Problem 4-5B (Concluded)
Part 4
Current assets
Cash ………………………………………………………………… $ 7,400
Merchandise inventory …………………………………….. 21,300
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Financial and Managerial Accounting, 6th Edition
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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
Common stock …………………….
3,000
3,000
3,000
Retained earnings ………………..
40,000
40,000
40,000
Dividends …………………………….
2,000
2,000
2,000
Sales …………………………………...
227,100
227,100
227,100
Sales discounts …………………...
1,000
1,000
1,000
Sales returns and allowances
5,000
5,000
5,000
Cost of goods sold ……………….
75,800
(d)
2,700
78,500
78,500
Depreciation expense—Store eq ...
0
(c)
3,000
3,000
3,000
Salaries expense ………………….
63,000
63,000
63,000
Insurance expense ……………….
0
(b)
2,800
2,800
2,800
Rent expense ……………………….
26,000
26,000
26,000
Store supplies expense ………..
0
(a)
6,000
6,000
6,000
Advertising expense …………….
17,800
______
_____
_____
17,800
______
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 …………………………..
24,000
______
______
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
Cash …………………………………………………101 625
Paid employee.
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any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Financial and Managerial Accounting, 6th Edition
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Serial Problem — SP 4 (Continued)
Jan. 17 Accounts Payable ……………………………………201 5,800
Merchandise Inventory ………………………119 58
Cash …………………………………………………101 5,742
Paid account payable within discount period.
(Discount taken = $5,800 x .01 = $58)
20* Sales Returns and Allowances …………………414 500
Accounts Receivable—Liu Corp. ………..106.5 500
Customer returned defective goods.
* Business Solutions leaves the cost of defective
products in its costs of goods sold. If it did not,
the following entry would have been recorded:
Loss from Defective Merchandise …… 808 320
Cost of Goods Sold …………………… 502 320
22 Cash ………………………………………………………..101 4,653
Returned merchandise for credit.
26 Merchandise Inventory …………………………….119 9,000
Accounts Payable ……………………………..201 9,000
Purchased merchandise for resale.
26 Accounts Receivable—KC, Inc ………………….106.8 5,800
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 ……………………………………201 8,504
Merchandise Inventory ………………………119 90
Cash …………………………………………………101 8,414
Accounts Receivable—Alex’s Eng. Co. ……106.1 5,500
Collected accounts receivable.
15 Dividends …………………………..…………………….319 4,800
Cash …………………………………………………101 4,800
Paid cash for dividends.
Cash …………………………………………………101 192
Reimbursed Rey for business mileage.
Serial Problem — SP 4 (Continued)
Mar. 8 Computer Supplies ………………………………….126 2,730
Accounts Payable ……………………………..201 2,730
19 Accounts Payable ……………………………………201 3,830
Cash …………………………………………………101 3,830
Paid accounts payable ($1,100 + $2,730).
24 Accounts Receivable—Easy Leasing…………106.3 9,047
Computer Services Revenue ……………..403 9,047
Serial Problem — SP 4 (Continued)
Part 2
Ledger accounts as of March 31 before posting of March 31 adjusting entries
Cash Acct. No. 101
Date Explanation PR Debit Credit Balance
Dec. 31 Balance 48,372
Jan. 4 625 47,747
5 25,000 72,747
9 2,668 75,415
15 600 74,815
16 4,000 78,815
Accounts Receivable—Alex’s Engineering Co. Acct. No. 106.1
Date Explanation PR Debit Credit Balance
Dec. 31 Balance 0
Jan. 11 5,500 5,500
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any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Financial and Managerial Accounting, 6th Edition
290
Serial Problem — SP 4 (Continued)
Accounts Receivable—Easy Leasing Acct. No. 106.3
Date Explanation PR Debit Credit Balance
Dec. 31 Balance 0
Mar. 24 9,047 9,047
Accounts Receivable—IFM Co. Acct. No. 106.4
Date Explanation PR Debit Credit Balance
Dec. 31 Balance 3,000
Mar. 30 2,220 5,220
Accounts Receivable—Liu Corporation Acct. No. 106.5
Date Explanation PR Debit Credit Balance
Dec. 31 Balance 0
Feb. 23 3,220 3,220
Mar. 9 3,220 0
Accounts Receivable—KC, Inc. Acct. No. 106.8
Serial Problem — SP 4 (Continued)
Accounts Receivable—Dream, Inc. Acct. No. 106.9
Date Explanation PR Debit Credit Balance
Dec. 31 Balance 0
Merchandise Inventory Acct. No. 119
Date Explanation PR Debit Credit Balance
Dec. 31 Balance 0
Jan. 7 5,800 5,800
13 3,560 2,240
Computer Supplies Acct. No. 126
Date Explanation PR Debit Credit Balance
Dec. 31 Balance 580
Mar. 8 2,730 3,310
Prepaid Insurance Acct. No. 128
Date Explanation PR Debit Credit Balance
Dec. 31 Balance 1,665
Prepaid Rent Acct. No. 131
Date Explanation PR Debit Credit Balance
Office Equipment Acct. No. 163
Date Explanation PR Debit Credit Balance
Serial Problem — SP 4 (Continued)
Accumulated Depreciation—Office Equipment Acct. No. 164
Date Explanation PR Debit Credit Balance
Computer Equipment Acct. No. 167
Date Explanation PR Debit Credit Balance
Dec. 31 Balance 20,000
Accumulated Depreciation—Computer Equipment Acct. No. 168
Date Explanation PR Debit Credit Balance
Dec. 31 Balance 1,250
Accounts Payable Acct. No. 201
Date Explanation PR Debit Credit Balance
Dec. 31 Balance 1,100
Wages Payable Acct. No. 210
Date Explanation PR Debit Credit Balance
Dec. 31 Balance 500
Jan. 4 500 0
Unearned Computer Services Revenue Acct. No. 236
Date Explanation PR Debit Credit Balance