ACG 2021 Final: Chapter 3 - Detailed Review
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(a) Record the January transactions in a two-column general journal below.
General Journal | G1 | |||
Date | Account Titles | Ref | Debit | Credit |
Adjusting Entries | ||||
Check figures:
Cash Receipts Journal, total Cash DR: $ 70,348
Cash Payments Journal, total Cash CR: 62,060
Net Income: 25,218 Total Assets: 149,568
Total Post Closing Trial Balance: 151,193
Sun & Surf Company uses a perpetual inventory system and both an accounts receivable and an accounts payable subsidiary ledger. Balances related to both the general ledger and the subsidiary ledger for Sun & Surf are indicated in the working papers. Below are a series of transactions for Sun & Surf Co. for the month of January. Credit sales terms are 2/10, n/30. The cost of all merchandise sold was 55% of the sales price.
Jan.3 Sell merchandise on account to M. Knast $5,100, invoice no. 825, and to C. Ryder $1,900, invoice no. 826.
5 Purchase merchandise from R. Drifter $5,000 and N. Sova $2,200, terms n/30.
7 Receive checks from V. Arnold $4,000 and I. Tan $2,000 after discount period has lapsed.
8 Pay freight on merchandise purchased $235.
9 Send checks to K. Xerxes for $9,000 less 2% cash discount, and to T. Caper for $11,000 less 1% cash discount.
9 Issue credit of $300 to C. Ryder for merchandise returned.
10 Summary daily cash sales total $15,500.
11 Sell merchandise on account to D. Gallagher $1,600, invoice no. 827, and to V. Arnold $900, invoice no. 828.
12 Pay rent of $1,000 for January.
13 Receive payment in full from M. Knast and C. Ryder less cash discounts.
15 Withdrawal of $800 cash by J. Sandy for personal use.
15 Post all entries to the subsidiary ledgers.
16 Purchase merchandise from T. Caper $18,000, terms 1/10, n/30; K. Xerxes $14,200, terms 2/10, n/30; and R. Drifter $1,500, terms n/30.
17 Pay $400 cash for office supplies.
18 Return $200 of merchandise to K. Xerxes and receive credit.
20 Summary daily cash sales total $20,100.
21 Issue $15,000 note, maturing in 90 days, to M. Griffen in payment of balance due.
21 Receive payment in full from V. Arnold less cash discount.
22 Sell merchandise on account to M. Knast $2,700, invoice no. 829, and to D. Gallagher $1,300, invoice no. 830.
22 Post all entries to the subsidiary ledgers.
23 Send checks to T. Caper and K. Xerxes in full payment less cash discounts.
25 Sell merchandise on account to I. Tan $3,500, invoice no. 831, and to C. Ryder $6,100, invoice no. 832.
27 Purchase merchandise from T. Caper $14,500, terms 1/10, n/30; N. Sova $1,200, terms n/30; and R. Drifter $5,400, terms n/30.
27 Post all entries to the subsidiary ledgers.
28 Pay $275 cash for office supplies.
31 Summary daily cash sales total $21,300.
31 Pay salaries and wages of $8,100. (continued)
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Instructions
(a) Record the January transactions in a sales journal, a single-column purchases journal, a cash receipts journal, a cash payments journal, and a two-column general journal.
(b) Post the journals to the general ledger.
(c) Prepare a trial balance at January 31, 2017, in the trial balance columns of the worksheet. Complete the worksheet using the following additional information.
1. Office supplies at January 31 total $900.
2. Insurance coverage expires on September 30, 2017.
3. Annual depreciation on the equipment is $1,500.
4. Interest of $50 has accrued on the note payable.
(d) Prepare a multiple-step income statement and an owner's equity statement for January and a classified balance sheet at the end of January.
(e) Prepare and post adjusting and closing entries.
(f) Prepare a post-closing trial balance, and determine whether the subsidiary ledgers agree with the control accounts in the general ledger.
General Ledger | |||||
Cash | No. 101 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Jan. 1 | Balance | â | $ 37,150 | ||
Accounts Receivable | No. 112 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Jan. 1 | Balance | â | $ 13,000 | ||
Notes Receivable | No. 115 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Jan. 1 | Balance | â | $ 39,000 | ||
Inventory | No. 120 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Jan. 1 | Balance | â | $ 17,795 | ||
Office Supplies | No. 125 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Jan. 1 | Balance | â | $ 1,200 | ||
Prepaid Insurance | No. 130 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Jan. 1 | Balance | â | $ 2,205 | ||
Equipment | No. 157 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Jan. 1 | Balance | â | $ 6,450 | ||
Accumulated Depreciation - Equipment | No. 158 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Jan. 1 | Balance | â | $ 1,500 | ||
Notes Payable | No. 200 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Accounts Payable | No. 201 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Jan. 1 | Balance | â | $ 35,000 | ||
Interest Payable | |||||
Date | Explanation | Ref. | Debit | Credit | Balance |
J. Sandy, Capital | No. 301 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Jan. 1 | Balance | â | $ 80,300 | ||
J. Sandy, Drawing | No. 306 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Income Summary | No. 350 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Sales | No. 401 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Sales Returns and Allowances | No. 412 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Sales Discounts | No. 414 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Cost of Goods Sold | No. 505 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Salaries and Wages Expense | No. 627 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Depreciation Expense | No. 711 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Interest Expense | No. 718 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Insurance Expense | No. 722 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Office Supplies Expense | No. 728 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Rent Expense | No. 729 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Week One: Hands-on MIS Application Software ExerciseSolution
Store & Region Sales Database
This exercise helps students understand how a raw file of salestransactions can be analyzed to produce valuable information formanagers. Your challenge is to ask the right questionsabout the data and then present your case!
Import the data into Excel or Access (or compatiblespreadsheet/database). Use the data to perform the belowanalyses:
Analyze ALL THREE of the below items:
1.Best Performing Regions by TotalRevenue
2.Best Performing Stores by TotalRevenue
3.Best Selling Products by TotalRevenue
Select ONLY ONE of the below items:
A.Strongest Selling Period for eachProduct by Total Revenue
B.Strongest Selling Period for eachRegion by Total Revenue
C.Strongest Selling Period for eachStore by Total Revenue
Provide a business case â in the form of ONE descriptiveparagraph and ONE data table-- for eachanalysis. Each paragraph must refer to the informationpresented in the table using the labeled Table #. UseAPA format to label your tables.
SUBMITâ your final report with one WORDdocument and one EXCEL/ACCESS file.
Store & Region Sales Database | |||||||
ID | StoreNo | SalesRegion | ItemNo | ItemDescription | UnitPrice | UnitsSold | WeekEnding |
1 | 1 | South | 2005 | 17"Monitor | $229.00 | 28 | 10/27/10 |
2 | 1 | South | 2005 | 17"Monitor | $229.00 | 30 | 11/24/10 |
3 | 1 | South | 2005 | 17"Monitor | $229.00 | 9 | 12/29/10 |
4 | 1 | South | 3006 | 101Keyboard | $19.95 | 30 | 10/27/10 |
5 | 1 | South | 3006 | 101Keyboard | $19.95 | 35 | 11/24/10 |
6 | 1 | South | 3006 | 101Keyboard | $19.95 | 39 | 12/29/10 |
7 | 1 | South | 6050 | PC Mouse | $8.95 | 28 | 10/27/10 |
8 | 1 | South | 6050 | PC Mouse | $8.95 | 3 | 11/24/10 |
9 | 1 | South | 6050 | PC Mouse | $8.95 | 38 | 12/29/10 |
10 | 1 | South | 8500 | DesktopCPU | $849.95 | 25 | 10/27/10 |
11 | 1 | South | 8500 | DesktopCPU | $849.95 | 27 | 11/24/10 |
12 | 1 | South | 8500 | DesktopCPU | $849.95 | 33 | 12/29/10 |
13 | 2 | South | 2005 | 17"Monitor | $229.00 | 8 | 10/27/10 |
14 | 2 | South | 2005 | 17"Monitor | $229.00 | 8 | 11/24/10 |
15 | 2 | South | 2005 | 17"Monitor | $229.00 | 10 | 12/29/10 |
16 | 2 | South | 3006 | 101Keyboard | $19.95 | 8 | 10/27/10 |
17 | 2 | South | 3006 | 101Keyboard | $19.95 | 8 | 11/24/10 |
18 | 2 | South | 3006 | 101Keyboard | $19.95 | 8 | 12/29/10 |
19 | 2 | South | 6050 | PC Mouse | $8.95 | 9 | 10/27/10 |
20 | 2 | South | 6050 | PC Mouse | $8.95 | 9 | 11/24/10 |
21 | 2 | South | 6050 | PC Mouse | $8.95 | 8 | 12/29/10 |
22 | 2 | South | 8500 | DesktopCPU | $849.95 | 18 | 10/27/10 |
23 | 2 | South | 8500 | DesktopCPU | $849.95 | 18 | 11/24/10 |
24 | 2 | South | 8500 | DesktopCPU | $849.95 | 20 | 12/29/10 |
25 | 3 | South | 2005 | 17"Monitor | $229.00 | 38 | 10/27/10 |
26 | 3 | South | 2005 | 17"Monitor | $229.00 | 30 | 11/24/10 |
27 | 3 | South | 2005 | 17"Monitor | $229.00 | 3 | 12/29/10 |
28 | 3 | South | 3006 | 101Keyboard | $19.95 | 30 | 10/27/10 |
29 | 3 | South | 3006 | 101Keyboard | $19.95 | 32 | 11/24/10 |
30 | 3 | South | 3006 | 101Keyboard | $19.95 | 33 | 12/29/10 |
31 | 3 | South | 6050 | PC Mouse | $8.95 | 25 | 10/27/10 |
32 | 3 | South | 6050 | PC Mouse | $8.95 | 5 | 11/24/10 |
33 | 3 | South | 6050 | PC Mouse | $8.95 | 26 | 12/29/10 |
34 | 3 | South | 8500 | DesktopCPU | $849.95 | 28 | 10/27/10 |
35 | 3 | South | 8500 | DesktopCPU | $849.95 | 27 | 11/24/10 |
36 | 3 | South | 8500 | DesktopCPU | $849.95 | 29 | 12/29/10 |
37 | 4 | North | 2005 | 17"Monitor | $229.00 | 18 | 10/27/10 |
38 | 4 | North | 2005 | 17"Monitor | $229.00 | 20 | 11/24/10 |
39 | 4 | North | 2005 | 17"Monitor | $229.00 | 4 | 12/29/10 |
40 | 4 | North | 3006 | 101Keyboard | $19.95 | 12 | 10/27/10 |
41 | 4 | North | 3006 | 101Keyboard | $19.95 | 24 | 11/24/10 |
42 | 4 | North | 3006 | 101Keyboard | $19.95 | 36 | 12/29/10 |
43 | 4 | North | 6050 | PC Mouse | $8.95 | 29 | 10/27/10 |
44 | 4 | North | 6050 | PC Mouse | $8.95 | 11 | 11/24/10 |
45 | 4 | North | 6050 | PC Mouse | $8.95 | 38 | 12/29/10 |
46 | 4 | North | 8500 | DesktopCPU | $849.95 | 21 | 10/27/10 |
47 | 4 | North | 8500 | DesktopCPU | $849.95 | 24 | 11/24/10 |
48 | 4 | North | 8500 | DesktopCPU | $849.95 | 30 | 12/29/10 |
49 | 5 | North | 2005 | 17"Monitor | $229.00 | 27 | 10/27/10 |
50 | 5 | North | 2005 | 17"Monitor | $229.00 | 25 | 11/24/10 |
51 | 5 | North | 2005 | 17"Monitor | $229.00 | 23 | 12/29/10 |
52 | 5 | North | 3006 | 101Keyboard | $19.95 | 80 | 10/27/10 |
53 | 5 | North | 3006 | 101Keyboard | $19.95 | 82 | 11/24/10 |
54 | 5 | North | 3006 | 101Keyboard | $19.95 | 75 | 12/29/10 |
55 | 5 | North | 6050 | PC Mouse | $8.95 | 65 | 10/27/10 |
56 | 5 | North | 6050 | PC Mouse | $8.95 | 24 | 11/24/10 |
57 | 5 | North | 6050 | PC Mouse | $8.95 | 55 | 12/29/10 |
58 | 5 | North | 8500 | DesktopCPU | $849.95 | 55 | 10/27/10 |
59 | 5 | North | 8500 | DesktopCPU | $849.95 | 57 | 11/24/10 |
60 | 5 | North | 8500 | DesktopCPU | $849.95 | 47 | 12/29/10 |
61 | 6 | East | 2005 | 17"Monitor | $229.00 | 24 | 10/27/10 |
62 | 6 | East | 2005 | 17"Monitor | $229.00 | 85 | 11/24/10 |
63 | 6 | East | 2005 | 17"Monitor | $229.00 | 56 | 12/29/10 |
64 | 6 | East | 3006 | 101Keyboard | $19.95 | 52 | 10/27/10 |
65 | 6 | East | 3006 | 101Keyboard | $19.95 | 58 | 11/24/10 |
66 | 6 | East | 3006 | 101Keyboard | $19.95 | 69 | 12/29/10 |
67 | 6 | East | 6050 | PC Mouse | $8.95 | 35 | 10/27/10 |
68 | 6 | East | 6050 | PC Mouse | $8.95 | 39 | 11/24/10 |
69 | 6 | East | 6050 | PC Mouse | $8.95 | 44 | 12/29/10 |
70 | 6 | East | 8500 | DesktopCPU | $849.95 | 78 | 10/27/10 |
71 | 6 | East | 8500 | DesktopCPU | $849.95 | 88 | 11/24/10 |
72 | 6 | East | 8500 | DesktopCPU | $849.95 | 99 | 12/29/10 |
73 | 7 | East | 2005 | 17"Monitor | $229.00 | 34 | 10/27/10 |
74 | 7 | East | 2005 | 17"Monitor | $229.00 | 36 | 11/24/10 |
75 | 7 | East | 2005 | 17"Monitor | $229.00 | 35 | 12/29/10 |
76 | 7 | East | 3006 | 101Keyboard | $19.95 | 49 | 10/27/10 |
77 | 7 | East | 3006 | 101Keyboard | $19.95 | 47 | 11/24/10 |
78 | 7 | East | 3006 | 101Keyboard | $19.95 | 48 | 12/29/10 |
79 | 7 | East | 6050 | PC Mouse | $8.95 | 45 | 10/27/10 |
80 | 7 | East | 6050 | PC Mouse | $8.95 | 42 | 11/24/10 |
81 | 7 | East | 6050 | PC Mouse | $8.95 | 45 | 12/29/10 |
82 | 7 | East | 8500 | DesktopCPU | $849.95 | 55 | 10/27/10 |
83 | 7 | East | 8500 | DesktopCPU | $849.95 | 57 | 11/24/10 |
84 | 7 | East | 8500 | DesktopCPU | $849.95 | 55 | 12/29/10 |
85 | 8 | East | 2005 | 17"Monitor | $229.00 | 18 | 10/27/10 |
86 | 8 | East | 2005 | 17"Monitor | $229.00 | 17 | 11/24/10 |
87 | 8 | East | 2005 | 17"Monitor | $229.00 | 23 | 12/29/10 |
88 | 8 | East | 3006 | 101Keyboard | $19.95 | 22 | 10/27/10 |
89 | 8 | East | 3006 | 101Keyboard | $19.95 | 18 | 11/24/10 |
90 | 8 | East | 3006 | 101Keyboard | $19.95 | 22 | 12/29/10 |
91 | 8 | East | 6050 | PC Mouse | $8.95 | 14 | 10/27/10 |
92 | 8 | East | 6050 | PC Mouse | $8.95 | 16 | 11/24/10 |
93 | 8 | East | 6050 | PC Mouse | $8.95 | 17 | 12/29/10 |
94 | 8 | East | 8500 | DesktopCPU | $849.95 | 32 | 10/27/10 |
95 | 8 | East | 8500 | DesktopCPU | $849.95 | 28 | 11/24/10 |
96 | 8 | East | 8500 | DesktopCPU | $849.95 | 30 | 12/29/10 |
Problem 10-23A Make or Buy Decision [LO10-3]
Silven Industries, which manufactures and sells a highlysuccessful line of summer lotions and insect repellents, hasdecided to diversify in order to stabilize sales throughout theyear. A natural area for the company to consider is the productionof winter lotions and creams to prevent dry and chapped skin. |
Afterconsiderable research, a winter products line has been developed.However, Silvenâs president has decided to introduce only one ofthe new products for this coming winter. If the product is asuccess, further expansion in future years will be initiated. |
Theproduct selected (called Chap-Off) is a lip balm that will be soldin a lipstick-type tube. The product will be sold to wholesalers inboxes of 12 tubes for $8.50 per box. Because of excess capacity, noadditional fixed manufacturing overhead costs will be incurred toproduce the product. However, a $110,000 charge for fixedmanufacturing overhead will be absorbed by the product under thecompanyâs absorption costing system. |
Using theestimated sales and production of 100,000 boxes of Chap-Off, theAccounting Department has developed the following cost per box: |
Directmaterials | $ | 4.80 | |
Direct labor | 1.00 | ||
Manufacturingoverhead | 1.40 | ||
Total cost | $ | 7.20 | |
The costs above include costs for producing both the lip balmand the tube that contains it. As an alternative to making thetubes, Silven has approached a supplier to discuss the possibilityof purchasing the tubes for Chap-Off. The purchase price of theempty tubes from the supplier would be $1.20 per box of 12 tubes.If Silven Industries accepts the purchase proposal, direct laborand variable manufacturing overhead costs per box of Chap-Off wouldbe reduced by 10% and direct materials costs would be reduced by20%. |
Required: | |
1a. | Calculate the total variable cost of producing one box ofChap-Off. (Do not round intermediate calculations. Roundyour answer to 2 decimal places.) |
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1b. | Assume that the tubes for the Chap-Off are purchased from theoutside supplier, calculate the total variable cost of producingone box of Chap-Off. (Do not round intermediatecalculations. Round your answer to 2 decimal places.) |
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1c. | Should Silven Industries make orbuy the tubes? | ||||
|
2. | What would be the maximum purchase price acceptable to SilvenIndustries? (Do not round intermediate calculations. Roundyour answer to 2 decimal places.) |
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3. | Instead of sales of 100,000 boxes, revised estimates show asales volume of 115,000 boxes. At this new volume, additionalequipment must be acquired to manufacture the tubes at an annualrental of $32,000. Assume that the outside supplier will not acceptan order for less than 115,000 boxes. |
a. | Calculate the total relevant cost of making 115,000 boxes andtotal relevant cost of buying 115,000 boxes. (Do not roundintermediate calculations.) |
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b. | Based on the above calculations,should Silven Industries make or buy the boxes? | ||||
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4. | Refer to the data in (3) above. Assume that the outside supplierwill accept an order of any size for the tubes at $1.20 per box.Which of these is the best alternative? | ||||||||
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