Question

4. (7 pts) Comprehensive problem: identify, analyze, and record transactions, post to T-accounts, and prepare an unadjusted trial balance: Suppose that on October 1st, 2017, Waltzing Along, Ltd., a retailer which sells running apparel and footwear has the following account balances: Cash $52,980; Accounts Receivable (A/R): $5,300; Supplies: $830; Inventory: $3,840; Equipment: $25,000; Accounts Payable (A/P): $4,950; Notes Payable: $63,000; Common Stock: $20,000; Assume all revenue and expense accounts and the dividend account have a beginning balance of $0 on 10/1. Waltzing Along, Ltd. identified the following transactions occurred during October 2017: a. 10/3/17: Purchased inventory worth a total of $33,800 from suppliers, 75% of this inventory was purchased on account, and the other 25% of this inventory was paid for in cash. b. 10/7/17: Sold inventory, which originally cost $9,530, for $16,690 to customers on account. c. 10/11/17: Purchased supplies for $200 in cash d. 10/21/17: Sold inventory, which originally cost $17,245, for $28,170 to customers. e. f. g. h. Customers paid 50% in cash and the other 50% was purchased by customers on account. 10/23/17: Received $8,050 in cash payments from customers in transaction b. 10/25/17: Paid $17,330 in cash to suppliers from transaction a. 10/31/17: Paid $450 cash for utilities used in October. 10/31/17: Paid $18,300 in cash for wages to workers for the pay period 10/17 - 10/31. PART 1- Account Identification and transaction analysis (1.5pts): 1) Prepare a 'transaction worksheet' summarizing all of the transactions listed above for Waltzing Along, Ltd. (see lecture slides and/or Ilustration 2-4 in your custom text for sample framework). Make sure to include a beginning balance on 10/1 and an ending balance on 10/31. HINT: After you record each transaction in your worksheet, make sure the accounting equation remains in balance! . PART 2- Record transactions using journal entries (2pts): Record all of the above transactions using journal entries (HINT: there will be two separate journal entries to record for transaction b. and transaction d.). Assume Waltzing Along, Ltd., uses the following accounts: Cash, Accounts Receivable (A/R), Supplies, Inventory, Accounts Payable (A/P), Notes Payable, Sales Revenue, Cost of Goods Solod (COGS), wages expense, and utilities expense. . PART 3- Post transactions to T-Accounts (2pts): Post each of the above transactions to T-Accounts and calculate the ending account balances in each T-account. Make sure to start with the beginning balance in each T-account on 10/1. .

Answer 1