Comprehensive cycle problem: Periodic system (Appendix)
The following trial balance pertains to Nate’s Grocery as of January 1, 2012:
Account Title | Debit | Credit |
Cash | $26,000 |
|
Accounts receivable | 4,000 |
|
Merchandise inventory | 50,000 |
|
Accounts payable |
| $ 4,000 |
Common stock |
| 43,000 |
Retained earnings |
| 33,000 |
Totals | $80,000 | $80,000 ; |
The following events occurred in 2012. Assume that Nate’s uses the periodic inventory method.
1. Purchased land for $20,000 cash.
2. Purchased merchandise on account for $126,000, terms 1/10 n/45.
3. Paid freight of $1,000 cash on merchandise purchased FOB shipping point.
4. Returned $3,600 of defective merchandise purchased in Event 2.
5. Sold merchandise for $86,000 cash.
6. Sold merchandise on account for $120,000, terms 2/10 n/30.
7. Paid cash within the discount period on accounts payable due on merchandise purchased in Event 2.
8. Paid SI 1.600 cash for selling expenses.
9. Collected 550,000 of the accounts receivable from Event 6 within the discount period.
10. Collected $60,000 of the accounts receivable but not within the discount period.
11. Paid S6.400 of other operating expenses.
12. A physical count indicated that $27,600 of inventory was on hand at the end of the accounting period.
Required
a. Record these transactions in a general journal.
b. Post the transactions to ledger T-accounts.
c. Prepare a schedule of costs of goods sold, an income statement, statement of changes in stockholders’ equity, balance sheet, and statement of cash flows for 2012.
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