Question

MERCHANDISE COMPANY ACCOUNTING CYCLE (Perpetual System) Oct. 1: Owner invests cash S40,000 and building worth S50,000 7: Buy supplies on account, $3,000 8: Pay S1,000 of the amount due on the supplies 15: Purchase $10,000 of merchandise on account 19: Return $2,000 of the merchandise 25: Pay for the purchase (2/10 N/30) 27: Sell some merchandise for $15,000 on account (Cost 4,000) 29: Draw $3,000 cash 30: Pay advertising, $500 INSTRUCTIONS Journalize the above transactions C. Do a trial balance (dated Oct. 31s) 2. Supplies used $1200 A. B. Post to the T-accounts D. Do adjusting journal entries, as follows: 1. Building depreciation is $3,000 3. Receive telephone bill, $600 (not aying now) E. Post the adjusting entries to the T-accounts Do an adjusted trial balance F. G. Prepare the financial statements: 1. Income statement 2. Capital statement 3. Balance sheet Journalize closing entries Post the closing entries to the T-account H. I. BE/review problem

Letters A- I please

Answer 1

ournal of Merchandise Compan Date Debit Particulars Credit 1-Oct Bank 40,000 50,000 Building Capital 90,000 7-Oct Supplies 3,000 Accounts Payable 3,000 8-0ct Accounts Payable 1,000 Bank 1,000 15-Oct Inventory 10,000 Accounts Payable 10,000 19-Oct Accounts Payable 2,000 Inventorv 2,000 25-Oct Accounts Payable 8,000 7,840 Bank Discount allowed 160 2% discount 27-0ct Accounts Receivable 15,000 Sales 15,000 27-0ct Cost of Sales 4,000 Inventory 4,000 29-0ct Capital 3,000 Bank 3,000 30-Oct Advertising Bank 500 500

Below accounts are to be opened in T-format to post the above transactions Bank Building Capital Supplies Accounts Payable Inventory Discount allowed Accounts Receivable Sales Cost of Sales Advertising

The balances after posting above transactions in T-format in each of the above accounts would be Particulars Bank Building Capital Supplies Accounts Payable Inventory Discount allowed Accounts Receivable Sales Cost of Sales Advertising Total 2 Amount 27,660 50,000 (87,000) 3,000 (2,000) 4,000 (160) 15,000 (15,000) 4,000 500

Adjusting entries to be posted in T-format accounts Debit Date Particulars Credit 31-0ct Depreciation 3,000 Building 3,000 31-Oct Supplies expense Supplies 1,200 1,200 31-0ct Telephone expense 600 Outstanding expense 600

The adjusted trial balance after posting above values in the T-format accounts would be Particulars Bank Building Capital Supplies Accounts Payable Inventorv Discount allowed Accounts Receivable Sales Cost of Sales Advertising Outstanding expense Depreciation Supplies expense Telephone expense Total Amount 27,660 47,000 (87,000) 1,800 (2,000) 4,000 (160) 15,000 (15,000) 4,000 500 (600) 3,000 1,200 600