Question

Page 1 PRACTICE SET ACCOUNTING 3341 (5133) SPRING 2020 This practice set is intended to refresh your basic accounting skills by requiring you to record, summarize, and report the results of a basic set of accounting transactions for a sample company, HOW TO PROCEED Enter the current period transactions in the General Journal. Use the journal entry number for each transaction as a reference. It is not necessary to include an explanation for the entries in this problem. Enter the beginning balances for each account in the General Ledger and post the current period journal entries to the accounts in the General Ledger. Balance each account in the General Ledger. List each account balance on the Unadjusted Trial Balance. Record the adjusting entries in the General Journal. Post the adjusting entries to the General Ledger and re- balance each account. List each account balance on the Adjusted Trial Balance, Prepare a multiple-step Income Statement, a Statement of Retained Earnings, and a classified Balance Sheet. Record the year-end closing entries in the General Journal, post them to the General Ledger, and re-balance each account. Prepare a Post-Closing Trial Balance. REQUIREMENTS nimi tvoros COMPLETE THE FOLLOWING FOR THE PERIOD CURRENTLY ENDED: General Journal - should include current period entries, adjusting entries and closing entries. General Ledger - with all journal entries appropriately posted. Unadjusted Trial Balance - which you will complete prior to making adjusting entries, Adjusted Trial Balance - which you will use to prepare the financial statements. Income Statement (Multiple Step) - including Earnings-Per-Share, Statement of Retained Earnings. Balance Sheet (Classified). Post-Closing Trial Balance. NOTE: All of the above must be submitted inside this bound workbook and in page number sequence in order to insure uniformity in the grading process. If your practice set is submitted in any other form, credit will be deducted for failure to follow instructions.

Answer 1

Requirement 1: Prepare the journal entries as follows

Credit JE. #. 1 Debit $201.960 Account Title and Explanation Merchandise Inventory Accounts Payable To record merchandise inventory purchased $201.960 2 $1.130.220 Accounts Receivable Sales Revenue To record sales on account $1.130.220 $508,599 Cost of Goods sold Merchandise Inventory $508,599 $980,352 Cash Accounts Receivable To record cash collected on account $980,352 4 $414,000 Accounts Payable Cash To record cash paid on account $414.000 5 Telephone & Utility Expense $27.490 Cash To record cash paid for telephone and utility expenses $27.490 6 $438.840 Salaries and Wages Expense Cash To record salaries and wages paid $438.840 7 $22.767 Rent Expense Cash To record rent paid $22,767 AJE# Credit Debit $6,500 Account Title and Explanation Cost of goods sold ($844.641 - $838,141) Merchandise Inventory To record adjustment for inventory shortage $6,500 $66,096 Depreciation Expense Accumulated Depreciation To adjustment for record depreciation expense $66.096 $184,920 Income Tax Expense Income Tax Payable To adjustment for record income tax expense $184,920 Credit Clo# 1 Debit $12.724,020 Account Title and Explanation Sales Revenue Income Summary To close revenue accounts $11,108,016 Income Summary Cost of Goods Sold Salaries and Wages Expense Telephone and Utility Expense Rent Expense Depreciation Expense Income Tax Expense To close expense accounts $5.782.259 $4.483,440 $295,330 $295.971 $66.096 $184.920 $1,616,004 Income Summary Retained Earnings To close income summary account $1.616.004

Requirement 2: Post the entries as follows

Cash Credit Debit $980,352 Acct # 1110 Item Item Dec. 1 Beginning balance JE #3 Cash collections JE #4 Cash payments JE # 5 Cash payments JE #6 Salaries JE #7 Rent $414,000 $27,490 $438,840 $22.767 Balance $691,200 $1,671,552 $1,257,552 $1,230,062 $791,222 $768,455 LEIL Debit Acct # 1120 Item Item Dec. 1 Beginning balance JE #2 Credit sales JE #3 Cash collections Accounts Receivable Credit Balance $423,360 $1,553,580 $980,352 $573,228 $1.130.220 Debit Acct # 1130 Item Item Dec. 1 Beginning balance JE #1 Purchases JE #2 Sales AJE #1 Shortage Merchandise Inventory Credit Balance $1,151,280 $1,353,240 $508.599 $844.641 $6,500 $838,141 $201.960 Acct # 1230 Item Beginning balance Item Dec. 1 Debit Equipment Credit Balance $1,468,800 Acct # 1231 Item Beginning balance Item Dec. 1 AJE # 2 Debit Accumulated Dep. Credit Balance $594,864 $66,096 $660,960 Accounts Payable Credit Acct #2110 Item Item Dec. 1 Beginning balance JE #1 Purchases JE #4 Cash payments Balance $380,160 $582,120 $168,120 $201.960 $414.000 Acct # 2210 Income Tax Payable Credit Balance Item Debit Item Dec. 1 AJE # 3 Beginning balance $0 $184,920 $184,920 Acct # 3010 Item Beginning balance Common Stock Credit Item Dec. 1 Debit Balance $40,000 Item Dec. 1 Acct # 3020 Item Beginning balance Paid-in Capital In Excess of Par Debit Credit Balance $260,616 Income Summary Debit Credit Balance Acct # 3030 Item Beginning balance Revenue Expenses Item Dec. 1 Clo #1 Clo #2 Clo # 3 $0 $11,108,016 $1,616,004 $12,724.020 $12,724,020 $1,616,004 SO Acct # 3040 Item Beginning balance Item Dec. 1 Clo #3 Debit Retained Earnings Credit Balance $718,004 $1.616.004 $2,334,008 Debit Item Dec. 1 JE #2 Clo #1 Acct # 4010 Item Beginning balance Credit sales Sales Revenue Credit Balance $11,593,800 $1.130.220 $12,724,020 SO $12,724.020 Debit Acct # 5020 Item Item Dec. 1 Beginning balance JE # 2 Sales AJE# 1 Inventory shortage | Clo #2 Cost of Goods Sold Credit Balance $5,267,160 $5,775,759 $5,782,259 $5,782,259 SO $508,599 $6,500 Acct # 6010 Item Item Dec. 1 Beginning balance JE #6 Salaries Clo #2 Salaries and Wages Expense Debit Credit Balance $4,044,600 $438.840 $4,483,440 $4,483,440 SO Acct # 6060 Item Item Dec. 1 Beginning balance JE #5 Cash payments | Clo #2 Telephone and Utility Expense Debit Credit Balance $267,840 $27.490 $295,330 $295,330 SO Rent Expense Credit Debit Acct #6070 Item Item Dec. 1 Beginning balance JE #7 Rent Clo #2 Balance $273,204 $295,971 $22,767 $295,971 Acct # 6120 Item Beginning balance Item Dec. 1 AJE # 2 Clo #2 Depreciation Expense Debit Credit Balance SO $66,096 $66,096 $66,096 $0 Acct # 6410 Income Tax Expense Credit Balance Item Debit Beginning balance Item Dec. 1 AJE # 3 Clo #2 $184.920 $184,920 $184,920 $0

Requirement 3 to 8

TT Inc
Unadjusted Trial Balance
As of December 31, 2019
Account Title	Debit	Credit
Cash	$768,455
Accounts Receivable	$573,228
Merchandise Inventory	$844,641
Equipment	$1,468,800
Accumulated Depreciation		$594,864
Accounts Payable		$168,120
Income Tax Payable		$0
Income Summary		$0
Common Stock		$40,000
Paid-in Capital in Excess of Par		$260,616
Retained Earnings		$718,004
Sales Revenue		$12,724,020
Cost of Goods Sold	$5,775,759
Salaries and Wages Expense	$4,483,440
Telephone and Utility Expense	$295,330
Rent Expense	$295,971
Depreciation Expense	$0
Income Tax Expense	$0
Total	$14,505,624	$14,505,624
TT Inc
Adjusted Trial Balance
As of December 31, 2019
Account Title	Debit	Credit
Cash	$768,455
Accounts Receivable	$573,228
Merchandise Inventory	$838,141
Equipment	$1,468,800
Accumulated Depreciation		$660,960
Accounts Payable		$168,120
Income Tax Payable		$184,920
Income Summary		$0
Common Stock		$40,000
Paid-in Capital in Excess of Par		$260,616
Retained Earnings		$718,004
Sales Revenue		$12,724,020
Cost of Goods Sold	$5,782,259
Salaries and Wages Expense	$4,483,440
Telephone and Utility Expense	$295,330
Rent Expense	$295,971
Depreciation Expense	$66,096
Income Tax Expense	$184,920
Total	$14,756,640	$14,756,640
TT Inc
Income Statement
For the Year Ended December 31, 2019
Sales Revenue		$12,724,020
Deduct: Cost of Goods Sold		$5,782,259
Gross Profit		$6,941,761
Operating Expenses
Salaries and Wages Expense	$4,483,440
Telephone and Utility Expense	$295,330
Rent Expense	$295,971
Depreciation Expense	$66,096
Total Operating Expenses		$5,140,837
Income before income tax		$1,800,924
Income Tax Expense		$184,920
Net income		$1,616,004
Earnings per share ($1,676,592 ÷ 40,000)		$40.40
TT Inc
Statement of Retained Earnings
For the Year Ended December 31, 2019
Retained Earnings - Beginning Balance		$718,004
Add: Net income		$1,616,004
Retained Earnings - Ending Balance		$2,334,008
TT Inc
Balance Sheet
December 31, 2019
Assets
Current Assets
Cash	$768,455
Accounts Receivable	$573,228
Merchandise Inventory	$838,141
Total Current Assets		$2,179,824
Property, Plant and Equipment:
Equipment	$1,468,800
Deduct: Accumulated Depreciation	($660,960)	$807,840
Total Assets		$2,987,664
Liabilities and Stockholders' Equity
Current Liabilities
Accounts Payable	$168,120
Income Tax Payable	$184,920
Total liabilities		$353,040
Stockholders' Equity
Common Stock	$40,000
Paid-in Capital in Excess of Par	$260,616
Retained Earnings	$2,334,008	$2,634,624
Total Liabilities and Stockholders' Equity		$2,987,664
TT Inc
Post-Closing Trial Balance
As of December 31, 2019
Account Title	Debit	Credit
Cash	$768,455
Accounts Receivable	$573,228
Merchandise Inventory	$838,141
Equipment	$1,468,800
Accumulated Depreciation		$660,960
Accounts Payable		$168,120
Income Tax Payable		$184,920
Common Stock		$40,000
Paid-in Capital in Excess of Par		$260,616
Retained Earnings		$2,334,008
Sales Revenue
Cost of Goods Sold
Salaries and Wages Expense
Telephone and Utility Expense
Rent Expense
Depreciation Expense
Income Tax Expense
Total	$3,648,624	$3,648,624

Notes: Computation of depreciation expense

Cost of equipment	$1,468,800
Deduct: Salvage value ($1,468,800 × 10%)	$146,880
Depreciable value	$1,321,920
÷ Useful life	20
Annual depreciation expense	$66,096