Account Project

Randiddle Co. is a merchandising business. Their account balances as of November 30, 2012 (unless otherwise indicated), are as follows:

110 Cash $ 74,770

112 Accounts Receivable 5,580

113 Allowance for Doubtful Accounts 200

115 Merchandise Inventory 2,346

116 Prepaid Insurance 5,750

117 Store Supplies 2,850

123 Store Equipment 100,800

124 Accumulated Depreciation-Store Equipment 31,060

210 Accounts Payable 3,286

211 Salaries Payable 0

218 Interest Payable 0

220 Note Payable (Due 2017) 30,000

310 Randiddle, Capital (January 1, 2012) 45,690

311 Randiddle, Withdrawals 60,000

312 Income Summary 0

410 Sales 296,130

411 Sales Returns and Allowances 10,020

412 Sales Discounts 7,200

510 Cost of Goods Sold 30,250

520 Sales Salaries Expense 34,400

521 Advertising Expense 18,000

522 Depreciation Expense 0

523 Store Supplies Expense 0

529 Miscellaneous Selling Expense 2,800

530 Office Salaries Expense 25,500

531 Rent Expense 24,200

532 Insurance Expense 0

533 Bad Debt Expense 0

539 Miscellaneous Administrative Expense 1,650

550 Interest Expense 1,100

Randiddle Co. uses the perpetual inventory system and the Last-in, First-out costing method. Transportation-in and purchase discounts should be added to the Inventory Control Sheet, but since this will complicate the computation of the Last-in, First-out costing method, please ignore this step in the process. They also use the Allowance Method for bad debt.

The Accounts Receivable and Accounts Payable Subsidiary Ledgers along with the Inventory Control Sheet should be updated as each transaction affects them (daily).

Randiddle Co. sells three types of microwave ovens.

The sale prices of each are:

900 watt microwave: $199

1000 watt microwave: $299

1200 watt microwave: $499

During December, the last month of the accounting year, the following transactions were completed:

Dec. 1. Issued check number 2632 for the December rent, $2,200.

2. Sold two 1200 watt microwaves for cash.

4. Purchased four 1000 watt microwaves on account from Matt Co., terms 2/10,

n/30, FOB shipping point, $596.

5. Issued check number 2633 to pay the transportation charges on purchase of

December 4, $89. (NOTE: Do not include shipping and purchase

discounts to the Inventory Control sheet for this project.)

Sold six 1000 watt microwaves and four 1200 watt microwaves on account to Briana Co., invoice 891, terms 2/10, n/30, FOB shipping point.

8. Issued check number 2634 for refund of cash on sales made for cash, $150.

(Customer was going to return goods until an allowance was arranged.)

10.
Purchased store supplies on account from Prince Co., terms n/30, $310.

10. Issued check to Matt Co. number 2635 for the full amount due, less discount

allowed. (Round discount to nearest dollar.)

11.
Paid Prince Co. full amount due, check number 2636.

12. Issued credit memo for one 1000 watt microwave returned on sale of

December 6.

13.
Issued check number 2637 for advertising expense for last half of December, $3,000.

14.
Received cash from Briana Co. for the full amount due (less return of December 12 and discount; round to nearest dollar).

19. Issued check number 2638 to buy five 900 watt microwaves, $495.

19. Issued check number 2639 for $596 to Joseph Co. on account.

20.
Sold seven 900 watt microwaves on account to Cameron Co., invoice number 892, terms 1/10, n/30, FOB shipping point.

20.
To expedite sale on Dec. 20, issued check number 2640 for shipping charges on sale to Cameron on December 20, $120.

21.

Received $1,396 cash from McKenzie Co. on account, no discount.

21. Purchased three 1200 watt microwaves on account from Elisha Co., terms 1/10, n/30, FOB shipping point, $747, shipping $78.

24. Received notification that Marie Co. has been granted bankruptcy with no

amount of recovery. We are to write-off her amount due. (Note: See page

365 for entry required.)

26. Issued a debit memo for return of $299 because of damage to one 1200 watt

microwave purchased on December 21, receiving credit from the seller.

27. Issued check number 2641 for sales salaries of $2,050 and office

salaries of $1,400.

28.
Purchased store equipment on account from Joseph Co., terms n/30, FOB

destination, $1,200.

29.
Issued check number 2642 for store supplies, $70.

29. Purchased seven 1000 watt microwave from Prince Co, terms 1/10, n/30,

FOB shipping point, for $1,113 on account, shipping $107.

30. Sold eight 1000 watt microwaves on account to Briana Co., invoice number

893, terms 2/10, n/30, FOB shipping point.

30.
Received cash from sale of December 20, less discount, plus transportation

paid on December 20. (Round calculations to the nearest dollar.)

31. Issued check number 2643 for purchase of December 21, less return

of December 25 and discount. (Round discount to the nearest dollar.)

31. Issued a debit memo for $200 of the purchase returned from

December 28.

Instructions:

1.
Enter the balances of each of the accounts in the appropriate balance column of the General Ledger (B-S and I-S Ledger). Write Balance in the item section, and place a (x) 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 and Inventory Control Sheet as needed.

3.
Total each column on the special journals and prove the journals.

4.
Post the totals of the account named columns and individually post the “Other Accounts” columns as well to the General Ledger.

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, 2012, using the following adjustment data:

a. Merchandise inventory on December 31 $1,090

b. Insurance expired during the year 2,250

c. Store supplies on hand on December 31 850

d. Depreciation for the current year needs to be calculated. The business uses

the Straight-line method, the store equipment has a useful life of 10 years

with no salvage value. (NOTE: the purchase and return will not be included

as the dates of the transactions were after the 15th of the month).

e. Accrued salaries on December 31:

Sales salaries $1,075

Office salaries 540 $1,615

f. The note payable terms are at 8%, payment is not being made until Jan. 3, 2013. Interest must be recognized for one month.

g. Calculate the Bad Debt adjustment amount; net realizable value of Accounts Receivable is determined to be $6,313.

8. Prepare a multiple-step income statement, a statement of owner’s equity, and a

classified balance sheet in good form. (Recommend review of “Current Liabilities” on page 149.)

9. Journalize and post the adjusting entries.

10.
Journalize and post the closing entries. Indicate closed accounts by inserting a zero

in both balance columns opposite the closing entry.

11.
Prepare a post-closing trial balance.

>SJ

CR.

2 2

6 6

SALES

JOURNAL

Page No

INVOICE

POST

ACCTS. REC.

DR.

COST OF SALE DR.

DATE

NO.

ACCOUNT

DEBIT

REF

SALES

CR.

INVENTORY

CRJ

RECEIPTS JOURNAL

POST

SALES CASH

DATE

REF

INVENTORY CR.

DR.

1 1
2 2
3 3
4 4
5 5
6 6

CASH

Page No. 4

OTHER

ACCOUNTS

COST/SOLD DR.

ACCOUNT

CREDIT

ACCTS – CR.

SALES – CR

REC. – CR.

DISC. – DR.

PJ

POST OTHER ACCOUNTS

DATE ACCOUNT CREDITED REF

CR. DR. DR.

1 1
2 2
3 3
4 4
5 5
6 6
7 7
8 8

PURCHASES JOURNAL	Page No.					11
STORE		MERCH.
	(SUNDRY)		PAYABLE	SUPPLIES	INVENORY
	ACCTS – DR.

CPJ

Page No. 8

POST OTHER ACCOUNTS MERCH.

DATE NO. ACCOUNT DEBITED REF (SUNDRY) PAYABLE INVENTORY CASH
ACCTS – DR. DR. CR. CR.
1 1
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3 3
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8 8
9 9

11 11

CASH PAYMENTS JOURNAL
CK.
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Journal

JOURNAL

POST
DATE

REF DEBIT CREDIT

1 1
2 . 2
3 3
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JOURNAL

POST
DATE DESCRIPTION REF DEBIT CREDIT
1 1

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Page No. 54

Inventory

(

)

INVENTORY

Units cost per unit Amount Units cost per unit Amount

Purchases Cost of Goods Sold (Sales) INVENTORY
Date Units cost per unit Amount Units cost per unit Amount Units cost per unit Amount

11/30/12 3

Purchases Cost of Goods Sold (Sales) INVENTORY
Date Units cost per unit Amount Units cost per unit Amount Units cost per unit Amount

11/30/12 7

Inventory Control Sheet

900 watt microwave:

Purchases

Cost of Goods Sold

Sales

Date

Units

cost per unit

Amount

11/30/12

$79

$316

1000 watt microwave:

$119

$357

1200 watt microwave:

$239

$1,673

Ending Inventory Value:

AR-SUB

POST

DATE

REF DEBIT CREDIT

3,388

POST RUNNING
DATE TRANSACTION REF DEBIT CREDIT BALANCE

11/20/12 SJ 5

598

POST RUNNING
DATE TRANSACTION REF DEBIT CREDIT BALANCE

SJ 5

796

POST RUNNING
DATE TRANSACTION REF DEBIT CREDIT BALANCE

SJ 5

1,396

POST RUNNING
DATE TRANSACTION REF DEBIT CREDIT BALANCE

ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER

(CUSTOMERS)

Customer Name: Albert Co.

RUNNING

TRANSACTION

BALANCE

11/20/12

SJ 5

3,388

Customer Name: Marie Co.

598

Customer Name: Cameron Co.

11/15/12

796

Customer Name: McKenzie Co.

11/27/12

1,396

Customer Name: Briana Co.

AP-SUB

Prince Co.

POST RUNNING
DATE TRANSACTION REF DEBIT CREDIT BALANCE

398

POST RUNNING
DATE TRANSACTION REF DEBIT CREDIT BALANCE

P 10

596

POST RUNNING
DATE TRANSACTION REF DEBIT CREDIT BALANCE

P 10

795

POST RUNNING
DATE TRANSACTION REF DEBIT CREDIT BALANCE

P 10

1,497

Vendor Name:

POST RUNNING
DATE TRANSACTION REF DEBIT CREDIT BALANCE

ACCOUNTS PAYABLE SUBSIDIARY LEDGER
(VENDERS)
	Vendor Name:
11/26/12			P 10	398
Vendor Name: Joseph Co.
11/16/12		596
Vendor Name: Elisha Co.
11/29/12		795
Vendor Name: Matt Co.
11/28/12		1,497

SCH-SUB

Schedule of		Accounts Receivable
Total Accounts Receivable
Schedule of		Accounts Payable
Total Accounts Payable

B-S Ledger

Accounts

POST BALANCE
DATE

REF DEBIT CREDIT DEBIT CREDIT

Accounts Receivable ACCOUNT NO.