Caesar Of Gangs
,
Tuesday, 10th of August 2010 04:00:42 PM
Assume it is Monday, May 1, the first business day of the month, and you
Caesar Of Gangs
have just been hired as the accountant for Colo Company, which operates
Registered User
with monthly accounting periods. All of the company’s accounting work is
Joined: Sunday, 23rd of May 2010, 05:47:50
completed through the end of April and its ledgers show April 30 balances.
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During your first month on the job, the company experiences the following
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transactions and events (terms for all its credit sales are 2/10, n/30
unless stated differently):
May 1 - Issued Check No. 3410 to
S&P Management Co. in payment of the May rent, $3,710. (Use two lines to
record the transaction. Charge 80% of the rent to Rent Expense—Selling
Space and the balance to Rent Expense—Office Space.)
2 - Sold
merchandise on credit to Hensel Company, Invoice No. 8785, for $6,100 (cost
is $4,100).
2 - Issued a $175 credit memorandum to Knox, Inc.,
for defective (worthless) merchandise sold on April 28 and returned for
credit. The total selling price (gross) was $4,725.
3 -
Received a $798 credit memorandum from Peyton Products for the return of
merchandise purchased on April 29.
4 - Purchased the following
on credit from Gear Supply Co.: merchandise, $37,072; store supplies, $574;
and office supplies, $83. Invoice dated May 4, terms n/10 EOM.
/>5 - Received payment from Knox, Inc., for the balance from the April 28
sale less the May 2 return and the discount.
8 - Issued Check
No. 3411 to Peyton Products to pay for the $7,098 of merchandise purchased
on April 29 less the May 3 return and a 2% discount.
9 - Sold
store supplies to the merchant next door at their cost of $350 cash. />
10 - Purchased $4,074 of office equipment on credit from Gear
Supply Co., invoice dated May 10, terms n/10 EOM.
11 -
Received payment from Hensel Company for the May 2 sale less the discount.
11 - Purchased $8,800 of merchandise from Garcia, Inc., invoice
dated May 10, terms 2/10, n/30.
12 - Received an $854 credit
memorandum from Gear Supply Co. for the return of defective office
equipment received on May 10.
15 - Issued Check No. 3412,
payable to Payroll, in payment of sales salaries, $5,320, and office
salaries, $3,150. Cashed the check and paid the employees.
15
- Cash sales for the first half of the month are $59,220 (cost is
$38,200). (Cash sales are recorded daily but are recorded only twice here
to reduce repetitive entries.)
15 - Post to the customer and
creditor accounts. Also post individual items that are not included in
column totals at the end of the month to the general ledger accounts.
(Such items are posted daily but are posted only twice each month because
they are few in number.)
16 - Sold merchandise on credit to
Hensel Company, Invoice No. 8786, for $3,990 (cost is $1,890).
/>17 - Purchased $13,650 of merchandise from Fink Corp., invoice dated May
14, terms 2/10, n/60.
19 - Issued Check No. 3413 to Garcia,
Inc., in payment of its May 10 invoice less the discount.
22 -
Sold merchandise to Lee Services, Invoice No. 8787, for $6,850 (cost is
$4,990), terms 2/10, n/60.
23 - Issued Check No. 3414 to Fink
Corp. in payment of its May 14 invoice less the discount.
24 -
Purchased the following on credit from Gear Supply Co.: merchandise,
$8,120; store supplies, $630; and office supplies, $280. Invoice dated May
24, terms n/10 EOM.
25 - Purchased $3,080 of merchandise from
Peyton Products, invoice dated May 23, terms 2/10, n/30.
26 -
Sold merchandise on credit to Crane Corp., Invoice No. 8788, for $14,210
(cost is $8,230).
26 - Issued Check No. 3415 to Perennial
Power in payment of the May electric bill, $1,283.
29 - The
owner of Colo Company, Jenny Colo, used Check No. 3416 to withdraw $7,000
cash from the business for personal use.
30 - Received payment
from Lee Services for the May 22 sale less the discount.
30 -
Issued Check No. 3417, payable to Payroll, in payment of sales salaries,
$5,320, and office salaries, $3,150. Cashed the check and paid the
employees.
31 - Cash sales for the last half of the month are
$66,052 (cost is $42,500).
31 - Post to the customer and
creditor accounts. Also post individual items that are not included in
column totals at the end of the month to the general ledger accounts. Foot
and cross foot the journals and make the month-end postings.
/>Required
1. Enter these transactions in a sales journal, a
purchases journal, a cash receipts journal, a cash disbursements journal,
or a general journal as illustrated in this chapter. Post when instructed
to do so. Assume a perpetual inventory system.
2. Prepare a
trial balance in the Trial Balance columns of the work sheet form provided
with the working papers. Complete the work sheet using the following
information for accounting adjustments:
a. Expired insurance, $553.
b. Ending store supplies inventory, $2,632.
c. Ending office
supplies inventory, $504.
d. Depreciation of store equipment, $567.
e. Depreciation of office equipment, $329.
Prepare and
post adjusting an