MGAB01H3 Lecture Notes - Lecture 2: Retained Earnings, Trial Balance, Deferral
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On November 1, 2012 the following were the account balances ofSolo Sales and Service, Inc. The perpetual inventory method isused.
Debits | Credits | |||
Cash | $4,795 | Accumulated depreciation | $1,000 | |
Accounts Receivable | 2,320 | Accounts Payable | 6,800 | |
Supplies | 1,000 | Unearned Service Revenue | 400 | |
Equipment | 40,000 | Salaries Payable | 550 | |
Common Stock | 11,000 | |||
Retained Earnings | 28,365 | |||
$48,115 | $48,115 |
During November the followingsummary transactions were completed.
Nov. 8 | Paid $1,150 for salaries due employees, of which $550 is forOctober salaries payable and $600 is for November. |
10 | Received $1,400 cash from customers in payment of account. |
11 | Purchased merchandise on account from Midwest Wholesale Supplyfor $6,000, terms 2/10, n/30. |
12 | Sold merchandise on account for $4,500, terms 2/10, n/30. Thecost of the merchandise sold was $3,000. |
15 | Received credit from Midwest Wholesale Supply for merchandisereturned $200. |
19 | Received collections in full, less discounts, from customersbilled on sales of $4,500 on November 12. |
20 | Paid Midwest Wholesale Supply in full, less discount. (Donâtforget the return on the 15th.) |
22 | Received $1,300 cash for services performed in November. |
25 | Purchased equipment on account $3,000. |
27 | Purchased supplies on account $1,300. |
28 | Paid creditors $2,500 of accounts payable due. |
29 | Paid November rent $300. |
29 | Paid salaries $1,100. |
29 | Performed services on account and billed customers for servicesprovided $1,900. |
29 | Received $550 from customers for services to be provided in thefuture. |
Adjustment data:
1. | Supplies on hand are valued at $1,600. |
2. | Accrued salaries payable as of 11/30 are $500. |
3. | Depreciation for the month is $750. |
4. | $650 of the unearned service revenue has not been earned bymonth end. |
Instructions
Enter the November 1 balances in ledger accounts. Use T accountsprovided on the next page.
Cash | |
| |
|
Accounts Receivable | |
Supplies | |
Store Equipment | |
Accumulated Depreciationâ Store Equipment | |
Accounts Payable | |
Unearned Service Revenue | |
Salaries Payable | |
Common Stock | |
Retained Earnings | |
General Ledger (Continued)
Income Summary | |