjusting Post Ref. GJ2 Debit Credit 5 0 00 Debit 1 1 7 00 6 7 00 Credit
LUMBER EQUIPMENT
ACCOUNT NO. 121
ACCUMULATED DEPRECIATION, LUMBER EQUIPMENT
ACCOUNT NO. 122
Balance Date 200X Explanation Dec. 31 Balance Adjusting Post Ref. GJ2 Debit Credit 4 0 0 00 Debit Credit 3 4 0 00 7 4 0 00
ACCOUNTS PAYABLE
ACCOUNT NO. 220
Balance Date 200X Explanation Dec. 31 Balance Post Ref. Debit Credit Debit Credit 1 3 3 0 00
WAGES PAYABLE
ACCOUNT NO. 221
Balance Date 200X Explanation Dec. 31 Adjusting Jan. 1 Post Ref. GJ2 GJ2 Debit 1 7 5 00 Credit 1 7 5 00 Debit Credit 1 7 5 00
436

J. CALLAHAN, CAPITAL ACCOUNT NO. 330
Balance Date 200X Explanation Dec. 31 Balance Closing Closing Post Ref. GJ2 GJ2 Debit Credit 2 7 3 0 00 3 5 0 0 00 Debit Credit 7 5 6 2 00 10 2 9 2 00 6 7 9 2 00
J. CALLAHAN, WITHDRAWALS
ACCOUNT NO. 331
Balance Date 200X Explanation Dec. 31 Balance 31 Closing Post Ref. GJ2 Debit Credit 3 5 0 0 00 Debit 3 5 0 0 00 Credit
INCOME SUMMARY
ACCOUNT NO. 332
Balance Date 200X Dec. 31 31 31 31 31 Explanation Adjusting Adjusting Closing Closing Closing Post Ref. Debit Credit Debit Credit GJ2 5 6 0 0 00 5 6 0 0 00 GJ2 3 9 0 0 00 1 7 0 0 00 GJ2 23 9 8 5 00 22 2 8 5 00 GJ2 19 5 5 5 00 2 7 3 0 00 GJ2 2 7 3 0 00
SALES ACCOUNT NO. 440
Balance Date 200X Explanation Dec. 31 Balance 31 Closing Post Ref. Debit GJ2 23 0 0 0 00 Credit Debit Credit 23 0 0 0 00
ACCOUNT NO. 441
Balance Date 200X Explanation Dec. 31 Balance 31 Closing Post Ref. GJ2 Debit Credit 4 0 0 00 Debit 4 0 0 00 Credit
437

PURCHASES ACCOUNT NO. 550
Balance Date 200X Dec. 31 31 Explanation Post Ref. GJ2 Debit Credit 14 7 0 0 00
ACCOUNT NO. 551
Debit 14 7 0 0 00
Credit
PURCHASES DISCOUNT
ACCOUNT NO. 552
Credit
Debit
Credit 4 4 0 00
ACCOUNT NO. 660
Credit
Debit
Credit 5 4 5 00
WAGES EXPENSE
Balance Date 200X Explanation Dec. 31 Balance Adjusting Closing Jan. 1 Post Ref. GJ2 GJ2 GJ2 Debit 1 7 5 00 2 5 6 5 00 1 7 5 00 Credit Debit 2 3 9 0 00 2 5 6 5 00 Credit
1 7 5 00
ACCOUNT NO. 661
ADVERTISING EXPENSE
438

RENT EXPENSE ACCOUNT NO. 662
DEPRECIATION EXPENSE, LUMBER EQUIPMENT
ACCOUNT NO. 663
LUMBER SUPPLIES EXPENSE
ACCOUNT NO. 664
INSURANCE EXPENSE
ACCOUNT NO. 665
Balance Date 200X Explanation Dec. 31 Adjusting 31 Closing Post Ref. GJ2 GJ2 Debit 5 0 00 Credit 5 0 00 Debit 5 0 00 Credit
439
PROBLEM 12B-4 (CONCLUDED)

CALLAHAN LUMBER POST-CLOSING TRIAL BALANCE DECEMBER 31, 200X Dr. Cr.
Cash Accounts Receivable Merchandise Inventory Lumber Supplies Prepaid Insurance Lumber Equipment Acc. Depr., Lumber Equipment Accounts Payable Wages Payable J. Callahan, Capital
1 3
9 4 0 00 4 7 0 00 9 0 0 00 6 0 00 6 7 00 6 0 0 00 1 6 9 7 3 1 7 0 4 3 7 9 3 0 0 5 2 7 00 00 00 00 00
0 3 7 00
440
SOLUTION TO REAL WORLD APPLICATION #1

CHAN COMPANY INCOME STATEMENT FOR YEAR ENDED DECEMBER 31, 20X1 Revenue: Gross Sales Less: Sales Ret. and Allow. Sales Discount Net Sales Cost of Goods Sold: Merchandise Inv., 01/01/X1 Purchases Less: Purch. Ret & Allow. Purch. Discount Net Cost of Purchases Cost of Goods Avail. for Sale Less: Merch. Inv., 12/31/X1 Cost of Goods Sold Gross Profit Operating Expenses: Delivery Expense Salaries Expense Rent Expense Office Supplies Expense Advertising Expense Depreciation Exp., Store Equip. Total Operating Expenses Net Income from Operations
$5 $ 1 4 0 3 0 00 00 $5
5 4 2 00 1 7 0 00 3 7 2 00
$1 $2 4 0 0 00 $ 1 0 0 1 2 0 00 00 2 2 0 00 2 $3 3
4 0 0
00
1 8 0 5 8 0 0 0 0
00 00 00 $4 5 8 0 00 7 9 2 00
9 8 4 3 5 1 4
0 0 0 0 0 0
00 00 00 00 00 00 1 $3 0 6 0 00 7 3 2 00
441
SOLUTION TO REAL WORLD APPLICATION #2

GREGOT COMPANY BALANCE STATEMENT DECEMBER 31, 200X Current Assets: Cash Accounts Receivable Inventory Office Supplies Prepaid Insurance Total Current Assets Plant and Equipment: Building Less: Accum. Dep. Land Total Plant and Equip. Total Assets Liabilities Current Liabilities: Notes Payable Accounts Payable Total Current Liabilities Owners Equity G. Gregot, Capital* Total Liabilities and Owners Equity
$11 0 0 0 38 0 0 0 80 0 0 0 6 0 0 7 5 0
00 00 00 00 00 $130 3 5 0 00
$50 0 0 0 12 0 0 0
00 00
$38 0 0 0 17 5 0 0
00 00 $ 55 5 0 0 00 $185 8 5 0 00
$40 0 0 0 30 0 0 0
00 00 $ 70 0 0 0 00
115 8 5 0 00 $185 8 5 0 00
* Need to calculate net income and add to beg. capital less withdrawals. 442
SOLUTION TO REAL APPLICATION #3 The question in this case is whether Janet should only show the income statement to the Petro National Bank. I feel that when a company applies for a loan, the bank should be able to know financial stability of the company. In this case, Janets action is obstructing the bank from making a reasonable assessment of the company. Thus, it seems unethical for Janet to only report the income statement and not the balance sheet to the bank. SOLUTION TO CONTINUING PROBLEM 12
Account Titles and Description Adjusting Entries Mar. 31 Rent Expense Prepaid Rent Mar. 31 Supplies Expense Supplies Mar. 31 Depreciation Expense, Office Equipment Accumulated Depreciation, Office Equip. Mar. 31 Depreciation Expense, C.S. Equipment Accumulated Depreciation, C.S. Equip. Mar. 31 Merchandise Inventory Income Summary
Date 20XX
PR 5020 1025 5050 1030 5090 1091 5080 1081 1040 3020 2
Dr. 4 0 0 00 2 2 8 7 00
Cr.
4 0 0 00
2 8 7 00 1 0 0 00 1 0 0 00 4 4 3 00 4 4 3 00 3 0 0 00 3 0 0 00
443
ELDORADO COMPUTER CENTER GENERAL LEDGER CASH ACCOUNT NO. 1000
Balance Date 200X Explanation Mar. 1 Balance Post Ref. Debit Credit Debit 12 5 1 6 65 Credit
PETTY CASH
ACCOUNT NO. 1010
Balance Date 200X Explanation Mar. 1 Balance Post Ref. Debit Credit Debit 1 0 0 00 Credit
ACCOUNTS RECEIVABLE
ACCOUNT NO. 1020
Balance Date 200X Mar. 1 Explanation Post Ref. Debit Credit Debit 11 9 0 0 00 Credit
PREPAID RENT
ACCOUNT NO. 1025
Balance Date 200X Explanation Mar. 1 Balance 31 Adjusting Post Ref. J12 Debit Debit 2 8 0 0 00 2 4 0 0 00 4 0 0 00 Credit Credit
444
SUPPLIES
ACCOUNT NO. 1030
Balance Date Explanation Mar. 1 Balance 31 Adjusting Post Ref. J12 Debit Credit 2 8 7 00 Debit 4 3 2 00 1 4 5 00 Credit
ACCOUNT NO. 1040
Balance Date Explanation Mar. 31 Adjusting Post Ref. J12 Debit 3 0 0 00 Credit Debit 3 0 0 00 Credit
COMPUTER SHOP EQUIPMENT
ACCOUNT NO. 1080
Balance Date Explanation Mar. 1 Balance Post Ref. Debit Credit Debit 3 8 0 0 00 Credit
ACCUMULATED DEPRECIATION, C.S. EQUIPMENT
ACCOUNT NO. 1081
Balance Date Explanation Mar. 1 Balance 31 Adjusting Post Ref. J12 Debit Credit 4 2 3 00 Debit Credit 9 9 00 5 2 2 00
OFFICE EQUIPMENT
ACCOUNT NO. 1090
ACCUMULATED DEPRECIATION, OFFICE EQUIPMENT
ACCOUNT NO. 1091
Balance Date Explanation Mar. 1 Balance 31 Adjusting Post Ref. J12 Debit Credit 1 0 0 00 Debit Credit 2 0 00 1 2 0 00
445
ACCOUNTS PAYABLE
ACCOUNT NO. 2000
Balance Date Explanation Mar. 1 Balance Post Ref. Debit Credit Debit Credit 2 8 4 0 00
WAGES PAYABLE
ACCOUNT NO. 2010
Balance Date Explanation Post Ref. Debit Credit Debit Credit
FICA S.S. PAYABLE
ACCOUNT NO. 2020
FICA MEDICARE PAYABLE
ACCOUNT NO. 2030
FIT PAYABLE
ACCOUNT NO. 2040
SIT PAYABLE
ACCOUNT NO. 2050
446
FUTA PAYABLE
ACCOUNT NO. 2060
SUTA PAYABLE
ACCOUNT NO. 2070
T. FREEDMAN, CAPITAL
ACCOUNT NO. 3000
T. FREEDMAN, WITHDRAWALS
ACCOUNT NO. 3010
INCOME SUMMARY
ACCOUNT NO. 3020
Balance Date Explanation Mar. 31 Adjusting Post Ref. J12 Debit Credit 3 0 0 00 Debit Credit 3 0 0 00
SERVICE REVENUE
ACCOUNT NO. 4000
447
SALES
ACCOUNT NO. 4010
SALES RETURN AND ALLOWANCES
ACCOUNT NO. 4020
Balance Date Explanation Mar. 1 Balance Post Ref. Debit Credit Debit 4 0 0 00 Credit
SALES DISCOUNTS
ACCOUNT NO. 4030
ADVERTISING EXPENSE
ACCOUNT NO. 5010
RENT EXPENSE
ACCOUNT NO. 5020
Balance Date Explanation Mar. 31 Adjusting Post Ref. J12 Debit 2 4 0 0 00 Credit Debit 2 4 0 0 00 Credit
UTILITIES EXPENSE
ACCOUNT NO. 5030
448
PHONE EXPENSE
ACCOUNT NO. 5040
SUPPLIES EXPENSE
ACCOUNT NO. 5050
INSURANCE EXPENSE
ACCOUNT NO. 5060
POSTAGE EXPENSE
ACCOUNT NO. 5070
DEPRECIATION EXPENSE, C.S. EQUIPMENT
ACCOUNT NO. 5080
DEPRECIATION EXPENSE, OFFICE EQUIPMENT
ACCOUNT NO. 5090
449
MISCELLANEOUS EXPENSE
ACCOUNT NO. 5100
Balance Date Explanation Mar. 1 Balance Post Ref. Debit Credit Debit 1 0 00 Credit
WAGE EXPENSE
ACCOUNT NO. 5110
PAYROLL TAX EXPENSE
ACCOUNT NO. 5120
INTEREST EXPENSE
ACCOUNT NO. 5130
BAD DEBT EXPENSE
ACCOUNT NO. 5140
PURCHASES
ACCOUNT NO. 6000
450
PURCHASE RETURNS AND ALLOWANCES
ACCOUNT NO. 6010
Balance Date Explanation Mar. 1 Balance Post Ref. Debit Credit Debit Credit 1 0 0 00
PURCHASE DISCOUNTS
ACCOUNT NO. 6020
FREIGHT IN
ACCOUNT NO. 6030
451
ELDORADO COMPUTER CENTER INCOME STATEMENT FOR THE SIX MONTHS ENDED MARCH 31, 200X Revenue Service Revenue Sales Less: SRA Less: SD Net Revenue COGS: Merch. Inv. beg Purchases Less: PRA Net Purchases Cost of Good Avail. Less: End Inventory COGS Gross Profit Operating Expenses: Advertising Expense Rent Expense Phone Expense Supplies Expense Insurance Expense Postage Expense Depr. ExpenseCS Equip. Depr. ExpenseOffice Equip. Misc. Expense Wage Expense Payroll Tax Expense Utilities Expense Total Operating Expenses Net Income
$19 8 0 0 00 9 7 0 0 00 $4 0 0 2 2 0 00 00 6 2 0 00 28 8 8 0 00
- 0 $9 5 0 10 0 00 00 8 5 0 00 8 5 0 3 0 0 00 00 28 5 5 0 00 3 3 0 00
8 4 1 2 1 1 4 1
0 0 5 8 0 7 4 0 1 0 3 2 2 2 9
0 0 0 7 0 5 3 0 0 0 6 0
00 00 00 00 00 00 00 00 00 00 35 00 7 0 1 1 35 $21 3 1 8 65
452
ELDORADO COMPUTER CENTER STATEMENT OF OWNERS EQUITY FOR THE SIX MONTHS ENDED MARCH 31, 200X Beg. CapitalT. Freedman Add: Net Income Less: W/D NET INCREASE IN CAPITAL Ending CapitalT. Freedman $ 7 $21 2 3 0 1 8 1 5 65 00 19 $26 ELDORADO COMPUTER CENTER BALANCE SHEET MARCH 31, 200X Assets Current Assets Cash Petty Cash Accounts Rec. Prepaid Rent Supplies Merch. Inventory Total Curr. Assets Long Term Assets CS Equip. Less: Accum. Depr. Office Equip. Less: Accum. Depr. Total Long Term Assets Total Assets Liabilities Current Liabilities Accounts Payable Total Liabilities 2 8 4 0 00 2 8 4 0 00 3 8 0 0 00 ( 5 4 2 00) 0 5 0 00 ( 1 2 0 00) $12 5 1 11 9 4 1 3 1 0 0 0 4 0 6 0 0 0 5 0 65 00 00 00 00 00 $25 3 6 1 65 3 7 0 0 3 9 65 65 4 0 6 00
3 2 5 8
00
9 3 0
00 4 1 8 8 00
$29 5 4 9 65
Owners Equity T. Freedman, Capital 26 7 0 9 65
Total Liab & Owners Equity 453
$29 5 4 9 65
MINI PRACTICE SET

THE CORNER DRESS SHOP GENERAL JOURNAL PAGE 4
Date 200X
A
Account Titles and Description
PR 412 111/ 1
Dr. 0 0 0 00 1
Cr. 0 0 0 00
Mar. 10 Sales Returns and Allowance Accounts Receivable, Ronald Co. Issued Credit Memo #10 (INV 52) 14 Accounts Payable, Jones Co. Purch. Ret. and Allowance Issued Debit Memo #4 30 Office Salaries Expense Sales Salaries Expense FICASocial Security FICAMedicare Payable FIT Payable SIT Payable Salaries Payable 30 Payroll Tax Expense FICASocial Security Payable FICAMedicare Payable SUTA Tax Payable FUTA Tax Payable Adjusting Entries
210/ 512
0 0 0 00 2 0 0 0 00
611 610 216 218 214 218 212 612 216 218 222 224
3 8
3 2 5 00 8 8 0 00 7 1 3 8 0 5 7 8 5 3 6 6 2 4 4 71 97 00 35 97
1 9 9 6 7 28
7 5 6 1 7 6 2 8 4
71 97 80 80
31 Income Summary Merchandise Inventory 31 Merchandise Inventory Income Summary 31 Rent Expense Prepaid Rent 31 Depreciation Expense, Delivery Truck Acc. Depreciation., Delivery Truck
330 114 114 330 618 116 616 121
6 0 0 00 5 6 0 0 00
13 5 1 5 00 13 5 1 5 00 6 0 0 00 6 0 0 00 1 5 0 00 1 5 0 00
454
COMPREHENSIVE REVIEW PROBLEM

Date 200X
I
Account Titles and Description 31 Unearned Rent Rental Income Closing Entries
PR 226 416
Dr. 2 0 0 00
Cr. 2 0 0 00
31 Sales Rental Income Purch. Ret. & Allow. Purchase Discount Income Summary Transfers credit account balance on Income Statement column of worksheet to Income Summary 31 Income Summary Sales Ret. & Allow. Sales Discount Purchases Sales Salary Expense Office Salary Expense Payroll Tax Expense Cleaning Expense Postage Expense Delivery Expense Miscellaneous Expense Rent Expense Depreciation Expense, Truck Transfers all Expense and Reduction to Sales to Income Summary Income Summary B. Loeb, Capital Transfers Net Income to Capital B. Loeb, Capital B. Loeb, Withdrawals Withdrawals Transferred to Capital
410 416 512 514 330
70 2 2 2 0 2
0 0 0 8
0 0 0 0
00 00 00 00 72 6 8 0 00
330 412 414 510 610 611 612 614 620 622 624 618 616
56 4 1 3 28 1 0 1 41 0 8 8 3 3 9 3 0 6 0 8 2 6 0 0 0 0 0 5 7 6 5 0 0 0 0 00 00 00 00 00 28 00 00 00 00 00 00
1 1 60 15
330 310
24 1 8 1 72 24 1 8 1 72
310 320
1 0 0 00 1 0 0 00
455

Date 200X
PR
Dr.
Cr.
456
THE CORNER DRESS SHOP WORKSHEET FOR THE MONTH ENDED MARCH 31, 200X
Adjustments DR CR Adjusted Trial Balance DR CR Income Statement DR CR Balance Sheet DR CR
Account Titles
Beginning Trial Balance DR CR
26,864.53 15,000.00 35.00 5,600.00 1,800.00 23,200.00 f 5,600.00 600.00 150.00 13,515.00 e g h 1,500.00 39,100.00
26,864.53 15,000.00 35.00 13,515.00 1,200.00 23,200.00
26,864.53 15,000.00 35.00 13,515.00 1,200.00 23,200.00 1,650.00 39,100.00
1,382.00 1,513.42 353.94 854.35 1,008.00 168.00 800.00 I 9,103.10 200.00 5,600.00 f 13,515.00 1,000.00 160.00 70,200.00 100.00 5,600.00 13,515.00 70,200.00 5,600.00 1,000.00 160.00 200.00 41,000.00 2,000.00 280.00 h 150.00 2,000.00 280.00 41,000.00
1,650.00 39,100.00 1,382.00 1,513.42 353.94 854.35 1,008.00 168.00 600.00 9,103.10 100.00 13,515.00 70,200.00
1,382.00 1,513.42 353.94 854.35 1,008.00 168.00 600.00 9,103.10
457 I
200.00 g 600.00 150.00 8,880.00 3,325.00 967.28 306.00 5.00 10.00 10.00 600.00 128,262.81 20,065.00 20,065.00 141,927.81
100.00
1,000.00 160.00
200.00 2,000.00 280.00
41,000.00
Cash A/R Petty Cash Mdse. Inv. Ppd. Rent Delivery Truck A/D Delivery Truck A/P Salaries Payable FIT Payable FICASoc. Sec. Pay FICAMedicare Pay SIT Pay SUTA Pay FUTA Pay Unearned Rent B. Loeb, Capital B. Loeb, Withdrawals Income Summary Sales Sales Ret. & Allow. Sales Discount Rent Income Purchases Purchases Ret. & Allow. Purchases Discount Depr. Exp., Truck Sales Salary Expense Office Salary Expense Payroll Tax Expense Cleaning Expense Postage Expense Delivery Expense Miscellaneous Expense Rent Expense 86,195.00 141,927.81 86,195.00
8,880.00 3,325.00 967.28 306.00 5.00 10.00 10.00
79,914.53 79,914.53
Net Income Column Totals for Month
128,262.81
150.00 8,880.00 3,325.00 967.28 306.00 5.00 10.00 10.00 600.00 62,013.28 24,181.72 86,195.00
55,732.81 24,181.72 79,914.53
THE CORNER DRESS SHOP PURCHASES JOURNAL
Date 200X March 2 9 11 21 27 29 Terms 2/10, n/30 2/10, n/30 1/15, n/60 2/10, n/30 2/10, nN/30
Account Credited Morris Co. Morris Co. Jones Co. Moes Garage Blew Co. Morris Co.
Accounts Sundry Dr. Payable Purchases PR Cr. Account PR Amount Dr. 10 0 0 0 00 10 0 0 0 00 5 0 0 0 00 5 0 0 0 00 10 0 0 0 00 10 0 0 0 00 17 2 0 0 00 Del. Truck 120 17 2 0 0 00 6 0 0 0 00 6 0 0 0 00 9 0 0 0 00 9 0 0 0 00 57 2 0 0 00 40 0 0 0 00 17 2 0 0 00 (X) (510) (210)
458 THE CORNER DRESS SHOP SALES JOURNAL PAGE 3
Date 200X Terms 2/10, n/30 2/10, n/30 2/10, n/30 2/10, n/30 2/10, n/30 1/10, n/30 2/10, n/30 Ronald Co. Ronald Co. Ronald Co. Bing Co. Ronald Co. Bing Co. Blew Co. 51 52 53 54 55 56 57
Invoice No.
Account Debited
PR
Accounts Rec. - Dr. Toy Sales - Cr. 7 5 3 3 4 2 10 34 (111) 0 0 0 0 0 0 0 0 0 2 0 0 0 0 0 0 0 0 0 0 0 2 0 0 (410) 00 00 00 00 00 00 00 00
March
3 6 9 16 22 24 30 31

THE CORNER DRESS SHOP CASH RECEIPTS JOURNAL
Date 200X Mar. 1 13 15 16 16 28 28 31
2 7 29 3 7 3 3 56
Cash Dr. 20 0 00 0 00 0 92 0 00 0 92 0 20 0 24 0 (110)
Sales Discounts Dr. 00 00 00 00 00 00 00 00
Sundry Account Pr. Amount Cr. Name Bing Co. 7 0 0 0 00 Cash Sales X 29 0 0 0 00 Cash Sales X 8 0 00 4 0 0 0 00 Ronald Co. 7 0 0 0 00 Ronald Co. 8 0 00 4 0 0 0 00 Ronald Co. 3 2 0 0 00 Bing Co. 1 6 0 00 20 4 0 0 00 36 0 0 0 00 (414) (111) (410) Accounts Receivable Cr. 2 2 0 0 00 Sales Cr.
459
THE CORNER DRESS SHOP CASH PAYMENTS JOURNAL PAGE 7
Sundry Dr. 3 0 0 00 10 0 0 0 00 2 0 0 00 9
Accounts Payable Dr.
Salaries Payable Dr.
Purchases Discount Cr.
Cash Cr. 3 0 0 00 8 0 0 00
3 3 1 1 7 8 0 0 0 00
3 1 1 0 5
9 3 6 0 6
20 20 00 00 00
8 0 00 7 1
7 1 7 9 0
6 0 5 2 0
8 0 6 0 0
40 00 00 00 00
460
Date Check 200X No. Accounts Debited Mar. 9 110 Cleaning Expense 12 111 Morris Co. 15 112 FICASoc. Sec. Payable FICAMedicare Payable FIT Payable 15 113 B. Loeb, Withdrawals 15 114 SIT Payable 23 115 Jones Co. 25 116 Purchases 30 117 Postage Expense Delivery Expense Cleaning Expense Misc. Expense 31 118 Mel Case 31 119 Jane Holl 31 120 Jackie Moore PR. 614 216 1 218 214 1 320 220 510 1 620 622 614 624 X X X 4 0 0 0 5 1 0 6 1 0 2 3 3 9 00 00 00 00 00 89 42 66 97 9 5 5 40 18 0 0 0 00 (X) (210) 5 4 3 0 6 4 4 2 6 0 3 4 (212)
3 1 2 5 4 3 3 0 6 4 3 4 2 6 2 8 0 00 31 7 1 0 (514) (110)
00 89 42 66 37

ACCOUNTS PAYABLE SUBSIDIARY LEDGER NAME BLEW CO.
Date 200X Explanation Mar. 1 Balance 27
Post Ref. PJ4
Debit
Credit Balance 1 9 0 0 00 6 0 0 0 00 7 9 0 0 00 Credit
NAME
JONES CO.
Date 200X Mar. 11 14 23
Explanation
Post Ref. PJ4 GJ4 CPJ7
Credit Credit Balance 10 0 0 0 00 10 0 0 0 00 2 0 0 0 00 8 0 0 0 00 8 0 0 0 00 Debit
NAME
MOES GARAGE
Date 200X Mar. 21
Explanation
Post Ref. PJ4
Debit
Credit Credit Balance 17 2 0 0 00 17 2 0 0 00
461
NAME
MORRIS CO.
Date 200X Mar. 2 9 12 29
Explanation
Post Ref. PJ4 PJ4 CPJ7 PJ4
Credit Credit Balance 10 0 0 0 00 10 0 0 0 00 5 0 0 0 00 15 0 0 0 00 10 0 0 0 00 5 0 0 0 00 9 0 0 0 00 14 0 0 0 00 Debit
ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER NAME BING CO.
Date 200X Explanation Mar. 1 Balance 1 16 Inv. #54 24 Inv. #56 28
Post Ref. CRJ6 SJ3 SJ3 CRJ6
Debit
Credit 2 2 0 0 00
Debit Balance 2 2 0 0 00
3 2 0 0 00 2 0 0 0 00
3 2 0 0 00 5 2 0 0 00 3 2 0 0 00 2 0 0 0 00
NAME
BLEW CO.
Date 200X Explanation Mar. 31 Inv. #57
Post Ref. SJ3
Debit 10 0 0 0 00
Credit
Debit Balance 10 0 0 0 00
462

NAME RONALD CO.
Date 200X Mar. 3 6 9 10 16 16 22 28
Explanation Inv. #51 Inv. 352 Inv. #53 CM #19 (Inv. #52)
Inv. #55
Post Ref. SJ3 SJ3 SJ3 GJ4 CRJ6 CRJ6 SJ3 CRJ6
Debit 7 0 0 0 00 5 0 0 0 00 3 0 0 0 00
Credit
1 0 0 0 00 4 0 0 0 00 7 0 0 0 00 4 0 0 0 0 4 0 0 0 00
Debit Balance 7 0 0 0 00 12 0 0 0 00 15 0 0 0 00 14 0 0 0 00 10 0 0 0 00 3 0 0 0 00 7 0 0 0 00 3 0 0 0 00
GENERAL LEDGER CASH ACCOUNT NO. 110
Balance Date 200X Explanation Mar. 1 Balance 31 31 Post Ref. Debit Credit Debit 2 3 3 4 90 CRJ6 56 2 4 0 00 58 5 7 4 90 CPJ7 31 7 1 0 37 26 8 6 4 53 Credit
ACCOUNTS RECEIVABLE
ACCOUNT NO. 111
Balance Date 200X Explanation Mar. 1 Balance 10 31 31 Post Ref. Debit Credit Debit 2 2 0 0 GJ4 1 0 0 0 00 1 2 0 0 SJ3 34 2 0 0 00 35 4 0 0 CRJ6 20 4 0 0 00 15 0 0 0 Credit 00 00 00 00
463

PETTY CASH ACCOUNT NO. 112
Balance Date 200X Explanation Mar. 1 Balance Post Ref. Debit Credit Debit 3 5 00 Credit
ACCOUNT NO. 114
Date 200X Explanation Mar. 1 Balance 31 Adjusting 31 Adjusting
Balance Post Ref. Debit Credit Debit Credit 5 6 0 0 00 GJ4 5 6 0 0 00 GJ4 13 5 1 5 00 13 5 1 5 00
PREPAID RENT
ACCOUNT NO. 116
Balance Date 200X Explanation Mar. 1 Balance 31 Adjusting Post Ref. GJ4 Debit Credit Debit 1 8 0 0 00 6 0 0 00 1 2 0 0 00 Credit
DELIVERY TRUCK
ACCOUNT NO. 120
Balance Date 200X Explanation Mar. 1 Balance 21 Post Ref. Debit PJ4 17 2 0 0 00 Credit Debit 6 0 0 0 00 23 2 0 0 00 Credit
464

ACCUMULATED DEPRECIATION, TRUCK ACCOUNT NO. 121
Balance Date 200X Explanation Mar. 1 Balance 31 Post Ref. GJ4 Debit Credit 1 5 0 00 Debit Credit 1 5 0 0 00 1 6 5 0 00
ACCOUNTS PAYABLE
ACCOUNT NO. 210
Balance Date 200X Explanation Mar. 1 Balance 14 31 31 Post Ref. Debit Credit GJ4 2 0 0 0 00 PJ4 57 2 0 0 00 CPJ7 18 0 0 0 00 Debit 1 0 0 00 57 1 0 0 00 39 1 0 0 00 Credit 1 9 0 0 00
SALARIES PAYABLE
ACCOUNT NO. 212
Balance Date 200X Mar. 30 31 Explanation Post Ref. GJ4 CPJ7 Debit 9 0 3 4 97 Credit 9 0 3 4 97 Debit Credit 9 0 3 4 97
FIT PAYABLE
ACCOUNT NO. 214
Balance Date 200X Explanation Mar. 1 Balance 15 30 Post Ref. GJ4 CPJ7 GJ4 Debit 1 1 1 6 00 1 3 8 2 00 1 3 8 2 00
ACCOUNT NO. 216
Credit
Debit
Credit 1 1 1 6 00
FICASOCIAL SECURITY PAYABLE
Balance Date 200X Explanation Mar. 1 Balance 15 30 30 Post Ref. CPJ7 GJ4 GJ4 Debit 1 3 3 9 20 7 5 6 71 7 5 6 71 7 5 6 71 1 5 1 3 42 Credit Debit Credit 1 3 3 9 20
465

FICAMEDICARE PAYABLE ACCOUNT NO. 218
Balance Date 200X Explanation Mar. 1 Balance 15 30 31

SIT PAYABLE
Post Ref. CPJ7 GJ4 GJ4
Debit 3 1 3 20
Credit
Debit
Credit 3 1 3 20 1 7 6 97 3 5 3 94
1 7 6 97 1 7 6 97
ACCOUNT NO. 220
Balance Date 200X Explanation Mar. 1 Balance 15

SUTA TAX PAYABLE
Post Ref. CPJ7 GJ4
Debit 7 5 6 00
Credit
Debit
Credit 7 5 6 00 8 5 4 35
8 5 4 35
ACCOUNT NO. 222

FUTA TAX PAYABLE
Post Ref. GJ4
Debit
Credit 2 8 80
Debit
Credit 9 7 9 20 1 0 0 8 00
ACCOUNT NO. 224

UNEARNED RENT
Post Ref. GJ4
Debit
Credit 4 80
Debit
Credit 1 6 3 20 1 6 8 00
ACCOUNT NO. 226
Balance Date 200X Explanation Mar. 1 Balance 31 Adjusting

B. LOEB, CAPITAL
Post Ref. GJ5
Debit 2 0 0 00
Credit
Debit
Credit 8 0 0 00 6 0 0 00
ACCOUNT NO. 310
Balance Date 200X Explanation Mar. 1 Balance 31 Closing 31 Closing Post Ref. GJ5 GJ5 Debit Credit 24 1 8 1 72 1 0 0 00
466
Debit
Credit 9 1 0 3 10 23 4 6 9 82 33 1 8 4 82

B. LOEB, WITHDRAWALS ACCOUNT NO. 320
Balance Date 200X Explanation Mar. 15 31 Closing Post Ref. CPJ7 GJ5 Debit 1 0 0 00 Credit 1 0 0 00 Debit 1 0 0 00 Credit
INCOME SUMMARY
ACCOUNT NO. 330
Balance Date 200X Mar. 31 31 31 31 31 Explanation Adjusting Adjusting Closing Closing Closing Post Ref. Debit Credit Debit Credit GJ4 5 6 0 0 00 5 6 0 0 00 GJ4 13 5 1 5 00 7 9 1 5 00 GJ5 72 6 8 0 00 80 5 9 5 00 GJ5 56 4 1 3 28 24 1 8 1 72 GJ5 24 1 8 1 72
SALES
ACCOUNT NO. 410
Balance Date 200X Explanation Mar. 31 31 31 Closing Post Ref. Debit Credit SJ3 34 2 0 0 00 CRJ6 36 0 0 0 00 GJ5 70 2 0 0 00 Debit Credit 34 2 0 0 00 70 2 0 0 00
ACCOUNT NO. 412
Balance Date 200X Explanation Mar. 10 31 Closing Post Ref. GJ4 GJ5 Debit 1 0 0 0 00 Credit 1 0 0 0 00 Debit 1 0 0 0 00 Credit
SALES DISCOUINT
ACCOUNT NO. 414
Balance Date 200X Explanation Mar. 31 31 Closing Post Ref. CRJ6 GJ5 Debit 1 6 0 00 Credit 1 6 0 00 Debit 1 6 0 00 Credit
467

RENTAL INCOME ACCOUNT NO. 416
Balance Date 200X Explanation Mar. 31 Adjusting 31 Closing Post Ref. GJ4 GJ5 Debit 2 0 0 00 Credit 2 0 0 00 Debit Credit 2 0 0 00
PURCHASES
ACCOUNT NO. 510
Balance Date 200X Explanation Mar. 25 31 31 Closing Post Ref. Debit Credit Debit CPJ7 1 0 0 0 00 1 0 0 0 00 PJ4 40 0 0 0 00 41 0 0 0 00 GJ5 41 0 0 0 00 Credit
ACCOUNT NO. 512
Balance Date 200X Explanation Mar. 14 31 Closing Post Ref. GJ4 GJ5 Debit 2 0 0 0 00 Credit 2 0 0 0 00 Debit Credit 2 0 0 0 00
PURCHASES DISCOUNT
ACCOUNT NO. 514
Balance Date 200X Explanation Mar. 31 31 Closing Post Ref. CPJ7 GJ5 Debit 2 8 0 00 Credit 2 8 0 00 Debit Credit 2 8 0 00
SALES SALARY EXPENSE
ACCOUNT NO. 610
468

OFFICE SALARY EXPENSE ACCOUNT NO. 611
PAYROLL TAX EXPENSE
ACCOUNT NO. 612
Balance Date 200X Explanation Mar. 30 31 Closing Post Ref. GJ4 GJ5 Debit 9 6 7 28 Credit 9 6 7 28 Debit 9 6 7 28 Credit
CLEANING EXPENSE
ACCOUNT NO. 614
Balance Date 200X Explanation Mar. 9 30 31 Closing Post Ref. CPJ7 CPJ7 GJ5 Debit 3 0 0 00 6 00 Credit Debit 3 0 0 00 3 0 6 00 Credit
3 0 6 00
ACCOUNT NO. 616
DEPRECIATION EXPENSE, TRUCK
469
RENT EXPENSE
ACCOUNT NO. 618

POSTAGE EXPENSE ACCOUNT NO. 620
Balance Date 200X Explanation Mar. 30 31 Closing Post Ref. CPJ7 GJ5 Debit 5 00 Credit 5 00 Debit 5 00 Credit
DELIVERY EXPENSE
ACCOUNT NO. 622
Balance Date 200X Explanation Mar. 30 31 Closing Post Ref. CPJ7 GJ5 Debit 1 0 00 Credit 1 0 00 Debit 1 0 00 Credit
MISCELLANEOUS EXPENSE
ACCOUNT NO. 624
Balance Date 200X Explanation Mar. 30 31 Closing Post Ref. CPJ7 GJ5 Debit 1 0 00 Credit 1 0 00 Debit 1 0 00 Credit
470
THE CORNER DRESS SHOP AUXILIARY PETTY CASH RECORD
Receipts 3 5 00 Cleaning Expense 3 00 Misc. Expense 5 00 5 00 2 00 5 00 1 0 00
Payment
Postage Expense
Category of Payment Delivery Sundry Expense Account Amount 6 00 1 0 00
Date Voucher 200X No. Mar. 1 2 18 5 19 8 20 9 21 14 22 27 23 3 5 00 6 3 1 0 5 5 2 3 1 4 3 5 00 00 00 00 00 00 00 00 00
Description Balance Cleaning Expense Postage Expense First Aid Delivery Expense Delivery Expense Postage Expense Total Ending Balance
1 6 00
30 30
Ending Balance Replenishment Balance (New)
3 5 4 3 1 3 5
00 00 00 00
471

THE CORNER DRESS SHOP SCHEDULE OF ACCOUNTS RECEIVABLE MARCH 31, 200X
Bing Co. Blew Co. Ronald Co. Total Accounts Receivable
$2 10 3 $15
0 0 0 0
0 0 0 0
0 0 0 0
00 00 00 00
THE CORNER DRESS SHOP SCHEDULE OF ACCOUNTS PAYABLE MARCH 31, 200X
Blew Co. Moes Garage Morris Co. Total Accounts Payable
$7 17 14 $39
9 2 0 1
0 0 0 0
0 0 0 0
00 00 00 00
472

THE CORNER DRESS SHOP INCOME STATEMENT FOR THE MONTH ENDING MARCH 31, 200X Revenue: Sales Less: Sales Returns and Allowances Sales Discounts Net Sales Cost of Goods Sold: Merchandise Inventory, 3/01/0X Purchases Less: Purch. Ret. & Allow. Purchase Discounts Net Cost of Purchases Cost of Goods Available for Sale Less: Merchandise Inventory, 3/31/0X Cost of Goods Sold Gross Profit Operating Expenses: Sales Salaries Expense Office Salaries Expense Payroll Tax Expense Cleaning Expense Postage Expense Delivery Expense Miscellaneous Expense Rent Expense Depreciation Exp., Truck Total Operating Expenses Net Income from Operations Other Income: Rental Income Net Income
$70 $ 1 0 0 0 1 6 0 00 00 1 $69
2 0 0 00 1 6 0 00 0 4 0 00
$ 5 $41 0 0 0 $2 0 0 0 2 8 0 00 00 2 2 8 0 00 00 38 $44 13
6 0 0
00
7 2 0 3 2 0 5 1 5
00 00 00 30 $38 8 0 5 00 2 3 5 00
8 3
8 3 9 3
8 2 6 0
1 1 6 0 1 5
0 5 7 6 5 0 0 0 0
00 00 28 00 00 00 00 00 00 $14 $23 2 5 3 28 9 8 1 72
$24
2 0 0 00 1 8 1 72
473
THE CORNER DRESS SHOP STATEMENT OF OWNERS EQUITY FOR MONTH ENDED MARCH 31, 200X
$9 $24 1 8 1 72 1 0 0 00 24 0 8 1 72 $33 1 8 4 82
B. Loeb, Capital, March 1, 200X Net Income for Month Less Withdrawals Increase in Capital B. Loeb, Capital, March 31, 200X
1 0 3 10
THE CORNER DRESS SHOP PAYROLL REGISTER MARCH, 200X

EARNINGS Allow. and Marital Status Cum. Earnings Salary Regular Overtime Gross 6 6 0 0 00 3 3 2 5 00 3 3 2 5 00 6 8 0 0 00 4 1 2 0 00 4 1 2 0 00 8 2 0 0 00 4 7 6 0 00 4 7 6 0 00 21 6 0 0 00 12 2 0 5 00 12 2 0 5 00 Cum. Earnings M 2 M 1 M 0 TAXABLE EARNINGS FICA Unemp. Soc. Sec. Medicare 4 0 0 00 3 3 2 5 00 3 3 2 5 00 2 0 0 00 4 1 2 0 00 4 1 2 0 00 4 7 6 0 00 4 7 6 0 00 6 0 0 00 12 2 0 5 00 12 2 0 5 00
474
Deductions Soc. Sec. 2 0 6 15 2 5 5 44 2 9 5 12 7 5 6 71 6 9 02 5 9 74 4 5 2 00 6 3 6 00 4 8 21 2 9 4 00 Medicare FIT SIT Net Pay 2 3 2 75 2 5 4 3 89 2 8 8 40 3 0 6 4 42 3 3 3 20 3 4 2 6 66 8 5 4 35 9 0 3 4 97 Check Number 1 7 6 97 1 3 8 2 00
Employee
Mel Case
3 3 2 5 00 9 9 2 5 00 4 1 2 0 00 10 9 2 0 00 4 7 6 0 00 12 9 6 0 00 12 2 0 5 00 33 8 0 5 00
Jane Holl
Jackie Moore
Totals for Mar.
Employee
Distribution Office Sales Salary Salaries Expense Exp. 3 3 2 5 00 4 1 2 0 00 4 7 6 0 00 3 3 2 5 00 8 8 8 0 00
Mel Case
Jane Holl
Jackie Moore
Totals for Mar.

THE CORNER DRESS SHOP BALANCE SHEET MARCH 31, 200X Assets Current Assets: Cash Accounts Receivable Petty Cash Merchandise Inventory Prepaid Rent Total Current Assets Plant and Equipment: Delivery Truck Less: Acc. Depr., Delivery Truck Total Assets Liabilities Current Liabilities: Accounts Payable FIT Payable FICASoc. Sec. Payable FICAMedicare Payable SIT Payable SUTA Payable FUTA Payable Unearned rent Total Current Liabilities Owners Equity B. Loeb, Capital, 3/31/200X Total Liabilities and Owners Equity
$26 8 6 15 0 0 3 13 5 1 1 2 0
4 0 5 5 0
53 00 00 00 00 $56 6 1 4 53
$23 2 0 0 1 6 5 0
00 00
21 5 5 0 00 $78 1 6 4 53
$39 1 0 0 1 3 8 2 1 5 1 3 3 5 3 8 5 4 1 0 0 8 1 6 8 6 0 0
00 00 42 94 35 00 00 00 $44 9 7 9 71
$33 1 8 4 82 $78 1 6 4 53
475

THE CORNER DRESS SHOP POST-CLOSING TRIAL BALANCE MARCH 31, 200X
Account Cash Accounts Receivable Petty Cash Merchandise Inventory Prepaid Rent Delivery Truck Acc. Dep., Delivery Truck Account Payable FIT Payable FICASoc. Sec. Payable FICAMedicare Payable SIT Payable SUTA Payable FUTA Payable Unearned Rent B. Loeb, Capital 26 15 13 1 23
Dr. 8 6 4 0 0 0 3 5 5 1 5 2 0 0 2 0 0 53 00 00 00 00 00 1 39 1 1 6 1 3 5 3 8 0 1 6 1 8
Cr.
79
8 1 4 53
33 79
5 0 8 1 5 5 0 6 0 8 1
0 0 2 3 3 4 8 8 0 4 4
00 00 00 42 94 35 00 00 00 82 53
476
477
BLANK FORMS GENERAL JOURNAL PAGE 1
Date
PR
Dr.
Cr.
478
ACCOUNT NO. _______________
479
ACCOUNT NO. _______________
ACCOUNT NO. _______________
ACCOUNT NO. _______________
ACCOUNT NO. _______________
480
ACCOUNT NO. _______________
ACCOUNT NO. _______________
ACCOUNT NO. _______________
481
INCOME STATEMENT
482
STATEMENT OF OWNERS EQUITY
483
BALANCE SHEET LIABILITIES AND OWNERS EQUITY
ASSETS
484
WORKSHEET __________________________ __________________________ __________________________
Account Titles
Trial Balance Dr. Cr.
Adjustments Dr. Cr.
485
Adjusted Trial Balance Dr. Cr.
Income Statement Dr. Cr.
Balance Sheet Dr. Cr.
486
Dr.
Cr.
SALES JOURNAL PAGE
Date
Sales Ticket No.
Terms
Accounts Debited
PR.
Accounts Rec. - Dr. Sales - Cr.
487
SALES JOURNAL PAGE
Invoice Date No.
Customers Name
PR.
Accounts Receivable Dr.
Pizza Sales Cr.
Grocery Sales Cr.
488
SALES JOURNAL PAGE
Date
Customer
Sales Ticket PR.
Accounts Receivable Dr.
Sales Tax Payable Cr.
Cr.
Cr.
489
CASH RECEIPTS JOURNAL PAGE
Sundry Account Names PR. Ammount Cr.
Date
Cash Dr. Sales Cr.
Sales Discounts Dr. Accounts Receivable Cr.
490
CASH RECEIPTS JOURNAL PAGE
Date
Cash Dr. Sales Cr.
Sales Discounts Dr.
Accounts Receivable Cr.
Sundry Account Names PR Amount Cr.
491
PURCHASES JOURNAL PAGE
Sundry Dr. Account PR Amount
Date Terms PR
Account Credited Date of Invoice Purchases Dr. Inv. No.
Accounts Payable Cr.
492
CASH PAYMENTS JOURNAL PAGE
Date
Ck. No. Account Debited PR.
Sundry Dr. Purchases Dr.
Accounts Payable Dr.
Purchases Discount Cr.
Cash Cr.
493
AUXILIARY PETTY CASH RECORD Category of Payment Description Receipts Payment Account Sundry Amount
Date
Voucher No.
494
ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER NAME ADDRESS
Date
Explanation
Post Ref.
Debit
Credit
Debit Balance
NAME ADDRESS
Date
Explanation
Post Ref.
Debit
Credit
Debit Balance
495
ACCOUNTS PAYABLE SUBSIDIARY LEDGER NAME ADDRESS
Date
Explanation
Post Ref.
Debit
Credit
Cr. Balance
NAME ADDRESS
Date
Explanation
Post Ref.
Debit
Credit
Cr. Balance
NAME ADDRESS
Date
Explanation
Post Ref.
Debit
Credit
Cr. Balance
496
BALANCE SHEET
497
INCOME STATEMENT
498
PAYROLL REGISTER Earnings Cumulative Earnings Regular Overtime Gross Soc. Sec Taxable Earnings FICA Medicare Cumulative Earnings
Employee Name
Allowance & Marital Status
499 Deductions Distribution of Expense Accounts Net Pay Ck. No. Office Sales Medicare FIT SIT Union Dues
FICA
Soc. Sec.

SMCH 12

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SMCH 12

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Completion of the Accounting Cycle For a Merchandise Company

ANSWERS TO DISCUSSION QUESTIONS 1. 2.

5. A. January 1 January 8 B. $600

SOLUTIONS TO EXERCISES (CONTINUED) 12-4.

Salaries Expense 26,000 300

Salaries Payable 300 3 0 0 00 3 0 0 00

Salaries Expense 300

Salaries Payable 300 300

Salaries Expense 6,000 300

Cash 15,000 6,000

SOLUTIONS TO A PROBLEMS PROBLEM 12A-1

$12 4 0 0 00 ($3 7 1 0 00) (1 0 0 00) 3 8 1 0 00 $ 8 5 9 0 00

PROBLEM 12A-2 (CONCLUDED)

2,000 3,000 10,400 1,380 3,400

406 22,620 400 500 143,440 143,440

Training Fees Earned Dep. Exp, Equipment Insurance Expense

400 500 118,980 4,340 123,320

20,120 4,340 24,460

PROBLEM 12A-3 (CONTINUED)

$11 $63 6 0 0 00 $13 6 0 0 3 2 0 0 00 00 16 8 0 0 00 $46 8 0 0 00 2 6 8 0 00 49 $60 10

PROBLEM 12A-3 (CONTINUED)

$10 5 6 0 00 $4 (4 3 4 0 00 2 8 0 00) 6 0 00 $10 6 2 0 00

PROBLEM 12A-3 (CONTINUED)

PROBLEM 12A-3 (CONTINUED)

CALLAHAN LUMBER WORKSHEET FOR YEAR ENDED DECEMBER 31, 200X

Trial Balance Debit Credit

Adjustments Debit Credit

Adjusted Trial Balance Debit Credit

Income Statement Debit Credit

Balance Sheet Debit Credit

1,340 1,300 4,900 75 68 3,000

23,949 4,336 28,285

95 9,347 4,336 13,683

PROBLEM 12A-4 (CONTINUED)

PROBLEM 12A-4 (CONTINUED)

PROBLEM 12A-4 (CONTINUED)

PROBLEM 12A-4 (CONTINUED)

PROBLEM 12A-4 (CONTINUED)

ACCOUNT NO. 111

ACCOUNT NO. 112

ACCOUNT NO. 113

PROBLEM 12A-4 (CONTINUED) PREPAID INSURANCE ACCOUNT NO. 114

ACCOUNT NO. 121

ACCUMULATED DEPRECIATION, LUMBER EQUIPMENT

ACCOUNT NO. 122

ACCOUNT NO. 220

ACCOUNT NO. 221

PROBLEM 12A-4 (CONTINUED)

ACCOUNT NO. 331

ACCOUNT NO. 332

Date 200X Dec. 31 31 31 31 31

Explanation Adjusting Adjusting Closing Closing Closing

ACCOUNT NO. 440

SALES RETURNS AND ALLOWANCES

ACCOUNT NO. 441

PROBLEM 12A-4 (CONTINUED)

PURCHASES RETURNS AND ALLOWANCES

ACCOUNT NO. 660

PROBLEM 12A-4 (CONTINUED)

DEPRECIATION EXPENSE, LUMBER EQUIPMENT

ACCOUNT NO. 663

LUMBER SUPPLIES EXPENSE