ACCT215 Quiz: WEEK 3 Accounts Receivable PORTFOLIO 1
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Palisade Creek Co. is a merchandising business that uses theperpetual inventory system. The account balances for Palisade CreekCo. as of May 1, 2016 (unless otherwise indicated), are asfollows:
110 | Cash | $ 83,600 |
112 | Accounts Receivable | 233,900 |
115 | Merchandise Inventory | 624,400 |
116 | Estimated Returns Inventory | 28,000 |
117 | Prepaid Insurance | 16,800 |
118 | Store Supplies | 11,400 |
123 | Store Equipment | 569,500 |
124 | Accumulated Depreciation-Store Equipment | 56,700 |
210 | Accounts Payable | 96,600 |
211 | Salaries Payable | — |
212 | Customers Refunds Payable | 50,000 |
310 | Lynn Tolley, Capital, June 1, 2015 | 685,300 |
311 | Lynn Tolley, Drawing | 135,000 |
312 | Income Summary | — |
410 | Sales | 5,069,000 |
510 | Cost of Merchandise Sold | 2,823,000 |
520 | Sales Salaries Expense | 664,800 |
521 | Advertising Expense | 281,000 |
522 | Depreciation Expense | — |
523 | Store Supplies Expense | — |
529 | Miscellaneous Selling Expense | 12,600 |
530 | Office Salaries Expense | 382,100 |
531 | Rent Expense | 83,700 |
532 | Insurance Expense | — |
539 | Miscellaneous Administrative Expense | 7,800 |
During May, the last month of the fiscal year, the followingtransactions were completed:
Record the following transactions on page 20 of the journal.Refer to the Chart of Accounts for exact wording of accounttitles.
May | 1 | Paid rent for May, $5,000. |
3 | Purchased merchandise on account from Martin Co., terms 2/10,n/30, FOB shipping point, $36,000. | |
4 | Paid freight on purchase of May 3, $600. | |
6 | Sold merchandise on account to Korman Co., terms 2/10, n/30,FOB shipping point, $68,500. The cost of the merchandise sold was$41,000. | |
7 | Received $22,300 cash from Halstad Co. on account. | |
10 | Sold merchandise for cash, $54,000. The cost of the merchandisesold was $32,000. | |
13 | Paid for merchandise purchased on May 3. | |
15 | Paid advertising expense for last half of May, $11,000. | |
16 | Received cash from sale of May 6. | |
19 | Purchased merchandise for cash, $18,700. | |
19 | Paid $33,450 to Buttons Co. on account. | |
20 | Paid Korman Co. a cash refund of $13,230 for returnedmerchandise from sale of May 6. The invoice amount of the returnedmerchandise was $13,500 and the cost of the returned merchandisewas $8,000. |
Record the following transactions on page 21 of the journal.Refer to the Chart of Accounts for exact wording of accounttitles.
May | 20 | Sold merchandise on account to Crescent Co., terms 1/10, n/30,FOB shipping point, $110,000. The cost of the merchandise sold was$70,000. |
21 | For the convenience of Crescent Co., paid freight on sale ofMay 20, $2,300. | |
21 | Received $42,900 cash from Gee Co. on account. | |
21 | Purchased merchandise on account from Osterman Co., terms 1/10,n/30, FOB destination, $88,000. | |
24 | Returned of damaged merchandise purchased on May 21, receivinga credit memo from the seller for $5,000. | |
26 | Refunded cash on sales made for cash, $7,500. The cost of themerchandise returned was $4,800. | |
28 | Paid sales salaries of $56,000 and office salaries of$29,000. | |
29 | Purchased store supplies for cash, $2,400. | |
30 | Sold merchandise on account to Turner Co., terms 2/10, n/30,FOB shipping point, $78,750. The cost of the merchandise sold was$47,000. | |
30 | Received cash from sale of May 20 plus freight paid on May21. | |
31 | Paid for purchase of May 21, less return of May 24. |
Required: | |||||||||||||||||||
1. | Download the spreadsheet in the Ledger panel and save the Excelfile to your computer. Use the spreadsheet to post the Maytransactions from the journal to a ledger of four-column accounts.Be sure to save your work in Excel as it will be used to completethe following steps in Part 1 of this problem as well as steps inPart 2 of this problem. Your input into the spreadsheet will not beincluded in your grade in CengageNOW on this problem.
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2. | Post the journal to the general ledger, extending the month-endbalances to the appropriate balance columns after all posting iscompleted. In this problem, you are not required to update or postto the accounts receivable and accounts payable subsidiary ledgers.Add the appropriate posting reference to the journal. | ||||||||||||||||||
3. | Prepare an unadjusted trial balance. Accounts with zerobalances can be left blank. | ||||||||||||||||||
4. | At the end of May, the following adjustment data wereassembled. Analyze and use these data to complete (5) and (6).
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5. | (Optional) On your own paper or spreadsheet, enter theunadjusted trial balance on a 10-column end-of-period spreadsheet(work sheet), and complete the spreadsheet. Find a blankend-of-period work sheet in the Excel spreadsheet you previouslydownloaded. | ||||||||||||||||||
6. |
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7. | Prepare an adjusted trial balance. Accounts with zero balancescan be left blank.
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TOWNE CLEANERS | |||||
TRIAL BALANCE | |||||
NOVEMBER 30, 20XX | |||||
DEBIT | CREDIT | ||||
101 | Cash | $13,942.00 | |||
102 | Cash - Payroll Account | 0 | |||
103 | Change Fund | 100.00 | |||
105 | Petty Cash Fund | 50.00 | |||
110 | Accounts Receivable | 530.00 | |||
115 | Office Supplies | 68.00 | |||
120 | Cleaning Supplies | 83.00 | |||
125 | Prepaid Insurance | 404.00 | |||
150 | Delivery Van | 18,000.00 | |||
151 | Accum. Deprec., Delivery Van | $8,750.00 | |||
160 | Furniture & Fixtures | 6,000.00 | |||
161 | Accum. Deprec., Furniture & Fixtures | 3,935.00 | |||
165 | Cleaning Equipment | 24,000.00 | |||
166 | Accum. Deprec., Cleaning Equipment | 9,788.00 | |||
170 | Office Equipment | 4,000.00 | |||
171 | Accum. Deprec., Office Equipment | 1,462.00 | |||
201 | Accounts Payable | 698.00 | |||
210 | Wages Payable | 0 | |||
215 | Employees' Federal Income Tax Payable | 310.12 | |||
216 | Employees' State Income Tax Payable | 77.50 | |||
220 | FICA Social Security Tax Payable | 621.26 | |||
225 | FICA Medicare Tax Payable | 145.29 | |||
230 | Employees' Medical Insurance Payable | 120.00 | |||
235 | Federal Unemployment Tax Payable | 4.50 | |||
240 | State Unemployment Tax Payable | 30.25 | |||
245 | Note Payable, Delivery Van | 4,080.00 | |||
301 | Patricia Towne, Capital | 26,096.00 | |||
350 | Patricia Towne, Drawing | 27,200.00 | |||
370 | Income Summary | 0 | 0 | ||
401 | Cleaning Services Income | 183,606.00 | |||
402 | Alterations Income | 25,444.00 | |||
410 | Tuxedo Rental Income | 14,230.00 | |||
411 | Interest Income | 39.97 | |||
501 | Wages Expense | 149,881.00 | |||
505 | Payroll Tax Expense | 12,569.89 | |||
508 | Rent Expense, Building | 6,600.00 | |||
510 | Utilities Expense | 2,580.00 | |||
515 | Advertising Expense | 468.00 | |||
517 | Cash Short/(Over) | 84.00 | |||
520 | Cleaning Equipment Repair Expense | 592.00 | |||
521 | Office Equipment Repair Expense | 384.00 | |||
530 | Contributions Expense | 120.00 | |||
535 | Insurance Expense | 660.00 | |||
555 | Deprec. Expense, Delivery Van | 2,750.00 | |||
560 | Deprec. Expense, Furniture & Fixtures | 935.00 | |||
565 | Deprec. Expense, Cleaning Equipment | 2,285.00 | |||
570 | Deprec. Expense, Office Equipment | 465.00 | |||
576 | Delivery Expense | 72.00 | |||
577 | Delivery Van Operating Expense | 1,420.00 | |||
580 | Interest Expense | 648.00 | |||
590 | Office Supplies Expense | 302.00 | |||
591 | Cleaning Supplies Expense | 2,176.00 | |||
599 | Miscellaneous Expense | 69.00 | |||
CONTROL TOTALS | $279,437.89 | $279,437.89 | |||
TOWN CLEANERS
DECEMBER TRANSACTIONS
Date
11/30 Record Trial Balance amounts from page 4 in the IndividualGeneral Ledger Accounts
12/01 Receive invoice from Harbor Cleaning Supplies for cleaningsupplies, $125
12/02 Receive and pay for office typewriter repairs by John’sTypewriter for $35, check #321
12/03 Receive invoice from the Chronicle for newspaperadvertising, $42
12/04 Contribute $15 to Ventura Holiday Fund, (contributionsexpense) check #322
12/05 Paid $188 to Harbor Cleaning Supplies for suppliespurchased on 11/18, check #323
12/05 Deposit weekly receipts for:
- Cleaning services $1,648.00
- Alterations $226.00
- Tuxedo rentals $493.00
12/06 Receive and deposit $365 from Thai Restaurant for Novemberlinen cleaning services previously billed
12/06 Receive invoice from California Power for November gas andelectricity, $188
12/06 Owner withdrawal of $400 for personal use, check #324
12/08 Purchase office supplies on account from City Stationers,$38
12/09 Receive and pay invoice from Thrifty Gasoline for Novemberdelivery van operating costs, $114, check #325
12/10 Petty cash disbursement of $5.75 for delivery, Voucher#90
12/11 Receive and deposit $165 from Sandra Gallager foralterations previously billed
12/11 Make partial payment on 11/22 invoice to Moore’s OfficeEquipment for prior purchase on account, $175, check #326
Date
12/12 Deposit weekly receipts for:
Cleaning services $1,726.00
Alterations $318.00
Tuxedo rentals $85.00
NOTE: Above amounts represent cash register totals. The actualdeposit was for
only $2,120, cash on hand, thus there must be a shortage.
12/13 Owner withdrawal of $500 for personal use, check #327
12/13 Remit federal payroll taxes (income taxes and FICA taxes)in the amount of the credit
balances in ledgers for November payrolls. Check #328 payable toAmerica Bank West
12/15 Remit monthly note payment on delivery van of $455 ($400principal; $55 interest) to Car Cal Credit, check #329
12/16 Record transfer of funds from regular bank account tospecial payroll bank account for payment of employees, check #330
12/16 Record the automatic transfer of funds from theCash–Payroll account to the employees’ personal bank accounts.(Auto-pay system)
12/16 Petty cash disbursement for office supplies, $4.20,Voucher #91
12/16 Receive and pay invoice from Carter’s Repair Services for$48 for repair of cleaning equipment, check #331
12/17 Pay balance of 11/22 invoice to Moore’s Office Equipmentfor prior purchase on account $55, check #332
12/18 Invoice Thai Restaurant for linen cleaning services forfirst half of December, $140
12/18 Pay 12/03 invoices to the Chronicle for newspaperadvertising $42, check #333
12/19 Deposit weekly receipts:
-Cleaning Services $1,910.00
-Alterations $273.00
-Tuxedo rentals $230.00
12/19 Purchase cleaning supplies on account from Harbor CleaningSupplies for $106
12/20 Owner withdrawal of $600 for personal use, check #334
12/22 Receive and pay November telephone bill of $46 fromAmerican Telephone, check #335
12/23 Petty cash disbursement of $10 to owner for personal use,Voucher #92
12/23 Receive and pay invoices from Samnii’s Tire for $19 forservices on delivery van, check #336
12/24 Rent tuxedos on account to Tri County Choral for holidaypresentation, $765
12/24 Petty cash contribution of $8 to Big Brothers, Voucher#93
12/24 Deposit of weekly receipts for:
-Cleaning services $1,240.00
-Alterations $286.00
-Tuxedo rentals $425.00
Date
12/26 Pay 12/01 invoice to Harbor Cleaning Supplies, $125, check#337
12/26 Pay 12/08 invoice to City Stationers, $38, check #338
12/27 Pay monthly rent to J.D. Smith, Co. for building space,$600, check #339
12/28 Receive annual insurance premium on delivery van fromInsurers International for $340
12/28 Receive and deposit $140 from Thai Restaurant in paymentof invoice dated 12/18
12/30 Record the transfer of funds from the regular bank accountto the special payroll bank account for payment to employees, check#340.
12/30 Record the automatic transfer of funds from theCash–Payroll account to the employees’ personal bank accounts.(Auto-pay system)
12/30 Petty cash disbursement of $9.45 for dry cleaningsolution, Voucher #94
12/31 Owner withdrawal of $800 for personal use, check #341
12/31 Reimburse Petty Cash (K. Smith) for transactions recordedin the Petty Cash Payments Record, check #342.
Date
12/31 Remit employees’ medical insurance withholdings of $120for month of November to Big Blue, check #343
12/31 Deposit final receipts for December:
- Cleaning services $2,106.00
- Alterations $487.00
- Tuxedo rentals $234.00
12/31 Invoice Thai Restaurant for linen cleaning services forlast half of December, $159
12/31 Complete a Bank Reconciliation based upon the informationprovided, journalize and post the appropriate entries.
TOWNE CLEANERS
CHART OF ACCOUNTS
No. Account Name No. Account Name
ASSETS OWNER’S EQUITY
101 Cash 301 Patricia Towne, Capital
102 Cash – Payroll Account 350 Patricia Towne, Drawing
103 Change Fund 370 Income Summary
105 Petty Cash Fund
110 Accounts Receivable
370 Income Summary
115 Office Supplies REVENUE
120 Cleaning Supplies
125 Prepaid Insurance 401 Cleaning Service Income
150 Delivery Van 402 Alterations Income
151 Accumulated Depreciation, 410 Tuxedo Rental Income
Delivery Van 411 Interest Income
160 Furniture & Fixtures
161 Accumulated Depreciation, EXPENSES
Furniture & Fixtures
165 Cleaning Equipment 501 Wages Expense
166 Accumulated Depreciation, 505 Payroll Tax Expense
Cleaning Equipment 508 Rent Expense, Building
170 Office Equipment 510 Utilities Expense
171 Accumulated Depreciation, 515 Advertising Expense
Office Equipment 517 Cash Short/(Over)
520 Cleaning Equipment Repair Expense
LIABILITIES 521 Office Equipment Repair Expense
530 Contributions Expense
201 Accounts Payable 535 Insurance Expense
210 Wages Payable 555 Depreciation Expense, Delivery Van
215 Employees’ Federal Income 560 Depreciation,
Tax Payable Furniture & Fixtures
216 Employees’ State Income 565 Depreciation Expense,
Tax Payable Cleaning Equipment
220 FICA Social Security Payable 570 Depreciation Expense,
225 FICA Medicare Tax Payable Office Equipment
230 Employees’ Medical 576 Delivery Expense
Insurance Payable 577 Delivery Van Operating Expense
235 Federal Unemployment 580 Interest Expense
Tax Payable 590 Office Supplies Expense
240 State Unemployment Tax Payable 591 Cleaning SuppliesExpense
245 Note Payable, Delivery Van 599 Miscellaneous Expense
Directions:Prepare journal , journalize them and post to generaljournal (If you can when you post them make them close enough sothat i can read them)
TOWNE CLEANERS
YEAR-END TRANSACTIONS FOR DECEMBER
Record the Trial Balance section of the Work Sheet using theGeneral Ledger Account Balances.
Record the following adjustments on the Work Sheet, adding newaccounts as necessary:
(Adjustments through November have been previously posted)
Office Supplies inventory is $42 as of December 31
Cleaning Supplies inventory is $115 as of December 31
Depreciation, Delivery Van, for the month of December, $250
Depreciation, Furniture and Fixtures, for the month of December,$85
Depreciation, Cleaning Equipment, for the month of December,$208
Depreciation, Office Equipment, for the month of December,$42
Expired Insurance, for the month of December, $60
Accrued wages for the fast five days of December are $1,072
An Accounts Receivable in the amount of $416 for earned butunbilled cleaning services in December was overlooked and notrecorded in the accounting records
Complete the Work Sheet
Prepare the Financial Statements:
Income Statement for year ended December31
Statement of Owner’s Equity for the year ended December 31
Balance Sheet as of December 31
Journalize and post the Adjusting Entries.
Journalize and post the Closing Entries.
Prepare the Post-Closing Trial Balance as of December 31.