ACTG 211 Lecture Notes - Lecture 2: Accounts Payable, General Ledger, Retained Earnings
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Account Tracking form provided:
Account Title -> copy the name of the accounts from the listbelow
Account Major Classification -> Asset (A), Liability (L),Ownerâs Equity (OE), Revenue (R) or Expense (E) or Not Applicable(NA)
Contra account -> place a check mark in this column if theitem is a contra account
Account Sub Classification -> only to be used with Asset andLiability accounts; Current Asset (CA); Property, Plant &Equipment (PPE); Current Liability (CL), Long-term Liability (LTL)or Not Applicable (NA)
Normal Balance -> debit (DR), credit (CR) or Not Applicable(NA)
Financial Statement-> Income Statement (IS), Statement ofOwnerâs Equity (SOE), Balance Sheet (BS) or Not Applicable (NA)
Temporary or Permanent -> T for temporary (nominal) accountsand P for permanent (real) accounts
Accounts Payable |
Accounts Receivable |
Accumulated Depreciation |
Advertising Expense |
Buildings |
Cash |
Depreciation Expense |
Fees Earned |
Income Summary |
Insurance Expense |
Interest Payable (due in 1 month) |
Interest Receivable (due in 2 months) |
Joey Bee, Capital |
Joey Bee, Drawing |
Land |
Notes Payable (due in 3 years) |
Notes Receivable (due in 2 months) |
Office Equipment |
Prepaid Insurance |
Prepaid Rent |
Rent Expense |
Notes Payable (due in 2 months) |
Store Equipment |
Supplies |
Supplies Expense |
Taxes Payable (due in 4 months) |
Unearned Fees |
Unearned Rent |
Unearned Revenue |
Wages Payable |
Solve for the adjusting entry:-
2018
Debit Balance Credit Balance
100000 Bank Account dr $300,318
110100 Accounts Receivable (Direct Posting Account) dr 94,670
110150 Allowance for Bad Debts cr 2,600
200600 Inventory-Operating Supplies dr 8,832
200900 Inventory-Raw Materials (Direct Post) dr 52,000
200910 Inventory-Finished Goods (Direct Post) dr 281,298
200920 Inventory-Trading Goods (Direct Post) dr 66,474
210000 Prepaid Insurance dr 3,000
212000 Prepaid Advertising dr 2,400
220110 Land (Direct Post) dr 528,000
220210 Production Machinery, Equip & Fixtures (Dir.Post) dr 915,000
220310 Accumulated Depreciation-Machinery (Direct Post) cr 408,000
300200 Accounts Payable (Direct Posting Account) cr 48,000
300700 Payables-Salaries and Wages cr 94,313
300800 Accrued Expenses cr 2,200
320000 Accrued Tax â Output cr 4,000
329000 Common Stock cr 1,010,000
329100 Additional Paid-in-Capital cr 52,870
330010 Retained Earnings (Direct Posting) cr 630,009
Payables-Salaries and Wages | 94,313 | |
Bank Account | 94,313 | |
to record payment of salaries and wages | ||
Inventory-Trading Goods (Direct Post) | 60,600 | |
Inventory-Raw Materials (Direct Post) | 40,900 | |
Accounts Payable (Direct Posting Account) | 100,000 | |
Bank Account | 1,500 | |
to record acquisition of invemtory and payment of shipment | ||
Accounts Receivable (Direct Posting Account) | 22,500 | |
Cost of Goods Sold | 15,000 | |
Sales Revenue | 22,500 | |
Inventory-Trading Goods (Direct Post) | 15,000 | |
to record the sale of accessories | ||
Bank Account | 24,000 | |
Accounts Receivable (Direct Posting Account) | 24,000 | |
to record payment receipt from Northwest bikes | ||
Accrued Expenses | 2,200 | |
Bank Account | 2,200 | |
to record payment of utilities | ||
Advertising Expense | 1,100 | |
Prepaid Advertising | 1,100 | |
to record advertisiment expense | ||
Inventory-Operating Supplies | 380 | |
Accounts Payable (Direct Posting Account) | 380 | |
to record receipt of Staples | ||
Bank Account | 21,825 | |
Sales Discount | 675 | |
Accounts Receivable (Direct Posting Account) | 22,500 | |
to recors payment of windy city bikes | ||
Accounts Payable (Direct Posting Account) | 100,000 | |
Bank Account | 100,000 | |
to record payment to Dallas Bike Basics | ||
Deposits on Purchases | 8,800 | |
Bank Account | 2,000 | |
Accounts Payable (Direct Posting Account) | 6,800 | |
to record the purchase of barcoding | ||
Accounts Payable (Direct Posting Account) | 15,890 | |
Bank Account | 15,890 | |
to record payment of Lightbulb Accesorry Kits | ||
Accounts Receivable (Direct Posting Account) | 128,000 | |
Cost of Goods Sold | 78,000 | |
Sales Revenue | 128,000 | |
Inventory-Finished Goods (Direct Post) | 78,000 | |
to record sale to Rocky Mountain Bikes(Denver) | ||
Inventory-Raw Materials (Direct Post) | 75,600 | |
Accounts Payable (Direct Posting Account) | 75,600 | |
to record purchase of raw material(Space Bike) | ||
Allowance for Bad Debts | 4,200 | |
Accounts Receivable (Direct Posting Account) | 4,200 | |
to record Bad debt expense | ||
Bank Account | 90,000 | |
Accounts Receivable (Direct Posting Account) | 90,000 | |
to record payment from Sillicon Valley Bikes | ||
Accounts Payable (Direct Posting Account) | 380 | |
Bank Account | 380 | |
Accounts Receivable (Direct Posting Account) | 2,977 | |
Cost of Goods Sold | 1,300 | |
Sales Revenue | 2,750 | |
Accrued Tax- Input | 227 | |
Inventory-Trading Goods (Direct Post) | 1,300 | |
to record sale of inventory | ||
Prepaid Advertising | 9,000 | |
Bank Account | 9,000 | |
to record payment for advertising | ||
Bank Account | 27,000 | |
Cost of Goods Sold | 17,000 | |
Sales Revenue | 27,000 | |
Inventory-Finished Goods (Direct Post) | 17,000 | |
to record sale to Beantown Bikes | ||
Accounts Payable (Direct Posting Account) | 32,000 | |
Bank Account | 32,000 | |
to record payment to Night Rider Aluminum | ||
Accrued Tax â Output | 3,000 | |
Bank Account | 3,000 | |
to record payment sale tax | ||
Prepaid Rent | 4,000 | |
Bank Account | 4,000 | |
to record prepaid rent | ||
Accounts Payable (Direct Posting Account) | 6,800 | |
Bank Account | 6,800 | |
to record payment for barcoding system | ||
Accounts Receivable (Direct Posting Account) | 358,500 | |
Cost of Goods Sold | 250,000 | |
Sales Revenue | 358,500 | |
Inventory-Trading Goods (Direct Post) | 65,000 | |
Inventory-Finished Goods (Direct Post) | 185,000 | |
to record sale to Big Apple Bikes | ||
Adjustment information as of January 31, not already given in the original transaction(s):
1. Based on prior experience, GBI estimates that approximately 1.5 % of the credit sales from each month will become bad debt. GBI writes off bad debts as they occur and recognizes bad debt expense based on percentage of credit sales as an adjusting entry each month.
2. As a control measure, physical inventories are taken on a periodic basis alternating between the raw materials inventory, finished goods inventory and trading goods inventory. Physical inventory of the finished goods inventory was taken at the end of January. It was determined that the value of the finished goods merchandise on hand was $1,200.
3. GBI counted the office (operating) supplies on hand after the close of business on the last day of the month and determined the cost of the unused office supplies to be $1000.
4. Production Machinery, Equipment and Fixtures were placed in service on January 1, 2013, with no salvage value. The bar-code system has a 5-year life and no salvage value. GBI depreciates fixed assets on a straight-line basis and those assets placed in service in the first half of the months are depreciated for the entire month, while fixed assets placed in service during the last half of the month are not depreciated until the second month. Depreciation is rounded to the nearest dollar and assets are depreciated on a monthly basis (i.e. number of days in the month is not of consequence).
5. GBI used the Internet to review the monthly charges for utilities the business consumed during January. Based on the Internet report, the amount to be billed by the utilities company for January usage is the same as was billed for December.
6. Liability insurance for the six-month period ending on January 31 was paid last August on the first of the month. Liability insurance is assumed to be utilized uniformly over the six-month policy period.
7. GBI needs to recognize the wages expense for the month. Since all employees are paid salaries and no changes have been made, this amount is the same as the previous month salaries. (For purposes of this assignment, ignore manufacturing, office, and administrative payrolls and assume all wages expense is towards labor expense.