1A
ALTERNATIVE SOLUTION
The following pages 3A-57A contain the solution to the “Alternative Set of
Instructions” (pages 17-19) for the Rockford Corporation practice set.
3A
JOURNALS
GENERAL JOURNAL
PURCHASES JOURNAL
SALES JOURNAL
DATE Account Titles and Explanation REF. DEBIT CREDIT
2014
12 3 Allowance for Doubtful Accounts 113 3700
Accounts Receivable–Iwanaga Plumbing and Heating 112/190 3700
To record the write-off of an
account due to bankruptcy.
12 9 Payroll Tax Expense 730 3 5 0
FICA Taxes Payable 214 3 5 0
12 17 Notes Receivable 115 45200
Accounts Receivable–Bilder Construction 112/180 45200
To record receipt of a 14%, 6-month
note for an overdue accounts receivable
12 22 Freight-In 516 2300
on December 26, payable January 14, 2015
(6,300 shs – 1,700 shs = 4,600 shs ×$1.80 = $8,280)
12 26 Notes Receivable 115 14000
Accounts Receivable–Beverly’s Building Products 112/175 14000
To record receipt of a 12%, 6-month note
GENERAL JOURNAL Page 9
5A
DATE Account Titles and Explanation REF. DEBIT CREDIT
2014
12 31 Payroll Tax Expense 730 3120
FICA Taxes Payable 214 3120
To record payroll tax expense on monthly
payroll
ADJUSTING ENTRIES AT 12/31/14
12 31 Bad Debt Expense 612 83232
Allowance for Doubtful Accounts 113 83232
GENERAL JOURNAL Page 10
(a)
DATE Account Titles and Explanation REF. DEBIT CREDIT
2014
12 31 Income Summary 350 53 1960
Inventory 120 53 1960
12 31 Salaries and Wages Expense 726 5800
FICA Taxes Payable 214 4 1 0
Federal Withholding Taxes Payable 216 9 8 0
State Withholding Taxes Payable 218 2 0 0
Salaries and Wages Payable 212 4210
To record wages earned but unpaid at
December 31, 2014.
12 31 Interest Expense 905 12205
Interest Payable 230 12205
To accrue interest owing on mortgage
notes and bonds at December 31, 2014.
Mort. notes $113,000 ×7% ×6/12 = $ 3,955
Bonds pay. $275,000 ×9% ×4/12 = 8,250
$12,205
GENERAL JOURNAL Page 11
(g)
(e)
(c)
DATE Account Titles and Explanation REF. DEBIT CREDIT
2014
12 31 Interest Receivable 118 1465
Interest Revenue 820 1465
To record interest receivable at
December 31, 2014.
12 31 Utilities Expense 732 8 6 0
Accounts Payable–Northern Electric 201/# 5 9 0
Accounts Payable–City of Rockford 201/# 2 7 0
To record utilities bills unpaid at
December 31, 2014.
Office Equipment:
($32,800 – $2,000) ×1/7 = $4,400
$6,100 ×2/4 ×1/2 = 1,525
$5,925
Trucks:
Truck #1 – ($28,000 – $3,100) x 15,000 / 60,000 = $6,225
GENERAL JOURNAL Page 12
(h)
(j)
DATE Account Titles and Explanation REF. DEBIT CREDIT
2014
12 31 Income Tax Expense 999 24917
Income Taxes Payable 215 24917
To record the balance of tax expense for
2014 as follows:
Income Statement Credits $5,769,203
Income Statement Debits $5,507,522
Less Income Taxes 112,000 5,395,522
Federal 121,970
Total 136,917
Less amount already paid and recorded 112,000
Tax accrual $ 24,917
CLOSING ENTRIES 12/31/14
GENERAL JOURNAL Page 13
DATE Account Titles and Explanation REF. DEBIT CREDIT
2014
12 31 Income Summary 350 553 2439
Sales Returns and Allowances 412 1 4060
Sales Discounts 414 7 7181
Purchases 510 396 2380
Freight-In 516 2 2820
Utilities Expense 732 1 7529
Interest Expense 905 4 0051
Loss on Disposal of Plant Assets 921 5 0 0
Income Tax Expense 999 13 6917
To close debit balance accounts to
GENERAL JOURNAL Page 14
PUR.
DATE ORDER ACCOUNT CREDITED ACCT. AMOUNT
2014 NO. NO.
12 2 315 Edward’s Plumbing Supplies, Inc. n/60 18 24 320
8 316 Phoenix Plastics 1/10, n/30 14 52 700
17 317 Smith Pipe Company 1/15, n/60 39 50 800
PURCHASES JOURNAL PAGE 12
11A
DATE INVOICE ACCOUNT DEBITED ACCT. AMOUNT
2014 NO. NO.
12 1 1201 Beverly’s Building Products 175 13 150
3 1202 Bilder Construction Co. 180 44 900
4 1203 Coconino Contractors, Inc. 160 10 300
8 1204 Trudy’s Plumbing 155 29 300
SALES JOURNAL PAGE 12
CASH RECEIPTS JOURNAL Page 12
SUNDRY ACCOUNTS
SALES ACCOUNTS SALES
DATE DESCRIPTION CASH DISCOUNTS REF RECEIVABLE REVENUE ACCT.
2014 DR DR CR CR NO. ✓DR CR
12 1
Swanson Brothers Construction
23569 481 133 24050
4 The Potts Company 49294 1006 122 50300
5 Rankin Plumbing Corp. 72863 1487 166 74350
8 Coconino Contractors, Inc. 27800 160 27800
8 Boecker Builders 29000 117 29000
10 Trudy’s Plumbing 15100 155 15100
SUNDRY ACCOUNTS
ACCOUNTS PUR.
DATE CHECK PAYEE CASH REF PAYABLE DISC.
ACCT.
2014 NO. CR DR CR NO. ✔DR CR
12 2 1580 Oxenford Copperworks 26400 35 26400
4 1581 Standard Oil Company 810 644 ✔810
9 1585 Scooter Gordon 600 610 ✔600
9 1586 Phoenix Plastics 6750 14 6750
10 1587 Smith Pipe Company 37719 39 38100 381
15 1588 N. Ill. Communications 399 732 ✔399
16 1589 Winnebago County Bank 11360 216 ✔9573
214 ✔1787
216 ✔1067
218 ✔225
26 1595 Dionne Schivone 83000 330 ✔83000
29 1596 Wayne McManus 2650 140 ✔2650
30 1597 Northern Star 500 610 ✔500
30 1598 Standard Oil Company 925 644 ✔925
30 1599 Chicago Trust Company 15000 135 ✔15000
CASH DISBURSEMENTS JOURNAL Page 18
15A
GENERAL LEDGER
BALANCE
39610
DATE EXPLANATION REF. DEBIT CREDIT
2014
1/1 Balance ✔
GENERAL LEDGER ACCOUNTS
ACCOUNT: Cash 101
BALANCE
DATE EXPLANATION REF. DEBIT CREDIT
2014
ACCOUNT: Petty Cash 105
BALANCE
172643
DATE EXPLANATION REF. DEBIT CREDIT
2014
1/1 Balance ✔
ACCOUNT: Accounts Receivable 112
17A
BALANCE
40000
DATE EXPLANATION REF. DEBIT CREDIT
2014
1/1 Balance ✔
ACCOUNT: Notes Receivable 115
GENERAL LEDGER ACCOUNTS
BALANCE
13520
DATE EXPLANATION REF. DEBIT CREDIT
2014
1/1 Balance ✔
ACCOUNT: Allowance for Doubtful Accounts 113
BALANCE
580
DATE EXPLANATION REF. DEBIT CREDIT
2014
1/1 Balance ✔
ACCOUNT: Interest Receivable 118
BALANCE
1650
DATE EXPLANATION REF. DEBIT CREDIT
2014
1/1 Balance ✔
GENERAL LEDGER ACCOUNTS
ACCOUNT: Supplies 126
BALANCE
DATE EXPLANATION REF. DEBIT CREDIT
2014
ACCOUNT: Prepaid Insurance 130
BALANCE
DATE EXPLANATION REF. DEBIT CREDIT
2014
ACCOUNT: Prepaid Rent 131
BALANCE
531960
DATE EXPLANATION REF. DEBIT CREDIT
2014
1/1 Balance ✔
ACCOUNT: Inventory 120
19A
BALANCE
GENERAL LEDGER ACCOUNTS
DATE EXPLANATION REF. DEBIT CREDIT
2014
ACCOUNT: Other Assets 135
BALANCE
DATE EXPLANATION REF. DEBIT CREDIT
2014
ACCOUNT: Buildings 145
BALANCE
DATE EXPLANATION REF. DEBIT CREDIT
2014
ACCOUNT: Land 140
BALANCE
BALANCE
DATE EXPLANATION REF. DEBIT CREDIT
2014
GENERAL LEDGER ACCOUNTS
ACCOUNT: Accum. Depr.–Buildings 146
BALANCE
DATE EXPLANATION REF. DEBIT CREDIT
2014
ACCOUNT: Trucks 163
DATE EXPLANATION REF. DEBIT CREDIT
2014
ACCOUNT: Equipment 151
BALANCE
DATE EXPLANATION REF. DEBIT CREDIT
2014
ACCOUNT: Accum. Depr.–Equip. 152
21A
BALANCE
DATE EXPLANATION REF. DEBIT CREDIT
2014
ACCOUNT: Accum. Depr.–Trucks 164
GENERAL LEDGER ACCOUNTS
BALANCE
DATE EXPLANATION REF. DEBIT CREDIT
2014
ACCOUNT: Notes Payable 200
BALANCE
86352
DATE EXPLANATION REF. DEBIT CREDIT
2014
1/1 Balance ✔
ACCOUNT: Accounts Payable 201
BALANCE
1906
DATE EXPLANATION REF. DEBIT CREDIT
2014
1/1 Balance ✔
GENERAL LEDGER ACCOUNTS
ACCOUNT: Salaries and Wages Payable 212
BALANCE
781
DATE EXPLANATION REF. DEBIT CREDIT
2014
1/1 Balance ✔
ACCOUNT: FICA Taxes Payable 214
BALANCE
15789
DATE EXPLANATION REF. DEBIT CREDIT
2014
1/1 Balance ✔
ACCOUNT: Income Taxes Payable 215