PROBLEM SET B
Problem 4-1B (40 minutes)—Perpetual & Gross Method
May 2 Merchandise Inventory ………………………………. 10,000
Accounts Payable—Havel ……………………. 10,000
Purchased goods, terms 1/15, n/30.
9 Cost of Goods Sold ……………………………………. 2,000
Merchandise Inventory ………………………… 2,000
Record cost of May 9 sale.
Problem 4-1B (Concluded)
May 17 Accounts Payable—Havel …………………………. 10,000
Merchandise Inventory* ………………………. 100
25 Accounts Payable—Duke ………………………….. 3,000
Merchandise Inventory* ………………………. 60
Problem 4-2B (40 minutes)—Perpetual and Gross Method
July 3 Merchandise Inventory ……………………………… 15,000
10 Merchandise Inventory ……………………………… 14,200
Problem 4-2B (Concluded)
July 17 Cash …………………………………………………………. 9,310
Sales Discounts* ………………………………………. 190
21 Accounts Receivable—Brown …………………… 11,000
Sales ………………………………………………….. 11,000
Problem 4-3B (40 minutes)
1.
Net sales
Sales ………………………………………………………………………
$332,650
Sales returns and allowances ………………………..
2.
Purchase discounts received ………………………………….
Purchase returns and allowances …………………………..
Total cost of merchandise purchases ……………………..
Problem 4-3B (Continued)
3. Multiple-step income statement
BARKLEY COMPANY
Income Statement
For Year Ended March 31, 2016
Sales ………………………………………………………….. $332,650
Less: Sales discounts ……………………………….. $ 5,875
General and administrative expenses
Office salaries expense …………………………... 40,750
Problem 4-3B (Concluded)
4. Single-step income statement
BARKLEY COMPANY
Income Statement
For Year Ended March 31, 2016
Net sales ………………………………………………………. $306,775
Problem 4-4B (30 minutes)
Part 1
Closing entries
March 31 Sales ………………………………………………………… 332,650
Income Summary …………………………………… 332,650
Close temporary accounts with credit balances.
March 31 Income Summary ……………………………………….. 55,175
Part 2
This year’s sales returns and allowances ratio:
Problem 4-5B (60 Minutes)
Part 1
Adjustment (a)
Oct. 31 Store Supplies Expense …………………………….. 6,000
Adjustment (b)
Problem 4-5B (Continued)
Part 2 Multiple-step income statement
FOSTER PRODUCTS COMPANY
Income Statement
For Year Ended October 31, 2016
Sales ………………………………………………………………. $227,100
Less: Sales discounts …………………………………….. $ 1,000
Part 3 Single–step income statement
FOSTER PRODUCTS COMPANY
Income Statement
For Year Ended October 31, 2016
Net sales …………………………………………………………. $221,100
Problem 4-5B (Concluded)
Part 4
Current assets
Cash ………………………………………………………………… $ 7,400
Merchandise inventory …………………………………….. 21,300
Problem 4-6BB (50 minutes)
FOSTER PRODUCTS COMPANY
Work Sheet
For Year Ended October 31, 2016
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 ………………………
(a)
6,000
Prepaid insurance ………………..
(b)
2,800
Store equipment …………………..
81,800
81,800
81,800
32,000
(c)
3,000
35,000
Accounts payable ………………..
18,000
18,000
Common stock …………………….
Dividends …………………………….
Sales discounts ……………………
Sales returns and allowances
Cost of goods sold ……………….
75,800
(d)
2,700
78,500
(c)
3,000
Salaries expense ………………….
63,000
63,000
Insurance expense ……………….
(b)
2,800
Rent expense ……………………….
26,000
26,000
Store supplies expense ………..
(a)
6,000
Totals …………………………………..
203,100
Net income …………………………..
SERIAL PROBLEM — SP 4
Serial Problem — SP 4 (120 minutes) Part 1
Journal entries
Jan. 4 Wages Expense ……………………………………….623 125
9 Cash ………………………………………………………..101 2,668
Serial Problem — SP 4 (Continued)
Jan. 17 Accounts Payable ……………………………………201 5,800
22 Cash ………………………………………………………..101 4,653
Sales Discounts ……………………………………….415 47
Accounts Receivable—Liu Corp …………106.5 4,700
Collected accounts receivable.
January 13 sale ………………………………. $5,200
Serial Problem — SP 4 (Continued)
Feb. 1 Prepaid Rent ……………………………………………131 2,475
11 Cash ………………………………………………………..101 5,500
Serial Problem — SP 4 (Continued)
Mar. 8 Computer Supplies ………………………………….126 2,730
24 Accounts Receivable—Easy Leasing ………..106.3 9,047
Computer Services Revenue ……………..403 9,047
Billed customer for services.
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
Accounts Receivable—Alex’s Engineering Co. Acct. No. 106.1
Date Explanation PR Debit Credit Balance
Accounts Receivable—Wildcat Services Acct. No. 106.2
Date Explanation PR Debit Credit Balance