Question

Comprehensive Problem 2 May for the May 11,000 15 Parting 20 Paddy Recenbe n cins 21 Cam p 110.000 The 21. Redachfrom Geet 21. Purchased endise on account Omance Refund mechanin ia dedo made for the commerchand de m e for 5.000 p te . The cost of the on Tue Com 30 Red cash from so u thed on May 21 31. Poruchy Instructions 1. Enter the balances of each of the cours in the propri e column of four.com account. Write Raw in the section, and place a check mark in the Posting Refer ence column. i e the transactions for July, starting on Page 20 of the mall balance shelposting pled th e top or post to the receive and accounts payable sur le 3. Prepare an d trial balance & A n d of May, the data were and Analyse and use the A nventory on May 1 trance expired during the year Store supplies on and on May Officeries The adjustment for customers 535.000 forces of good old 6.600 11600 was is 560.for sales and and 5. Oplona) Enter the unadjusted trial balance on a 10-commend of period spreadsheet (worksheet, and complete the spreadsheet 6. Journaline and post the adjusting entries. Record the adjusting entries on Page 22 of the journal 7. Prepare ad usted til balance 8. Prepare an income tatement, and caring statement, and a balance sheet 9. Prepare and post the closing entries. Record the closing entries on Page 23 of the journal Indicate dosed accounts by inserting a line in both the Balance columns opposite the clos ing entry. Insert the balance in the r ed caring account 10. Prepare a post-dosing trial balance

Answer 1

Palisade Creek Journal Enteries Date Particulars 1.5.2016 Rent Expense a/c To Cash (Rent paid in cash) Dr. Debit in $ Credit In $ 5000 K 5000 36000 3.5.2016 Inventory a/c Dr. To Accounts Payable (Purchased inventory on account) 36000 4.5.2016 Inventory a/c Dr. To Cash (Paid Freight expense in cash) 600 Dr. 68500 6.5.2016 Accounts Receivable a/c To Sales (Sales made on account) 68500 41000 Cost of goods sold a/c To Inventory (Cost of goods sold recorded) 41000 223001 7.5.2016 Cash a/c Dr. To Accounts Receivable (Cash received from debtors) 22300 Dr. 54000 10.5.2016 Cash a/c To Sales (Sales made on account) 54000 32000 Cost of goods sold a/c Dr. To Inventory JiCost of goods sold recorded) 32000 36000 720 13.5.2016 Accounts Payable a/c Dr. To Inventory To Cash (Accounts Payable paid off for May 3 purchase) 36000 x 2% = 720 35280

Date Particulars 15.5.2016 Advertising Expense a/c Dr. To Cash (Advertising Expense paid) Debit in Credit In $ 11000 11000 671301 1370 16.5.2016 |Cash a/c Dr. Sales Discount a/c Dr. To Accounts Receivable (Received cash from debtors for May 6 Sales) 68500 18700 19.5.2016 Inventory a/c Dr. To Cash (Purchased inventory for cash) 18700 33450 19.5.2016 Accounts Payable a/c Dr. To Cash (Accounts Payable paid) 33450 Dr. 13230 20.5.2016 Sales Return a/c To Cash (Sales return reorded) 13230 8000 Inventory a/c Dr. To Cost of goods sold (Inventory returned recorded) 8000 Dr. 110000 20.5.2016 Accounts Receivable a/c To Sales (Sales made on account) 110000 70000 Cost of goods sold a/c Dr. To Inventory (Cost of goods sold recorded) 70000

Date Particulars 21.5.2016 Accounts Receivable a/c Dr. To Cash (Freight paid on behalf of client) Debit in s Credit In $ 2300 2300 Dr. 42900 21.5.2016 Cash a/c To Accounts Receivable (Cash received from debtors) 42900 88000 21.5.2016 Inventory a/c Dr. To Accounts Payable (Purchased inventory on account) 88000 Dr. 5000 24.5.2016 Accounts Payable a/c To Inventory (Inventory returned) 5000 Dr. 7500 26.5.2016 Sales Return a/c To Cash (Sales return recorded) 7500 48001 Inventory a/c Dr. To Cost of goods sold (Inventory returned recorded) 4800 56000 29000 28.5.2016 Sales Salaries Expense a/c Dr. Office Salaries Expense a/c Dr. To Cash (Salaries paid in cash) 85000

Date Particulars 29.5.2016 Store Supplies a/c Dr. To Cash (Supplies purchased for cash) Debit in credit in $ 2400 2400 Dr. 78750 30.5.2016 Accounts Receivable a/c To Sales (Sales made on account) 78750 47000 Cost of goods sold a/c Dr. To Inventory (Cost of goods sold recorded) 47000 111200 1100 30.5.2016 Cash a/c Dr. Sales Discount a/c Dr. To Accounts Receivable (Received cash from debtors for May 6 Sales) 110000 x 1% = 1100; 110000 + 2300 = 112300 112300 83000 31.5.2016 Accounts Payable a/c Dr. To Inventory To Cash (Accounts Payable paid off for May 3 purchase) 83000 x 1% = 830 830 82170

Adjusting Enteries Date Particulars 31.5.2016 Cost of goods sold a/c To Inventory (Inventory value declined) Dr. Debit in $ Credit in $ 13950 13950 Dr. 12000 31.5.2016 Insurance Expense a/c To Prepaid Insurance (Insurance expired) 12000 Dr. 9800 31.5.2016 Supplies Expense a/c To Store Supplies (Supplies Expensed) 9800 14000 31.5.2016 Depreciation Expense - Store Equip a/c Dr. To Accum. Depre-Store Equip (Depreciation Charged to Equipemnt) 14000 Dr. Dr. 7000 6600 31.5.2016 Sales Salaries Expense a/c Office Salaries Expense a/c To Salaries Payable (Salaries accrued) 13600 60000 31.5.2016 Sales Return a/c Dr. To Accounts Receivable (Sales return recorded) 60000 35000 Inventory a/c Dr. To Cost of goods sold (Inventory returned recorded) 35000

Worksheet For the period ending 31.5.2016 Unadjusted Adjustment Adjusted Post Closing Debit in $ Credit In $ Debit in $ Credit In $ Debit in $ Credit In $ Debit in $ Credit In $ 84500 84500 84500 247450 60000 187450 187450 583950 13950 570000 570000 28000 35000 63000 63000 16800 12000 4800 4800 13800 9800 4000 4000 569500 569500 569500 56700 14000 70700 70700 63150 63150 63150 13600 13600 13600 50000 50000 50000 685300 685300 1285800 135000 135000 Particulars Cash Accounts Receivable Inventory Estimated Returns Inventory Prepaid Insurance Store Supplies Store Equipment Accumulated Depre-Store Equip. Accounts Payable Salaries Payable Customer Refunds Payable Lynn Tolley, Capital Lynn Tolley, Drawing Income Summary Sales Sales Return Sales Discount Cost of goods sold Sales Salaries Expense Office Salaries Expense Advertising Expense Depreciation Expense Store Supplies Expense Miscellaneous Selling Expense Rent Expense Insurance Expense Miscellaneous administrative Expense Totals 5380250 5380250 60000 20730 2470 3000200 720800 411100 292000 -21050 7000 6600 14000 9800 80730 2470 2979150 727800 417700 292000 14000 9800 12600 88700 12000 7800 6263000 12600 88700 12000 7800 6235400 6235400 123350 123350 6263000 1483250 1483250

Statement of Income For the period ending 31.5.2016 Sales Sales Return Sales Discount Net Sales Cost of goods sold Gross Margin 5380250 -80730 -2470 5297050 -2979150 2317900 Selling Expense: Sales Salaries Expense Advertising Expense Depreciation Expense Store Supplies Expense Miscellaneous Selling Expense 727800 292000 14000 9800 12600 1056200 Administrative Expense: Office Salaries Expense Rent Expense Insurance Expense Miscellaneous administrative Expense Net Income 417700 88700 12000 7800 526200 735500 Statement of Owners Equity For the period ending 31.5.2016 Lynn Tolley, Capital Net Income 685300 735500 1420800 - 135000 1285800 Less:Lynn Tolley, Drawing

Amounts in $ Amounts in $ Balance sheet As at 31.8.2017 Assets Current Assets Cash Accounts Receivable Inventory Estimated Returns Inventory Prepaid Insurance Store Supplies Amounts in $ Amounts in $ Liabilities Current Liabilities 84500 Accounts Payable 187450 Salaries Payable 570000 Customer Refunds Payable 63000 4800 4000 913750 63150 13600 50000 126750 1285800 Non Current Assets Store Equipment Accumulated Depre - Store Eq Total Assets 569500 -70700 Owners Capital Lynn Tolley, Capital 498800 1412550 Total Liabilities & Equity 1412550

Closing Enteries Date Particulars Debit in $ Credit in $ 31.5.2016 Income Summary a/c Dr. 4644750 To Sales Return 80730 To Sales Discount 2470 To Cost of goods sold 2979150 To Sales Salaries Expense 727800 To Office Salaries Expense 417700 To Advertising Expense 292000 To Depreciation Expense 14000 To Store Supplies Expense 9800 To Miscellaneous Selling Expense 12600 To Rent Expense 88700 To Insurance Expense 12000 To Miscellaneous administrative Expense 7800 (Expense accounts closed) 5380250 31.5.2016 Sales a/c Dr. To Income Summary (Revenue accounts closed) 5380250 735500 31.5.2016 Income Summary a/c Dr. To Lynn Tolley, Capital (Profit transferref to Capital account) 735500 135000 31.5.2016 Lynn Tolley, Capital a/c Dr. To Lynn Tolley, Drawing (Drawings charged to Capital) 135000