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Alli Co. is a merchandising business. The account balances




Question;Alli;Co. is a merchandising business. The;account balances for Alli Co. as of November 30, 2012 (unless otherwise;indicated), are as follows;110 Cash $ 73,920;112 Accounts;Receivable 37,875;113 Allowance;for Doubtful Accounts 3,500;115 Merchandise;Inventory 133,900;116 Prepaid;Insurance 3,750;117 Store;Supplies 2,850;123 Store;Equipment 100,800;124 Accumulated;Depreciation-Store Equipment 20,160;210 Accounts;Payable 21,450;211 Salaries;Payable 0;218 Interest;Payable 0;220 Note;Payable (Due 2017) 10,000;310 P.;Williams, Capital (January 1, 2012) 89,510;311 P.;Williams, Drawing 40,000;312 Income Summary 0;410 Sales;853,040;411 Sales;Returns and Allowances 20,600;412 Sales;Discounts 13,200;510 Cost;of Merchandise Sold 414,575;520 Sales;Salaries Expense 74,400;521 Advertising;Expense 18,000;522 Depreciation;Expense 0;523 Store;Supplies Expense 0;529 Miscellaneous;Selling Expense 2,800;530 Office;Salaries Expense 40,500;531 Rent;Expense 18,600;532 Insurance;Expense 0;533 Bad;Debt Expense 0;539 Miscellaneous;Administrative Expense 1,650;550 Interest Expense 240;Alli;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).;Alli Co. sells four types of television;entertainment units.;The;sale prices of each are;TV;A: $3,500;TV;B: $5,250;TV;C: $6,125;PS;D: $9,000;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.;3. Purchased four TV;C units on account from Prince Co., terms 2/10, n/30, FOB shipping point;$14,800.;4. Issued check;number 2633 to pay the transportation changes on purchase of December 3;$400. (NOTE: Do not include shipping and purchase;discounts to the Inventory Control sheet for this project.);6. Sold four TV A and;four TV B on account to Albert Co., invoice 891, terms 2/10, n/30, FOB shipping;point.;10. Sold two project;systems for cash.;11. Purchased store;supplies on account from Matt Co., terms n/30, $620.;13. Issued check to;Prince Co. number 2634 for full amount due, less discount allowed.;14. Issued credit memo;for one TV A unit returned on sale of December 6.;15. Issued check;number 2635 for advertising expense for last half of December, $1,500.;16. Received cash from;Albert Co. for full amount due (less return of December 14 and discount).;19.;Issued check number 2636 to buy two TV C units, $7,600.;19.;Issued check number 2637 for $6,100 to Joseph Co. on account.;20. Sold three TV C;units on account to Cameron Co., invoice number;892, terms 1/10, n/30, FOB shipping point.;20. For the;convenience of the customer, issued check number 2638 for shipping charges on;sale of December 20, $600.;21. Received $12,250;cash from McKenzie Co. on account, no discount.;21. Purchased three;projector systems on account from Elisha Co., terms 1/10, n/30, FOB;destination, $15,600.;25.;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;402 for entry required.);24. Issued a debit;memo for return of $5,200 because of a damaged projection system purchased on;December 21, receiving credit from the seller.;26. Issued check;number 2639 for refund of cash on sales made for cash, $1,000. (Customer was going to return goods until an;allowance was arranged.);27. Issued check number 2640 for sales;salaries of $1,750 and office;salaries of $950.;28. Purchased store;equipment on account from Matt Co., terms n/30, FOB;destination, $800.;29. Issued check;number 2641 for store supplies, $550.;30. Sold four TV C;units on account to Randall 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.);30. Issued check;number 2642 for purchase of December 21, less return;of December 24 and discount.;30. 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 a four-column;account (General Ledger). Write Balance;in the item section, and place a check mark (v) 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 when needed the Inventory Control;Sheet.;3. Total each column;on the special journals and prove the journal.;4. Post the totals of;the account named columns and individually post the ?other? 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 $110,200;b.;Insurance expired during the year 1,250;c.;Store supplies on hand on December 31 975;d.;Depreciation for the current year needs to be calculated. Alli Co. 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 $480;Office salaries 260 530;f. The note payable terms are at 8%, payment is;not being made until Jan. 3, 2013.;Interest must be recognized for one month (round answer to the nearest;dollar amount).;g. Net realizable value of Accounts Receivable;is determined to be $30,000.;8. Prepare a multiple-step income statement, a;statement of owner?s equity, and a;classified balance sheet in good form.;9. Journalize and post the adjusting entries.;10. Journalize and;post the closing entries. Indicate;closed accounts by inserting a line;in both balance columns opposite the;closing entry.;11. Prepare a;post-closing trial balance.


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