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PROBLEM 13.3A (continued)
Vincent Arroyo, Capital, January 1, 2013 32,700.00
Current Assets
Cash 28,386.00
Accounts Receivable 500.00
Prepaid Advertising 320.00
Current Liabilities:
Notes Payable, due 2014 20,000.00
Accounts Payable 2,705.00
Wages Payable 500.00
Year Ended December 31, 2013
Statement of Owner's Equity
The Wine Shop
Liabilities and Owner's Equity
The Wine Shop
Balance Sheet
December 31, 2013
Assets
PROBLEM 13.3A (continued)
Analyze: The inventory turnover for The Wine Shop is 6.91, calculated as follows:
PROBLEM 13.4A
PAGE
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REF.
1 1
2 2013 (Adjustment a) 2
3 Dec. 31 Income Summary 8600000 3
4 Merchandise Inventory 8600000 4
5 To transfer beginning inventory 5
6 6
7 (Adjustment b) 7
8 31 Merchandise Inventory 7800000 8
9 Income Summary 7800000 9
10 To record ending inventory 10
11 11
12 (Adjustment c) 12
13 31 Uncollectible Accounts Expense 280000 13
14 Allowance for Doubtful Accounts 280000 14
15 To record estimated loss for 2013, based 15
16 on 0.5% of net credit sales $560,000 16
17 17
18 (Adjustment d) 18
19 31 Supplies Expense 922000 19
20 Supplies 922000 20
21 To record supplies used during 2013 21
22 22
23 (Adjustment e) 23
24 31 Insurance Expense 360000 24
25 Prepaid Insurance 360000 25
26 To record expired insurance 26
27 27
28 (Adjustment f) 28
29 31 Depreciation Expense—Office Equipment 132500 29
30 Accumulated Depreciation—Office Equipment 132500 30
31 To record depreciation for 2013 (schedule on file) 31
Adjusting Entries
GENERAL JOURNAL 25
DATE DESCRIPTION DEBIT CREDIT
PROBLEM 13.4A (continued)
PAGE
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REF.
1 1
2 2013 (Adjustment g) 2
3 Dec. 31 Depreciation Expense—Warehouse Equipment 480000 3
4 Accumulated Depreciation—Warehouse Equipment 480000 4
5 To record depreciation for 2013 (schedule on file) 5
6 6
7 (Adjustment h) 7
8 31 Interest Expense 6 4 0 00 8
Adjusting Entries
GENERAL JOURNAL 26
DATE DESCRIPTION DEBIT CREDIT
PROBLEM 13.4A (continued)
PAGE
POST.
REF.
1 1
2 2013 2
3 Dec. 31 Sales 65377800 3
4 Purchases Returns and Allowances 920000 4
5 Income Summary 66297800 5
6 6
7 31 Income Summary 59927750 7
8 Sales Returns and Allowances 1000000 8
9 Purchases 35000000 9
19 Interest Expense 6 4 0 00 19
20 20
21 31 Income Summary 5570050 21
29 29
30 30
31 31
32 32
33 33
34 34
35 35
36 36
37 37
Closing Entries
27
DATE DESCRIPTION DEBIT CREDIT
GENERAL JOURNAL
PROBLEM 13.4A (continued)
PAGE
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REF.
1 1
2 2014 2
3 Jan. 1 Interest Payable 6 4 0 00 3
4 Interest Expense 6 4 0 00 4
5 To reverse adjusting entry (h) made Dec. 31, 2013 5
6 6
7 1 Salaries Payable 500000 7
21 21
22 22
23 23
Analyze: The following entry would be required:
PAGE
POST.
REF.
1 2014 1
6 6
28
DATE DESCRIPTION DEBIT CREDIT
GENERAL JOURNAL
Reversing Entries
GENERAL JOURNAL 29
DATE DESCRIPTION DEBIT CREDIT
PROBLEM 13.5A
PAGE
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REF.
1 1
2 2013 (Adjustment a) 2
3 Dec. 31 Rent Expense 885000 3
4 Prepaid Rent 885000 4
5 To record expired rent on 6-month lease of 5
6 $17,700 paid October 1, 2013 6
7 7
8 (Adjustment b) 8
9 31 Supplies Expense 928000 9
10 Supplies 928000 10
11 To record supplies used in 2013 11
Adjusting Entries
GENERAL JOURNAL 25
DATE DESCRIPTION DEBIT CREDIT
PROBLEM 13.5A (continued)
PAGE
POST.
REF.
1 1
2 2014 2
3 Jan. 1 Salaries Payable 4 4 0 0 00 3
4 Salaries Expense 4 4 0 0 00 4
5 To reverse adjusting entry (d) made Dec. 31, 2013 5
16 16
Analyze: The balance of the Prepaid Rent Account on January 1, 2014, is $8,850.
Reversing Entries
26
DATE DESCRIPTION DEBIT CREDIT
GENERAL JOURNAL
PROBLEM 13.1B
Operating Revenue
Sales 42980000
Net Delivered Cost of Purchases 17693000
Total Merchandise Available for Sale 21005500
Less Merchandise Inventor
y
, Dec. 31, 2013 3540000
Cost of Goods Sold 17465500
Gross Profit on Sales 25199500
Operating Expenses
Warehouse Expenses
Lite Speed Electronics
Income Statement
Year Ended December 31, 2013
PROBLEM 13.1B (continued)
General and Administrative Expenses
Salaries Expense—Office 1590000
Office Supplies Expense 115000
Insurance Expense 150000
Lite Speed Electronics
Income Statement (continued)
Year Ended December 31, 2013
PROBLEM 13.1B (continued)
Lite Speed Electronics
Statement of Owner's Equity
PROBLEM 13.1B (continued)
Current Assets
Cash 1020000
Petty Cash Fund 1 0 0 00
Notes Receivable 320000
Accounts Receivable 2125000
Building 4850000
Less Accumulated Depreciation 1300000 3550000
Warehouse Equipment 800000
Less Accumulated Depreciation 230000 570000
Delivery Equipment 1640000
Less Accumulated Depreciation 360000 1280000
Current Liabilities
Notes Payable 500000
Accounts Payable 1314000
Interest Payable 2 4 0 00
Total Current Liabilities 1838000
Lite Speed Electronics
Balance Sheet
December 31, 2013
Assets
PROBLEM 13.1B (continued)
Long-Term Liabilities
Mortgage Payable 1595000
Loans Payable 400000
Analyze: The gross profit percentage for the period is 59.06% ($251,995/$426,650).
Lite Speed Electronics
Balance Sheet (continued)
December 31, 2013
PROBLEM 13.2B
Operating Revenue
Sales 60841700
Less Sales Returns and Allowances 940000
Net Sales 59901700
Cost of Goods Sold
Merchandise Inventory, January 1, 2013 8898000
Purchases 23005000
Income Statement
Year Ended December 31, 2013
Hog Wild
PROBLEM 13.2B (continued)
General and Administrative Expenses
Salaries Expense—Office 5750000
Office Supplies Expense 136000
Insurance Expense 950000
Utilities Expense 691200
Hog Wild
Income Statement (continued)
Year Ended December 31, 2013
PROBLEM 13.2B (continued)
Nick Henry, Capital, January 1, 2013 19871000
Hog Wild
Statement of Owner's Equity
Year Ended December 31, 2013
PROBLEM 13.2B (continued)
Current Assets
Cash 1435000
Petty Cash Fund 2 0 0 00
Notes Receivable 600000
Accounts Receivable 5460000
Less Allowance for Doubtful Accounts 500000 4960000
Plant and Equipment
Land 2040000
Building 5310000
Less Accumulated Depreciation 840000 4470000
Warehouse Equipment 2400000
Less Accumulated Depreciation 400000 2000000
Current Liabilities
Notes Payable 800000
Accounts Payable 3250000
Interest Payable 180000
Total Current Liabilities 4230000
Hog Wild
Balance Sheet
December 31, 2013
Assets
PROBLEM 13.2B (continued)
Long-Term Liabilities
Mortgage Payable 3587500
Notes Payable-Long Term 600000
Hog Wild
Balance Sheet (continued)
December 31, 2013
PROBLEM 13.3B
Operating Revenue
Sales 162,660.00
Less Sales Discount 180.00
Net Sales 162,480.00
Cost of Goods Sold
Merchandise Inventory, January 1, 2013 18,500.00
Purchases 92,500.00
Gross Profit on Sales 71,975.00
Operating Expenses
Rent Expense 26,400.00
Wages Expense 18,800.00
Payroll Taxes Expense 1,872.20
Year Ended December 31, 2013
The Game Place
Income Statement
PROBLEM 13.3B (continued)
Matt Huffman, Capital, January 1, 2013 43,000.00
Current Assets
Cash 32,465.00
Accounts Receivable 669.00
Prepaid Advertising 160.00
Supplies 150.00
The Game Place
Year Ended December 31, 2013
Statement of Owner's Equity
The Game Place
Balance Sheet
December 31, 2013
Assets
PROBLEM 13.3B (continued)
Analyze: The amount of working capital is 24,707.80, calculated as follows:
PROBLEM 13.4B
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REF.
1 1
2 2013 (Adjustment a) 2
3 Dec. 31 Income Summary 16 9 8 5 00 3
4 Merchandise Inventory 1698500 4
5 To transfer beginning inventory 5
6 6
19 31 Supplies Expense 5 0 5 00 19
20 Supplies 5 0 5 00 20
21 To record supplies used during 2013 21
22 22
Adjusting Entries
GENERAL JOURNAL 29
DATE DESCRIPTION DEBIT CREDIT
