Foundations of Accounting I
Accounting Project
Written by: Karen Pitsch
Special thanks to Donna Larner
Randiddle Co. is a merchandising business. Their account balances as of November 30, 2012 (unless otherwise indicated), are as follows:
110
Cash
$ 74,370
112
Accounts Receivable
6,178
113
Allowance for Doubtful Accounts
650
115
Merchandise Inventory
2,346
116
Prepaid Insurance
5,750
117
Store Supplies
2,850
123
Store Equipment
100,800
124
Accumulated Depreciation-Store Equipment
31,060
210
Accounts Payable
3,286
211
Salaries Payable
0
218
Interest Payable
0
220
Note Payable (Due 2017)
30,000
($6,000 to be paid in 2013)
310
Randiddle, Capital (January 1, 2012)
46,288
311
Randiddle, Withdrawals
60,000
312
Income Summary
0
410
Sales
296,130
411
Sales Returns and Allowances
10,020
412
Sales Discounts
7,200
510
Cost of Goods Sold
30,250
520
Sales Salaries Expense
34,400
521
Advertising Expense
18,000
522
Depreciation Expense
0
523
Store Supplies Expense
0
529
Miscellaneous Selling Expense
2,800
530
Office Salaries Expense
25,500
531
Rent Expense
24,200
532
Insurance Expense
0
533
Bad Debt Expense
0
539
Miscellaneous Administrative Expense
1,650
550
Interest Expense
1,100
Randiddle Co. uses the perpetual inventory system and the Last-in, First-out costing method. Transportation-in and purchase discounts should be added to the Inventory Control Sheet, but since this will complicate the computation of the Last-in, First-out costing method, please ignore this step in the process. They also use the Allowance Method for bad debt.
The Accounts Receivable and Accounts Payable Subsidiary Ledgers along with the Inventory Control Sheet should be updated as each transaction affects them (daily).
Randiddle Co. sells three types of microwave ovens.
The sale prices of each are:
900 watt microwave: $199
1000 watt microwave: $299
1200 watt microwave: $499
During December, the last month of the accounting year, the following transactions were completed:
Dec.
1. Issued check number 2632 for the December rent, $2,200.
2. Sold two 1200 watt microwaves for cash.
4. Purchased four 1000 watt microwaves on account from Matt Co., terms 2/10,
n/30, FOB shipping point, $596.
5. Issued check number 2633 to pay the transportation charges on purchase of
December 4, $89. (NOTE: Debit Merchandise Inventory. Do not include shipping and purchase discounts to the Inventory Control sheet for this project.)
6. Sold six 1000 watt microwaves and four 1200 watt microwaves on account to Briana Co., invoice 891, terms 2/10, n/30, FOB shipping point.
8. Issued check number 2634 for refund of cash on sales made for ca.
Foundations of Accounting IAccounting ProjectWritten by .docx
1. Foundations of Accounting I
Accounting Project
Written by: Karen Pitsch
Special thanks to Donna Larner
Randiddle Co. is a merchandising business. Their account
balances as of November 30, 2012 (unless otherwise indicated),
are as follows:
110
Cash
$ 74,370
112
Accounts Receivable
6,178
113
Allowance for Doubtful Accounts
8. Interest Expense
1,100
Randiddle Co. uses the perpetual inventory system and the Last-
in, First-out costing method. Transportation-in and purchase
discounts should be added to the Inventory Control Sheet, but
since this will complicate the computation of the Last-in, First-
out costing method, please ignore this step in the process. They
also use the Allowance Method for bad debt.
The Accounts Receivable and Accounts Payable Subsidiary
Ledgers along with the Inventory Control Sheet should be
updated as each transaction affects them (daily).
Randiddle Co. sells three types of microwave ovens.
The sale prices of each are:
900 watt microwave: $199
1000 watt microwave: $299
1200 watt microwave: $499
During December, the last month of the accounting year, the
following transactions were completed:
Dec.
1. Issued check number 2632 for the December rent, $2,200.
2. Sold two 1200 watt microwaves for cash.
4. Purchased four 1000 watt microwaves on account from Matt
Co., terms 2/10,
9. n/30, FOB shipping point, $596.
5. Issued check number 2633 to pay the transportation charges
on purchase of
December 4, $89. (NOTE: Debit Merchandise Inventory. Do
not include shipping and purchase discounts to the Inventory
Control sheet for this project.)
6. Sold six 1000 watt microwaves and four 1200 watt
microwaves on account to Briana Co., invoice 891, terms 2/10,
n/30, FOB shipping point.
8. Issued check number 2634 for refund of cash on sales made
for cash, $150.
(Customer was going to return goods until an allowance was
arranged.)
10. Purchased store supplies on account from Prince Co., terms
n/30, $310.
10. Issued check to Matt Co. number 2635 for the full amount
due, less discount
allowed. (Round discount to nearest dollar.)
11. Paid Prince Co. full amount due, check number 2636.
12. Issued credit memo for one 1000 watt microwave returned
on sale of
December 6. (NOTE: Assume the returned microwave was from
the 11/30 inventory)
13. Issued check number 2637 for advertising expense for last
10. half of December, $3,000.
14. Received cash from Briana Co. for the full amount due (less
return of December 12 and discount; round to nearest dollar).
19. Issued check number 2638 to buy five 900 watt
microwaves, $495.
19. Issued check number 2639 for $596 to Joseph Co. on
account.
20. Sold seven 900 watt microwaves on account to Cameron
Co., invoice number 892, terms 1/10, n/30, FOB shipping point.
20. To expedite sale on Dec. 20, issued check number 2640 for
shipping charges on sale to Cameron on December 20, $120
(NOTE: Cameron Co. will be reimbursing us for this shipping
cost).
21. Received $1,396 cash from McKenzie Co. on account, no
discount.
21. Purchased three 1200 watt microwaves on account from
Elisha Co., terms 1/10, n/30, FOB shipping point, $747,
shipping $78 (NOTE: Debit Merchandise Inventory $825, but
only put $747 in the Inventory Control Sheet).
24. Received notification that Marie Co. has been granted
bankruptcy with no
amount of recovery. We are to write-off her amount due.
(Note: See page
365 for entry required.)
26. Issued a debit memo for return of$249 because of damage
11. to one 1200 watt
microwave purchased on December 21, receiving credit
from the seller.
27. Issued check number 2641 for sales salaries of $2,050 and
office
salaries of $1,400.
28. Purchased store equipment on account from Joseph Co.,
terms n/30, FOB
destination, $1,200.
29. Issued check number 2642 for store supplies, $70.
29. Purchased seven 1000 watt microwave from Prince Co,
terms 1/10, n/30,
FOB shipping point, for $1,113 on account, shipping $107.
30. Sold eight 1000 watt microwaves on account to Briana Co.,
invoice number
893, terms 2/10, n/30, FOB shipping point.
30. Received cash from sale of December 20, less discount,
plus transportation
paid on December 20. (Round calculations to the nearest
dollar.)
31. Issued check number 2643 for purchase of December 21,
less return
of December 25 and discount. (Round discount to the nearest
12. dollar.)
31. Issued a debit memo for $200 of the purchase returned from
December 28.
Instructions:
1. Enter the balances of each of the accounts in the appropriate
balance column of the General Ledger (B-S and I-S Ledger).
Write Balance in the item section, and place a (x) in the Post
Reference column.
2. Journalize the transactions in a sales journal, purchases
journal, cash receipts journal, cash payments journal, or general
journal as illustrated in chapter 7. Also post to the Accounts
Receivable and Accounts Payable Subsidiary ledgers and
Inventory Control Sheet as needed.
3. Total each column on the special journals and prove the
journals.
4. Post the totals of the account named columns and
individually post the “Other Accounts” columns as well to the
General Ledger.
5. Prepare the Schedule of Accounts Receivable and the
Schedule of Accounts Payable (their total amount must equal
the amount in their controlling general ledger account).
6. Prepare the unadjusted trial balance on the worksheet.
7. Complete the worksheet for the year ended December 31,
2012, using the following adjustment data:
a. Merchandise inventory on December 31
13. $1,090
b. Insurance expired during the year
2,250
c. Store supplies on hand on December 31
850
d. Depreciation for the current year needs to be calculated.
The business uses
the Straight-line method, the store equipment has a
useful life of 10 years
with no salvage value. (NOTE: the purchase and
return will not be included
as the dates of the transactions were after the 15th
of the month).
e. Accrued salaries on December 31:
Sales salaries
$1,075
14. Office salaries
540
$1,615
f. The note payable terms are at 8%, payment is not being
made until Jan. 3, 2013. Interest must be recognized for one
month.
g. Calculate the Bad Debt adjustment amount; net realizable
value of Accounts Receivable is determined to be $6,313.
8. Prepare a multiple-step income statement, a statement of
owner’s equity, and a
classified balance sheet in good form. (Recommend review of
“Current Liabilities” on page 149.)
9. Journalize and post the adjusting entries.
10. Journalize and post the closing entries. Indicate closed
accounts by inserting a zero
in both balance columns opposite the closing entry.
11. Prepare a post-closing trial balance.
Check Figures for Accounting Project:
Cash Receipts Journal; Cash Column: 7,314
Unadjusted Trial Balance Total: 415,118
Net Income: 119,449
Post Closing Trial Balance: 181,970
15. SJSALES JOURNAL Page No. 6INVOICEPOST
ACCTS. REC. DR. COST OF SALE DR.DATENO.ACCOUNT
DEBITEDREFSALES CR. INVENTORY CR.112233445566
CRJ CASH RECEIPTS JOURNALPage No.
4POSTOTHERACCOUNTSCOST/SOLD DR.SALES
CASHDATEACCOUNT CREDITEDREFACCTS - CR.SALES -
CRREC. - CR.INVENTORY CR.DISC. -
DR.DR.112233445566778899
PJ PURCHASES JOURNAL Page No.
11POSTOTHERACCOUNTSSTOREMERCH.DATEACCOUNT
CREDITEDREF(SUNDRY)PAYABLESUPPLIESINVENORYA
CCTS - DR.CR.DR.DR.1122334455667788
CPJ CASH PAYMENTS JOURNAL
Page No.
8CK.POSTOTHERACCOUNTSMERCH.DATENO.ACCOUNT
DEBITEDREF(SUNDRY)PAYABLEINVENTORYCASHACCT
S -
DR.DR.CR.CR.1122334455667788991010111112121313141415
151616
Journal JOURNAL Page No.
53POSTDATEDESCRIPTIONREFDEBITCREDIT112
.2334455667788991010111112121313141415151616171718181
91920202121222223232424252526262727282829293030313132
32333334343535363637373838393940404141 JOURNAL
Page No.
54POSTDATEDESCRIPTIONREFDEBITCREDIT11223344556
67788991010111112121313141415151616171718181919202021
21222223232424252526262727282829293030313132323333343
43535363637373838393940404141
InventoryInventory Control Sheet900 watt
microwave:PurchasesCost of Goods Sold
(Sales)INVENTORYDateUnitscost per unitAmountUnitscost per
unit AmountUnitscost per unitAmount11/30/124$79$3161000
watt microwave:PurchasesCost of Goods Sold
(Sales)INVENTORYDateUnitscost per unitAmountUnitscost per
unit AmountUnitscost per unitAmount11/30/123$119$3571200
16. watt microwave:PurchasesCost of Goods Sold
(Sales)INVENTORYDateUnitscost per unitAmountUnitscost per
unit AmountUnitscost per
unitAmount11/30/127$239$1,673Ending Inventory Value:
AR-SUB ACCOUNTS RECEIVABLE
SUBSIDIARY LEDGER
(CUSTOMERS)Customer Name: Albert Co.POST
RUNNINGDATETRANSACTIONREF DEBIT CREDIT
BALANCE11/20/12SJ 53,3883,388Customer Name: Marie
Co.POST RUNNINGDATETRANSACTIONREF
DEBIT CREDIT BALANCE11/20/12SJ
5598598Customer Name: Cameron Co.POST
RUNNINGDATETRANSACTIONREF DEBIT
CREDIT BALANCE11/15/12SJ 5796796Customer Name:
McKenzie Co.POST
RUNNINGDATETRANSACTIONREF DEBIT
CREDIT BALANCE11/27/12SJ 51,3961,396Customer
Name: Briana Co.POST
RUNNINGDATETRANSACTIONREF DEBIT
CREDIT BALANCE
AP-SUB ACCOUNTS PAYABLE
SUBSIDIARY LEDGER
(VENDERS)Vendor Name: Prince Co.POST
RUNNINGDATETRANSACTIONREF DEBIT
CREDIT BALANCE11/26/12P 10398398Vendor Name:
Joseph Co.POST RUNNINGDATETRANSACTIONREF
DEBIT CREDIT BALANCE11/16/12P
10596596Vendor Name: Elisha Co.POST
RUNNINGDATETRANSACTIONREF DEBIT
CREDIT BALANCE11/29/12P 10795795Vendor Name:
Matt Co.POST RUNNINGDATETRANSACTIONREF
DEBIT CREDIT BALANCE11/28/12P
101,4971,497Vendor Name:POST
RUNNINGDATETRANSACTIONREF DEBIT
CREDIT BALANCE
SCH-SUBSchedule of Accounts ReceivableTotal Accounts