Foundations of Accounting IAccounting Project
Written by: Karen PitschSpecial thanks to Donna Larner
Randiddle Co. is a merchandising business. Their account balances as of November 30 2012 (unless otherwise indicated) are as follows: 110 Cash $ 74370 112 Accounts Receivable 6178 113 Allowance for Doubtful Accounts 650 115 Merchandise Inventory 2346 116 Prepaid Insurance 5750 117 Store Supplies 2850 123 Store Equipment 100800 124 Accumulated Depreciation-Store Equipment 31060 210 Accounts Payable 3286 211 Salaries Payable 0 218 Interest Payable 0 220 Note Payable (Due 2017) 30000 ($6000 to be paid in 2013) 310 Randiddle Capital (January 1 2012) 46288 311 Randiddle Withdrawals 60000 312 Income Summary 0 410 Sales 296130 411 Sales Returns and Allowances 10020 412 Sales Discounts 7200 510 Cost of Goods Sold 30250 520 Sales Salaries Expense 34400 521 Advertising Expense 18000 522 Depreciation Expense 0 523 Store Supplies Expense 0 529 Miscellaneous Selling Expense 2800 530 Office Salaries Expense 25500 531 Rent Expense 24200 532 Insurance Expense 0 533 Bad Debt Expense 0 539 Miscellaneous Administrative Expense 1650 550 Interest Expense 1100Randiddle 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: $1991000 watt microwave: $2991200 watt microwave: $499During December the last month of the accounting year the following transactions were completed:Dec. 1. Issued check number 2632 for the December rent $2200. 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 ofDecember 4 $89. (NOTE: Debit Merchandise Inventory. Do not include shipping and purchase discounts to the Inventory Control sheet for this project.)6. 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 ofDecember 6. (NOTE: Assume the returned microwave was from the 11/30 inventory)13. Issued check number 2637 for advertising expense for last half of December $3000.14. 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 (NOTE: Cameron Co. will be reimbursing us for this shipping cost).21. Received $1396 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 (NOTE: Debit Merchandise Inventory $825 but only put $747 in the Inventory Control Sheet).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$249 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 $2050 and office salaries of $1400.28. Purchased store equipment on account from Joseph Co. terms n/30 FOB destination $1200.29. 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 $1113 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 $1090b. Insurance expired during the year 2250c. Store supplies on hand on December 31 850d. 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 $1075 Office salaries 540 $1615f. 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 $6313.8. Prepare a multiple-step income statement a statement of owner s equity and aclassified 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 zeroin both balance columns opposite the closing entry.11. Prepare a post-closing trial balance.
Foundations of Accounting IAccounting Project Written by: Karen PitschSpecial th
Foundations of Accounting IAccounting Project