Name Date Class
22-4 APPLICATION PROBLEM (concluded)
2.
GENERAL JOURNAL PAGE
DATE ACCOUNT TITLE DOC.
NO.
POST.
REF. DEBIT CREDIT
1 1
2 2
3 3
4 4
5 5
9 9
10 10
11 11
12 12
13 13
14 14
15 15
16 16
17 17
18 18
19 19
20 20
21 21
22 22
23 23
24 24
25 25
26 26
27 27
28 28
29 29
30 30
31 31
32 32
Reversing Entries
20–
Jan. 1Interest Income 6 3 0 00
Interest Receivable 6 3 0 00
1Interest Payable 6 0 0 00
14
22-M MASTERY PROBLEM (LO1, 2, 3, 4, 5, 6, 7), p. 710
Journalizing adjustments, preparing financial statements, and journalizing end-of-fiscal-period
entries for a corporation
Ramel Corporation
Unadjusted Trial Balance
december 31, 20–
ACCOUNT TITLE DEBIT CREDIT
Cash 55 0 3 6 50
Petty Cash 2 5 0 00
Accounts Receivable 251 6 9 6 50
Prepaid Insurance 28 0 0 0 00
Ofce Equipment 58 2 9 6 44
Accumulated depreciation—Ofce Equipment 17 4 2 0 00
Store Equipment 54 3 1 6 00
Accumulated depreciation—Store Equipment 36 3 2 0 00
Accounts Payable 89 5 6 6 58
Sales Tax Payable 5 0 3 7 32
Notes Payable 50 0 0 0 00
Interest Payable
dividends Payable 16 0 0 0 00
Bonds Payable 15 0 0 0 00
Capital Stock—Common 80 0 0 0 00
Paid-in Capital in Excess of Par—Common 180 0 0 0 00
Capital Stock—Preferred 40 0 0 0 00
(Note: Unadjusted trial balance is continued on next page.)
Name Date Class
22-M MASTERY PROBLEM (continued)
Ramel Corporation
Unadjusted Trial Balance (Concluded)
december 31, 20–
ACCOUNT TITLE DEBIT CREDIT
Paid-in Capital in Excess of Par—Preferred
Retained Earnings 298 3 6 6 00
Advertising Expense 32 9 7 3 80
Cash Short and Over 3 3 76
Credit Card Fee Expense 16 9 7 8 66
depreciation Expense—Ofce Equipment
depreciation Expense—Store Equipment
Insurance Expense
Miscellaneous Expense 84 3 7 2 60
Payroll Taxes Expense 64 3 6 8 04
Rent Expense 90 0 0 0 00
Repairs Expense 12 3 0 9 98
23148_ch22_hr_683-754.indd 725 1/18/18 1:41 AM
22-M MASTERY PROBLEM (continued)
1., 3.
GENERAL JOURNAL PAGE 12
DATE ACCOUNT TITLE DOC.
NO.
POST.
REF. DEBIT CREDIT
1 1
2 2
3 3
4 4
5 5
6 6
7 7
8 8
9 9
Adjusting Entries
20–
Dec. 31 Uncollectible Accounts Expense 11 3 4 0 00
Allowance for Uncollectible Accounts 11 3 4 0 00
31 Interest Receivable 1 6 0 00
Interest Income 1 6 0 00
31 Merchandise Inventory 4 8 5 3 00
Income Summary 4 8 5 3 00
31 Supplies Expense 12 3 4 2 55
Supplies 12 3 4 2 55
Adjusted Trial Balance amounts:
Total of Income Statement Credit amounts, including Income Summary, $4,557,795.70
Total of Income Statement Debit amounts, $4,305,572.39
Net Income before Federal Income Tax: $4,557,795.70 2 $4,305,572.39 5 $252,223.31
Federal Income Tax from table on page 680 in text:
Name Date Class
22-M MASTERY PROBLEM (continued)
2., 4.
Income Summary
depreciation Expense—Ofce Equipment
Allowance for Uncollectible Accounts
Balance 320.00
Balance 11,020.00
Interest Receivable
11,340.00
Adjustment
160.00
Adjustment
Adjustment
Adjustment
4,853.00
10,960.00
22-M MASTERY PROBLEM (continued)
Uncollectible Accounts Expense
Interest Income
Balance 1,296.00
Balance 1,456.00
Accumulated depreciation—Ofce Equipment
Balance 17,420.00
Balance 28,380.00
Interest Payable
10,960.00
Adjustment
625.00Adjustment
Adjustment
Adjustment
11,340.00
160.00
Name Date Class
22-M MASTERY PROBLEM (continued)
5.
Adjusted Trial Balance
ACCOUNT TITLE DEBIT CREDIT
Cash 55 0 3 6 50
Petty Cash 2 5 0 00
Accounts Receivable 251 6 9 6 50
Accumulated depreciation—Ofce Equipment
Store Equipment 54 3 1 6 00
Accumulated depreciation—Store Equipment
Accounts Payable 89 5 6 6 58
Sales Tax Payable 5 0 3 7 32
Notes Payable 50 0 0 0 00
Interest Payable
Unearned Rent Income
Employee Income Tax Payable 4 9 1 7 60
Social Security Tax Payable 4 2 4 2 62
(Note: Adjusted trial balance is continued on next page.)
Ramel Corporation
December 31, 20–
28 3 8 0 00
46 4 4 0 00
6 2 5 00
3 0 0 0 00
22-M MASTERY PROBLEM (continued)
Adjusted Trial Balance (Concluded)
ACCOUNT TITLE DEBIT CREDIT
Paid-in Capital in Excess of Par—Preferred
Retained Earnings 298 3 6 6 00
Purchases discount 26 2 3 6 04
Purchases Returns and Allowances 12 3 6 8 32
Advertising Expense 32 9 7 3 80
Cash Short and Over 3 3 76
Credit Card Fee Expense 16 9 7 8 66
depreciation Expense—Ofce Equipment
depreciation Expense—Store Equipment
Insurance Expense
Miscellaneous Expense 84 3 7 2 60
Payroll Taxes Expense 64 3 6 8 04
Rent Expense 90 0 0 0 00
Repairs Expense 12 3 0 9 98
Ramel Corporation
December 31, 20–
10 9 6 0 00
10 1 2 0 00
24 0 0 0 00
Name Date Class
22-M MASTERY PROBLEM (continued)
6.
Income Statement
% OF
SALES
Operating Revenue:
Sales
Less: Sales discount
Sales Returns and Allowances
Gross Profit
Operating Expenses:
Advertising Expense
Cash Short and Over
Credit Card Fee Expense
depreciation Expense—Office Equipment
depreciation Expense—Store Equipment
Insurance Expense
Miscellaneous Expense
Payroll Taxes Expense
Rent Expense
Gain on Plant Assets
Total Other Income
Other Expenses:
Interest Expense
Loss on Plant Assets
Total Other Expenses
Net deduction
Net Income before Federal Income Tax
Less Federal Income Tax Expense
Net Income after Federal Income Tax
Ramel Corporation
For Year Ended December 31, 20–
4503 7 8 6 34
11 7 8 8 72
30 9 7 4 78 42 7 6 3 50
1508 1 1 4 04 33.81
32 9 7 3 80
3 3 76
16 9 7 8 66
10 9 6 0 00
10 1 2 0 00
24 0 0 0 00
84 3 7 2 60
64 3 6 8 04
90 0 0 0 00
3 0 9 6 00
10 5 5 2 00
7 8 2 5 00
4 8 3 0 40
12 6 5 5 40
2 1 0 3 40 0.05
252 2 2 3 31 5.65
81 6 1 7 09 1.83
170 6 0 6 22 3.82
22-M MASTERY PROBLEM (continued)
7.
Acceptable
%
Actual
%
Positive Result Recommended Action if
Needed
Yes No
Cost of merchandise
sold Not more than 65.00%
Gross profit on
operations Not less than 35.00%
66.19% ✔Identify ways of reducing
the cost of merchandise.
33.81% ✔Decrease the cost of
merchandise sold or
increase unit sales prices.
Name Date Class
22-M MASTERY PROBLEM (continued)
8.
Statement of Stockholders’ Equity
Capital Stock—Common:
$5.00 Par Value
January 1, 20–, 10,000 Shares Issued
Issued during Current Year, 6,000 Shares
Capital Stock—Preferred:
$20.00 Par Value, 5%
January 1, 20–, 1,500 Shares Issued
Issued during Current Year, 500 Shares
Balance, december 31, 20–, 2,000 Shares Issued
Retained Earnings:
Ramel Corporation
For Year Ended December 31, 20–
50 0 0 0 00
30 0 0 0 00
30 0 0 0 00
10 0 0 0 00
40 0 0 0 00
22-M MASTERY PROBLEM (continued)
9.
Balance Sheet
Assets
Current Assets:
Cash
Petty Cash
Plant Assets:
Ofce Equipment
Less Accumulated depreciation—Office Equipment
Store Equipment
Less Accumulated depreciation—Store Equipment
Total Plant Assets
Total Assets
Liabilities
Current Liabilities:
Accounts Payable
Medical Insurance Payable
Unemployment Tax Payable—State
Unemployment Tax Payable—Federal
Federal Income Tax Payable
dividends Payable
Total Current Liabilities
Long-term Liabilities:
Bonds Payable
Total Long-term Liabilities
Total Liabilities
Ramel Corporation
December 31, 20–
55 0 3 6 50
2 5 0 00
58 2 9 6 44
28 3 8 0 00 29 9 1 6 44
54 3 1 6 00
46 4 4 0 00 7 8 7 6 00
37 7 9 2 44
928 0 2 4 61
89 5 6 6 58
1 3 4 4 00
5 8 5 60
9 1 20
31 6 1 7 09
16 0 0 0 00
208 0 5 2 39
15 0 0 0 00
15 0 0 0 00
223 0 5 2 39
Name Date Class
22-M MASTERY PROBLEM (continued)
10.
Acceptable Actual Positive Result Recommended Action if
Needed
Yes No
Working capital Not less than
$600,000.00
Statement of Cash Flows
11.
$682,179.78 ✔None
Ramel Corporation
For Year Ended December 31, 20–
Cash ows from operating activities:
Cash receipts from:
Sales 4211 3 2 6 34
Interest 1 5 1 0 00
Rent 9 0 0 0 00
Total cash payments (3980 91291)
Net cash provided/(used) by operating activities 240 9 2 3 43
Cash ows from investing activities:
Sale of store equipment 3 5 0 0 00
Purchase of office equipment (48 6 5 1 87)
Purchase of store equipment (15 5 0 0 00)
Net cash provided/(used) by investing activities (60 6 5 1 87)
Cash ows from financing activities:
Issuance of stock 90 0 0 0 00
22-M MASTERY PROBLEM (continued)
12.
GENERAL JOURNAL PAGE
DATE ACCOUNT TITLE DOC.
NO.
POST.
REF. DEBIT CREDIT
1 1
2 2
3 3
4 4
5 5
13 13
14 14
15 15
16 16
17 17
18 18
19 19
20 20
21 21
28 28
29 29
30 30
31 31
32 32
33 33
Closing Entries
20–
Dec. 31 Sales 4503 7 8 6 34
Purchases Discount 26 2 3 6 04
Purchases Returns and Allowances 12 3 6 8 32
Interest Income 1 4 5 6 00
Advertising Expense 32 9 7 3 80
Cash Short and Over 3 3 76
Credit Card Fee Expense 16 9 7 8 66
Depreciation Expense—Office Equipment 10 9 6 0 00
Depreciation Expense—Store Equipment 10 1 2 0 00
Insurance Expense 24 0 0 0 00
Miscellaneous Expense 84 3 7 2 60
Payroll Taxes Expense 64 3 6 8 04
Interest Expense 7 8 2 5 00
Loss on Plant Assets 4 8 3 0 40
31 Income Summary 170 6 0 6 22
Retained Earnings 170 6 0 6 22
31 Retained Earnings 64 0 0 0 00
Dividends 64 0 0 0 00
16
Name Date Class
22-M MASTERY PROBLEM (concluded)
13.
GENERAL JOURNAL PAGE
DATE ACCOUNT TITLE DOC.
NO.
POST.
REF. DEBIT CREDIT
1 1
2 2
3 3
4 4
8 8
9 9
10 10
11 11
12 12
13 13
14 14
15 15
16 16
17 17
18 18
19 19
20 20
21 21
22 22
23 23
24 24
25 25
26 26
27 27
28 28
29 29
30 30
31 31
32 32
33 33
Reversing Entries
20–
Jan. 1Interest Income 1 6 0 00
Interest Receivable 1 6 0 00
Interest Payable 6 2 5 00
17
738 • Working Papers
© 2019 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
1. a.
1. a. and b.
1. b.
Notes Receivable
december 31 Balance 10,000.00
Interest Income
december 31 Closing 75.00 december 31 Adjustment
22-C CHALLENGE PROBLEM (LO7), p. 712
Reversing entries
GENERAL JOURNAL PAGE
DATE ACCOUNT TITLE DOC.
NO.
POST.
REF. DEBIT CREDIT
1Reversing Entries 1
2 2
3 3
4 4
5 5
75.00
1
CASH RECEIPTS JOURNAL PAGE
1234567
DATE ACCOUNT TITLE DOC.
POST.
GENERAL ACCOUNTS
RECEIVABLE
SALES
SALES TAX
PAYABLE
SALES
DISCOUNT
CASH
1. c. Interest Income reported in 20X1
Interest Income reported in 20X2
3
TE
March 1
March 1January 1 Balance
10,000.00
225.0075.00
20X2
Jan. 1Interest Income 7 5 00
Interest Receivable 7 5 00
$150.00
$75.00
23148_ch22_hr_683-754.indd 738 1/18/18 1:41 AM