Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
Problem 4-5B (Concluded)
Part 4
Current assets
Cash ........................................................................... $ 7,400
Merchandise inventory ............................................. 21,300
Store supplies ........................................................... 3,700
Prepaid insurance ..................................................... 3 ,800 *
Total current assets................................................... $ 36,200
Current liabilities.......................................................... $ 18,000
Current ratio ($36,200 / $18,000)..................................... 2.01
*$6,600 - $2,800 = $3,800
Problem 4-6BB (50 minutes)
FOSTER PRODUCTS COMPANY
Work Sheet
For Year Ended October 31, 2015
Unadjusted
Trial Balance Adjustments
Adjusted
Trial Balance
Income
Statement Balance Sheet
Account Title Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr.
Cash........................................... 7,400 7,400 7,400
Merchandise inventory............ 24,000 (d) 2,700 21,300 21,300
Store supplies........................... 9,700 (a) 6,000 3,700 3,700
Prepaid insurance..................... 6,600 (b) 2,800 3,800 3,800
Store equipment....................... 81,800 81,800 81,800
Accum. depreciation—Store eq..... 32,000 (c) 3,000 35,000 35,000
Accounts payable..................... 18,000 18,000 18,000
Advertising expense................
17,800
______ _____ _____ 17,80
0
______ 17,800
______ ______ ______
Totals..........................................
320,100
320,100
14,500
14,500
323,100
323,100
203,100 227,100 120,000 96,000
Net income................................ 24,00
0
______ ______ 24,000
Totals.......................................... 227,100
227,100
120,000
120,000
SERIAL PROBLEM — SP 4
Serial Problem — SP 4, Business Solutions (150 minutes) Part 1
Journal entries
Jan. 4..............................................................................Wages Expense
623 ..............................................................................125
..............................................................................Wages Payable
210 ..............................................................................500
9..............................................................................Cash 101
2,668
..................................................................................Accounts Receivable—
Gomez Co. ......................................................................106.6 2,668
Collected accounts receivable.
11.............................................................................Accounts Receivable—
Alex’s Eng. Co.................................................................106.1 5,500
..............................................................................Unearned Computer
13.............................................................................Cost of Goods Sold
502..............................................................................3,560
..................................................................................Merchandise Inventory
119.................................................................................. 3,560
To record cost of Jan. 13 sale.
15.............................................................................Merchandise Inventory
..............................................................................119 600
..................................................................................Cash 101
600
Serial Problem — SP 4 (Continued)
Jan. 17.............................................................................Accounts Payable
..............................................................................201 5,800
..................................................................................Merchandise Inventory
20*............................................................................Sales Returns and
Allowances .....................................................................414 500
..................................................................................Accounts Receivable—
Liu Corp...........................................................................106.5 500
Customer returned defective goods.
22.............................................................................Cash 101
4,653
..............................................................................Sales Discounts
415 ..............................................................................47
..................................................................................Accounts Receivable—
Liu Corp...........................................................................106.5 4,700
Collected accounts receivable.
January 13 sale .....................................
.................................................................
$5,200
January 20 return...................................
500
Amount due from Liu.............................
.................................................................
$4,700
26.............................................................................Accounts Receivable—
KC, Inc.............................................................................106.8 5,800
..................................................................................Sales 413
5,800
Sold merchandise on credit.
26.............................................................................Cost of Goods Sold
502..............................................................................4,640
..................................................................................Merchandise Inventory
119 ................................................................................. 4,640
Serial Problem — SP 4 (Continued)
Feb. 1..............................................................................Prepaid Rent
131 .............................................................................. 2,475
..................................................................................Cash 101
2,475
Paid three months’ rent in advance.
3.............................................................................Accounts Payable
Paid account payable within discount period.
January 26 purchase.........................
.............................................................
5.............................................................................Advertising Expense
655 ..............................................................................600
..................................................................................Cash 101
600
Purchased ad in local newspaper.
11............................................................................Cash 101
15............................................................................Dividends 319
4,800
..................................................................................Cash 101
4,800
Paid cash for dividends.
23.............................................................................Cost of Goods Sold
502.............................................................................2,660
..................................................................................Merchandise Inventory
119 ................................................................................. 2,660
To record cost of Feb. 23 sale.
26............................................................................Wages Expense
623.............................................................................1,000
..................................................................................Cash 101
1,000
Paid employee.
27.............................................................................Mileage Expense
Serial Problem — SP 4 (Continued)
9.............................................................................Cash 101
3,220.............................................................................
Accounts Rec.—Delta Co. ......................106.7 3,220
Collected accounts receivable.
11.............................................................................Repairs Expense–
Computer .......................................................................684 960
..................................................................................Cash 101
960
Paid for computer repairs.
24.............................................................................Accounts Receivable—
Easy Leasing..................................................................106.3 9,047
..................................................................................Computer Services
Revenue .........................................................................403 9,047
Billed customer for services.
25 ............................................................................Accounts Receivable—
Wildcat Services.....................................................................106.2 2,800
..................................................................................Sales 413
2,800
Sold merchandise on credit.
25.............................................................................Cost of Goods Sold
30.............................................................................Accounts Receivable—
IFM Co. ...........................................................................106.4 2,220
..................................................................................Sales 413
2,220
Sold merchandise on credit.
31.............................................................................Mileage Expense
676..............................................................................128
..................................................................................Cash 101
128
Reimbursed Rey for business mileage.
