Salaries expense
14,000
Rent expense
2,000
$119,500
$119,500
Prepare closing entries at December 31 for the current year.
219)
From the adjusted trial balance for Brookstone Art Supplies given below, prepare a multiple-step
income statement in good form.
Brookstone Art SuppliesAdjusted Trial BalanceDecember 31
Debit
Credit
Cash
$9,400
Accounts receivable
25,000
Merchandise inventory
36,000
Office supplies
900
Store equipment
75,000
Accumulated depreciation–store equipment
$22,000
Office equipment
60,000
Accumulated depreciation–office equipment
15,000
Accounts payable
42,000
Notes payable
10,000
A. Brookstone, Capital
110,700
A. Brookstone, Withdrawals
48,000
Sales
325,000
Sales discounts 121
6,000
Sales discounts
6,000
Sales returns and allowances
16,500
Cost of goods sold
195,000
Selling expenses
32,500
General and administrative expenses
19,800
Interest expense
600
Totals
$524,700
$524,700
220)
From the adjusted trial balance for Fabricated Products Company given below, prepare the necessary
closing entries.
Fabricated Products CompanyAdjusted Trial BalanceDecember 31
Debit
Credit
Cash
$19,400
Accounts receivable
25,000
Merchandise inventory
26,000
Office supplies
1,900
Store equipment
84,000
Accumulated depreciation–store equipment
$22,000
Office equipment
40,000
Accumulated depreciation–office equipment
15,000
Accounts payable
12,000
Notes payable
40,000
P. Card, Capital
110,700
P. Card, Withdrawals
28,000
Sales
245,000
Sales discounts
6,000
Sales returns and allowances
16,500
Cost of goods sold
145,000
Sales salaries expense
32,500
Depreciation expense–store equipment
11,000
Depreciation expense–office equipment
7,500
Office supplies expense
1,300
Interest expense
600
Totals
$444,700
$444,700
221)
Johnnycake Restaurant uses a periodic inventory system and the gross method of accounting for
purchases. Prepare general journal entries to record the following transactions for Johnnycake:
Aug. 10
Johnnycake purchased merchandise on credit from Foster Foods for
$9,000, terms 2/10, n/30, FOB destination. Transportation costs of $350
were paid by Foster.
12
Johnnycake returned $600 of merchandise from the August 10 purchase.
19
Johnnycake paid Foster for the August 10 purchase.
Purchases
Accounts Payable
Purchases Returns and Allowances
Accounts Payable
Cash
Purchases Discounts ($8,400 x .02)
May 3
Sold merchandise to a customer on credit for $600, terms 2/10, n/30. The
cost of the merchandise sold was $350.
May 4
Sold merchandise to a customer for cash of $425. The cost of the
merchandise was $250.
May 6
Sold merchandise to a customer on credit for $1,300, terms 2/10, n/30. Th
cost of the merchandise sold was $750.
May 8
The customer from May 3 returned merchandise with a selling price of
$100. The cost of the merchandise returned was $55.
May 15
The customer from May 6 paid the full amount due, less any appropriate
discounts earned.
May 31
The customer from May 3 paid the full amount due, less any appropriate
discounts earned.
222)
Austin’s Pub Supply uses the periodic inventory system and the gross method of accounting for
sales. The company had the following sales transactions during August:
August 2
Sold merchandise to Jo’s Pub and Grub on credit for $3,750, terms 2/15,
n/60. The items sold had a cost of $1,200.
August 4
Jo’s Pub and Grub returned merchandise that had a selling price of $300.
The cost of the merchandise returned was $110.
August 13
Jo’s Pub and Grub paid for the merchandise sold on August 2, taking any
appropriate discount earned.
Prepare the journal entries that Austin’s Pub Supply must make to record these transactions.
223)
Preston Office Furniture uses the periodic inventory system and the gross method of accounting for
sales. It had the following transactions during the month of May:
e
Prepare the required journal entries that Preston Office Furniture must make to record these
transactions.
224)
At its fiscal year-end of June 30, Kendall Wholesale’s general ledger shows the following selected
account balances. Kendall Wholesale uses the perpetual inventory system.
Merchandise Inventory
$60,000
Sales
940,000
Sales discounts
16,000
Sales returns and allowances
8,000
Cost of goods sold
456,000
A physical count of its June 30 year-end inventory discloses that the cost of the merchandise
inventory still available is $58,160. Prepare the entry to record any inventory shrinkage.
225)
Prepare journal entries to record the following merchandising transactions of Margin Company,
which applies the perpetual inventory system and the gross method of recording invoices. Margin
Company offers all of its credit customers credit terms of 2/10, n/30.
May 1
Purchased merchandise from Craft Company for $7,800 under credit terms
of 1/10, n/30, FOB shipping point, invoice dated May 1.
May 2
Purchased merchandise from Bow Company for $10,600 under credit
terms 2/05, n/20, FOB destination.
May 3
Sold merchandise to Sting Company for $5,600, FOB shipping point,
invoice dated May 4. The merchandise had cost $3,000.
May 4
Paid $300 cash for the freight charges on the May 1 purchase of
merchandise.
May 5
Received an $800 credit memorandum from Craft Company for the return
of part of the merchandise purchased on May 1.
May 6
Paid Bow Company the balance due within the discount period.
May 8
Sold merchandise to Skeet Company for $3,300, FOB shipping point,
invoice dated May 8. The merchandise had a cost of $1,500.
May 11
Paid Craft Company the balance due within the discount period.
May 13
Received the balance due from Sting Company within the discount period.
May 14
Issued a credit $300 credit memorandum to Skeet Company for an
allowance on defective merchandise.
May 17
Received the balance due from Skeet Company within the discount period.
226)
Prepare journal entries to record the following merchandising transactions of Margin Company,
which applies the perpetual inventory system and the gross method of recording invoices. Margin
Company offers all of its credit customers credit terms of 2/10, n/30.
May 1
Purchased merchandise from Craft Company for $7,800 under credit terms
of 1/10, n/30, FOB shipping point, invoice dated May 1.
May 2
Purchased merchandise from Bow Company for $10,600 under credit
terms 2/05, n/20, FOB destination.
May 4
Paid $300 cash for the freight charges on the May 1 purchase of
merchandise.
May 5
Received an $800 credit memorandum from Craft Company for the return
of part of the merchandise purchased on May 1.
May 6
Paid Bow Company the balance due within the discount period.
May 11
Paid Craft Company the balance due within the discount period.
227)
Prepare journal entries to record the following merchandising transactions of Margin Company,
which applies the perpetual inventory system and the gross method of recording invoices. Margin
Company offers all of its credit customers credit terms of 2/10, n/30.
May 3
Sold merchandise to Sting Company for $5,600, FOB shipping point,
invoice dated May 4. The merchandise had cost $3,000.
May 8
Sold merchandise to Skeet Company for $3,300, FOB shipping point,
invoice dated May 8. The merchandise had a cost of $1,500.
May 13
Received the balance due from Sting Company within the discount period.
May 14
Issued a credit $300 credit memorandum to Skeet Company for an
allowance on defective merchandise.
May 17
Received the balance due from Skeet Company within the discount period.
228)
From the adjusted trial balance given below for the Grayson Company, prepare a multiple-step
income statement in good form. Salaries expense and building depreciation expense should be
equally divided between selling activities and the general and administrative activities.
229)
Vincent Company purchased merchandise from Liu Company with an invoice price of $300,000
and credit terms of 2/10, n/30. Liu Company’s cost for the merchandise was $200,000. Vincent
Company paid within the discount period. Assume that both buyer and seller use a perpetual
inventory system and the gross method of recording invoices.
1. Prepare entries that Vincent should record for (a) the purchase and (b) the cash payment.
2. Prepare entries that Liu should record for (a) the sale and (b) the cash collection.
3. Assume that the buyer borrowed enough cash to pay the balance on the last day of the discount
period at an annual interest rate of 9% and paid it back on the last day of the credit period. Compute
how much the buyer saved by following this strategy. (Assume a 365-day year and round dollar
amounts to the nearest cent.)