Serial Problem, Business Solutions (Concluded)
Part 3
GENERAL JOURNAL Page 2
2016
Jan. 5 Cash……………………………………………….…………101 25,000
S. Rey, Capital……………….…………..………301 25,000
Additional investment by owner.
* An optional additional entry for Jan. 20 is to debit “Loss from
Defective Merchandise” and credit “Cost of Goods Sold” for $320.
24 Accounts Payable—Kansas Corp………..…..…201 496
Merchandise Inventory…………………..…..119 496
Returned merchandise for credit.
29 No entry recorded in the journal (but memorandum noted).
Comprehensive Problem
Comprehensive Problem, Colo Company (150 minutes)
Part 1
SALES JOURNAL Page 2
Date Account Debited
Invoice
Number PR
Accounts Receivable Dr.
Sales Cr.
Cost of Goods Sold Dr.
Inventory Cr.
May 2 Hensel Company…………………..……………8785 6,100 4,100
16 Hensel Company………………………………..8786 3,990 1,890
7-2
7-3
Comprehensive Problem, Colo Company (Part 1—Continued)
PURCHASES JOURNAL Page 2
Date Account
Date of
Invoice Terms PR
Accounts
Payable
Cr.
Inventory
Dr.
Office
Supplies
Dr.
Other
Accounts
Dr.
May 4 Store Supp./Gear Supp……..………............5/04 n/10, EOM 125/37,729 37,072 83 574
10 Office Equip./Gear Supp…........................5/10 n/10, EOM 163/4,074 4,074
CASH RECEIPTS JOURNAL Page 2
Date
Account
Credited Explanation PR
Cash
Dr.
Sales
Discoun
t
Dr.
Accounts
Receivable
Cr.
Sales
Cr.
Other
Accts.
Cr.
Cost of Goods
Sold Dr.
Inventory Cr.
May 5 Knox, Inc…..………………………..................
Sale of Apr. 28…….……………………..……………………….………….…….
4,459 91 4,550
9 Store Supplies…..………………………..........Sold store
supplies……………………………………………………………………..….
125
350 350
11 Hensel Company………………………....…….Sale of May 2…………………………………………………………………..
5,978 122 6,100
15 Sales……………………………………..…..…….Cash sales
(101) (415) (106) (413) () (502/119)
7-5
Comprehensive Problem, Colo Company (Part 1—Continued)
CASH DISBURSEMENTS JOURNAL Page 2
Date
Ck.
No. Payee Account Debited PR
Cash
Cr.
Inventory
Cr.
Other
Accounts
Dr.
Accounts
Payable
Dr.
May 1 341
0
S&P Mgmt. Co….………………....................Rent Exp.–Selling Space……………………………….......................642 2,968
Rent Exp.–Office Space…………………………………………………….641 3,710 742
8 341
1
Peyton Products…………………………….…..Peyton Products……………………………………………..……..……....
6,174 126 6,300
15 341
2
Payroll……………………………………………...Sales Salaries Expense………………………………………….…..…….621 5,320
Inventory………….………..…………………..………………..…...119 798
Received a credit memo for returns.
12 Accts. Payable—Gear Supply Co……………..……………..…201/854
Office Equipment……………..………..…………..…..….….…163 854
Received a credit memo for returns.
7-7
Comprehensive Problem, Colo Company (Continued) Part 2
COLO COMPANY
Work Sheet for Month Ended May 31, 2015
Unadjusted Trial
Balance Adjustments
Income
Statement
Balance Sheet or State-
ment of Owner’s Equity
Account Debit Credit Debit Credit Debit Credit Debit Credit
Cash……………………….……………..….….... 135,911 135,911
Accounts receivable……..……….………… 18,200 18,200
Merchandise inventory…..….…..…..…... 189,519 189,519
Office supplies……..……….……………..…. 793 (c) 289 504
Store supplies……….………………..….…... 3,301 (b) 669 2,632
Prepaid insurance……….……….………….. 3,318 (a) 553 2,765
Office equipment………………..…..….…... 25,690 25,690
Accum. depr. –Office equipment......... 9,898 (e) 329 10,227
Sales……………….……………….……….…….. 156,422 156,422
Sales discounts………..…..….…..…..….… 350 350
Sales returns and allowances….….…... 175 175
Cost of goods sold………………..…..….… 99,910 99,910
Depr. Expense–Office equipment........ (e) 329 329
Rent expense, selling space…………….. 2,968 2,968
Office supplies expense….…..….…..….. (c) 289 289
Store supplies expense…..…..…..….….. (b) 669 669
Utilities expense……………..….…..…..….. 1,283 ______ _____ _____ 1,283 ______ ______ ______
Totals…….……………….……….………………. 545,020 545,020 2,407 2,407 124,775 156,422 421,141 389,494
7-8
Comprehensive Problem, Colo Company (Continued)
Part 2—continued
Adjusting entries (Part 2)
May 31 Insurance Expense……………………………………………..637 553
Prepaid Insurance……………………..…………………..128 553
To adjust for expired insurance.
31 Store Supplies Expense………….………………………….651 669
Store Supplies………………………….……………………125 669
To adjust for store supplies used.
Comprehensive Problem, Colo Company (Continued)
Part 2—continued
Closing entries (Part 2)
May 31 Sales…………………………………………………....……………413 156,422
Income Summary……………….………………..………..901 156,422
To close temporary accounts with
credit balances.
May 31 Income Summary…………………….……………..………….901 124,775
Sales Returns and Allowances……………………….414 175
Sales Discounts……………………………………………..415 350
7-10
Rent Expense, Office Space…………………….……..641 742
May 31 Income Summary……………………..…………901 31,647
J. Colo, Capital…………………..…………..301 31,647
To close income summary to
owner’s capital.
May 31 J. Colo, Capital………………………..………….301 7,000
J. Colo, Withdrawals………………….……302 7,000
To close withdrawals to owner’s capital.
Comprehensive Problem, Colo Company (Continued)
Part 2—continued
GENERAL LEDGER
Cash Acct. No. 101
Merchandise Inventory Acct. No. 119
Date Explanation PR Debit Credit Balance
Apr. 30 Balance 220,080
May 3 G2 798 219,282
31 D2 575 218,707
7-11
Office Supplies Acct. No. 124
Date Explanation PR Debit Credit Balance
Apr. 30 Balance 430
May 31 P2 363 793
31 G2 289 504
Store Supplies Acct. No. 125
7-12
Comprehensive Problem, Colo Company (Continued)
Part 2—continued
Prepaid Insurance Acct. No. 128
Date Explanation PR Debit Credit Balance
Apr. 30 Balance 3,318
May 31 G2 553 2,765
Office Equipment Acct. No. 163
Date Explanation PR Debit Credit Balance
May 31 G2 329 10,227
Store Equipment Acct. No. 165
Date Explanation PR Debit Credit Balance
Apr. 30 Balance 38,920
Accumulated Depreciation–Store Equipment Acct. No. 166
Date Explanation PR Debit Credit Balance
Jenny Colo, Capital Acct. No. 301
Date Explanation PR Debit Credit Balance
Apr. 30 Balance 308,085
May 31 G2 31,647 339,732
31 G2 7,000 332,732
7-13
Comprehensive Problem, Colo Company (Continued)
Part 2—continued
Jenny Colo, Withdrawals Acct. No. 302
Date Explanation PR Debit Credit Balance
May 29 D2 7,000 7,000
31 G2 7,000 0
Sales Acct. No. 413
Date Explanation PR Debit Credit Balance
Sales Discounts Acct. No. 415
Date Explanation PR Debit Credit Balance
May 31 R2 350 350
31 G2 350 0
Cost of Goods Sold Acct. No. 502
Date Explanation PR Debit Credit Balance
Depreciation Expense—Store Equipment Acct. No. 613
Date Explanation PR Debit Credit Balance
May 31 G2 567 567
31 G2 567 0
7-14
Comprehensive Problem, Colo Company (Continued)
Part 2—continued
Office Salaries Expense Acct. No. 620
Date Explanation PR Debit Credit Balance
Insurance Expense Acct. No. 637
Date Explanation PR Debit Credit Balance
May 31 G2 553 553
31 G2 553 0
Rent Expense, Office Space Acct. No. 641
Date Explanation PR Debit Credit Balance
31 G2 2,968 0
Office Supplies Expense Acct. No. 650
Date Explanation PR Debit Credit Balance
May 31 G2 289 289
31 G2 289 0
Store Supplies Expense Acct. No. 651
Date Explanation PR Debit Credit Balance
May 31 G2 669 669
31 G2 669 0
7-15