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David?s Entertainment is a merchandising business




Question;Foundations of Accounting I;Accounting Project;Written by: Karen Pitsch;David?s;Entertainment is a merchandising business.;Their account balances as of November 30, 2012 (unless otherwise;indicated), are as follows:Foundations of Accounting IAccounting ProjectWritten by: Karen Pitsch David?s;Entertainment is a merchandising business.;Their account balances as of November 30, 2012 (unless otherwise;indicated), are as follows: 110 Cash $ 73,920 112 Accounts;Receivable 34,250 113 Allowance;for Doubtful Accounts 11,000 115 Merchandise;Inventory 123,900 116 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) 15,000 310 D.;Williams, Capital (January 1, 2012) 73,260 311 D.;Williams, Drawing 50,000 312 Income;Summary 0 410 Sales 853,445 411 Sales;Returns and Allowances 20,020 412 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 1,100David?s;Entertainment uses the perpetual inventory system and the First-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 First-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). David?s Entertainment sells four types of;television entertainment units. The sale;prices of each are:TV A: $3,500TV B: $5,250TV C: $6,125PS D: $9,000During;December, the last month of the accounting year, the following transactions;were completed:Dec. 1.;Issued check number 2632 for the December rent, $2,600.3. Purchased three TV C units on account;from Prince Co., terms 2/10, n/30, FOB shipping point, $11,100.4. 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 projector systems for cash. 11. Purchased store supplies on account;from Matt Co., terms n/30, $580.13. Issued check to Prince Co. number 2634;for the 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 the;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 five 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, $700.21. 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, $15,600.24. Received notification that Marie Co. has been;granted bankruptcy with noamount of recovery. We are to write-off her amount due. (Note: See page402 for entry required.)25.;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, $600. (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, $1,200.29. Issued check number 2641 for store supplies;$470.30. 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 25 and discount.30. Issued a debit memo for $300 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 (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 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 $90,800b. Insurance expired during the year 1,250c. Store supplies on hand on December 31 975d. 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 $1,400 Office;salaries 760 2,160f. The note;payable terms are at 8%, payment is not being made until Jan. 3, 2013. Interest must be recognized for one month.g. Net;realizable value of Accounts Receivable is determined to be $27,950.8.;Prepare a multiple-step income statement, a statement of owner?s equity;and aclassified;balance sheet in good form. (Recommend review of ?Current Liabilities? on pages;166 & 167 and ?Current Maturities of Long-term Debt? on page 480.)9.;Journalize and post the adjusting entries.10.;Journalize;and post the closing entries. Indicate;closed accounts by inserting a linein;both balance columns opposite the closing entry.11.;Prepare;a post-closing trial balance.;="msonormal">="msonormal">


Paper#44602 | Written in 18-Jul-2015

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