Question;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 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 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 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 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 $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;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.
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