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Term Problem_Adriana Lopez_Journal, Ledger and Trial Balance




Term Problem On October 1, 2014, Adriana Lopez launched a computer services;company called Success Systems, which provides consulting services, computer systems;installations, and custom program development. Lopez adopts the calendar year for;reporting purposes and prepared the company?s first set of financial statements on;December 31, 2014. 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, 2014. 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 modification allows the;company to continue using the existing chart of accounts.;Cash;Accounts Receivable - ABC Service Corp.;Accounts Receivable - Bobcat Co.;Accounts Receivable - Colburt Co.;Accounts Receivable - Delta Corp.;Accounts Receivable - Energy Co.;Accounts Receivable - Five Bros, Inc.;Accounts Receivable - Good Times, Inc;Accounts Receivable - Hard Leasing;Accounts Receivable - Inventory, Inc.;Merchandise Inventory;Computer Supplies;Prepaid Insurance;Prepaid Rent;Office Equipment;Accumulated Depreciation - Office Equipment;Computer Equipment;Accumulated Depreciation - Computer Equipment;Accounts Payable;Wages Payable;Unearned Computer Services Revenue;1,550;950;6,000;1,575;$ 56,000;$ 400;26,600;Debit Credit;101;106.1;106.2;106.3;126;128;131;163;164;106.4;106.5;106.6;106.7;106.8;106.9;Acct.;236;167;168;201;210;No.;119;SUCCESS SYSTEMS;Trial Balance;January 1, 2015;4,200;2,350;11,500;3,500;11,200;2,500A. Lopez, Capital;A. Lopez, Withdrawals;Computer Services Revenue;Sales;Sales Returns and Allowances;Sales Discounts;Cost of Goods Sold;Depreciation Expense - Office Equipment;Depreciation Expense - Computer Equipment;Wages Expense;Insurance Expense;Rent Expense;Computer Supplies Expense;Advertising Expense;Mileage Expense;Miscellaneous Expense;Repairs Expense - Computer;Totals;In response to requests from customers, Lopez will begin selling computer software.;The company will extend credit terms of 1/20, n/30, FOB shipping point, to all;customers who purchase this merchandise. However, no cash discount is available on;consulting fees. Success Systems does not use reversing entries and, therefore, all;revenue and expense accounts have zero balances as of January 1, 2015. Its;transactions for January through March follow;Jan Paid cash to Lisa Wu for fourteen days? work at the rate of per day.;Nine of the fourteen days relate to wages payable that were accrued in the;prior year.;Sold merchandise with a retail value of and a cost of to;ABC Service Corp., invoice dated January 10.;Received cash from Inventory, Inc. as full payment on its account.;Purchased of merchandise from Nevada Corp. with terms of 1/15;n/30, FOB shipping point, invoice dated January 11.;$ 10,000 $ 7,500;11 $ 6,800;7 $175;10;10 $ 3,500;Trial Balance (Continued);107,375;Credit;Acct.;637;No.;301;403;302;413;414;652;655;676;677;684;415;502;612;613;623;640;January 1, 2015;SUCCESS SYSTEMS;Debit;$ 117,850 $ 117,850Adriana Lopez invested an additional cash in the business.;Paid cash for freight charges on the merchandise purchased on;January 11.;Paid cash to Big Mall for another three months? rent in advance.;Adriana Lopez withdrew cash for personal use.;Paid Nevada Corp. for the invoice dated January 11, net of the discount.;ABC Service Corp. returned of defective merchandise from its invoice;dated January 10. The returned merchandise, which had a cost, is;discarded. (The policy of Success Systems is to leave the cost of defective;products in cost of goods sold.);Completed a five-day project for Bobcat Co. and billed it which is;the total price of less the advance payment of.;Feb Purchased of computer supplies from Cain Office Products on;credit, invoice dated March 8.;Received the balance due from ABC Service Corp., net of both the discount;and the credit for the returned merchandise.;Paid cash to Lisa Wu for 17 days? work at per day.;Reimbursed Adriana Lopez for business automobile mileage (miles at;per mile).;Paid cash to the local newspaper for an advertising insert in today?s;paper.;Mar Paid cash to Lisa Wu for 18 days? work at per day.;Paid the full amount due to Cain Office Products, including amounts created on;December 28 (of) and February 1.;Paid cash for minor repairs to the company?s computer.;Received the balance due from Bobcat Co. for fees billed on January 27.;Sold merchandise for with a cost of on credit to Delta;Corp., invoice dated March 25.;Billed Five Bros, Inc. for of computing services provided.;Reimbursed Adriana Lopez for business automobile mileage (miles at;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 merchandise inventory still available totals.;b. Wu has not been paid for 23 days of work at the rate of per day.;c. Three more months have expired since the company purchased its annual;insurance policy at a cost for 12 months of coverage.;$ 1,550;$175;$ 5,000;$ 8,000;$ 4,800 $ 3,600;$1,800;1 $ 1,750;1;1;25;$ 11,000;25;25 $900;27;$ 0.56;14 $ 325;17;18;12;$ 7,500;15;$ 375;$175;15;1;4;$0.56;$ 8,400;25 $ 14,000;$ 7,500;31;16;17;750;$ 175;$720;$ 6,000;825;$ 4,000d. Depreciation on the computer equipment for January 1 through March 31 is.;e. Depreciation on the office equipment for January 1 through March 31 is.;f. The March 31 amount of computer supplies still available totals.;g. Three months have passed since any prepaid rent has been transferred to expense.;The monthly rent expense is.;Required;1. Prepare journal entries to record each of the January through March transactions.;2. 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 January 1;2013.);3. Prepare a partial work sheet consisting of the first six columns (similar to the one;shown in Exhibit 5B.1 on page 205.) that includes the unadjusted trial balance, the;March 31 adjustments (a) through (g), and the adjusted trial balance. Journalize the;adjustments, and post them to the ledger.;4. Prepare an income statement (from the adjusted trial balance in part 3) for the three;months ended March 31, 2013. Use the multi-step format. List all expenses without;differentiating between selling expenses and general and administrative expenses.;See the example on page 193, Exhibit 5.13.;5. Prepare a statement of owner?s equity (from the adjusted trial balance in part 3) for;the three months ended March 31, 2013. See the example on page 141, Exhibit 4.2.;6. Prepare a classified balance sheet (from the adjusted trial balance) as of March 31;2013. See the example on page 148, Exhibit 4.9.;Check;Unadjusted Trial Balance Totals - $ 152,525;Adjusted Trail Balance Totals - $ 157,900;Cash ending balance - $ 40,020


Paper#76039 | Written in 18-Jul-2015

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