Question

On the basis of the following information available in year 2012 for Ladson Retail Store Company (Note: the company uses perpetual inventory method) a) Prepare general journal entries and indicate "No entry" where an entry is not necessary. b) Post your entries into the general ledger using "T" shape form of accounts. Please write 5. your information clearly and do not squeeze information together. You have plenty of spaces to show your information. c) Prepare a Trial Balance d) Prepare Income Statement e) Prepare Retained earnings Statement assuming no beginning retained earnings f) Prepare Closing entries Prepare a Balance Sheet g) January 1, 2012 Mr. Ladson, owner, invested Equipment of $600,000 and Cash of $500,000 in the company January 1 Interviewed a Secretary who agreed to accept $6,000 per month; she was hired and the starting date is January 15. Bought merchandise for cash, $50,000 Bought merchandise on account from Michael Taylor for $100,000. Term-3/15; n/30, FOB shipping point. The purchaser paid the transportation charge of $2,000. Bought additional merchandise on account from John Davis for $120,000; term 2/15; Jan 2 EOM, FOB destination. The transportation charge of $1,500 was paid by the seller January 8 January 9 January 10 Bought supplies for $8,000 for cash Sold merchandise costing $80,000 for $350,000 on account to Nathaniel Norris. Nathaniel Norris returned $40,000 worth of the goods sold to him. The cost of the goods returned by Mr. Nathaniel Norris is $25,000. Received the amount due from Mr. Nathaniel Norris, who was given a 2% discount upon payment Returned $10,000 merchandise to Michael Taylor. The Secretary reported for duty as agreed with an understanding that he would be paid $6,000 per month. Paid the amount due to Michael Taylor. January 12 January 12, January 15 Jan 17, Returned $5,000 merchandise to John Davis January 21 Paid the amount due to John Davis January 31 Paid $2,000 to the Secretary for services performed January 31 Accrued Salary owed to the Secretary was in the amount of $ 1,000 lanuary 31 January 31 Depreciation of $20,000 was computed on the eauipment An inventory of supplies shows supplies on hand of $$,00o

Answer 1

Journal Entries
Date	Particulars	Debit	Credit
01-01-2012	Equipment	6,00,000
	Cash	5,00,000
	Capital		11,00,000
	(Being Business started)
01-01-2012	No Entry
01-01-2012	Purchases	50,000
	Cash		50,000
	(Being Cash purchases made)
02-01-2012	Purchases	1,00,000
	Transportation Charges	2,000
	Michael Taylor		1,00,000
	Cash		2,000
	(Being Goods purchased on Account)
05-01-2012	Purchases	1,20,000
	Transportation Charges	1,500
	John Davis		1,21,500
	(Being Goods purchased on Account)
08-01-2012	Purchases	8,000
	Cash		8,000
	(Being Cash purchases made)
09-01-2012	Nathaniel Norris	3,50,000
	Sales		3,50,000
	(Being Sales made on Account)
10-01-2012	Sales Returns	40,000
	Nathaniel Norris		40,000
	(Being Goods returned by the buyer)
12-01-2012	Cash	3,03,800
	Discount Given	6,200
	Nathaniel Norris		3,10,000
	(Being Amount received)
12-01-2012	Michael Taylor	10,000
	Purchase Returns		10,000
	(Being Goods returned to the seller)
15-01-2012	No Entry
17-01-2012	Michael Taylor	90,000
	Discount Received		2,700
	Cash		87,300
	(Being Amount paid)
18-01-2012	John Davis	5,000
	Purchase Returns		5,000
	(Being Goods returned to the seller)
21-01-2012	John Davis	1,16,500
	Cash		1,16,500
	(Being Amount paid)
31-01-2012	Salary	3,000
	Cash		2,000
	Salary Payable		1,000
	(Being part of Salary paid and balance due)
31-01-2012	Depreciation	20,000
	Equipment		20,000
	(Being Depreciation Accounted)

Equipment
Date	Particulars	Amt.	Date	Particulars	Amt.
01-01-2012	Capital	6,00,000	31-01-2012	Depreciation	20,000
			31-01-2012	Balance	5,80,000
		6,00,000			6,00,000
Cash
Date	Particulars	Amt.	Date	Particulars	Amt.
01-01-2012	Capital	5,00,000	01-01-2012	Purchases	50,000
12-01-2012	Nathaniel Norris	3,03,800	02-01-2012	Transportation Charges	2,000
			08-01-2012	Purchases	8,000
			17-01-2012	Michael Taylor	87,300
			21-01-2012	John Davis	1,16,500
			31-01-2012	Salary	2,000
			31-01-2012	Balance	5,38,000
		8,03,800			8,03,800
Purchases
Date	Particulars	Amt.	Date	Particulars	Amt.
01-01-2012	Cash	50,000	31-01-2012	Purchase Returns	15,000
02-01-2012	Michael Taylor	1,00,000	31-01-2012	P&L	2,63,000
05-01-2012	John Davis	1,20,000
08-01-2012	Cash	8,000
		2,78,000			2,78,000
Transportation Charges
Date	Particulars	Amt.	Date	Particulars	Amt.
02-01-2012	Cash	2,000	31-01-2012	P&L	3,500
05-01-2012	John Davis	1,500
		3,500			3,500
Sales Returns
Date	Particulars	Amt.	Date	Particulars	Amt.
10-01-2012	Nathaniel Norris	40,000	31-01-2012	Sales	40,000
		40,000			40,000
Nathaniel Norris
Date	Particulars	Amt.	Date	Particulars	Amt.
09-01-2012	Sales	3,50,000	10-01-2012	Sales Returns	40,000
			12-01-2012	Cash	3,03,800
				Discount Given	6,200
		3,50,000			3,50,000
Discount Given
Date	Particulars	Amt.	Date	Particulars	Amt.
12-01-2012	Nathaniel Norris	6,200	31-01-2012	P&L	6,200
		6,200			6,200
Salary
Date	Particulars	Amt.	Date	Particulars	Amt.
31-01-2012	Cash	2,000	31-01-2012	P&L	3,000
	Salary Payable	1,000
		3,000			3,000
Depreciation
Date	Particulars	Amt.	Date	Particulars	Amt.
31-01-2012	Equipment	20,000	31-01-2012	P&L	20,000
		20,000			20,000