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Problem E-6BA (Continued)
Sales Salaries Expense
Acct. No. 621
Date
Explanation
PR
Debit
Credit
Balance
Nov. 15
D2
6,585
6,585
30
D2
6,585
13,170
ACCOUNTS RECEIVABLE LEDGER
Carlos Mantel
Date
Explanation
PR
Debit
Credit
Balance
Nov. 10
S2
13,500
13,500
19
R2
13,500
0
22
S2
3,695
3,695
Cyd Rounder
Date
Explanation
PR
Debit
Credit
Balance
Nov. 8
S2
6,550
6,550
18
R2
6,550
0
Problem E-6BA (Continued)
Grebe Company
Date
Explanation
PR
Debit
Credit
Balance
Nov. 5
P2
1,040
1,040
16
P2
459
1,499
Financial & Managerial Accounting, 5th Edition
1564
Problem E-6BA (Concluded)
Part 3—continued
GRASSLEY COMPANY
Schedule of Accounts Receivable
November 30
Carlos Mantel. ......................................................
$3,695
Tori Tripp ..............................................................
4,280
Total accounts receivable ................................
$7,975
GRASSLEY COMPANY
Schedule of Accounts Payable
November 30
Brun Supply. .........................................................
$4,136
Grebe Company ...................................................
1,499
Total accounts payable ................................
$5,635
SERIAL PROBLEM – SP E
Serial Problem, Success Systems (100 minutes) Parts 1 and 2
SALES JOURNAL
Page 2
Date
Account Debited
Invoice
Number
PR
Accounts Receivable Dr.
Sales Cr.
Cost of Goods Sold Dr.
Inventory Cr.
Jan. 13
Liu Corp. ....................................................
n/a
✓
5,200
3,560
26
KC, Inc. .......................................................
n/a
✓
5,800
4,640
Feb. 23
Delta Co......................................................
n/a
✓
3,220
2,660
Mar. 25
Wildcat Services ................................
n/a
✓
2,800
2,002
30
IFM Company ................................
n/a
✓
2,220
1,100
31
Totals ..........................................................
19,240
13,962
(106/413)
(502/119)
CASH RECEIPTS JOURNAL
Page 2
Date
Account Credited
Explanation
PR
Cash
Dr.
Sales
Discount
Dr.
Accounts
Receivable
Cr.
Services
Revenue
Cr.
Other
Accts.
Cr.
Cost of Goods
Sold Dr.
Inventory Cr.
Jan. 9
Gomez Co ................................
Invoice, n/a
✓
2,668
2,668
16
Services Revenue ................................
Cash Sales
✓
4,000
4,000
22
Liu Corp ................................
Invoice, 1/13
✓
4,653
47
4,700
Feb.11
Alex’s Eng. Co ................................
Invoice, 1/11
✓
5,500
5,500
Mar. 9
Delta Co ................................
Invoice, 2/23
✓
3,220
3,220
16
Services Revenue ................................
Cash Sales
✓
5,260
__
_____
5,260
_
_
31
Totals ................................
25,301
47
16,088
9,260
0
0
(101)
(415)
(106)
(403)
(✓)
(502/119)
Serial Problem, Success Systems (Continued)
PURCHASES JOURNAL
Page 2
Date
Account
Date of
Invoice
Terms
PR
Accounts
Payable
Cr.
Inventory
Dr.
Computer
Supplies
Dr.
Other
Accounts
Dr.
Jan. 7
Kansas Corp ................................
1/7
1/10, n/30
✓
5,800
5,800
26
Kansas Corp ................................
1/26
1/10, n/30
✓
9,000
9,000
Mar. 8
Harris Office Products ............................
3/8
✓
2,730
_____
2,730
31
Totals .........................................................
17,530
14,800
2,730
0
(201)
(119)
(126)
(✓)
CASH DISBURSEMENTS JOURNAL
Page 2
Date
Ck.
No.
Payee
Account Debited
PR
Cash
Cr.
Inventory
Cr.
Other
Accounts
Dr.
Accounts
Payable
Dr.
Jan. 4
n/a
Lyn Addie ................................
Wages Expense
Wages Payable
623/210
625
125
500
15
n/a
Not specified ................................
Merchandise Inventory
119
600
600
17
n/a
Kansas Corp ................................
Kansas Corp
✓
5,742
58
5,800
31
n/a
Lyn Addie ................................
Wages Expense
623
1,250
1,250
Feb. 1
n/a
Hillside Mall ................................
Prepaid Rent
131
2,475
2,475
3
n/a
Kansas Corp ................................
Kansas Corp
✓
8,414
90
8,504
5
n/a
Not specified ................................
Advertising Expense
655
600
600
15
n/a
A. Lopez ................................
Dividends
319
4,800
4,800
26
n/a
Lyn Addie ................................
Wages Expense
623
1,000
1,000
27
n/a
A. Lopez ................................
Mileage Expense
676
192
192
Mar. 11
n/a
Not Specified ................................
Repairs Expense
684
960
960
19
n/a
Harris Off. Prod ................................
Harris Office Products
✓
3,830
3,830
31
n/a
A. Lopez ................................
Mileage Expense
676
128
___
128
_____
31
Totals ................................
30,616
148
12,630
18,134
(101)
(119)
(✓)
(201)
Serial Problem, Success Systems (Concluded)
Part 3
GENERAL JOURNAL
Page 2
2014
Jan. 5 Cash ................................................................... 101 25,000
Common Stock ........................................ 307 25,000
Additional investment by owner.
11 Accounts Receivable—Alex’s Eng. Co .......... 106.1 5,500
24 Accounts Payable—Kansas Corp................... 201 496
Merchandise Inventory ........................... 119 496
Returned merchandise for credit.
Reporting in Action — BTN E-1
1. Polaris’s Note 12 identifies its single reported business segment.
2. Polaris identifies and describes its single reportable segment in its
Note 1 as follows: “its engaged in the design, engineering,
3. Solution depends on the most recent information obtained.
Comparative Analysis — BTN E-2
1. Polaris - Current Year Revenue/Segment Assets
Domestic segment: $1,864,099 / [($957,497 + $873,183)/2] = 203.7%
International segment: $792,850 / [($270,527 + $188,464)/2] = 345.5%
2. Polaris’s domestic revenue as a percent of its domestic assets is
markedly higher than of Arctic Cat’s for both years for the domestic
segment. However, for the international segment, Arctic Cat’s revenue
Ethics Challenge — BTN E-3
1. Independence in fact means that the auditor maintains an objective
point of view of the client. Independence in appearance means that a
2. While auditors are hired by their clients to perform audits, auditors
have a responsibility to the company’s “stakeholders” and the public.
3. Since Erica Gray is a sole practitioner it is questionable whether she
can consult on the client’s accounting system and then remain
objective in subsequent years when she performs the audit of the
company. Large firms often separate consulting and auditing
engagements for the same client by having staff stationed in two
different geographic branches of the firm do the work. Or a large local
firm might be able to perform consulting and auditing for the same
client by assigning different personnel to the two jobs. In this
scenario, Erica Gray would need to do both jobs herself, making it
difficult to maintain independence in fact and appearance.
(Note to instructors: The Sarbanes-Oxley Act specifically prohibits auditors
from providing financial information and system designs for their SEC audit
clients. This was codified by the SEC [Final Ruling 68].)
Communicating in Practice — BTN E-4
The memo should recommend the use of special journals and subsidiary
ledgers. It should explain the time-saving aspect of journalizing in labeled
columns and also the posting of column totals representing the impact of
groups of like transactions. The memo should discuss the timely
information provided by subsidiary ledgers regarding customer and
creditor balances. A discussion of the uses of a schedule for verifying the
accuracy of subsidiary ledgers should also be included.
Taking It to the Net — BTN E-5
(See Dell’s Note 14 – Segment Information)
1. Large Enterprise; Public; Small and Medium Business; and Consumer.
2. The Large Enterprise segment reports $1,854 million of operating income
and the Large Enterprise segment reports $3,108 million of assets.
3. Dell’s Operating Income and Total Assets by Segment
($ millions)
Operating
Income 2012
Total Assets 2012 :
Total Assets 2011
Segment Return
on Assets
Large Enterprise ...........
$ 1,854
$3,108 : $2,934
61.4%
Public ............................
$ 1,644
$2,330 : $2,545
67.4%
Small & Medium
Business .....................
$ 1,665
$1,421 : $1,398
118.1%
Consumer .....................
$ 324
$1,503,: $1,458
21.9%
The Small and Medium Business had the highest segment return on
assets for the fiscal year ended 2012 with a 118.1% return. The other
three showed returns on assets ranging from 21% to 67%.
4. The six product groups reported by Dell include: Desktop PCs, Mobility,
Teamwork in Action — BTN E-6
For check figures in the implementation of this activity see the solution
to Problem E-3A or E-3B.
Global Decision — BTN E-7
1. KTM has the following reported segments:
2. KTM discloses dollar amounts for the following line items:
• Profit and Loss Information
i. Net sales
