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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 TitleDebitCredit101Cash$48,502106.1Alex?s Engineering Co.0106.2Wildcat Services0106.3Easy Leasing0106.4IFM Co.3,080106.5Liu Corp.0106.6Gomez Co.2,748106.7Delta Co.0106.8KC, Inc.0106.9Dream, Inc.0119Merchandise inventory0126Computer supplies620128Prepaid insurance1,935131Prepaid rent915163Office equipment8,090164Accumulated depreciation?Office equipment$280167Computer equipment20,100168Accumulated depreciation?Computer equipment1,220201Accounts payable1,210210Wages payable$700236Unearned computer services revenue1,380307Common stock68,000318Retained earnings13,200319Dividends$0403Computer services revenue0413Sales0414Sales returns and allowances0415Sales discounts0502Cost of goods sold0612Depreciation expense?Office equipment0613Depreciation expense?Computer equipment0623Wages expense0637Insurance expense0640Rent expense0652Computer supplies expense0655Advertising expense0676Mileage expense0677Miscellaneous expenses0684Repairs expense?Computer0In 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.4The 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.5Adria Lopez invested an additional $23,100 cash in the company in exchange for more common stock.7The company purchased $7,200 of merchandise from Kansas Corp. with terms of 1/10, n/30, FOB shipping point, invoice dated January 7.9The company received $2,748 cash from Gomez Co. as full payment on its account.11The 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 $1,380.13The company sold merchandise with a retail value of $4,000 and a cost of $3,480 to Liu Corp., invoice dated January 13.15The company paid $640 cash for freight charges on the merchandise purchased on January 7.16The company received $4,060 cash from Delta Co. for computer services provided.17The company paid Kansas Corp. for the invoice dated January 7, net of the discount.20Liu 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.)22The company received the balance due from Liu Corp., net of both the discount and the credit for the returned merchandise.24The company returned defective merchandise to Kansas Corp. and accepted a credit against future purchases. The defective merchandise invoice cost, net of the discount, was $486.26The company purchased $9,900 of merchandise from Kansas Corp. with terms of 1/10, n/30, FOB destination, invoice dated January 26.26The company sold merchandise with a $4,550 cost for $5,900 on credit to KC, Inc., invoice dated January 26.29The company received a $486 credit memorandum from Kansas Corp. concerning the merchandise returned on January 24.31The company paid cash to Lyn Addie for 10 days? work at $175 per day.Feb.1The company paid $2,745 cash to Hillside Mall for another three months? rent in advance.3The company paid Kansas Corp. for the balance due, net of the cash discount, less the $486 amount in the credit memorandum.5The company paid $580 cash to the local newspaper for an advertising insert in today?s paper.11The company received the balance due from Alex?s Engineering Co. for fees billed on January 11.15The company paid $4,630 cash for dividends.23The company sold merchandise with a $2,480 cost for $3,340 on credit to Delta Co., invoice dated February 23.26The company paid cash to Lyn Addie for eight days? work at $175 per day.27The company reimbursed Adria Lopez for business automobile mileage (800 miles at $0.21 per mile).Mar.8The company purchased $2,880 of computer supplies from Harris Office Products on credit, invoice dated March 8.9The company received the balance due from Delta Co. for merchandise sold on February 23.11The company paid $910 cash for minor repairs to the company?s computer.16The company received $5,370 cash from Dream, Inc., for computing services provided.19The company paid the full amount due to Harris Office Products, consisting of amounts created on December 15 (of $1,210) and March 8.24The company billed Easy Leasing for $9,227 of computing services provided.25The company sold merchandise with a $2,102 cost for $2,830 on credit to Wildcat Services, invoice dated March 25.30The company sold merchandise with a $1,158 cost for $2,400 on credit to IFM Company, invoice dated March 30.31The 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#43603 | Written in 18-Jul-2015

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