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Adria Lopez_JOURNAL TO FINANCIAL STATEMENTS

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Question;Adria Lopez created Success Systems on October 1, 2013. The company has;been successful, and its list of customers has grown. To accommodate the;growth, the accounting system is modified to set up separate accounts for each;customer. The following chart of accounts includes the account number used for;each account and any balance as of December 31, 2013. Adria Lopez decided to;add a fourth digit with a decimal point to the 106 account number that had been;used for the single Accounts Receivable account. This change allows the company;to continue using the existing chart of accounts.;No.;Account Title;Debit;Credit;101;Cash;$;48,502;106.1;Alex?s Engineering Co.;0;106.2;Wildcat Services;0;106.3;Easy Leasing;0;106.4;IFM Co.;3,080;106.5;Liu Corp.;0;106.6;Gomez Co.;2,748;106.7;Delta Co.;0;106.8;KC, Inc.;0;106.9;Dream, Inc.;0;119;Merchandise inventory;0;126;Computer supplies;620;128;Prepaid insurance;1,935;131;Prepaid rent;915;163;Office equipment;8,090;164;Accumulated depreciation?Office equipment;$;280;167;Computer equipment;20,100;168;Accumulated depreciation?Computer equipment;1,220;201;Accounts payable;1,210;210;Wages payable;$;700;236;Unearned computer services revenue;1,380;307;Common stock;68,000;318;Retained earnings;13,200;319;Dividends;$;0;403;Computer services revenue;0;413;Sales;0;414;Sales returns and allowances;0;415;Sales discounts;0;502;Cost of goods sold;0;612;Depreciation expense?Office equipment;0;613;Depreciation expense?Computer equipment;0;623;Wages expense;0;637;Insurance expense;0;640;Rent expense;0;652;Computer supplies expense;0;655;Advertising expense;0;676;Mileage expense;0;677;Miscellaneous expenses;0;684;Repairs expense?Computer;0;In response to requests from customers, A. Lopez will begin selling;computer software. The company will extend credit terms of 1/10, n/30, FOB;shipping point, to all customers who purchase this merchandise. However, no;cash discount is available on consulting fees. Additional accounts (Nos. 119;413, 414, 415, and 502) are added to its general ledger to accommodate the;company?s new merchandising activities. Also, Success Systems does not use;reversing entries and, therefore, all revenue and expense accounts have zero;beginning balances as of January 1, 2014. Its transactions for January;through March follow;Jan.;4;The company paid cash to Lyn Addie for five days? work at the rate of;$175 per day. Four of the five days relate to wages payable that were accrued;in the prior year.;5;Adria Lopez invested an additional $23,100;cash in the company in exchange for more common stock.;7;The company purchased $7,200 of merchandise from Kansas Corp. with;terms of 1/10, n/30, FOB shipping point, invoice dated January 7.;9;The company received $2,748 cash from Gomez;Co. as full payment on its account.;11;The company completed a five-day project for Alex?s Engineering Co.;and billed it $5,470, which is the total price of $6,850 less the advance;payment of $1,380.;13;The company sold merchandise with a retail value of $4,000 and a cost;of $3,480 to Liu Corp., invoice dated January 13.;15;The company paid $640 cash for freight charges on the merchandise;purchased on January 7.;16;The company received $4,060 cash from Delta;Co. for computer services provided.;17;The company paid Kansas Corp. for the invoice dated January 7, net of;the discount.;20;Liu Corp. returned $700 of defective merchandise from its invoice;dated January 13. The returned merchandise, which had a $270 cost, is;discarded. (The policy of Success Systems is to leave the cost of defective;products in cost of goods sold.);22;The company received the balance due from Liu Corp., net of both the;discount and the credit for the returned merchandise.;24;The company returned defective merchandise to Kansas Corp. and;accepted a credit against future purchases. The defective merchandise invoice;cost, net of the discount, was $486.;26;The company purchased $9,900 of merchandise from Kansas Corp. with;terms of 1/10, n/30, FOB destination, invoice dated January 26.;26;The company sold merchandise with a $4,550 cost for $5,900 on credit;to KC, Inc., invoice dated January 26.;29;The company received a $486 credit memorandum from Kansas Corp.;concerning the merchandise returned on January 24.;31;The company paid cash to Lyn Addie for 10;days? work at $175 per day.;Feb.;1;The company paid $2,745 cash to Hillside Mall for another three;months? rent in advance.;3;The company paid Kansas Corp. for the balance due, net of the cash;discount, less the $486 amount in the credit memorandum.;5;The company paid $580 cash to the local newspaper for an advertising;insert in today?s paper.;11;The company received the balance due from;Alex?s Engineering Co. for fees billed on January 11.;15;The company paid $4,630 cash for dividends.;23;The company sold merchandise with a $2,480 cost for $3,340 on credit;to Delta Co., invoice dated February 23.;26;The company paid cash to Lyn Addie for;eight days? work at $175 per day.;27;The company reimbursed Adria Lopez for business automobile mileage;(800 miles at $0.21 per mile).;Mar.;8;The company purchased $2,880 of computer supplies from Harris Office;Products on credit, invoice dated March 8.;9;The company received the balance due from Delta Co. for merchandise;sold on February 23.;11;The company paid $910 cash for minor;repairs to the company?s computer.;16;The company received $5,370 cash from;Dream, Inc., for computing services provided.;19;The company paid the full amount due to Harris Office Products;consisting of amounts created on December 15 (of $1,210) and March 8.;24;The company billed Easy Leasing for $9,227;of computing services provided.;25;The company sold merchandise with a $2,102 cost for $2,830 on credit;to Wildcat Services, invoice dated March 25.;30;The company sold merchandise with a $1,158 cost for $2,400 on credit;to IFM Company, invoice dated March 30.;31;The company reimbursed Adria Lopez for business automobile mileage;(300 miles at $0.21 per mile).;The following additional facts are available for preparing adjustments;on March 31 prior to financial statement preparation;a.;The March 31 amount of computer supplies;still available totals $2,015.;b.;Three more months have expired since the;company purchased its annual insurance policy at a $2,580 cost for 12 months;of coverage.;c.;Lyn Addie has not been paid for seven days;of work at the rate of $175 per day.;d.;Three months have passed since any prepaid;rent has been transferred to expense. The monthly rent expense is $915.;e.;Depreciation on the computer equipment for;January 1 through March 31 is $1,220.;f.;Depreciation on the office equipment for;January 1 through March 31 is $280.;g.;The March 31 amount of merchandise;inventory still available totals $624.;Question one is "Prepare journal;entries to record each of the January through March transactions.;Question two is "Post the journal;entries in part 1 to the accounts in the company?s general ledger. (Note: Begin;with the ledger?s post-closing adjusted balances as of December 31;2013.);question three is Prepare a partial work;sheet consisting of the first six columns that includes the unadjusted trial;balance, the March 31 adjustments (a) through (g), and the adjusted trial;balance.;question four is Prepare an income;statement (from the adjusted trial balance in part 3) for the three months;ended March 31, 2014. Use a single-step format.;List all expenses without differentiating;between selling expenses and general and administrative expenses.;question five is Prepare a statement of;retained earnings (from the adjusted trial balance in part 3) for the three months;ended March 31, 2014.;question six is Prepare a classified;balance sheet (from the adjusted trial balance) as of March 31, 2014

 

Paper#37337 | Written in 18-Jul-2015

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