Accounting for inventory using the perpetual system—FIFO [25-30 min]
This exercise continues the Lawlor Lawn Service, Inc., situation from Exercise in Chapter 5. Consider the June transactions for Lawlor Lawn Service that were presented in Chapter 5. (Cost data has been removed from the sale transactions):
Jun 2 | Completed lawn service and received cash of $800. |
5 | Purchased 110 plants on account for inventory, $304, plus freight in of $15. |
15 | Sold 60 plants on account, $600. |
17 | Consulted with a client on landscaping design for a fee of $250 on account. |
20 | Purchased 120 plants on account for inventory, $384. |
21 | Paid on account, $400. |
25 | Sold 110 plants for cash, $990. |
30 | Recorded the following adjusting entries: Depreciation, $30. Physical count of plant inventory, 30 plants. |
Requirements
1. Prepare perpetual inventory records for June for Lawlor using the FIFO method. (Note: You must figure cost on the 15th, 25th, and 30th.)
2. Journalize and post the June transactions using the perpetual inventory record created in Requirement 1. Key all items by date. Compute each account balance, and denote the balance as Bal.
3. Journalize and post the adjusting entries. Denote each adjusting amount as Adj. After posting all adjusting entries, prove the equality of debits and credits in the ledger.
Journalizing purchase and sale transactions—perpetual inventory; making closing entries, and preparing financial statements [30-40 min]
This exercise continues the Lawlor Lawn Service, Inc., situation from Exercise of Chapter 4. Lawlor Lawn Service has also begun selling plants that it purchases from a wholesaler. During June, Lawlor Lawn Service completed the following transactions:
Jun 2 | Completed lawn service and received cash of $800. |
5 | Purchased 110 plants on account for inventory, $304, plus freight in of $15. |
15 | Sold 60 plants on account, $600 (cost $174). |
17 | Consulted with a client on landscaping design for a fee of $250 on account. |
20 | Purchased 120 plants on account for inventory, $384. |
21 | Paid on account, $400. |
25 | Sold 110 plants for cash, $990 (cost $337). |
30 | Recorded the following adjusting entries: Depreciation $30 Physical count of plant inventory, 30 plants (cost $96) |
Requirements
1. Open the following selected T-accounts in the ledger: Cash, Accounts receivable, Lawn supplies, Plant inventory, Equipment, Accumulated depreciation— equipment, Accounts payable, Salary payable, Common stock, Retained earning, Dividends, Income summary, Service revenue, Sales revenue, Cost of goods sold, Salary expense, Rent expense, Utilities expense, Depreciation expense-equipment, and Supplies expense.
2. Journalize and post the June transactions. Key all items by date. Compute each account balance, and denote the balance as Bal.
3. Journalize and post the closing entries. Denote each closing amount as Clo. After posting all closing entries, prove the equality of debits and credits in the ledger.
4. Prepare the June income statement of Lawlor Lawn Service. Use the singlestep format.
This exercise continues the Lawlor Lawn Service, Inc., situation from Exercise of Chapter 3. Start from the posted T-accounts and the adjusted trial balance for Lawlor Lawn Service prepared for the company at May 31, 2012:
Requirements
1. Complete the accounting worksheet at May 31, 2012.
2. Journalize and post the closing entries at May 31, 2012. Denote each closing amount as Clo and an account balance as Bal.
Preparing adjusting entries and preparing an adjusted trial balance [20-30 min]
This exercise continues the Lawlor Lawn Service, Inc., situation from Exercise of Chapter 2. Start from the trial balance and the posted T-accounts that Lawlor Lawn Service prepared at May 31, 2012.
Requirements
1. Open the following selected T-accounts in the ledger: Cash, Accounts receivable, Lawn supplies, Plant inventory, Equipment, Accumulated depreciation— equipment, Accounts payable, Salary payable, Common stock, Retained earning, Dividends, Income summary, Service revenue, Sales revenue, Cost of goods sold, Salary expense, Rent expense, Utilities expense, Depreciation expense—equipment, and Supplies expense.
2. Journalize and post the June transactions. Key all items by date. Compute each account balance, and denote the balance as Bal.
3. Journalize and post the closing entries. Denote each closing amount as Clo. After posting all closing entries, prove the equality of debits and credits in the ledger.
4. Prepare the June income statement of Lawlor Lawn Service. Use the singlestep format.
Lawlor Lawn Service completed the following transactions during May:
May 1 | Received $1,700 and issued 100 shares of common stock. Opened bank account titled Lawlor Lawn Service, Inc. |
3 | Purchased on account a mower, $1,200, and weed whacker, $240. The equipment is expected to remain in service for four years. |
5 | Purchased $30 of gas. Wrote check #1 from the new bank account. |
6 | Performed lawn services for client on account, $150. |
8 | Purchased $150 of fertilizer supplies from the lawn store that will be used on future jobs. Wrote check #2 from the new bank account. |
17 | Completed landscaping job for client, received cash $800. |
31 | Received $100 on account from May 6 sale. |
Requirements
1. Open T-accounts: Cash, Accounts receivable, Lawn supplies, Equipment, Accounts payable, Common stock, Retained earnings, Dividends, Service revenue, and Fuel expense.
2. Journalize the transactions. Explanations are not required.
3. Post to the T-accounts. Key all items by date, and denote an account balance as Bal. Formal posting references are not required.
4. Prepare a trial balance at May 31,2012.
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