College Accounting
- Comprehensive
Review Problem II - paradigm 5th edition
Mills Sporting Goods Store - College Accounting
- Comprehensive Review Problem II - paradigm
5th edition
You have now completed the accounting
cycle for a merchandising business and are ready to try to put it all together
in this second comprehensive review problem.
You are keeping the accounting records
for Cindi Mills, owner of Mills Sporting Goods Store. You begin with the
balances in her accounts and go through the accounting cycle for two months.
Directions:
1. Open accounts in
the general ledger with the following balances as of January 1, 20X1
Account Balance
111 Cash $6,560
112 Accounts
Receivable 2,955
113 Office
Supplies 825
114 Store
Supplies 1,915
115 Merchandise
Inventory 13,540
116 Prepaid
Insurance 750
121 Office
Equipment 9,500
121.1 Accumulated
Depreciation-Office Equipment 2,600
122 Store
Equipment 16,600
122.1 Accumulated
Depreciation-Store Equipment 4,000
123 Delivery
Equipment 13,000
123.1 Accumulated
Depreciation-Delivery Equipment 7,000
211 Accounts
Payable 3,880
311 Cindi
Mills, Capital 48,165
312 Cindi
Mills, Drawing
313 Income
Summary
411 Sales
412 Sales
Returns and Allowances
413 Sales
Discounts
511 Purchases
512 Purchases
Returns and Allowances
513 Purchases
Discounts
514 Freight
in
611 Salaries
Expense
612 Rent
Expense
613 Utilities
Expense
614 Office
Supplies Expense
615 Store
Supplies Expense
616 Insurance
Expense
617 Depreciation
Expense-Office Equipment
618 Depreciation
Expense-Store Equipment
619 Depreciation
Expense-Delivery Equipment
2. Open accounts in the accounts receivable
ledger with the following balances as of January 1, 20X1:
Customer
Name Balance
Henry Galvin $1,025
Lee Maddox 755
Neagle Co. 1,175
Smitz, Inc -0-
3. Open accounts in the accounts payable
ledger with the following balances as of January 1, 20X1:
W. Bedford Co. $1,365
Jones Co. -0-
Lemke Brothers 1,540
Wohlers, Inc. 975
4.
Record
the January transactions in a general journal (page 12), a one column sales
journal (page26), a purchases journal (page 10), a five-column cash receipts
journal (page 11), or a four column cash payments journal (page 9). All credit
sales carry terms of 2/10, n/30. Freight on all purchases is charged to the
freight in account.
20X1
January
2 Paid
rent for the month, $1.070, Check
No. 234
2 Sold
merchandise to Smitz, Inc., $765,
Invoice No. 176
4 Collected
the balance due from Henry Galvin, less 2% discount
5 Sold
merchandise to Henry Galvin, $1,670,
Invoice No. 177
6 Collected
the balance due from Neagle Co., less 2% discount
7 Issued a credit memorandum to Henry
Galvin for the return of defective merchandise sold on January 5, $210
7 Purchased merchandise from Lemke
Brothers, $1,045; terms 2/10,n/30;
Invoice No. 187
8 Paid W. Bedford Co. the balance due,
less 2% discount; Check No. 235
9 Paid Wohlers, Inc., the balance due,
less 1% discount; Check No. 236
10 Returned defective merchandise purchased
on January 7 from Lemke Brothers, receiving a credit memorandum for $105
10 Collected the balance due from Lee
Maddox, Less 2% discount
11 Paid Lemke Brothers the January 1
balance; no discount; Check No 237
12 Received a check from Smitz, Inc., for
the amount due from the sale of January 2
14 Purchased merchandise from Jones Co. $2,550; terms, 2/10,n/30; Invoice No.
188
15 Received a check from Henry Galvin for
the amount due from the sale of January 5, less the return of January 7
15 Recorded cash sales for the first half
of January, $1,665
15 Cindi invested an additional$3,000 cash in the firm
16 Purchased office equipment from Wohlers,
Inc., $4,400; terms, 2/30,n/60
Invoice No. 189
17 Sold merchandise to Lee Maddox, $950, Invoice No. 178
17 Paid Lemke Brothers the amount due from
the purchase of January 7, less the return of January 10; Check No. 238
18 Purchased office supplies from W.
Bedford Co., $860; terms, n/30;
Invoice No. 190
19 Returned defective office supplies to W.
Bedford Co., receiving a credit memorandum for $110
20 Purchased store supplies from Jones Co.,$555; terms, n/30; Invoice No. 191
22 Cindi invested a used truck valued at $4,700 in the business
23 Sold merchandise to Neagle Co., $820, Invoice No. 179
24 Paid the balance due to Jones Co. from
the purchase of January 14; Check No. 239
24 Cindi wrote check No. 240 to pay her
home phone bill, $205
25 Sold Merchandise to Smitz, Inc., $1,995, Invoice No. 180
26 Sold store supplies to another firm at
cost for cash, $110
27 Issued a credit memorandum to Smitz,
Inc., for a shortage from the sale of January 25, $75
27 Purchased merchandise from Jones Co., $750; terms, 2/10,n/30; Invoice No. 192
29 Paid January’s electric bill, $595, Check No. 241
31 Recorded cash sales for the second half
of January, $2,445
31 Paid freight on January purchases, $450, Check No. 242
31 Paid salaries for January, $4,450, Check No. 243
5. Total all special journals
6. Post all items that need to be
posted
7. Prepare a trial balance on a
work sheet as of January 31, 20X1
8. Prepare schedules of accounts
receivable and accounts payable
9. Complete the worksheet.
Adjustment data for January 31 are as follows:
(a)
Office Supplies on hand, $830
(b)
Store Supplies on hand, $750
(c)
Insurance Expired, $20
(d)
Depreciation of office equipment, $90
(e)
Depreciation of store equipment, $125
(f)
Depreciation of delivery equipment, $250
(g)
Merchandise Inventory (beginning), $13,540
(h)
Merchandise Inventory (ending), $12,210
10. Record and post adjusting entries
as of January 31.
11. Record and post closing entries
as of January 31.
12. Prepare a January 31
post-closing trial balance.
13. Prepare an income statement for
the month of January. All salaries are sales salaries.
14. Prepare a statement of owner’s
equity for the month of January
15. Prepare a January 31 balance
sheet
16. Record the following February
transactions
20X1
February
1 Paid rent for the month, $1,070, Check No. 244
2 Purchased merchandise from Lemke
Brothers, $740; terms, 2/10,n/30;
Invoice No. 193
3 Returned merchandise purchased from
Lemke Brothers on February 2, receiving a credit memorandum for $75
3 Collected the balance due from Lee
Maddox
4 Collected the balance due from Smitz,
Inc., for the sale of January 25 less the credit of January 27 and less the 2%
discount
5 Cindi took home $40 of office supplies for her personal use
6 Sold merchandise to Henry Galvin, $2,140, Invoice No. 181
6 Paid Jones Co. the balance due on
purchases of $555 and $750, less a 2% discount on the $750 purchase; Check No. 245
7 Collected the balance due from Neagle
Co.
8 Issued a credit memorandum to Henry
Galvin for damaged merchandise sold on February 6, $195
9 Purchased merchandise for cash, $375, Check No. 246
11 Paid Lemke Brothers for the balance due
from the purchase of February 2, less the return of February 3; Check No. 247
11 Returned $20 of the merchandise purchased on February 9, receiving a cash
refund
12 Sold merchandise to Lee Maddox, $1,185, Invoice No. 182
13 Cindi wrote Check No. 248 for personal
expenses, $350
14 Recorded cash sales for the first half
of the month, $3,095
15 Paid Wohlers, Inc., the balance due,
less 2% discount, Check No. 249
16 Received a check from Henry Galvin for
the amount due from the sale of February 6, less the return of February 8
17 Sold office supplies for cash, $85
17 Paid W. Bedford Co. the balance due for
the purchase of January 18, less the return of January 19; Check No. 250
19 Purchased store supplies from W. Bedford
Co. $340; terms, n/30; Invoice No.
194
20 Returned $30 of the store supplies purchased on February 19, receiving
credit
21 Purchased merchandise from Lemke
Brothers, $940; terms, 2/10,n/30;
Invoice No. 195
22 Sold merchandise to Neagle Co., $1,095; Invoice No. 183
24 Purchased merchandise from Jones Co., $1,045; terms, 2/10,n/30; Invoice No
196
25 Sold merchandise to Smitz, Inc., $1,755, Invoice No. 184
26 Purchased store equipment from Wohlers,
Inc., $2700; terms 2/30,n/60;
Invoice No. 197
27 Paid the electric bill for February, $550, Check No. 251
28 Recorded cash sales for the second half
of the month, $2,985
28 Paid freight on February purchases, $435, Check No. 252
28 Paid salaries for February, $4,450, Check No. 253
17. Total all special journals.
18. Post all items that need to be
posted
19. Prepare a trial balance on a
work sheet as of February 28, 20X1
20. Prepare schedules of accounts
receivable and accounts payable.
21. Complete the work sheet.
Adjustment data for February 28 are as follows
(a)
Office Supplies on hand, $355
(b)
Store Supplies on hand, $275
(c)
Insurance Expired, $20
(d)
Depreciation of office equipment, $90
(e)
Depreciation of store equipment, $125
(f)
Depreciation of delivery equipment, $250
(g)
Merchandise Inventory (beginning), $12.210
(h)
Merchandise Inventory (ending), $12,780
22. Record and post adjusting entries
as of February 28.
23. Record and post closing entries
as of February 28.
24. Prepare a February 28
post-closing trial balance.
25. Prepare an income statement for
the month of February. All salaries are sales salaries.
26. Prepare a statement of owner’s
equity for the month of February.
27. Prepare a February 28 balance sheet.
Check figures for January only.
Net Loss: 4,946.75 Total Assets: 57,168.25 Cash Balance: 4,823.25
SOLUTION PREVIEW
CRP
II Use an X instead of a check mark symbol, when needed. Data Entry Cells
1., 6., 10., 11., 18., 22., 23.
General Ledger
|
|||||||||||
ACCOUNT
|
Cash
|
ACCOUNT NO.
|
111
|
||||||||
DATE
|
ITEM
|
P.R.
|
DEBIT
|
CREDIT
|
BALANCE
|
||||||
DEBIT
|
CREDIT
|
||||||||||
20X1
Jan. |
1
|
Balance
|
6,560.00
|
||||||||
31
|
Cash Receipts Journal
|
12,296.40
|
18,856.40
|
||||||||
31
|
Cash Payment Journal
|
14,033.15
|
4,823.25
|
||||||||
Feb.
|
28
|
Cash Receipts Journal
|
11,742.70
|
16,565.95
|
|||||||
28
|
Cash Payment Journal
|
14,233.70
|
2,332.25
|
||||||||
ACCOUNT
|
Accounts Receivable
|
ACCOUNT NO.
|
112
|
||||||||
DATE
|
ITEM
|
P.R.
|
DEBIT
|
CREDIT
|
BALANCE
|
||||||
DEBIT
|
CREDIT
|
||||||||||
20X1
Jan. |
1
|
Balance
|
2,955.00
|
||||||||
7
|
General Journal
|
210.00
|
2,745.00
|
||||||||
27
|
General Journal
|
75.00
|
2,670.00
|
||||||||
31
|
Sales Journal
|
6,200.00
|
8,870.00
|
||||||||
31
|
Cash Receipt Jornal
|
5,180.00
|
3,690.00
|
||||||||
Feb.
|
8
|
General Journal
|
195.00
|
3,495.00
|
|||||||
28
|
Sales Journal
|
6,175.00
|
9,670.00
|
||||||||
28
|
Cash Receipt Jornal
|
5,635.00
|
4,035.00
|
||||||||
