ACC 291 ACC291 Acc 291 acc291 Acc291 acc 291 PRINCIPLES OF ACCOUNTING II https://uopcourses.com/category/acc-291/

ACC/291
PRINCIPLES OF ACCOUNTING II
The Latest Version A+ Study Guide
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ACC 291 Week 1 Practice: Connect Practice Assignment
1
Record the following transactions of Lisa’s Fashion Boutique in a
general journal. Lisa's Fashion Boutique operates in a state with 8%
sales tax. (Round your intermediate calculations and final answers to 2
decimal places):
DATE TRANSACTIONS
2019
Feb
.
2 Sold merchandise for cash totaling $3,800 to customers using bank credit
cards. Record the 2 percent discount on credit card sales at time of sale.
1
5
Sold merchandise totaling $2,100 to customers using American Express.
2
0
Received amount due from American Express, less their 3 percent discount,
for sales made by customers using American Express on February 15.

2
On April 1, Moloney Meat Distributors sold merchandise on account
to Fronke’s Franks for $3,500 on Invoice 1001, terms 2/10, n/30.
Payment was received in full from Fronke’s Franks, less discount, on
April 10.
Required:
Record the transactions on April 1 and April 10.
3
Record the following transactions of Fashion Park in a general
journal. Fashion Park must charge 8 percent sales tax on all sales.
DATE TRANSACTIONS
2019
April 2 Sold merchandise for cash, $2,500 plus sales tax.
3 The customer purchasing merchandise for cash on April 2 returned $250 of
the merchandise; provided a cash refund to the customer.
4 Sold merchandise on credit to Jordan Clark; issued Sales Slip 908 for $1,050
plus tax, terms n/30.
6 Accepted return of damaged merchandise from Jordan Clark; issued Credit
Memorandum 302 for $150 plus tax. The original sale was made on Sales
Slip 908 of April 4.
3
0
Received payment on account from Jordan Clark in payment of her purchase
of April 4, less the return on April 6.
4
Main Street Distributors, a wholesale firm, made sales using the
following list prices and trade discounts. What amount should be
recorded for each sale?
1. List price of $6,000 and trade discounts of 40 percent and 15 percent.
5
The following transactions took place at Five Flags Amusement Park
during May. Five Flags Amusement Park must charge 8 percent

sales tax on all sales:
DATE TRANSACTIONS
2019
May 1 Sold merchandise on account to Bill Gomez; issued Sales Slip 1015 for
$1,200 plus 8 percent sales tax, terms n/30.
1
5
Recorded cash sales, $5,800 plus 8 percent sales tax.
3
1
Received payment on account due from Bill Gomez for the sale on May 1.
ACC 291 Week 1 Apply: Connect Assignment
1
Exceptional Electronics began operations September 1, 2019. The
firm sells its merchandise for cash and on open account. Sales are
subject to a 7 percent sales tax. During September, Exceptional
Electronics engaged in the following transactions:
DATE TRANSACTIONS
2019
Sept. 1 Sold a high-definition television set on credit to Candy Cho; issued Sales
Slip 101 for $1,600 plus sales tax of $112.
3 Sold stereo equipment on credit to Jim Peterson; issued Sales Slip 102 for
$800 plus sales tax of $56.
7 Sold a microwave oven on credit to Bridgette Huffman; issued Sales Slip
103 for $400 plus sales tax of $28.
1
2
Accepted return of defective stereo equipment from Jim Peterson; issued
Credit Memorandum 101 for $200 plus sales tax of $14. The stereo
equipment was sold on September 3.
1
5
Recorded cash sales for the period from September 1 to September 15 of
$10,000 plus sales tax of $700.
1
6
Sold a gas dryer on credit to Kathy Sundstrand; issued Sales Slip 104 for
1
7
Sold a home entertainment system on credit to Mark Navalta; issued Sales
Slip 105 for $1,600 plus sales tax of $112.
1
8
Received $620 from Candy Cho on account.
2 Received payment in full from Jim Peterson for the sale of September 3, less

0 the return of September 12.
2
5
Gave Mark Navalta an allowance because of scratches on his home
entertainment system sold on September 17, Sales Slip 105; issued Credit
Memorandum 102 for $300 plus sales tax of $21.
2
7
Received payment in full from Bridgette Huffman for the sale of September
7.
2
9
Sold a dishwasher on credit to Mark Navalta; issued Sales Slip 106 for $500
plus sales tax of $35.
3
0
Required:
Record the transactions in a general journal.
Analyze:
What portion of the sales during September were for entertainment
items? Assume the cash sales transactions are for non-entertainment
items. (Hint: Do not forget to reduce sales by any sales returns or
allowances.)
2
Exceptional Electronics began operations September 1, 2019. The
firm sells its merchandise for cash and on open account. Sales are
subject to a 7 percent sales tax. During September, Exceptional
Electronics engaged in the following transactions.
DATE TRANSACTIONS
2019
Sept. 1 Sold a high-definition television set on credit to Candy Cho; issued
Sales Slip 101 for $3,200 plus sales tax of $224.
3 Sold stereo equipment on credit to Jim Peterson; issued Sales Slip 102
for $1,000 plus sales tax of $70.
7 Sold a microwave oven on credit to Bridgette Huffman; issued Sales
Slip 103 for $400 plus sales tax of $28.
1
2
Accepted return of defective stereo equipment from Jim Peterson; issued
Credit Memorandum 101 for $200 plus sales tax of $14. The stereo
equipment was sold on September 3.
1
5
1
6
Sold a gas dryer on credit to Kathy Sundstrand; issued Sales Slip 104 for
1 Sold a home entertainment system on credit to Mark Navalta; issued

7 Sales Slip 105 for $2,200 plus sales tax of $154.
1
8
Received $780 from Candy Cho on account.
2
0
Received payment in full from Jim Peterson for the sale of September 3,
less the return of September 12.
2
5
Gave Mark Navalta an allowance because of scratches on his home
entertainment system sold on September 17, Sales Slip 105; issued
Credit Memorandum 102 for $100 plus sales tax of $7
2
7
Received payment in full from Bridgette Huffman for the sale of
September 7
2
9
Sold a dishwasher on credit to Mark Navalta; issued Sales Slip 106 for
3
0
GENERAL LEDGER ACCOUNTS
10
1
Cash 40
1
Sales
111 Accounts Receivable 42
1
Sales Returns and Allowances
22
1
Sales Tax Payable
ACCOUNTS RECEIVABLE LEDGER ACCOUNTS
Candy Cho Jim Peterson
Bridgette Huffman Kathy Sundstrand
Mark Navalta
Required:
2. Post the entries from the general journal into the appropriate accounts
in the general ledger and in the accounts receivable ledger.
3. Prepare a schedule of accounts receivable.
Analyze:
What is the amount of sales tax owed at September 30, 2019?
3
The Appliance Store began operations March 1, 2019. The firm sells
its merchandise for cash and on open account. Sales are subject to a

6 percent sales tax. During March, The Appliance Store engaged in
the following transactions:
DATE TRANSACTIONS
2019
March 1 Sold merchandise on credit to Dave Allen; issued Sales Slip 101 for $550
4 Sold merchandise on credit to Castor Phan; issued Sales Slip 102 for $850
1
2
Sold merchandise on credit to Chris Hughes; issued Sales Slip 103 for
1
5
Recorded cash sales for the period from March 1 to March 15 of $6,100
2
5
Sold merchandise on credit to Brian Cooley; issued Sales Slip 104 for $800
2
8
Received a check from Castor Phan of $270 to apply toward his account.
3
1
Recorded cash sales for the period from March 16 to March 31 of $3,000
3
1
Received payment in full from Dave Allen for the sale of March 1.
Required:
1. Record the transactions in a general journal.
2. Post the entries from the general journal to the appropriate general
ledger accounts.
101 Cash 221 Sales Tax Payable
111 Accounts Receivable 401 Sales
Analyze:
What were the total cash receipts during March?

1
Big Country Ski Shop is a retail store that sells ski equipment and clothing. Big Country Ski Shop
commenced business on September 1, 2019. The firm purchases merchandise on open account.
The firm’s purchases, purchase returns and allowances, and cash payments on account during
September 2019 follow:
DATE TRANSACTIONS
2019
Sept. 2 Purchased ski boots for $6,600 plus a freight charge of $310 from Colorado Ski Shop, Inv
terms n/30.
3 Purchased skis for $12,200 from Alaska Supply Company, Invoice 5916; terms 3/10, n/30.
7 Received Credit Memorandum 165 for $1,000 from Colorado Ski Shop for return of da
boots; the boots were originally purchased September 2 on Invoice 6672.
11 Purchased ski jackets for $5,000 from Cold Mountain Clothing Company, Invoice 4091, te
12 Issued Check 104 to Alaska Supply Company in payment of Invoice 5916, dated Septem
the cash discount.
22 Purchased ski poles for $4,760 plus a freight charge of $170 from Alaska Supply Compan
5950, terms 3/10, n/30.
23 Purchased ski pants for $3,250 from Swenson Ski Goods, Invoice 528, terms n/30.
25 Received Credit Memorandum 245 for $400 from Swenson Ski Goods for return of de
pants; the pants were originally purchased September 23 on Invoice 528.
27 Purchased ski sweaters for $3,600 plus a freight charge of $150 from Colorado Ski Sho
6722, terms n/30.
30 Issued Check 110 to Colorado Ski Shop in payment of Invoice 6672, dated September
return of September 7.
Required:
1. Post the entries from the general journal to the appropriate accounts in the general ledger
and in the accounts payable ledger.
2. Prepare a schedule of accounts payable.
10
1
Cash, $27,000 Dr.
20
1
Accounts Payable
50
1
Purchases
50 Freight In

2
50
3
Purchases Returns and Allowances
50
4
Purchases Discounts
ACCOUNTS PAYABLE LEDGER ACCOUNTS
Alaska Supply Company
Cold Mountain Clothing Company
Colorado Ski Shop
Swenson Ski Goods
Analyze:
What portion of the purchases in September, before purchases returns and allowances
and before purchases discounts, were for clothing items? Include ski boots as a
clothing item.
2
NewTech Medical Devices is a medical devices wholesaler that
commenced business on June 1, 2019. NewTech Medical Devices
purchases merchandise for cash and on open account. In June 2019,
NewTech Medical Devices engaged in the following purchasing and
cash payment activities:
DATETRANSACTIONS
2019
June 1 Issued Check 101 to purchase merchandise, $4,500.
3 Purchased merchandise for $1,700 from BioCenter Inc., Invoice 606; terms
2/10, n/30.
5 Purchased merchandise for $5,850, plus a freight charge of $110, from New
Concepts Corporation, Invoice 1011, terms 2/10, n/30.
9 Paid amount due to BioCenter Inc. for purchase of June 3, less discount,
Check 102.
1
0
Received Credit Memorandum 227 from New Concepts Corporation for
damaged merchandise totaling $150 that was returned; the goods were
purchased on Invoice 1011, dated June 5.
11Purchased merchandise for $1,680 from BioCenter Inc., Invoice 612; terms
2/10, n/30.
1
4
Paid amount due to New Concepts Corporation for Invoice 1011 of June 5,
less the return of June 10 and less the cash discount, Check 103.

1
5
Purchased merchandise with a list price of $9,200 and trade discounts of 20
percent and 15 percent from Park Research, Invoice 1029, terms n/30.
2
0
Issued Check 104 to purchase merchandise, $3,000.
2
5
Returned merchandise purchased on June 20 as defective, receiving a cash
refund of $280.
3
0
Purchased merchandise for $3,200, plus a freight charge of $85, from New
Concepts Corporation, Invoice 1080; terms 2/10, n/30.
Required:
Journalize the transactions in a general journal.
Analyze:
What was the amount of trade discounts received on the June 15
purchase from Park Research?
3
Big Country Ski Shop is a retail store that sells ski equipment and
clothing. Big Country Ski Shop commenced business on September
1, 2019. The firm purchases merchandise on open account. The
firm’s purchases, purchase returns and allowances, and cash
payments on account during September 2019 follow:
DATE TRANSACTIONS
2019
Sept. 2 Purchased ski boots for $6,600 plus a freight charge of $310 from Colorado
Ski Shop, Invoice 6672, terms n/30.
3 Purchased skis for $12,200 from Alaska Supply Company, Invoice 5916;
terms 3/10, n/30.
7 Received Credit Memorandum 165 for $1,000 from Colorado Ski Shop for
return of damaged ski boots; the boots were originally purchased September
2 on Invoice 6672.
11Purchased ski jackets for $5,000 from Cold Mountain Clothing Company,
Invoice 4091, terms n/30.
1
2
Issued Check 104 to Alaska Supply Company in payment of Invoice 5916,
dated September 3, less the cash discount.
2
2
Purchased ski poles for $4,760 plus a freight charge of $170 from Alaska
Supply Company, Invoice 5950, terms 3/10, n/30.
2
3
Purchased ski pants for $3,250 from Swenson Ski Goods, Invoice 528, terms
n/30.
2
5
Received Credit Memorandum 245 for $400 from Swenson Ski Goods for
return of defective ski pants; the pants were originally purchased September

23 on Invoice 528.
2
7
Purchased ski sweaters for $3,600 plus a freight charge of $150 from
Colorado Ski Shop, Invoice 6722, terms n/30.
3
0
Issued Check 110 to Colorado Ski Shop in payment of Invoice 6672, dated
September 2, less the return of September 7.
Required:
Analyze:
What was the amount of the cash discount on September 12?
4
DATE TRANSACTIONS
2019
2/10, n/30.
Check 102.
1
0
2/10, n/30.
1
4
1
5
2
0
2
5
refund of $280.
3
0

Required:
1. Post the transactions in to the appropriate accounts in the general
ledger and the accounts payable subsidiary ledger.
2. Prepare a schedule of accounts payable at June 30, 2019.
10
1
Cash, $37,400 Dr.
20
1
Accounts Payable
50
1
Purchases
50
2
Purchases Returns and Allowances
50
3
Purchases Discounts
50
4
Freight In
ACCOUNTS PAYABLE LEDGER ACCOUNTS
BioCenter Inc.
New Concepts Corporation
Park Research
Analyze:
What was the amount of merchandise returned to vendors by
NewTech Medical Devices in June?
5
Bowden Company (buyer) and Song, Inc. (seller), engaged in the
following transactions during January 2019:
Bowden Company
DATE TRANSACTIONS
2019
Jan. 8 Issued Check 2101 for $2,940 on account to Song, Inc., in payment of Invoice

1885 dated December 30, 2018, less cash discount of $60.
1
0
Purchased merchandise for $3,500 from Song, Inc., Invoice 1920; terms 2/10,
n/30.
1
5
Received Credit Memorandum 320 from Song, Inc., for damaged
merchandise totaling $300 that was returned; the goods were purchased on
Invoice 1920, dated January 10.
1
9
Paid amount due to Song, Inc., for Invoice 1920 of January 10, less the return
of January 15 and less the cash discount, Check 2130.
3
0
Purchased merchandise for $4,400 from Song, Inc., Invoice 1950; terms 2/10,
n/30.
GENERAL LEDGER ACCOUNTS—BOWDEN COMPANY
201 Accounts Payable, $3,000 Cr.
ACCOUNTS PAYABLE LEDGER ACCOUNT—BOWDEN
COMPANY
Song, Inc., $3,000
Song, Inc.
DATE TRANSACTIONS
2019
Jan. 8 Received payment of $2,940 on account from Bowden Company in payment
of Invoice 1885 dated December 30, 2018, less cash discount of $60.
1
0
Sold merchandise for $3,500 on account to Bowden Company, Invoice
1920, terms 2/10, n/30.
1
5
Issued Credit Memorandum 320 to Bowden Company for damaged
merchandise totaling $300 that was returned; the goods were purchased on
Invoice 1920, dated January 10.
1
9
Received payment from Bowden Company for Invoice 1920 of January 10,
less the return of January 15 and less the cash discount.
3
0
Sold merchandise for $4,400 to Bowden Company, Invoice 1950; terms 2/10,
n/30.
GENERAL LEDGER ACCOUNTS—SONG, INC.
111 Accounts Receivable, $3,000 Dr.
ACCOUNTS RECEIVABLE LEDGER ACCOUNT—SONG, INC.
Bowden Company, $3,000
Required:

1. Journalize the transactions above in a general journal for both
Bowden Company and Song, Inc.
2. Post the transactions to the appropriate accounts in the general ledger
and the accounts payable subsidiary ledger for Bowden Company.
3. Post the transactions to the appropriate accounts in the general ledger
and the accounts receivable subsidiary ledger for Song, Inc.
Analyze:
What is the balance of the accounts payable for Song, Inc., in the
Bowden Company accounts payable subsidiary ledger? What is the
balance of the accounts receivable for Bowden Company in the
Song, Inc., accounts receivable subsidiary ledger?
1
DATETRANSACTIONS
2019
1/10, n/30.
Check 102.
1
0
2/10, n/30.
1
4
1
5
2
0

2
5
refund of $220.
3
0
Required:
Journalize the transactions in a general journal.
Analyze:
What was the amount of trade discounts received on the June 15
purchase from Park Research?
2
Big Country Ski Shop is a retail store that sells ski equipment and
clothing. Big Country Ski Shop commenced business on September
1, 2019. The firm purchases merchandise on open account. The
firm’s purchases, purchase returns and allowances, and cash
payments on account during September 2019 follow:
DATE TRANSACTIONS
2019
Sept. 2 Purchased ski boots for $6,000 plus a freight charge of $250 from Colorado
Ski Shop, Invoice 6672, terms n/30.
3 Purchased skis for $11,600 from Alaska Supply Company, Invoice 5916;
terms 3/10, n/30.
7 Received Credit Memorandum 165 for $940 from Colorado Ski Shop for
return of damaged ski boots; the boots were originally purchased September
2 on Invoice 6672.
11Purchased ski jackets for $4,400 from Cold Mountain Clothing Company,
Invoice 4091, terms n/30.
1
2
Issued Check 104 to Alaska Supply Company in payment of Invoice 5916,
dated September 3, less the cash discount.
2
2
Purchased ski poles for $4,160 plus a freight charge of $140 from Alaska
Supply Company, Invoice 5950, terms 3/10, n/30.
2
3
Purchased ski pants for $2,650 from Swenson Ski Goods, Invoice 528, terms
n/30.
2
5
Received Credit Memorandum 245 for $340 from Swenson Ski Goods for
return of defective ski pants; the pants were originally purchased September
23 on Invoice 528.
2
7
Purchased ski sweaters for $3,000 plus a freight charge of $120 from
Colorado Ski Shop, Invoice 6722, terms n/30.
3 Issued Check 110 to Colorado Ski Shop in payment of Invoice 6672, dated

0 September 2, less the return of September 7.
Required:
Analyze:
What was the amount of the cash discount on September 12?
1
Florence Company received a bank statement showing a balance of
$13,550 on November 30, 2019. During the bank reconciliation
process, Florence’s accountant noted the following bank errors:
1. A check for $265 issued by Florentine, Inc., was mistakenly charged
to Florence Company’s account.
2. Check 2782 was written for $200 but was paid by the bank as $1,200.
3. Check 2920 for $85 was paid by the bank twice.
4. A deposit for $580 on November 22 was credited by the bank for
$850.
Assuming outstanding checks total $2,450, prepare the adjusted
bank balance section of the November 30, 2019, bank reconciliation.
2
On January 2, The Public Legal Clinic issued Check 2108 for $450 to
establish a petty cash fund. Indicate how this transaction would be
recorded in a general journal.
3
Di Stefano Office Supply Company received a bank statement
showing a balance of $70,005 as of March 31, 2019. The firm’s
records showed a book balance of $71,487 on March 31. The
difference between the two balances was caused by the following
items.
1. A debit memorandum for $40, which covers the bank’s collection fee
for the note (item 6).
2. A deposit in transit of $4,700.

3. A check for $348 issued by another firm that was mistakenly charged
to Di Stefano’s account.
4. A debit memorandum for an NSF check of $6,145 issued by Wozniak
Construction Company, a credit customer.
5. Outstanding checks: Check 3782 for $2,200; Check 3840 for $251.
6. A credit memorandum for a $7,300 noninterest-bearing note
receivable that the bank collected for the firm.
Prepare a bank reconciliation statement for the firm as of March 31.
Prepare the necessary journal entries for March 31, 2019 from the
statement.
4
After returning from a three-day business trip, the accountant for
Southeast Sales, Johanna Estrada, checked bank activity in the
company’s checking account online. The activity for the last three
days follows.
Business Checking Account #123456-987
Date Type Description Additions Payments Bal
09/24/2019Loan Payment Online Transfer to CM XXXX $ 3,500.0
0
$ 15,
09/24/2019Deposit DEPOSIT ID NUMBER 8888 $ 2,269.6
0
$ 19,
09/23/2019Check CHECK #1554 (view) $ 3,500.0
0
$ 16,
09/23/2019Bill Payment Online Payment $ 36.05 $ 20,
09/22/2019Check CHECK #1553 (view) $ 240.00 $ 20,
09/22/2019Check CHECK #1551 (view) $ 1,750.0
0
$ 20,
09/22/2019ACH Credit Edwards UK AP PAYMENT $ 8,900.0
0
$ 22,
09/22/2019ATM ATM WITHDRAWAL $ 240.00 $ 13,
After matching these transactions to the company’s Cash account in
the general ledger, Johanna noted the following unrecorded
transactions:

1. The ATM withdrawal on 9/22/2019 was for personal use by the
owner, Robert Savage.
2. The ACH credit on 9/22/2019 was an electronic funds payment
received on account from Edwards UK, a credit customer located in
Great Britain.
3. The bill payment made 9/23/2019 was to Waste Control Trash
Services (utilities).
4. The loan payment on 9/24/2019 was an automatic debit by Central
Motors for the company’s monthly payment on a loan for its
automobiles. The loan does not bear interest.
Prepare the journal entries in a general journal to record the four
transactions above. (Round your answers to 2 decimal places.)
5
Teng Corporation received a bank statement showing a balance of
$15,700 as of October 31, 2019. The firm’s records showed a book
balance of $15,262 on October 31. The difference between the two
balances was caused by the following items.
1. A debit memorandum for an NSF check from Richard Wolf for $332.
2. Three outstanding checks: Check 7017 for $124, Check 7098 for $55,
and Check 7107 for $1,560.
3. A bank service charge of $12.
4. A deposit in transit of $957.
Prepare the adjusted bank balance section and the adjusted book
balance section of the bank reconciliation statement. Prepare the
necessary journal entries for the year 2019.
1
Royal Jewels, a retail business, started business on June 25, 2019. It
keeps a $300 change fund in its cash register. The cash receipts for
the period from June 25 to June 30, 2019 are below.
DATE TRANSACTIONS
June 25 Cash sales per the cash register tape, $1,226.

Cash count, $1,518.
26 Cash sales per the cash register tape, $1,336.
Cash count, $1,629.
Cash count, $1,650.
Cash count, $1,571.
Cash count, $1,428.
Cash count, $1,657.
Required:
2. Record the cash receipts from June 25 to June 30, 2019, in a general
journal.
3. Post the amounts for Cash Short or Over in the journal entries to the
general ledger.
Analyze:
How will the balance in Cash Short or Over on June 30 be reported
in the financial statements?
2
On August 31, 2019, the balance in the checkbook and
the Cash account of the Dry Creek Bed and Breakfast was $12,199.
The balance shown on the bank statement on the same date was
$13,152.
Notes
a. The firm’s records indicate that a $1,360 deposit dated August 30 and
a $692 deposit dated August 31 do not appear on the bank statement.
b. A service charge of $7 and a debit memorandum of $275 covering an
NSF check have not yet been entered in the firm’s records. (The
check was issued by Art Corts, a credit customer.)
c. The following checks were issued but have not yet been paid by the
bank:
Check 712,$ 10
1
Check 713,$116
Check 716,$ 22
9
Check 736,$ 56

8
Check 739,$ 69
Check 741,$111
d. A credit memorandum shows that the bank collected a $2,039 note
receivable and interest of $54 for the firm. These amounts have not
yet been entered in the firm’s records.
Required:
1. Prepare a bank reconciliation statement for the firm as of August 31.
2. Record general journal entries for items on the bank reconciliation
statement that must be journalized.
Analyze:
What effect did the journal entries recorded as a result of the bank
reconciliation have on the fundamental accounting equation?
3
On August 1, 2019, the accountant for Western Imports downloaded
the company's July 31, 2019, bank statement from the bank's
Website. The balance shown on the bank statement was $28,770.
The July 31, 2019, balance in the Cash account in the general ledger
was $14,131.
Jenny Irvine, the accountant for Western Imports, noted the following
differences between the bank's records and the
company's Cashaccount in the general ledger:
a. An electronic funds transfer for $14,500 from Foncier Ricard, a
customer located in France, was received by the bank on July 31.
b. Check 1422 was correctly written and recorded for $1,200. The bank
mistakenly paid the check for $1,270.
c. The accounting records indicate that Check 1425 was issued for $66
to make a purchase of supplies. However, examination of the check
online showed that the actual amount of the check was for $96.
d. A deposit of $890 made after banking hours on July 31 did not appear
on the July 31 bank statement.
e. The following checks were outstanding: Check 1429 for $1,250, and
Check 1430 for $142.
f. An automatic debit of $263 on July 31 from CentralComm for
telephone service appeared on the bank statement but had not been
recorded in the company's accounting records.

Required:
1. Prepare a bank reconciliation for the firm as of July 31.
2. Record general journal entries for the items on the bank reconiliation
that must be journalized.
Analyze:
What effect on total expenses occurred as a result of the general
journal entries recorded?
1
a. During the year 2019, Sampson Company had net credit sales of
$1,950,000. Past experience shows that 1.5 percent of the firm’s net
credit sales result in uncollectible accounts.
b. Equipment purchased by Park Consultancy for $38,220 on January 2,
2019, has an estimated useful life of 10 years and an estimated
salvage value of $2,700. What adjustment for depreciation should be
recorded on the firm’s worksheet for the year ended December 31,
2019?
c. On December 31, 2019, Giant Plumbing Supply owed wages of
$11,400 to its factory employees, who are paid weekly.
d. On December 31, 2019, Giant Plumbing Supply owed the employer’s
social security (6.2 percent) and Medicare (1.45 percent) taxes on the
entire $11,400 of accrued wages for its factory employees.
e. On December 31, 2019, Giant Plumbing Supply owed federal (0.6
percent) and state (5.4 percent) unemployment taxes on the entire
$11,400 of accrued wages for its factory employees.
2
On December 1, 2019, Jim’s Java Joint borrowed $50,000 from its
bank in order to expand its operations. The firm issued a four-month,
6 percent note for $50,000 to the bank and received $49,000 in cash
because the bank deducted the interest for the entire period in
advance.

In general journal form, show the entry that would be made to record
this transaction and the adjustment for prepaid interest that should be
recorded on the firm’s worksheet for the year ended December 31,
2019.
3
a. On December 31, 2019, the Notes Payable account at Northwood
Manufacturing Company had a balance of $16,000. This balance
represented a three-month, 7.5 percent note issued on November 1.
b. On January 2, 2019, Hitech Computer Consultants purchased flash
drives, paper, and other supplies for $5,230 in cash. On December 31,
2019, an inventory of supplies showed that items costing $1,590 were
on hand. The Supplies account has a balance of $5,230.
c. On September 1, 2019, North Dakota Manufacturing paid a premium
of $14,640 in cash for a one-year insurance policy. On December 31,
2019, an examination of the insurance records showed that coverage
for a period of four months had expired.
d. On May 1, 2019, Headcase Beauty Salon signed a one-year
advertising contract with a local radio station and issued a check for
$10,800 to pay the total amount owed. On December 31, 2019,
the Prepaid Advertising account has a balance of $10,800.
For each of the above independent situations, prepare the adjusting
entries that must be made on the December 31, 2019, worksheet
assuming no previous adjusting entries have been made during the
year.
4
The Income Statement section of the Johnson Company worksheet
for the year ended December 31, 2019, has $199,000 recorded in the
Debit column and $215,345 in the Credit column on the line for
the Income Summary account.
What were the beginning and ending balances for Merchandise
Inventory?
5
On December 31, 2019, the Notes Payable account at Vanessa’s
Boutique Shop had a balance of $90,000. This amount represented

funds borrowed on a six-month, 8 percent note from the firm’s bank
on December 1.
Record the journal entry for interest expense on this note that should
be recorded on the firm’s worksheet for the year ended December
31, 2019.
1
a.-b. Merchandise Inventory, before adjustment, has a balance of $6,600. The newly
counted inventory balance is $7,100.
c. Unearned Seminar Fees has a balance of $5,100, representing prepayment by customers
for five seminars to be conducted in June, July, and August 2019. Two seminars had been
conducted by June 30, 2019.
d. Prepaid Insurance has a balance of $6,600 for six months’ insurance paid in advance on
May 1, 2019.
e. Store equipment costing $12,890 was purchased on March 31, 2019. It has a salvage
value of $410 and a useful life of four years.
f. Employees have earned $160 that has not been paid at June 30, 2019.
g. The employer owes the following taxes on wages not paid at June 30, 2019: SUTA,
$4.80; FUTA, $0.96; Medicare, $2.32; and social security, $9.92.
h. Management estimates uncollectible accounts expense at 1 percent of sales. This year’s
sales were $1,100,000.
i. Prepaid Rent has a balance of $5,250 for six months’ rent paid in advance on March 1,
2019.
j. The Supplies account in the general ledger has a balance of $310. A count of supplies on
hand at June 30, 2019, indicated $105 of supplies remain.
k. The company borrowed $13,700 from First Bank on June 1, 2019, and issued a four-
month note. The note bears interest at 12 percent.
Required:
Based on the information above, record the adjusting journal entries that must be
made for Sufen Consulting on June 30, 2019. The company has a June 30 fiscal year-
end.
Analyze:
After all adjusting entries have been journalized and posted, what is the balance of
the Prepaid Rent account?

2
On July 1, 2019, Tim Stein established his own accounting practice.
Selected transactions for the first few days of July follow.
DATETRANSACTIONS
July1 Signed a lease for an office and issued Check 101 for $13,950 to pay the rent
in advance for six months.
1 Borrowed money from Second National Bank by issuing a four-month, 6
percent note for $31,200; received $30,576 because the bank deducted the
interest in advance.
1 Signed an agreement with Carter Corp. to provide accounting and tax services
for one year at $6,500 per month; received the entire fee of $78,000 in
advance.
1 Purchased office equipment for $17,200 from Office Outfitters; issued a two-
month, 9 percent note in payment. The equipment is estimated to have a useful
life of four years and a $1,840 salvage value. The equipment will be
depreciated using the straight-line method.
1 Purchased a one-year insurance policy and issued Check 102 for $1,680 to pay
the entire premium.
3 Purchased office furniture for $22,120 from Furniture Warehouse; issued
Check 103 for $15,520 and agreed to pay the balance in 60 days. The
equipment has an estimated useful life of six years and a $1,600 salvage value.
The office furniture will be depreciated using the straight-line method.
5 Purchased office supplies for $1,910 with Check 104. Assume $850 of supplies
are on hand July 31, 2019.
Required:
1. Record the transactions in the general journal. Assume that the firm
initially records prepaid expenses as assets and unearned income as a
liability for the year 2019.
2. Record the adjusting journal entries that must be made on July 31,
2019.
Analyze:
What balance should be reflected in Unearned Accounting Fees at July
31, 2019?
3
The Green Thumb Gardener is a retail store that sells plants, soil, and decorative pots.
On December 31, 2019, the firm's general ledger contained the accounts and balances
that appear below.

ADJUSTMENTS
a.–b. Merchandise inventory on December 31, 2019, is $11,621.
a. During 2019, the firm had net credit sales of $28,000; the firm estimates that
0.7 percent of these sales will result in uncollectible accounts.
b. On December 31, 2019, an inventory of the supplies showed that items costing
$240 were on hand.
c. On October 1, 2019, the firm signed a six-month advertising contract for $900
with a local newspaper and paid the full amount in advance.
d. On January 2, 2018, the firm purchased store equipment for $7,680. At that
time, the equipment was estimated to have a useful life of five years and a
salvage value of $530.
e. On January 2, 2018, the firm purchased office equipment for $1,180. At that
time, the equipment was estimated to have a useful life of five years and a
salvage value of $130.
f. On December 31, 2019, the firm owed salaries of $1,760 that will not be paid
until 2020.

g. On December 31, 2019, the firm owed the employer’s social security tax
(assume 6.2 percent) and Medicare tax (assume 1.45 percent) on the entire
$1,760 of accrued wages.
h. On December 31, 2019, the firm owed federal unemployment tax (assume 0.6
percent) and state unemployment tax (assume 5.4 percent) on the entire $1,760
of accrued wages.
Required:
1. Prepare the Trial Balance section of a 10-column worksheet. The worksheet
covers the year ended December 31, 2019.
2. Enter the adjustments above in the Adjustments section of the worksheet.
3. Complete the worksheet.
Analyze:
By what amount were the assets of the business affected by adjustments?
1
Healthy Eating Foods Company is a distributor of nutritious snack
foods such as granola bars. On December 31, 2019, the firm’s
general ledger contained the accounts and balances that follow.
Required:

1. Record adjusting entries in the general journal as of December 31,
2019.
2. Record closing entries in the general journal as of December 31,
2019.
3. Record reversing entries in the general journal as of January 1, 2020.
Analyze:
Assuming that the firm did not record a reversing entry for salaries
payable, what entry is required when salaries of $6,000 are paid on
January 3?
2
Good to Go Auto Products distributes automobile parts to service
stations and repair shops. The adjusted trial balance data that follows
is from the firm’s worksheet for the year ended December 31, 2019
Accounts Debit Credit
Cash $ 99,000
Petty Cash Fund 600
Notes Receivable, due 2020 15,000
Accounts Receivable 140,200
Allowance for Doubtful Accounts $ 3,800
Interest Receivable 150
Merchandise Inventory 128,500
Warehouse Supplies 3,300
Office Supplies 700
Prepaid Insurance 4,640
Land 16,000
Building 107,000
Accumulated Depreciation—Building 16,700
Warehouse Equipment 19,800
Accumulated Depreciation—Warehouse Equipment 9,500
Office Equipment 9,400
Accumulated Depreciation—Office Equipment 3,900
Notes Payable, due 2020 15,000
Accounts Payable 56,900
Interest Payable 400
Loans Payable—Long-Term 17,000
Mortgage Payable 20,000
Colin O’Brien, Capital (Jan. 1) 326,870
Colin O’Brien, Drawing 70,650
Income Summary 131,400 128,500

Sales 1,110,300
Sales Returns and Allowances 8,400
Interest Income 580
Purchases 463,000
Freight In 9,800
Purchases Returns and Allowances 13,650
Purchases Discounts 9,240
Warehouse Wages Expense 108,600
Warehouse Supplies Expense 5,800
Depreciation Expense—Warehouse Equipment 3,400
Salaries Expense—Sales 151,700
Travel Expense 24,000
Delivery Expense 37,425
Salaries Expense—Office 85,000
Office Supplies Expense 1,220
Insurance Expense 9,875
Utilities Expense 8,000
Telephone Expense 3,280
Payroll Taxes Expense 31,600
Building Repairs Expense 3,700
Property Taxes Expense 16,400
Uncollectible Accounts Expense 3,580
Depreciation Expense—Building 5,600
Depreciation Expense—Office Equipment 1,620
Interest Expense 4,000
Totals $ 1,732,34
0
$ 1,732,34
0
Required:
1. Prepare a classified income statement for the year ended December
31, 2019. The expense accounts represent warehouse expenses,
selling expenses, and general and administrative expenses.
2. Prepare a statement of owner’s equity for the year ended December
31, 2019. No additional investments were made during the period.
3. Prepare a classified balance sheet as of December 31, 2019. The
mortgage payable extends for more than one year.
Analyze:
What percentage of total operating expenses is attributable to
warehouse expenses?

3
Superior Hardwood Company distributes hardwood products to small
furniture manufacturers. The adjusted trial balance data given below
is from the firm’s worksheet for the year ended December 31, 2019.
ACCOUNTS Debit Credit
Cash $ 34,100
Petty Cash Fund 500
Office Supplies 1,420
Land 46,000
Building 178,000
Delivery Equipment 51,000
Accumulated Depreciation—Delivery Equipment 19,600
Loans Payable, Long-term 17,000
Charles Ronie, Capital (Jan. 1) 452,460
Charles Ronie, Drawing 127,000
Sales 1,685,00
0
Interest Income 1,580
Purchases 767,000
Freight In 13,800

Travel and Entertainment Expense 21,500
Delivery Wages Expense 60,330
Depreciation Expense—Delivery Equipment 9,800
Totals $ 2,649,42
0
$ 2,649,42
0
Required:
mortgage payable extends for more than a year.
Analyze:
What is the current ratio for this business?
4
The data below concerns adjustments to be made at Coffee Bean
Importers.
Adjustments
a. On November 1, 2019, the firm signed a lease for a warehouse and
paid rent of $21,000 in advance for a six-month period.
b. On December 31, 2019, an inventory of supplies showed that items
costing $1,940 were on hand. The balance of the Suppliesaccount was
$11,880.

c. A depreciation schedule for the firm’s equipment shows that a total of
$10,750 should be charged off as depreciation in 2019.
d. On December 31, 2019, the firm owed salaries of $6,100 that will not
be paid until January 2020.
e. On December 31, 2019, the firm owed the employer’s social security
(6.2 percent) and Medicare (1.45 percent) taxes on all accrued
salaries.
f. On October 1, 2019, the firm received a five-month, 8 percent note
for $6,500 from a customer with an overdue balance.
Required:
1. Record the adjusting entries in the general journal as of December 31,
2019.
2. Record reversing entries in the general journal as of January 1, 2020.
Analyze:
After the adjusting entries have been posted, what is the balance of
the Prepaid Rent account on January 1, 2020?
5
The Artisan Wines is a retail store selling vintage wines. On
December 31, 2019, the firm’s general ledger contained the accounts
and balances below. All account balances are normal.
Required:
31, 2019. The company does not classify its operating expenses as
selling expenses and general and administrative expenses.

31, 2019. No additional investments were made during the year.
3. Prepare a classified balance sheet as of December 31, 2019.
Analyze:
What is the inventory turnover for Artisan Wines?
1
Cash $ 23,900
Petty Cash Fund 600
Land 44,000
Building 176,000

Sales 1,681,00
0
Purchases 765,000
Freight In 13,600
Totals $ 2,624,88
0
$ 2,624,88
0
Required:
Analyze:

2
Good to Go Auto Products distributes automobile parts to service
stations and repair shops. The adjusted trial balance data that follows
Accounts Debit Credit
Cash $ 97,200
Petty Cash Fund 500
Interest Receivable 190
Office Supplies 520
Land 14,200
Building 98,000
Loans Payable—Long-Term 8,000
Colin O’Brien, Capital (Jan. 1) 322,350
Colin O’Brien, Drawing 68,850
Sales 1,074,30
0
Interest Income 400
Purchases 445,000
Freight In 8,000

Travel Expense 22,200
Delivery Expense 35,625
Building Repairs Expense 1,900
Totals $ 1,659,96
0
$ 1,659,96
0
Required:
mortgage payable extends for more than one year.
Analyze:
What percentage of total operating expenses is attributable to
warehouse expenses?
3
Cash $ 23,200
Petty Cash Fund 500

Land 37,000
Building 169,000
Sales 1,667,00
0
Purchases 758,000
Freight In 12,900

Totals $ 2,538,54
0
$ 2,538,54
0
Required:
Analyze:

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