SOLUTIONS MANUAL for College Accounting: A Practical Approach Canadian Twelfth Edition. Jeffrey Slat by StudyGuide

SOLUTIONS MANUAL for College Accounting: A Practical Approach Canadian Twelfth Edition. Jeffrey Slater Brian Zwicker

Contents

Chapter 1

Review of Arithmetic ..............................................................1

Chapter 2

Review of Basic Algebra .......................................................14

Chapter 3

Ratio, Proportion, and Percent ..............................................28

Chapter 4

Linear Systems ......................................................................41

Chapter 5

Cost-Volume-Profit Analysis and Break-Even .....................51

Chapter 6 Trade Discounts, Cash Discounts, Markup, and Markdown .62 Chapter 7

Simple Interest .......................................................................74

Chapter 8

Simple Interest Applications .................................................87

Chapter 9

Compound Interest—Future Value and Present Value ....... 99

Chapter 10 Compound Interest—Further Topics................................... 112 Chapter 11 Ordinary Simple Annuities .................................................. 124 Chapter 12 Ordinary General Annuities ................................................ 138 Chapter 13 Annuities Due, Deferred Annuities, and Perpetuities ......... 151 Chapter 14 Amortization of Loans, Including Residential Mortgages .. 168 Chapter 15 Bond Valuation and Sinking Funds..................................... 183 Chapter 16 Investment Decision Applications....................................... 199

1 Accounting Concepts and Procedures: An Introduction

ANSWERS TO DISCUSSION QUESTIONS AND CRITICAL THINKING/ETHICAL CASE 1. 2.

3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15.

The functions of accounting are to analyze, record, classify, summarize, report and interpret information. Sole proprietorship—1 owner, unlimited liability; easy to form Partnership—2 or more owners; unlimited liability, easy to form Corporation—1 or many shareholders; limited liability; more difficult to form Service, merchandising, or manufacturing Bookkeeping is the recording function of the accounting process. Accounting is the reporting and interpreting of that information. The three elements of the basic accounting equation are assets, liabilities, owner’s equity. Capital is the owner’s current investment or equity in the assets of a business. It is one subdivision of owner’s equity. True. The sum of the left side of the equation must equal the sum of the right side of the equation. False. It is the income statement which tells how well the company has performed. False. Revenue is a subdivision of owner’s equity. Owner’s equity is subdivided into Capital, Withdrawals, Revenue, and Expenses. False. It is a non-business expense; a subdivision of owner’s equity. Reject. As expenses increase, owner’s equity decreases. Revenue less Expenses; an income statement shows performance—profit or loss for the period. False. It calculates ending capital. The question in this case is whether Paul should be allowed to “pad” his expense account with an additional $100 of expenses. I feel that Paul should only be allowed to charge those items that are business related. Paul’s argument that he is entitled to an additional $100 is not a valid assumption. However, he should be allocated money for any business expenses during the weekend.

1-1

SOLUTIONS TO CLASSROOM DEMONSTRATION EXERCISES 1.

a. b. c. d. e. f.

A A L A OE A

$16,000 ($4,000 + $12,000)

b. d. f. g.

J. Penny, Capital J. Penny, Withdrawals Advertising Expense Taxi Fees Earned

a. b. c.

Equities Assets Accounts Payable

c. d.

Accounts Payable Grooming Fees Earned

a. b.

I S

a. b. d.

a. b. c. d. e. f. g. h.

IS BS BS BS IS IS OE BS

a. b. c. d.

OE BS BS IS

SOLUTIONS TO EXERCISES—SET A EXERCISE 1-1A. a.

$15,000

($19,000 - $4,000)

$15,000

($ 6,000 + $9,000)

$ 6,000

($10,000 - $4,000)

EXERCISE 1-2A. Cash

Assets + Equipment

a. + $8,000 b. - $600 c.

Liabilities

Owner’s Equity

+ $8,000 + $600 + $900

+ $900

EXERCISE 1-3A. RANGE CO. CLEANERS BALANCE SHEET NOVEMBER 30, 2016 ASSETS Cash Equipment

Total Assets

1-2A

LIABILITIES AND OWNER’S EQUITY $5 0 0 0 0 0 0 Liabilities 7 0 0 0 00 Accounts Payable Owner’s Equity B. Range, Capital Total Liabilities and $5 7 0 0 0 0 0 Owner’s Equity

$1 4 0 0 0 0 0 43 0 0 0 0 0 $5 7 0 0 0 0 0

EXERCISE 1-4A.

BELL’S COMPUTER COMPANY Assets

Cash a.

Accounts + Receivable

Computer Equipment

Liabilities +

Accounts Payable +

+ $60,000 + $7,000 - $200

+ $14,000

B. Bell, Capital

B. Bell, Withdrawals +

Revenue

Expenses

+ $60,000

b. c.

Owner’s Equity

+ $7,000 + $200 + $14,000

+ $30,000

- $4,000

+ $4,000

- $1,500

+ $1,500

ENDING BALANCE

$68,300

+ $30,000

+ $7,000

+ $105,300

$105,300

+ $60,000

- $200

+ $44,000

- $5,500

Remember, as withdrawals or expenses increase, the end result is to reduce owner’s equity.

EXERCISE 1-5A. (a) FRENCH REALTY INCOME STATEMENT FOR THE MONTH ENDED JUNE 30, 2016 Revenue: Professional Fees Operating Expenses: Salaries Expense Utilities Expense Rent Expense Total Operating Expenses Net Income

$2 9 0 0 0 0 $ 5 0 0 00 3 6 0 00 5 0 0 00 1 3 6 0 00 $1 5 4 0 0 0

(b) FRENCH REALTY STATEMENT OF OWNER’S EQUITY FOR THE MONTH ENDED JUNE 30, 2016 S. French, Capital, June 1, 2016 Net Income for June Less: Withdrawals for June Increase in Capital S. French, Capital, June 30, 2016

$8 0 0 0 0 0 $1 5 4 0 0 0 4 0 00 1 5 0 0 00 $9 5 0 0 0 0

1-3A

SOLUTIONS TO EXERCISES—SET A, Cont. (c) FRENCH REALTY BALANCE SHEET JUNE 30, 2016 ASSETS

LIABILITIES AND OWNER’S EQUITY

Cash Accounts Receivable Office Equipment

$3 3 1 0 0 0 Liabilities 1 4 9 0 00 Accounts Payable 6 7 0 0 0 0 Owner’s Equity S. French, Capital Total Liabilities $11 5 0 0 0 0 and Owner’s Equity

Total Assets

$2 0 0 0 0 0 9 5 0 0 00 $11 5 0 0 0 0

SOLUTIONS TO EXERCISES—SET B EXERCISE 1-1B. a.

$9,000

($15,000 - $6,000)

$19,000

($8,000 + $11,000)

$9,000

($14,000 - $5,000)

EXERCISE 1-2B. Cash

Assets + Equipment

a. + $12,000 b. - $2,000 + $2,000 c. + $3,500

Liabilities

Owner’s Equity

+ $12,000 + $3,500

EXERCISE 1-3B. RANGE CO. CLEANERS BALANCE SHEET NOVEMBER 30, 2016 ASSETS Cash Equipment

Total Assets

1-4B

LIABILITIES AND OWNER’S EQUITY $2 0 0 0 0 0 0 Liabilities 16 0 0 0 0 0 Accounts Payable Owner’s Equity B. Range, Capital Total Liabilities and $3 6 0 0 0 0 0 Owner’s Equity

$1 2 0 0 0 0 0 24 0 0 0 0 0 $3 6 0 0 0 0 0

EXERCISE 1-4B.

BELL’S COMPUTER COMPANY Assets

Cash a.

Accounts + Receivable

Computer Equipment

Liabilities +

Accounts Payable +

+ $40,000 + $8,000 - $150

+ $12,000

B. Bell, Capital

B. Bell, Withdrawals +

Revenue

Expenses

+ $40,000

b. c.

Owner’s Equity

+ $8,000 + $150 + $12,000

+ $25,000

- $3,000

+ $3,000

- $900

+ $900

ENDING BALANCE

$47,950

+ $25,000

+ $8,000

+ $80,950

$80,950

+ $40,000

- $150

+ $37,000

- $3,900

Remember, as withdrawals or expenses increase, the end result is to reduce owner’s equity.

EXERCISE 1-5B. (a)

FRENCH REALTY INCOME STATEMENT FOR THE MONTH ENDED JUNE 30, 2016 Revenue: Professional Fees Operating Expenses: Salaries Expense Utilities Expense Rent Expense Total Operating Expenses Net Income

$5 6 0 0 0 0 $ 8 0 0 00 7 6 0 00 6 5 0 00 2 2 1 0 00 $3 3 9 0 0 0

$9 0 0 0 0 0 $3 3 9 0 0 0 6 4 0 00 2 7 5 0 00 $11 7 5 0 0 0

1-5B

SOLUTIONS TO EXERCISES—SET B, Cont. (c) FRENCH REALTY BALANCE SHEET JUNE 30, 2016 ASSETS Cash Accounts Receivable Office Equipment

LIABILITIES AND OWNER’S EQUITY $4 6 5 0 0 0 Liabilities 2 6 0 0 00 Accounts Payable 8 5 0 0 0 0 Owner’s Equity S. French, Capital Total Liabilities $15 7 5 0 0 0 and Owner’s Equity

Total Assets

$4 0 0 0 0 0 11 7 5 0 0 0 $15 7 5 0 0 0

PROBLEM 1A-1. MIA’S NAIL SPA Assets

Cash

Transaction a BALANCE Transaction b BALANCE Transaction c BALANCE Transaction d ENDING BALANCE

Equipment

Liabilities

Owner’s Equity

Accounts Payable

Mia Annabelle, Capital

+ $20,000

20,000

-4,000 16,000

4,000

+6,000 16,000

10,000

20,000 +$6,000

-1,000 $15,000

20,000

+$4,000

6,000

20,000

$20,000

-1,000 +

$10,000

$5,000

$25,000

PROBLEM 1A-2. SEE’S INTERNET SERVICE BALANCE SHEET SEPTEMBER 30, 2017 ASSETS Assets: Cash Equipment Building

Total Assets

1-6B

LIABILITIES AND OWNER’S EQUITY Liabilities: $18 0 0 0 0 0 Accounts Payable 14 0 0 0 0 0 2 0 0 0 0 0 0 Owner’s Equity: B. See, Capital

$52 0 0 0 0 0

Total Liabilities and Owner’s Equity

$15 0 0 0 0 0

37 0 0 0 0 0

$52 0 0 0 0 0

PROBLEM 1A-3. RICK FOX DESKTOP PUBLISHING SERVICE Assets

Cash

a BALANCE b BALANCE c BALANCE d BALANCE e BALANCE f BALANCE g BALANCE h ENDING BALANCE

Accounts + Receivable

Office Equipment

Liabilities +

Accounts Payable +

+$12,000

Owner’s Equity R. Fox, Capital

R. Fox, Withdrawals +

Expenses

+$12,000

12,000

= + $4,000

12,000

12,000 + $4,000

4,000

12,000

4,000

12,000

+500

+ $500

12,500 + $2,100 12,500

Revenue

500 +2,100

2,100

4,000

12,000

2,600

2,100

4,000

12,000

2,600

11,640

2,100

4,000

12,000

2,600

860

11,640

2,100

4,000

4,900

12,000

2,600

1,760

$2,600

$1,760

- 650 11,850

+$650

- 210

+210

+900

- 400 $11,240

650

$400 +

$2,100

$4,000

$4,900

$17,340

$12,000

$400

PROBLEM 1A-4. (a) WEST’S STENCILLING SERVICE INCOME STATEMENT FOR THE MONTH ENDED JUNE 30, 2017 Revenue: Stenciling Fees Operating Expenses: Advertising Expense Repair Expense Travel Expense Supplies Expense Rent Expense Total Operating Expenses Net Income

$3 0 0 0 0 0

$ 1 1 0 00 2 5 00 2 5 0 00 1 9 0 00 2 5 0 00 8 2 5 00 $2 1 7 5 0 0

1-7

PROBLEM 1A-4., Cont. (b) WEST’S STENCILLING SERVICE STATEMENT OF OWNER’S EQUITY FOR THE MONTH ENDED JUNE 30, 2017 J. West, Capital, June 1, 2017 Net Income for June Less: Withdrawals for June Increase in Capital J. West, Capital, June 30, 2017

$1 2 0 0 0 0 $2 1 7 5 0 0 3 0 0 00 1 8 7 5 00 $3 0 7 5 0 0

Total Assets

1-8

LIABILITIES AND OWNER’S EQUITY Liabilities: $2 3 0 0 0 0 Accounts Payable 4 0 0 00 6 8 5 0 0 Owner’s Equity J. West, Capital

3 0 7 5 00

Total Liabilities and Owner’s Equity

$3 3 8 5 0 0

$ 3 1 0 00

PROBLEM 1A-5. MARTIN’S CATERING SERVICE Assets

Cash

10/28 BALANCE 10/29 BALANCE 10/30 BALANCE 10/31 BALANCE 11/1 BALANCE 11/4 BALANCE 11/8 BALANCE 11/11 BALANCE 11/15 BALANCE 11/18 BALANCE 11/19 BALANCE 11/25 BALANCE 11/28 BALANCE 11/29 ENDING BALANCE

Accounts + Receivable

Equipment

Liabilities +

Accounts Jill Martin, Payable + Capital

+$8,000

Owner’s Equity

Jill Martin, Withdrawals +

Catering Revenue

+$8,000

8,000 - 900

8,000

+$900

7,100

900

2,700

+1,800

+$1,800 +

8,000

800

8,000

800

8,000

2,900

2,700

800

8,000

2,900

2,700

800

8,000

-1,000

1,800 - 1,000

6,100 +2,900

+$2,900

9,000 -720

+$720

8,280 +$300 8,280

+100 8,380

Expenses

300

720

3,200

720

+300

- 100 +

200

2,700

800

8,000

3,200

200

2,700

800

8,000

3,200

795

200

2,700

800

8,000

3,200

795

10,015

200

2,700

800

8,000

5,000

795

10,015

200

3,100

1,200

8,000

5,000

795

10,015

200

3,100

1,800

8,000

5,000

1,395

- 75 8,305

+75

- 90 8,215

+90

+1,800

+400

+600

- 400 $9,615

+400 +

$200

$3,100

$1,800

$12,915

$8,000

$90

$5,000

$1,795

1-9

PROBLEM 1A-5., Cont. MARTIN’S CATERING SERVICE BALANCE SHEET OCTOBER 31, 2016 ASSETS Assets: Cash Equipment

Total Assets

LIABILITIES AND OWNER’S EQUITY

$6 1 0 0 0 0 2 7 0 0 00

$8 8 0 0 0 0

Liabilities: Accounts Payable

$ 8 0 0 00

Owner’s Equity: Jill Martin, Capital

8 0 0 0 00

Total Liabilities and Owner’s Equity

$8 8 0 0 0 0

MARTIN’S CATERING SERVICE INCOME STATEMENT FOR THE MONTH ENDING NOVEMBER 30, 2016 Revenue: Catering Fees Operating Expenses: Salaries Expense Telephone Expense Rent Expense Supplies Expense Total Operating Expenses Net Income

1-10

$5 0 0 0 0 0

$ 7 2 0 00 7 5 00 6 0 0 00 4 0 0 00 1 7 9 5 00 $3 2 0 5 0 0

PROBLEM 1A-5., Cont. MARTIN’S CATERING SERVICE STATEMENT OF OWNER’S EQUITY FOR THE MONTH ENDED NOVEMBER 30, 2016 Jill Martin, Capital, November 1, 2016 Net Income for November Less: Withdrawals for November Increase in Capital Jill Martin, Capital, November 30, 2016

$8 0 0 0 0 0 $3 2 0 5 0 0 9 0 00 3 1 1 5 00 $11 1 1 5 0 0

MARTIN’S CATERING SERVICE BALANCE SHEET NOVEMBER 30, 2016 ASSETS Assets: Cash Accounts Receivable Equipment

Total Assets

LIABILITIES AND OWNER’S EQUITY Liabilities: $9 6 1 5 0 0 Accounts Payable 2 0 0 00 3 1 0 0 0 0 Owner’s Equity: Jill Martin, Capital

11 1 1 5 0 0

Total Liabilities and $1 2 9 1 5 0 0 Owner’s Equity

$1 2 9 1 5 0 0

$1 8 0 0 0 0

1-11

PROBLEM 1B-1. MIA’S NAIL SPA Assets

Cash

Transaction a BALANCE Transaction b BALANCE Transaction c BALANCE Transaction d ENDING BALANCE

Equipment

Liabilities

Owner’s Equity

Accounts Payable

Mia Annabelle, Capital

+ $16,000

+$16,000

16,000

= +$1,500

16,000

16,000 + $1,500

1,500

16,000

1,500

700

16,000

$4,500

$700

$16,000

$16,700

- 800 15,200

- 800

-3,000 $12,200

1,500

+3,000 +

PROBLEM 1B-2. SEE’S INTERNET SERVICE BALANCE SHEET SEPTEMBER 30, 2017 ASSETS Assets: Cash Building Equipment

Total Assets

1-12

LIABILITIES AND OWNER’S EQUITY Liabilities: $1 6 0 0 0 0 0 Accounts Payable 28 0 0 0 0 0 4 0 0 0 0 0 0 Owner’s Equity: B. See, Capital

$8 4 0 0 0 0 0

Total Liabilities and Owner’s Equity

$6 0 0 0 0 0 0

24 0 0 0 0 0

$8 4 0 0 0 0 0

PROBLEM 1B-3. RICK FOX DESKTOP PUBLISHING SERVICE Assets

Cash

a BALANCE b BALANCE c BALANCE d BALANCE e BALANCE f BALANCE g BALANCE h ENDING BALANCE

Accounts + Receivable

Office Equipment

Liabilities +

Accounts Payable

+$9,000

Owner’s Equity R. Fox, Capital

R. Fox, Withdrawals +

Revenue

+$9,000

9,000

= + $3,000

9,000

9,000 + $3,000

3,000

9,000

3,000

9,000

1,290

3,000

9,000

1,290

+1,290

+ $1,290

10,290 - 625

+$625

9,665 +$2,690 9,665

625

+2,690

2,690

3,000

9,000

3,980

625

2,690

3,000

9,000

3,980

1,125

2,690

3,000

9,000

3,980

1,125

- 500 9,165

+500

- 350 8,815

+$350 -

350

+100 $8,815

Expenses

$2,690

$3,000

$3,100

$14,505

+100 +

$9,000

$350

$3,980

$1,225

PROBLEM 1B-4. (a) WEST’S STENCILLING SERVICE INCOME STATEMENT FOR THE MONTH ENDED JUNE 30, 2017 Revenue: Stencilling Fees Operating Expenses: Advertising Expense Repair Expense Travel Expense Supplies Expense Rent Expense Total Operating Expenses Net Income

$1 0 9 8 0 0

$ 1 3 5 00 4 5 00 9 0 00 2 7 0 00 2 4 0 00 7 8 0 00 $ 3 1 8 00

1-13

PROBLEM 1B-4. Cont. (b) WEST’S STENCILLING SERVICE STATEMENT OF OWNER’S EQUITY FOR THE MONTH ENDED JUNE 30, 2017 J. West, Capital, June 1, 2017 Net Income for June Less: Withdrawals for June Decrease in Capital J. West, June 30, 2017

$3 7 2 0 0 0 $ 3 1 8 00 3 6 0 00 4 2 00 $3 6 7 8 0 0

Total Assets

1-14

LIABILITIES AND OWNER’S EQUITY Liabilities: $2 0 4 3 0 0 Accounts Payable 1 1 4 0 00 5 4 0 0 0 Owner’s Equity J. West, Capital Total Liabilities and $3 7 2 3 0 0 Owner’s Equity

4 5 00

3 6 7 8 00

$3 7 2 3 0 0

PROBLEM 1B-5. 1. MARTIN’S CATERING SERVICE Assets

Cash

10/28 BALANCE 10/29 BALANCE 10/30 BALANCE 10/31 BALANCE 11/1 BALANCE 11/4 BALANCE 11/8 BALANCE 11/11 BALANCE 11/15 BALANCE 11/18 BALANCE 11/19 BALANCE 11/25 BALANCE 11/28 BALANCE 11/29 ENDING BALANCE

Accounts + Receivable

Equipment

Liabilities +

Accounts Jill Martin, Payable + Capital

+$9,500

Owner’s Equity

Jill Martin, Withdrawals +

Catering Revenue

9,500

= +$1,200

9,500

- 1,500

1,200

9,500 +$1,200

1,200

9,500

1,200

9,500

+1,500

8,000

2,700

-600

- 600

7,400

2,700

600

+2,400

+$2,400

9,800

2,700

600

9,500

2,400

- 580

+$580

9,220

2,700

600

9,500

+$4,500 9,220

+2,000 11,220

4,500

2,400

580

+4,500 +

2,700

600

9,500

6,900

2,700

600

9,500

6,900

- 2,000 +

2,500

- 95 11,125

2,500

2,700

600

9,500

2,500

2,700

600

9,500

825

6,900

675

2,500

2,700

2,500

3,200

600

675

9,500

825

8,700

9,500

825

8,700

+500 =

1,100 +750

12,100

2,500

3,200

1,850

675 +750

9,500

825

8,700

- 600 $11,500

675

+1,800

+500 12,100

6,900

+825

+1,800 12,100

580 +95

-825 10,300

Expenses

+$9,500

1,425 +600

$2,500

$3,200

$1,850

$17,200

$9,500

$825

$8,700

$2,025

1-15

PROBLEM 1B-5., Cont. 2. MARTIN’S CATERING SERVICE BALANCE SHEET OCTOBER 31, 2016 ASSETS Assets: Cash Equipment

Total Assets

LIABILITIES AND OWNER’S EQUITY

$7 4 0 0 0 0 2 7 0 0 00

$10 1 0 0 0 0

Liabilities: Accounts Payable

$ 6 0 0 00

Owner’s Equity: Jill Martin, Capital

9 5 0 0 00

Total Liabilities and Owner’s Equity

$10 1 0 0 0 0

3. MARTIN’S CATERING SERVICE INCOME STATEMENT FOR THE MONTH ENDING NOVEMBER 30, 2016 Revenue: Catering Fees Operating Expenses: Salaries Expense Telephone Expense Rent Expense Supplies Expense Total Operating Expenses Net Income

1-16

$8 7 0 0 0 0

$ 5 8 0 00 9 5 00 7 5 0 00 6 0 0 00 2 0 2 5 00 $6 6 7 5 0 0

PROBLEM 1B-5., Cont. 4. MARTIN’S CATERING SERVICE STATEMENT OF OWNER’S EQUITY FOR THE MONTH ENDED NOVEMBER 30, 2016 Jill Martin, Capital, November 1, 2016 Net Income for November Less: Withdrawals for November Increase in Capital Jill Martin, Capital, November 30, 2016

$9 5 0 0 0 0 $6 6 7 5 0 0 8 2 5 00 5 8 5 0 00 $1 5 3 5 0 0 0

5. MARTIN’S CATERING SERVICE BALANCE SHEET NOVEMBER 30, 2016 ASSETS Assets: Cash Accounts Receivable Equipment

Total Assets

LIABILITIES AND OWNER’S EQUITY Liabilities: $11 5 0 0 0 0 Accounts Payable 2 5 0 0 00 3 2 0 0 0 0 Owner’s Equity: Jill Martin, Capital

$17 2 0 0 0 0

Total Liabilities and Owner’s Equity

$1 8 5 0 0 0

15 3 5 0 0 0

$1 7 2 0 0 0 0

1-17

PROBLEM 1C-1. RJ GRAPHICS Assets

Cash

TRANSACTION A BALANCE TRANSACTION B BALANCE TRANSACTION C BALANCE TRANSACTION D ENDING BALANCE

Computer Equipment

Software

Liabilities

Owner’s Equity

Accounts Payable

Ruth Jones Capital

+ $10,500

$10,500

= + $4,500

10,500

4,500

-2,500 8,000

4,500

10,500

-2,500 +

4,500

-3,800 $4,200

$10,500 + $4,500

2,000

10,500

+ $3,800

$2,000

$10,500

$12,500

+ $3,800 +

$4,500

PROBLEM 1C-2. LOH’S DATABASE SERVICE BALANCE SHEET APRIL 30, 2016 ASSETS Assets: Cash Equipment Building

Total Assets

1-18

LIABILITIES AND OWNER’S EQUITY Liabilities: $2 3 0 0 0 0 0 Accounts Payable 26 0 0 0 0 0 3 4 0 0 0 0 0 Owner’s Equity: Lewis Loh, Capital

$8 3 0 0 0 0 0

Total Liabilities and Owner’s Equity

$34 0 0 0 0 0

49 0 0 0 0 0

$8 3 0 0 0 0 0

PROBLEM 1C-3. LEROY’S TRAINING SERVICES Assets

Cash

A BALANCE B BALANCE C BALANCE D BALANCE E BALANCE F BALANCE G BALANCE H BALANCE I ENDING BALANCE

Accounts + Receivable

Office Equipment

Liabilities +

Accounts L. Greene, Payable + Capital

+$9,000

Owner’s Equity

L. Greene, Withdrawals +

Revenue

+$9,000

9,000

= +$4,250

9,000

9,000 $4,250

4,250

9,000

4,250

9,000

2,350

4,250

9,000

2,350

+2,350

+$2,350

11,350 - 800

+$800

10,550 +$3,650 10,550

Expenses

800

+3,650

3,650

4,250

9,000

6,000

800

3,650

4,250

9,000

6,000

1,400

8,950

3,650

4,250

9,000

1,000

6,000

1,400

8,950

3,650

4,250

4,650

9,000

1,000

6,000

1,800

- 600 9,950

+600

- 1,000

+ $1,000

+400

- 192 $8,758

192 +

$3,650

$4,250

$4,650

$16,658

$9,000

$1,000

$6,000

$1,992

PROBLEM 1C-4. (a) JENNIFER’S FASHION SERVICE INCOME STATEMENT FOR THE MONTH ENDED JULY 31, 2016 Revenue: Consulting Fees Operating Expenses: Advertising Expense Repair Expense Travel Expense Supplies Expense Rent Expense Office Expense Total Operating Expenses Net Income

$4 8 1 5 0 0 $ 6 3 5 00 3 8 7 00 1 6 9 0 00 2 6 2 00 4 4 0 00 1 7 5 00 3 5 8 9 00 $1 2 2 6 0 0

1-19

PROBLEM 1C-4., Cont. (b) JENNIFER’S FASHION SERVICE STATEMENT OF OWNER’S EQUITY FOR THE MONTH ENDED JULY 31, 2016 Jennifer Pace, Capital, July 1, 2016 Net Income for July Less: Withdrawals for July Increase in Capital Jennifer Pace, Capital, July 31, 2016

$6 4 3 0 0 0 $1 2 2 6 0 0 7 1 0 00 5 1 6 00 $6 9 4 6 0 0

Total Assets

1-20

LIABILITIES AND OWNER’S EQUITY Liabilities: $1 5 2 4 0 0 Accounts Payable 3 6 7 2 00 3 5 8 0 0 0 Owner’s Equity Jennifer Pace, Capital

$8 7 7 6 0 0

Total Liabilities and Owner’s Equity

$1 8 3 0 0 0

6 9 4 6 00

$8 7 7 6 0 0

PROBLEM 1C-5. 1. FIRST CITY SURVEYING SERVICE Assets

Cash

04/23 BALANCE 04/26 BALANCE 04/29 BALANCE 04/30 BALANCE 05/02 BALANCE 05/03 BALANCE 05/10 BALANCE 05/13 BALANCE 05/14 BALANCE 05/17 BALANCE 05/21 BALANCE 05/24 BALANCE 05/27 BALANCE 05/28 BALANCE 05/31 ENDING BALANCE

Accounts + Receivable

Surveying Equipment

Liabilities +

Accounts H. McGraw Payable + Capital -

$17,000

Owner’s Equity H. McGraw, Withdrawals +

Surveying Revenue

$17,000

17,000

= +$4,750

17,000

- 2,895

4,750

17,000 +$4,750

4,750

17,000

4,750

17,000

+2,895

14,105

7,645

2,375

17,000

7,645

2,375

17,000

2,350

7,645

2,375

17,000

2,350

7,645

2,375

17,000

-2,375

11,730 +2,350

+$2,350

14,080 -975

+$975

13,105 +$4,950 13,105

+2,500 15,605

Expenses

4,950

975

7,300

975

+4,950

- 2,500 +

2,450

7,645

2,375

17,000

7,300

975

2,450

7,645

2,375

17,000

7,300

1,079

2,450

7,645

2,375

17,000

1,043

7,300

1,079

16,283

2,450

7,645

2,375

17,000

1,043

9,125

1,079

16,283

2,450

10,060

4,790

17,000

1,043

9,125

1,079

2,450

10,060

4,790

17,000

1,043

9,125

1,904

2,450

10,060

4,790

17,000

1,043

9,125

2,150

- 104 15,501

+104

- 1,043 14,458

+$1,043

+1,825

+2,415

-825 15,458

+825

- 246 15,212

+246

+410 $15,212

$2,450

$10,060

$5,200

$27,722

+410 +

$17,000

$1,043

$9,125

$2,560

1-21

PROBLEM 1C-5., Cont. 2. FIRST CITY SURVEYING SERVICE BALANCE SHEET APRIL 30, 2016 ASSETS Assets: Cash Surveying Equipment

Total Assets

LIABILITIES AND OWNER’S EQUITY $11 7 3 0 0 0 7 6 4 5 00

$19 3 7 5 0 0

Liabilities: Accounts Payable

$2 3 7 5 0 0

Owner’s Equity: Howard McGraw, Capital

17 0 0 0 0 0

Total Liabilities and Owner’s Equity

$1 9 3 7 5 0 0

3. FIRST CITY SURVEYING SERVICE INCOME STATEMENT FOR THE MONTH ENDING MAY 31, 2016 Revenue: Surveying Revenue Operating Expenses: Salaries Expense Telephone Expense Rent Expense Supplies Expense Advertising Expense Total Operating Expenses Net Income

1-22

$9 1 2 5 0 0

$ 9 7 5 00 1 0 4 00 8 2 5 00 2 4 6 00 4 1 0 00 2 5 6 0 00 $6 5 6 5 0 0

PROBLEM 1C-5., Cont. 4. FIRST CITY SURVEYING SERVICE STATEMENT OF OWNER’S EQUITY FOR THE MONTH ENDED MAY 31, 2016 Howard McGraw, Capital, May 1, 2016 Net Income for May Less: Withdrawals for May Increase in Capital Howard McGraw, Capital, May 31, 2016

$17 0 0 0 0 0 $6 5 6 5 0 0 1 0 4 3 00 5 5 2 2 00 $22 5 2 2 0 0

5. FIRST CITY SURVEYING SERVICE BALANCE SHEET MAY 31, 2016 ASSETS Assets: Cash Accounts Receivable Equipment

Total Assets

LIABILITIES AND OWNER’S EQUITY Liabilities: $15 2 1 2 0 0 Accounts Payable 2 4 5 0 00 1 0 0 6 0 0 0 Owner’s Equity: Howard McGraw, Capital

$27 7 2 2 0 0

Total Liabilities and Owner’s Equity

$5 2 0 0 0 0

22 5 2 2 0 0

$2 7 7 2 2 0 0

1-23

SOLUTION TO ON-THE-JOB TRAINING, # T-1. Roger’s Window Washing Company Income Statement For The Year Ended December 31, 2015 Revenue: Window Cleaning Operating Expenses: Salaries Expense Supplies Expense Interest Expense Advertising Expense Total Operating Expenses Net Income

Insights $11 3 7 6 0 0 +2 9 0 0 0 0 $14 2 7 6 0 0

$14 2 7 6 0 0 $6 8 8 0 0 0 1 4 0 0 00 3 0 0 00 9 5 00

$5 0 8 0 0 0 +1 8 0 0 0 0 $6 8 8 0 0 0

8 6 7 5 00 $5 6 0 1 0 0

Advice to Roger: In the long run, a formal bookkeeping and accounting system may prove less costly than creating statements from informal records—and provide more reliance for Canada Revenue Agency as well.

SOLUTION TO ON-THE-JOB TRAINING, #T-2. 1.

LUNE CO. BALANCE SHEET DECEMBER 31, 2016 ASSETS

LIABILITIES AND OWNER’S EQUITY

Assets: Cash Accounts Receivable Land Building Desks Auto

Liabilities: $10 0 1 6 0 0 Notes Payable 104 3 3 7 0 0 Accounts Payable 72 9 3 5 0 0 Total Liabilities 44 6 0 0 0 0 6 8 2 5 0 0 Owner’s Equity: 14 2 6 8 0 0 J. Lune, Capital

Total Assets

$252 9 8 1 0 0

Total Liabilities and Owner’s Equity

$75 3 2 8 0 0 127 6 0 4 0 0 $202 9 3 2 0 0

50 0 4 9 0 0

$252 9 8 1 0 0

2. Slowe does not seem to understand the basic accounting equation, the classification of accounts, or the double entry accounting system which would keep all of the accounts in balance (including the Capital account). If she stays in the position of bookkeeper, it is likely that the accounting records will not be accurate.

1-24

LUNE CO. BALANCE SHEET REVISED JANUARY 4, 2017 ASSETS

LIABILITIES AND OWNER’S EQUITY

Assets: Cash Accounts Receivable Land Building Desks Auto

Liabilities: $28 0 1 6 0 0 Notes Payable 104 3 3 7 0 0 Accounts Payable 72 9 3 5 0 0 Total Liabilities 44 6 0 0 0 0 1 4 8 2 5 0 0 Owner’s Equity: 20 2 6 8 0 0 J. Lune, Capital

Total Assets

$284 9 8 1 0 0

$79 3 2 8 0 0 127 6 0 4 0 0 $2 0 6 9 3 2 0 0

78 0 4 9 0 0

Total Liabilities and Owner’s Equity

$284 9 8 1 0 0

Insight Cash 10,016 20,000

2,000

Desks

Auto

J. Lune

Notes Payable

6,825

14,268

50,049

75,328

8,000

6,000

28,000

4,000

1-25

CONTINUING PROBLEM 1., 2. PRECISION COMPUTER CENTRE Assets

Cash

a BALANCE b BALANCE c BALANCE d BALANCE

Supplies +

Liabilities +

Computer Shop Office Accounts T. Freedman, T. Freedman, Service Equipment + Equipment = Payable + Capital - Withdrawals + Revenue

+$4,500 4,500

4,500

+1,200

3,300

1,200

-600

+600

2,700

1,200

600

+250 2,700 + -400

BALANCE f BALANCE g BALANCE

2,300 +

250 +

4,500 + 250

1,200

600

250

4,500 +400 Rent

250 +

1,200

600

250

4,500

250 +

1,200

600

250

4,500

250 +

1,200

600

250

4,500

+250 2,550 +

400

+250

+200 2,750 +

- Expenses

+$4,500

-1,200

250 +200

450

+85 Utilities

+ 85

BALANCE i BALANCE j ENDING BALANCE

1-26

Owner’s Equity

2,750 +

250 +

1,200

600

335

4,500

1,200 3,950 +

250 +

1,200

600

335

4,500

-100 $3,850 +

450

485

1,200 +

1,650

485

$1,650

$485

+100 $250 +

$1,200

$600

$335

$5,900

$4,500

$100

CONTINUING PROBLEM, Cont. 3. PRECISION COMPUTER CENTRE INCOME STATEMENT FOR THE MONTH ENDED MAY 31, 2016 Revenue: Service Revenue

$1 6 5 0 0 0

Operating Expenses: Rent Expense Utilities Expense Total Operating Expenses

$ 4 0 0 00 8 5 00 4 8 5 00

Net Income

$1 1 6 5 0 0

PRECISION COMPUTER CENTRE STATEMENT OF OWNER’S EQUITY FOR THE MONTH ENDED MAY 31, 2016 T. Freedman, Capital Contribution, May 1, 2016 Plus: Net Income for May Less: Withdrawals for May Increase in Capital T. Freedman, Capital, May 31, 2016

$4 5 0 0 0 0 $1 1 6 5 0 0 1 0 0 00 1 0 6 5 00 $5 5 6 5 0 0

1-27

CONTINUING PROBLEM, Cont. 3. PRECISION COMPUTER CENTRE BALANCE SHEET MAY 31, 2016 ASSETS

LIABILITIES AND OWNER’S EQUITY

Assets: Cash Supplies Computer Shop Equipment Office Equipment

Liabilities: $3 8 5 0 0 0 Accounts Payable 2 5 0 00 1 2 0 0 0 0 Owner’s Equity 6 0 0 00 T. Freedman, Capital

Total Assets

$5 9 0 0 0 0

1-28

Total Liabilities and Owner’s Equity

$ 3 3 5 00

5 5 6 5 00

$5 9 0 0 0 0

2 Debits and Credits: Analyzing and Recording Business Transactions

ANSWERS TO DISCUSSION QUESTIONS AND CRITICAL THINKING/ETHICAL CASE 1. 2. 3. 4. 5. 6. 7. 8. 9.

10.

11.

A ledger is a group of accounts that records in monetary value data from business transactions. Because that is always the debit side. It is an arbitrary rule. False. Accounts with one entry will not need footings. The end product of the accounting process is preparing financial reports. The transaction analysis chart is a teaching device that is not used in the regular accounting process. Accounts affected, category, , rules, update of T accounts. The analysis of transactions results in the total of debits being equal to total of credits. A double-entry system provides a system of checks and balances. False. Informal report; does not have the same status as financial reports. The financial reports are prepared from the ending balances of the accounts (debit or credit) in the ledger. These ending balances are then used on financial reports. The inside columns on financial reports are for sub totaling. It is easier to prepare the reports from the trial balance, because a list of all accounts and their balances is provided. The columns for revenue, expenses, etc., on the expanded accounting equation do not list specific titles and their balances. The question in this case is whether Audrey should be allowed to put fictitious figures into the trial balance. Although Audrey has good intentions, this type of behavior cannot be tolerated. Her actions are extremely unprofessional and go against all accounting standards (not to mention ethics!).Instead of putting in fictitious figures, Audrey should stay late and correct the trial balance (or perhaps engage an assistant to help her so she could catch the plane).

2-1

SOLUTIONS TO CLASSROOM DEMONSTRATION EXERCISES 1. 2.

Cash

$17 ,200

Debit Balance

C. Clark, Capital

$11,000

Credit Balance

Liability

Cr.

Dr.

Cr.

Revenue

Cr.

Dr.

Cr.

Asset

Dr.

Cr.

Dr.

Capital

Cr.

Dr.

Cr.

Withdrawals

Dr.

Cr.

Dr.

Asset

Dr.

Cr.

Dr.

Expense

Dr.

Cr.

Dr.

3. Cash Cash Accounts Receivable Bookkeeping Services

2-2

Cash

Asset Asset Revenue

Dr.

600

Dr.

Accounts Receivable 1,900

Cr.

Bookkeeping Fees 2,500

Accounts Receivable

Office Equipment

Accounts Payable

J. Joy, Capital

J. Joy, Withdrawals

Hair Salon Fees Earned

Advertising Expense

Salary Expense

Utility Expense

SOLUTIONS TO EXERCISES—SET A EXERCISE 2-1A. EXERCISE 2-4A.

Balance Sheet Accounts Assets 111 Cash 112 Accounts Receivable 121 Office Equipment Liabilities 211 Accounts Payable Owner’s Equity 311 L. Jones, Capital 312 L. Jones, Withdrawals Income Statement Accounts Revenue 411 Legal Fees Expenses 511 Advertising Expense 512 Repair Expense 513 Salary Expense

A. B. C. D. E. F. G. H.

Dr. 8 6 9 1 10 3 2 1

Cr. 1 1 4 7 1 5 7 2

EXERCISE 2-2A. 1.

Accounts Affected

Category

Rules

T-Account Update

Computer Equipment

Asset

Dr.

Accounts Payable

Liability

Cr.

Computer Equipment

19,000 Accounts Payable 16,000 Cash

Cash

Asset

Cr.

3,000

EXERCISE 2-3A. ACCOUNT Supplies Legal Fees Earned P. Rey, Withdrawals Accounts Payable Salaries Expense Auto

CATEGORY Asset Revenue Owner’s Equity (Withdrawals) Liability Expense Asset

Dr. Cr. Dr.

Cr. Dr. Cr.

FINANCIAL Balance Sheet Income Statement Statement of Owner’s Equity

Cr. Dr. Dr.

Dr. Cr. Cr.

Balance Sheet Income Statement Balance Sheet

2-3A

SOLUTIONS TO EXERCISES—SET A Cont. EXERCISE 2-5A. HALL’S CLEANERS INCOME STATEMENT FOR THE MONTH ENDED JULY 31, 2016 Revenue: Cleaning Fees Operating Expenses: Salaries Expense Utilities Expense Total Operating Expenses Net Income

$ 4 5 8 00 $ 1 6 0 00 1 1 3 00 2 7 3 00 $ 1 8 5 00

HALL’S CLEANERS STATEMENT OF OWNER’S EQUITY FOR THE MONTH ENDED JULY 31, 2016 J. Hall, Capital, July 1, 2016 Net Income for July Less: Withdrawals for July Decrease in Capital J. Hall, Capital, July 31, 2016

$ 8 0 0 00 $ 1 8 5 00 1 9 8 00 1 3 00 $ 7 8 7 00

HALL’S CLEANERS BALANCE SHEET JULY 31, 2016 ASSETS Cash Equipment

Total Assets

2-4 2-4A

LIABILITIES AND OWNER’S EQUITY $ 5 5 0 0 0 Liabilities: 6 9 2 00 Accounts Payable Owner’s Equity J. Hall, Capital Total Liabilities and $1 2 4 2 0 0 Owner’s Equity

$ 4 5 5 00 7 8 7 00 $1 2 4 2 0 0

SOLUTIONS TO EXERCISES—SET B EXERCISE 2-1B. EXERCISE 2-4B.

Balance Sheet Accounts Assets 111 Cash 112 Accounts Receivable 121 Office Equipment Liabilities 211 Accounts Payable Owner’s Equity 311 L. Jones, Capital 312 L. Jones, Withdrawals Income Statement Accounts Revenue 411 Legal Fees Expenses 511 Cleaning Expense 512 Office Assistance Expense 513 Rent Expense

A. B. C. D. E. F. G. H.

Dr. 8 6 9 1 2 3 10 1

Cr. 1 1 4 7 7 4 4 2

EXERCISE 2-2B. 1.

Accounts Affected

Category

Rules

T-Account Update

Computer Equipment

Asset

Dr.

Accounts Payable

Liability

Cr.

Computer Equipment

21,000 Accounts Payable 16,000 Cash

Cash

Asset

Cr.

5,000

EXERCISE 2-3B. ACCOUNT Supplies Legal Fees Earned P. Rey, Withdrawals Cash Accounts Receivable Rent Expense

CATEGORY Asset Revenue Owner’s Equity (Withdrawals) Asset Asset Expense

Dr. Cr. Dr.

Cr. Dr. Cr.

FINANCIAL Balance Sheet Income Statement Statement of Owner’s Equity

Dr. Dr. Dr.

Cr. Cr. Cr.

Balance Sheet Balance Sheet Income Statement

2-5A

SOLUTIONS TO EXERCISES—SET B Cont. EXERCISE 2-5B. HALL’S CLEANERS INCOME STATEMENT FOR THE MONTH ENDED JULY 31, 2016 Revenue: Cleaning Fees Operating Expenses: Salaries Expense Utilities Expense Total Operating Expenses Net Income

$ 7 4 8 00 $ 2 5 0 00 8 3 00 3 3 3 00 $ 4 1 5 00

HALL’S CLEANERS STATEMENT OF OWNER’S EQUITY FOR THE MONTH ENDED JULY 31, 2016 J. Hall, Capital, July 1, 2016 Net Income for July Less: Withdrawals for July Increase in Capital J. Hall, Capital, July 31, 2016

$ 7 0 0 00 $ 4 1 5 00 2 4 5 00 1 7 0 00 $ 8 7 0 00

HALL’S CLEANERS BALANCE SHEET JULY 31, 2016 ASSETS Cash Equipment

Total Assets

2-6 2-6B

LIABILITIES AND OWNER’S EQUITY $ 7 5 0 0 0 Liabilities: 6 4 5 00 Accounts Payable Owner’s Equity J. Hall, Capital Total Liabilities and $1 3 9 5 0 0 Owner’s Equity

$ 5 2 5 00 8 7 0 00 $1 3 9 5 0 0

PROBLEM 2A-1. Accounts Affected

Category

A. Cash

Asset

Inc.

Dec.

Rules

T-Account Update

Dr.

Bill O’Brien, Capital

Cash

Bill O’Brien, Capital

Owner’s Equity

Cr.

Asset

Dr.

Delivery Trucks

Liability

Cr.

9,000

Expense

Dr.

Liability

Cr.

Rent Expense 900

Asset

Dr.

Fees Earned

Revenue

Cr.

E. Accounts Receivable

Asset

Dr.

Fees Earned

Revenue

Cr.

F. Bill O’Brien, Withdrawals

Owner’s Equity (Withdrawals)

Dr.

Asset

Cr.

B. Delivery Trucks Accounts Payable C. Rent Expense Accounts Payable D. Cash

Cash

21,000

21,000 Accounts Payable 9,000 Accounts Payable 9,000 900

Cash 21,000 1,400

Fees Earned

Accounts Receivable 150

Fees Earned

1,400

Bill O’Brien, Withdrawals 400

1,400 150

Cash 21,000 1,400

400

PROBLEM 2A-2. Cash (A) 20,000 (C) 900

Bernie Pillows, Withdrawals (D) 90

312

121

Consulting Fees Earned

411

90 (D) 400 (E) 1,000 (G)

Office Equipment (B) 5,000

Accounts Payable (G) 1,000

111

900 (C)

211

Advertising Expense (E) 400

511

311

Rent Expense (F) 1,400

512

5,000 (B) 1,400 (F)

Bernie Pillows, Capital 20,000 (A)

2-7

PROBLEM 2A-3. (a) Cash (A) 7,000 (G) 3,500

10,500

111 200 (D) 200 (E) 400 (F) 200 (H) 900 (I)

Accounts Payable (D) 200

211

Fees Earned

411

1,300 (C)

8,000 (B)

1,100

1,900 8,600

Accounts Receivable 112 (B) 8,000 3,500 (G)

Barry Joy, Capital

311

Rent Expense (F) 400

511

312

Utilities Expense (E) 200

512

7,000 (A)

4,500

Office Equipment (C) 1,300 (H) 200

121

Barry Joy, Withdrawals (I) 900

1,500

(b) BARRY’S CLEANING SERVICE TRIAL BALANCE MAY 31, 2016 Dr. Cash Accounts Receivable Office Equipment Accounts Payable Barry Joy, Capital Barry Joy, Withdrawals Fees Earned Rent Expense Utilities Expense Totals

2-8

Cr.

8 6 0 0 00 4 5 0 0 00 1 5 0 0 00 1 1 0 0 00 7 0 0 00 9 0 0 00 8 0 0 0 00 4 0 0 00 2 0 0 00 16 1 0 0 0 0 16 1 0 0 0 0

PROBLEM 2A-4. (a) GRACE LANTZ BARRISTER AND SOLICITOR INCOME STATEMENT FOR THE MONTH ENDED MAY 31, 2017 Revenue: Revenue from Legal Fees

$ 2 3 5 0 00

Operating Expenses: Utilities Expense Rent Expense Salaries Expense Total Operating Expenses Net Income

$ 3 0 0 00 4 5 0 00 1 1 5 0 00 1 9 0 0 00 $ 4 5 0 00

(b) GRACE LANTZ BARRISTER AND SOLICITOR STATEMENT OF OWNER’S EQUITY FOR THE MONTH ENDED MAY 31, 2017 Grace Lantz, Capital, May 1, 2017 Net Income for May Less: Withdrawals for May Increase in Capital Grace Lantz, Capital, May 31, 2017

$1 2 7 5 0 0 $ 4 5 0 00 3 0 0 00 1 5 0 00 $1 4 2 5 0 0

2-9

PROBLEM 2A-4., Cont. (c) GRACE LANTZ BARRISTER AND SOLICITOR BALANCE SHEET MAY 31, 2017 ASSETS Assets: Cash Accounts Receivable Office Equipment

Total Assets

2-10

LIABILITIES AND OWNER’S EQUITY

$5 0 0 0 0 0 6 5 0 00 7 5 0 00

$6 4 0 0 0 0

Liabilities: Accounts Payable Salaries Payable Total Liabilities

$4 3 0 0 0 0 6 7 5 00 $ 4 9 7 5 00

Owner’s Equity Grace Lantz, Capital

1 4 2 5 00

Total Liabilities and Owner’s Equity

$6 4 0 0 0 0

PROBLEM 2A-5. 1., 2., 3. Cash (A) 16,000 (E) 2,600 (J) 300

18,900

111 600 (C) 250 (D) 900 (F) 1,200 (G) 300 (K) 3,250

Accounts Payable

211

Advertising Expense (D) 250

511

Alice Angel, Capital 311 16,000 (A)

Gas Expense (G) 1,200

512

Alice Angel, Withdrawals (K) 300

Salaries Expense (F) 900

513

Telephone Expense (I) 700

514

18,000 (B) 700 (I) 18,700

15,650

Accounts Receivable 112 (H) 800 300 (J) 500

Office Equipment (C) 600

121

Delivery Trucks (B) 18,000

122

312

Delivery Fees Earned 411 2,600 (E) 800 (H) 3,400

ANGEL’S DELIVERY SERVICE TRIAL BALANCE MARCH 31, 2016 Dr.

Cash Accounts Receivable Office Equipment Delivery Trucks Accounts Payable Alice Angel, Capital Alice Angel, Withdrawals Delivery Fees Earned Advertising Expense Gas Expense Salaries Expense Telephone Expense Totals

Cr.

1 5 6 5 0 00 5 0 0 00 6 0 0 00 1 8 0 0 0 00 1 8 7 0 0 00 1 6 0 0 0 00 3 0 0 00 3 4 0 0 00 2 5 0 00 1 2 0 0 00 9 0 0 00 7 0 0 00 3 8 1 0 0 00 3 8 1 0 0 00

2-11

PROBLEM 2A-5, Cont. 5.(a) ANGEL’S DELIVERY SERVICE INCOME STATEMENT FOR THE MONTH ENDED MARCH 31, 2016 Revenue: Delivery Fees Earned

$3 4 0 0 0 0

Operating Expenses: Advertising Expense Gas Expense Salaries Expense Telephone Expense Total Operating Exenses Net Income

$ 2 5 0 00 1 2 0 0 00 9 0 0 00 7 0 0 00 3 0 5 0 00 $ 3 5 0 00

5.(b) ANGEL’S DELIVERY SERVICE STATEMENT OF OWNER’S EQUITY FOR THE MONTH ENDED MARCH 31, 2016 A. Angel, Capital, March 1, 2016 Net Income for March Less: Withdrawals for March Increase in Capital A. Angel, Capital, March 31, 2016

$16 0 0 0 0 0 $ 3 5 0 00 3 0 0 00 5 0 00 $16 0 5 0 0 0

5.(c) ANGEL’S DELIVERY SERVICE BALANCE SHEET MARCH 31, 2016 ASSETS Assets: Cash Accounts Receivable Office Equipment Delivery Trucks

Total Assets

2-12

LIABILITIES AND OWNER’S EQUITY Liabilities: Accounts Payable

$1 8 7 0 0 0 0

6 0 0 0 0 Owner’s Equity: 18 0 0 0 00 A. Angel, Capital

16 0 5 0 00

Total Liabilities and $3 4 7 5 0 0 0 Owner’s Equity

$3 4 7 5 0 0 0

$1 5 6 5 0 0 0 5 0 0 00

PROBLEM 2B-1. Accounts Affected

Category

A. Cash

Asset

Inc.

Dec.

Rules Dr.

Bill O’Brien, Capital B. Delivery Trucks

Owner’s Equity Asset

Cr. Dr.

Accounts Payable C. Rent Expense

Liability Expense

Cr. Dr.

Accounts Payable

Liability

Cr.

D. Cash

Asset

Dr.

Fees Earned E. Accounts Receivable

Revenue Asset

Cr. Dr.

Revenue Owner’s Equity (Withdrawals)

Cr. Dr.

Asset

Cr.

Fees Earned F. Bill O’Brien, Withdrawals Cash

T-Account Update

Cash 2,500

Bill O’Brien, Capital 2,500

Delivery Trucks 900

Accounts Payable

Rent Expense 250

Accounts Payable

Cash 2,500 1,200 Accounts Receivable 700 Bill O’Brien, Withdrawals 275

900

900 250 Fees Earned 1,200 Fees Earned 1,200 700 Cash 2,500 1,200

275

PROBLEM 2B-2. Cash (A) 20,000 (C) 1,200

Bernie Pillows, Withdrawals (D) 200

312

121

Consulting Fees Earned

411

200 (D) 600 (E) 400 (G)

Office Equipment (B) 6,000

Accounts Payable (G) 400

111

1,200 (C)

211

Advertising Expense (E) 600

511

311

Rent Expense (F) 500

512

6,000 (B) 500 (F)

Bernie Pillows, Capital 20,000 (A)

2-13

PROBLEM 2B-3. (a) Cash (A) 10,000 (F) 4,000 (G) 2,000 16,000

111

Accounts Payable

4,000 (C) 310 (D) 50 (E) 600 (H)

211

Fees Earned

411

2,000 (B)

4,000 (F) 4,000 (G) 8,000

4,960

11,040

Accounts Receivable (G) 2,000

112

Office Equipment (B) 2,000 (C) 4,000

121

Barry Joy, Capital

311

Rent Expense (D) 310

511

312

Utilities Expense (E) 50

512

10,000 (A)

Barry Joy, Withdrawals (H) 600

6,000

2-14

Cr.

11 0 4 0 0 0 2 0 0 0 00 6 0 0 0 00 2 0 0 0 00 10 0 0 0 0 0 6 0 0 00 8 0 0 0 00 3 1 0 00 5 0 00 20 0 0 0 0 0 20 0 0 0 0 0

PROBLEM 2B-4. (a) GRACE LANTZ BARRISTER AND SOLICITOR INCOME STATEMENT FOR THE MONTH ENDED MAY 31, 2017 Revenue: Revenue from Legal Fees

$9 8 0 0 0 0

Operating Expenses: Utilities Expense Rent Expense Salaries Expense Total Operating Expenses Net Income

$ 1 0 0 00 3 0 0 00 1 4 0 0 00 1 8 0 0 00 $8 0 0 0 0 0

$4 0 0 0 0 0 $8 0 0 0 0 0 2 0 0 0 00 6 0 0 0 00 $10 0 0 0 0 0

2-15

PROBLEM 2B-4., Cont. (c) GRACE LANTZ BARRISTER AND SOLICITOR BALANCE SHEET MAY 31, 2017 ASSETS Assets: Cash Accounts Receivable Office Equipment

LIABILITIES AND OWNER’S EQUITY Liabilities: $6 0 0 0 0 0 Accounts Payable 2 4 0 0 00 Salaries Payable 2 4 0 0 00 Total Liabilities Owner’s Equity Grace Lantz, Capital

Total Assets

2-16

Total Liabilities and $10 8 0 0 0 0 Owner’s Equity

$ 2 0 0 00 6 0 0 00 $ 8 0 0 00

10 0 0 0 0 0

$10 8 0 0 0 0

PROBLEM 2B-5. 1., 2., 3. Cash (A) 40,000 (E) 13,000 (J) 1,600

54,600

111 2,500 (D) 1,850 (F) 750 (G) 400 (I) 88 (K)

Accounts Payable

211

Advertising Expense (C) 800

511

Alice Angel, Capital 311 40,000 (A)

Gas Expense (G) 750

512

Alice Angel, Withdrawals (K) 88

Salaries Expense (F) 1,850

513

Telephone Expense (I) 400

514

25,000 (B) 800 (I) 25,000

5,588

49,012

Accounts Receivable 112 (H) 5,500 1,600 (J) 3,900

Office Equipment (C) 2,500

121

Delivery Trucks (B) 25,000

122

312

Delivery Fees Earned 411 13,000 (E) 5,500 (H) 18,500

4. ANGEL’S DELIVERY SERVICE TRIAL BALANCE MARCH 31, 2016

Dr. 49 0 1 2 0 0 3 9 0 0 00 2 5 0 0 00 25 0 0 0 0 0

Cr.

25 8 0 0 0 0 40 0 0 0 0 0 8 8 00 18 5 0 0 0 0 8 0 0 00 7 5 0 00 1 8 5 0 00 4 0 0 00 84 3 0 0 0 0 84 3 0 0 0 0

2-17

PROBLEM 2B-5., Cont. 5.(a) ANGEL’S DELIVERY SERVICE INCOME STATEMENT FOR THE MONTH ENDED MARCH 31, 2016 Revenue: Delivery Fees Earned

$18 5 0 0 0 0

Operating Expenses: Advertising Expense Gas Expense Salaries Expense Telephone Expense Total Operating Exenses Net Income

$ 8 0 0 00 7 5 0 00 1 8 5 0 00 4 0 0 00 3 8 0 0 00 $14 7 0 0 0 0

$40 0 0 0 0 0 $14 7 0 0 0 0 8 8 00 14 6 1 2 0 0 $54 6 1 2 0 0

5.(c) ANGEL’S DELIVERY SERVICE BALANCE SHEET MARCH 31, 2016 ASSETS

LIABILITIES AND OWNER’S EQUITY

Assets: Cash Accounts Receivable Office Equipment Delivery Trucks

Liabilities: $49 0 1 2 0 0 Accounts Payable 3 9 0 0 00 2 5 0 0 0 0 Owner’s Equity: 2 5 0 0 0 00 A. Angel, Capital

Total Assets

$80 4 1 2 0 0

2-18

Total Liabilities and Owner’s Equity

$25 8 0 0 0 0

54 6 1 2 0 0

$80 4 1 2 0 0

PROBLEM 2C-1. Accounts Affected

Category

A. Cash

Asset

Inc.

Dec.

Rules Dr.

Jack James, Capital B. Office Equipment

Owner’s Equity Asset

Cr. Dr.

Accounts Payable C. Rent Expense

Liability Expense

Cr. Dr.

Accounts Payable

Liability

Cr.

D. Cash

Asset

Dr.

Editing Fees Earned E. Accounts Receivable

Revenue Asset

Cr. Dr.

Revenue Owner’s Equity (Withdrawals)

Cr. Dr.

Editing Fees Earned F. Jack James, Withdrawals

T-Account Update

Cash 3,500 Office Equipment 1,875

Accounts Payable 1,875

Rent Expense 425

Accounts Payable 1,875 425

Cash 3,500 2,100

Editing Fees Earned 2,100

Accounts Receivable 1,499

Asset

Fees Earned 2,100 1,490

Jack James, Withdrawals Cash 3,500 175 2,100

175

Cash

Jack James, Capital 3,500

Cr.

PROBLEM 2C-2. Cash (A) 14,000 (C) 3,250 17,250

111

Val McIntyre, Withdrawals (D) 364

312

121

Consulting Fees Earned

411

364 (D) 725 (E) 2,750 (G) 3,839

13,411

Computer Equipment (B) 5,500

Accounts Payable (G) 2,750

3,250 (C)

211

Advertising Expense (E) 725

511

311

Rent Expense (F) 615

512

5,500 (B) 615 (F) 6,115 3,365

Val McIntyre, Capital 14,000 (A)

2-19

PROBLEM 2C-3. (a) Cash (A) 6,000 (F) 3,500 (G) 3,000

111 4,000 (B) 340 (D) 150 (E) 600 (H)

12,500

Accounts Receivable (G) 1,000

112

Equipment (B) 4,000 (C) 500

121

4,500

5,090

7,410

Accounts Payable

211

Linda Miyagawa, Capital 6,000 (A)

311

Linda Miyagawa Withdrawals 312 (H) 600

411

Rent Expense (D) 340

511

Utilities Expense (E) 150

500 (C)

Fees Eearned 3,500 (F) 4,000 (G)

512

7,500

(b) LINDA’S CONSULTING SERVICE TRIAL BALANCE OCTOBER 31, 2017 Dr. Cash Accounts Receivable Equipment Accounts Payable Linda Miyagawa, Capital Linda Miyagawa, Withdrawals Fees Earned Rent Expense Utilities Expense Totals

2-20

Cr.

7 4 1 0 00 1 0 0 0 00 4 5 0 0 00 5 0 0 00 6 0 0 0 00 6 0 0 00 7 5 0 0 00 3 4 0 00 1 5 0 00 14 0 0 0 0 0 14 0 0 0 0 0

PROBLEM 2C-4. (a) GLENDA SHAVER, ARCHITECT INCOME STATEMENT FOR THE MONTH ENDED JUNE 30, 2017 Revenue: Fees Earned Operating Expenses: Rent Expense Advertising Expense Utilities Expense Total Operating Expenses Net Income

$6 7 1 5 0 0 $1 2 0 0 0 0 4 8 0 00 5 6 5 00 2 2 4 5 00 $4 4 7 0 0 0

(b) GLENDA SHAVER, ARCHITECT STATEMENT OF OWNER’S EQUITY FOR THE MONTH ENDED JUNE 30, 2017 Glenda Shaver, Capital, June 1, 2017 Net Income for June Less: Withdrawals for June Increase in Capital Glenda Shaver,Capital, June 30, 2017

$5 6 0 0 0 0 $4 4 7 0 0 0 9 5 0 00 3 5 2 0 00 $9 1 2 0 0 0

LIABILITIES AND OWNER’S EQUITY

Assets: Cash Accounts Receivable Supplies Equipment

Liabilities: $2 2 0 0 0 0 Accounts Payable 1 0 7 5 00 2 6 5 0 0 Owner’s Equity: 6 2 0 0 00 Glenda Shaver,Capital

Total Assets

$9 7 4 0 0 0

Total Liabilities and Owner’s Equity

$ 6 2 0 00

9 1 2 0 00

$9 7 4 0 0 0

2-21

PROBLEM 2C-5. 1., 2., 3. Cash (A)33,000 (E) 5,900 (J) 2,000

40,900

111 3,300 (D) 1,720 (F) 320 (G) 150 (I) 66 (K) 700 (L)

Accounts Payable 211 (L) 700 14,000 (B) 1,150 (C) 700

Advertising Expense (C) 1,150

511

Repair Expense (G) 320

512

Salaries Expense (F) 1,720

513

Telephone Expense (I) 150

514

15,150 14,450

Clara Benson, Capital 311 33,000 (A)

6,256

34,644

Accounts Receivable 112 (H) 4,300 2,000 (J) 2,300

Office Equipment (D) 3,300

121

Design Equipment (B) 14,000

122

Clara Benson, Withdrawals (K) 66

312

Design Fees Earned 411 5,900 (E) 4,300 (H) 10,200

4. CLARA’S DESIGN SERVICE TRIAL BALANCE MARCH 31, 2017

Cash Accounts Receivable Office Equipment Design Equipment Accounts Payable Clara Benson, Capital Clara Benson, Withdrawals Design Fees Earned Advertising Expense Repair Expense Salaries Expense Telephone Expense Totals

2-22

Dr. 34 6 4 4 0 0 2 3 0 0 00 3 3 0 0 00 14 0 0 0 0 0

Cr.

14 4 5 0 0 0 33 0 0 0 0 0 6 6 00 10 2 0 0 0 0 1 1 5 0 00 3 2 0 00 1 7 2 0 00 1 5 0 00 57 6 5 0 0 0 57 6 5 0 0 0

PROBLEM 2C-5., Cont. 5.(a)

CLARA’S DESIGN SERVICE INCOME STATEMENT FOR THE MONTH ENDED MARCH 31, 2017

Revenue: Design Fees Earned

$10 2 0 0 0 0

Operating Expenses: Advertising Expense Repair Expense Salaries Expense Telephone Expense Total Operating Exenses Net Income

$1 1 5 0 0 0 3 2 0 00 1 7 2 0 00 1 5 0 00 3 3 4 0 00 $6 8 6 0 0 0

5.(b)

CLARA’S DESIGN SERVICE STATEMENT OF OWNER’S EQUITY FOR THE MONTH ENDED MARCH 31, 2017

Clara Benson, Capital, March 1, 2017 Net Income for March Less: Withdrawals for March Increase in Capital Clara Benson, Capital, March 31, 2017

5.(c)

$33 0 0 0 0 0 $6 8 6 0 0 0 6 6 00 6 7 9 4 00 $39 7 9 4 0 0

CLARA’S DESIGN SERVICE BALANCE SHEET MARCH 31, 2017 ASSETS

LIABILITIES AND OWNER’S EQUITY

Assets: Cash Accounts Receivable Office Equipment Design Equipment

Liabilities: $34 6 4 4 0 0 Accounts Payable 2 3 0 0 00 3 3 0 0 0 0 Owner’s Equity: 14 0 0 0 0 0 Clara Benson, Capital

Total Assets

$54 2 4 4 0 0

Total Liabilities and Owner’s Equity

$14 4 5 0 0 0

39 7 9 4 0 0

$54 2 4 4 0 0

2-23

SOLUTIONS TO ON-THE-JOB TRAINING, #T-1. RANCH COMPANY TRIAL BALANCE JUNE 30, 2017 Dr. Cash Accounts Receivable Office Equipment Accounts Payable Wages Payable H. Clo, Capital H. Clo, Withdrawals Professional Fees Rent Expense Advertising Expense Totals

Cr.

4 9 0 00 6 2 0 00 3 6 5 00 1 1 5 00 1 0 00 6 3 5 00 1 4 4 0 00 2 4 2 0 00 2 4 0 00 2 5 00 3 1 8 0 00

3 1 8 0 00

Note: 1. The Cash account subtraction error means the amount in Cash is overstated. 2. The normal balance of Accounts Receivable is a debit. Therefore, the $635 should have been on the debit side. ($15 from the $635 = $620.) Accounts Receivable would be severely understated if not corrected. 3. The normal balance of Accounts Payable, Wages Payable and Capital (H. Clo, Capital) is a credit. All understated. 4. Before recording the office equipment on account, Assets and money owed (Accounts Payable) would be understated. 5. Revenue being understated would mean net income would be lower than actual. 6. Expense accounts are normally debit accounts. Therefore, Rent Expense would be understated. To avoid this problem, Ranch Co. might insist that Andy take a course in accounting at a local college. He obviously needs more experience/training before he can be trusted to handle the company’s books. Better supervision may help somewhat, but the real solution is in getting a bookkeeper who is accurate and well trained.

SOLUTIONS TO ON-THE-JOB TRAINING, #T-2. Situation

Totals of Trial Balance

Effect on Accounts

Will balance, but be understated by $765.

Cash overstated by $765 and equipment understated by $765.

Will not balance.

Cash overstated by $200.

Will balance but be overstated by $400.

Capital and Accounts Receivable overstated by $400.

Will balance but be overstated by $360.

Accounts Payable overstated by $360 and Cash overstated by $400. Supplies understated by $40.

Trial Balance will balance with the correct amount.

Supplies overstated and Equipment understated by $800.

Trial Balance will not balance.

Cash overstated by $36.

Mistakes can be avoided in the future by carefully checking entries.

2-24

CONTINUING PROBLEM 1., 2., 3. Cash (p)

3,850 900

4,750

1000 150 (l) 200 (m) 1,400 (n) 85 (q) 50 (r)

285

690

Advertising Expense (n) 1,400 Rent Expense 400

5010

5020

405

1,885

T. Freedman, Capital

2,865

Accounts Receivable (o) 850 Supplies (s)

Accounts Payable 2000 (m) 200 335 (q) 85 155 (k) 200 (s)

3000

Utilities Expense 85

5030

T. Freedman, Withdrawals 100

3010

Phone Expense (k) 155

5040

Supplies Expense

5050

Service Revenue 1,650 850 (o) 900 (p)

4000

Insurance Expense (l) 150

5060

Postage Expense (r) 50

5070

1020

4,500

1030 250 200 450

Computer Shop Equipment 1080 1,200

3,400

Office Equipment 600

1090

PRECISION COMPUTER CENTRE TRIAL BALANCE JUNE 30, 2016

Cash Accounts Receivable Supplies Computer Shop Equipment Office Equipment Accounts Payable T. Freedman, Capital T. Freedman, Withdrawals Service Revenue Advertising Expense Rent Expense Utilities Expense Phone Expense Insurance Expense Postage Expense Total

2 8 6 5 00 8 5 0 00 4 5 0 00 1 2 0 0 00 6 0 0 00 4 0 5 00 4 5 0 0 00 1 0 0 00 3 4 0 0 00 1 4 0 0 00 4 0 0 00 8 5 00 1 5 5 00 1 5 0 00 5 0 00 8 3 0 5 00

8 3 0 5 00

2-25

CONTINUING PROBLEM, Cont. 5.

PRECISION COMPUTER CENTRE INCOME STATEMENT FOR THE TWO MONTHS ENDED JUNE 30, 2016

Revenue: Service Revenue Operating Expenses: Advertising Expense Insurance Expense Phone Expense Postage Expense Rent Expense Utilities Expense Total Operating Expenses Net Income

$ 3 4 0 0 00 $ 1 4 0 0 00 1 5 0 00 1 5 5 00 5 0 00 4 0 0 00 8 5 00 2 2 4 0 00 $ 1 1 6 0 00

PRECISION COMPUTER CENTRE STATEMENT OF OWNER’S EQUITY FOR THE TWO MONTHS ENDED JUNE 30, 2016 T. Freedman, Capital Contributed, May 1, 2016 Net Income for the two months Less: Withdrawals Increase in Capital T. Freedman, Capital, June 30, 2016

$ 4 5 0 0 00 $ 1 1 6 0 00 1 0 0 00 1 0 6 0 00 $ 5 5 6 0 00

PRECISION COMPUTER CENTRE BALANCE SHEET JUNE 30, 2016 ASSETS Assets: Cash Accounts Receivable Supplies Computer Shop Equipment Office Equipment Total Assets

2-26

LIABILITIES AND OWNER’S EQUITY Liabilities: $ 2 8 6 5 00 Accounts Payable 8 5 0 00 4 5 0 0 0 Owner’s Equity: 1 2 0 0 00 T. Freedman, Capital 6 0 0 00 Total Liabilities and $ 5 9 6 5 00 Owner’s Equity

$ 4 0 5 00

5 5 6 0 00

$ 5 9 6 5 00

3 Beginning the Accounting Cycle: Journalizing, Posting, and the Trial Balance

ANSWERS TO DISCUSSION QUESTIONS , AND CRITICAL THINKING/ETHICAL CASE 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14.

The accounting cycle represents the normal accounting procedures which are performed in a certain period of time (usually one year). Disagree; it is based on the income statement. Calendar year—January 1 to December 31 Fiscal year—Any 12 consecutive months. (A fiscal year could be a calendar year.) Interim reports are financial reports prepared for parts of the fiscal period. Transactions are first journalized in a book of original entry and then posted to the ledger, the book of final entry. The debit and credit parts of recording a transaction are located on the same page of the journal. In the ledger, they would be on separate pages. The chart of accounts provides all the titles of the accounts that will be used in the debit and credit parts of recording each transaction in the general journal. A compound journal entry is a journal entry that requires three or more accounts. Disagree; it means updating the ledger. False. The side that increases the account is the normal balance. Agree. Cross-referencing updates the PR column in the journal after the ledger account has been updated. Transposition is a rearrangement of digits: 5,132.00 5,312.00 Sliding means adding or deleting zeros: 4,821.00 482.10 The question in this case is whether Jay should be allowed to copy another company’s software. It is ethically wrong for Jay to ask his friend if he can copy his software. Software is protected under copyright laws. Maybe Jay should check with the manufacturer of the software for delayed billing.

3-1

SOLUTIONS TO CLASSROOM DEMONSTRATION EXERCISES 1.

a. b. c. d. e. f. g. h. i.

2012 November 19 Cash Equipment B. Moore, Capital Initial investment by owner $9,000 + $10,000 $19,000 1

(A) (B) (C)

Owner’s investment of cash and equipment Performed legal services for cash and charge Salary expense paid

NAME: CASH

Date 2015 May 1 4 11 14

ACCOUNT NO. Explanation

Post Ref. GJ1 GJ1

Debit 1 9 00 9 00

Dr Dr

6 00

GJ2 GJ3

DR CR

Credit

2 00

Dr Dr

111 Balance 1 9 00 2 8 00 2 2 00 2 4 00

Post. Ref. column of cash tells us from which page of Journal information came. The Acct #111 will be used to cross reference back to the Post Ref. column of the Journal to tell it was posted to Acct. #111 in the General Ledger. 4.

LEE COMPANY TRIAL BALANCE OCTOBER 31, 2017

Cash Equipment Accounts Payable D. Lee, Capital D. Lee, Withdrawals Taxi Fare Income Advertising Expense Rent Expense Totals

Date 2017 July 11

1 7 00 1 1 2 00 1 0 8 00 3 0 00 5 00 1 6 00

Account Title and Description Telephone Expense Repair Expense To correct posting of June 2

Post Ref.

3 00 1 7 00 1 5 4 00

1 5 4 00

Dr.

Cr.

2 1 0 00 2 1 0 00

When the original incorrect entry has been ruled through and the account balance corrected and initialed. Note that, in a computerized accounting environment, the correcting entry should be dated with the original June 2, 2017 date.

3-2

SOLUTIONS TO EXERCISES—SET A EXERCISE 3-1A. Date 2017 Oct 3

Account Title and Description

Post Ref.

Cash Equipment Janet Wills, Capital Owner’s investment Building Accounts Payable Purchased building on account Truck Cash Purchased truck for cash Supplies Accounts Payable Bought supplies from Lee Co. on account

Dr.

Cr.

70 0 0 0 00 6 0 0 0 00 76 0 0 0 00 40 0 0 0 00 40 0 0 0 00 16 0 0 0 00 16 0 0 0 00 9 0 0 00 9 0 0 00

EXERCISE 3-2A. Date 2016 Jan 4

Account Title and Description Cash Reggie Long, Capital Owner’s investment Auto Repair Equipment Cash Purchased auto repair equipment for cash Auto Repair Equipment Accounts Payable Bought equipment from Lowell Co. on account Cash Repair Fees Earned Fees collected Accounts Receivable Repair Fees Earned Fees charged to Sullivan Co. on account Reggie Long, Withdrawals Cash Personal withdrawal

Post Ref.

Dr.

Cr.

16 0 0 0 0 0 16 0 0 0 0 0 7 0 0 0 00 7 0 0 0 00 6 0 0 0 00 6 0 0 0 00 9 0 0 00 9 0 0 00 9 0 0 00 9 0 0 00 3 0 0 00 3 0 0 00

3-3A

SOLUTIONS TO EXERCISES—SET A, Cont. EXERCISE 3-3A. Date 2015 Apr 6

Page 4 Account Title and Description

Cash A. King, Capital Cash investment Equipment Cash Accounts Payable Purchase of equipment

3-4A

15 0 0 0 0 0 9 0 0 0 00 4 0 0 0 00 5 0 0 0 00

211

ACCOUNT NO. Explanation

Post Ref.

Debit

GJ4

15 0 0 0 0 0

Credit

DR CR Dr

4 0 0 0 00

GJ4

Explanation

Post Ref.

Debit

GJ4

9 0 0 0 00

Explanation

15 0 0 0 0 0 11 0 0 0 0 0

Post Ref.

Debit

GJ4

Balance

9 0 0 0 00

Debit

211

Credit

DR CR

Balance

5 0 0 0 00

ACCOUNT NO. Post Ref.

121

DR CR

ACCOUNT NO.

GJ4

Explanation

Credit

111 Balance

ACCOUNT NO.

NAME: A. KING, CAPITAL Date 2015 Apr 6

15 0 0 0 0 0

Cr.

111

NAME: ACCOUNTS PAYABLE Date 2015 Apr 13

111

121

NAME: EQUIPMENT Date 2015 Apr 13

Dr.

311

NAME: CASH Date 2015 Apr 6 13

Post Ref.

311

Credit

DR CR

Balance

15 0 0 0 0 0

EXERCISE 3-4A. (a)

Page 1

Date 2017 July 4

Account Title and Description Cash J. Lowe, Capital Owner’s investment Equipment Accounts Payable Purchased equipment from Lax Co. on account Accounts Receivable Fees Earned Services billed to Friend Co. Cash Services Earned Cash fees Salaries Expense Cash Salaries paid J. Lowe, Withdrawals Cash Personal withdrawals

Post Ref.

Dr.

111

6 0 0 0 00

Cr. 6 0 0 0 00

311

121

8 0 0 00 8 0 0 00

211

112

4 0 0 0 00 4 0 0 0 00

411

111

5 0 0 0 00 5 0 0 0 00

411

511

1 8 0 0 00 1 8 0 0 00

111

312

4 0 0 00 4 0 0 00

111

(b) NAME: CASH Date 2017 July 4 18 25 28

ACCOUNT NO. Explanation

Post Ref. GJ1 GJ1

Debit 6 0 0 0 00 5 0 0 0 00

GJ1

Explanation

DR CR Dr Dr

1 8 0 0 00 4 0 0 00

GJ1

NAME: ACCOUNTS RECEIVABLE Date 2017 July 15

Credit

Dr Dr

111 Balance

6 0 0 0 00 1 1 0 0 0 00 9 2 0 0 00 8 8 0 0 00

ACCOUNT NO. Post Ref.

Debit

GJ1

4 0 0 0 00

Credit

112

DR CR

Balance

4 0 0 0 00

3-5A

SOLUTIONS TO EXERCISES—SET A, Cont. EXERCISE 3-4A., Cont. NAME: EQUIPMENT Date 2017 July 7

ACCOUNT NO. Explanation

Post Ref.

Debit

GJ1

8 0 0 00

NAME: ACCOUNTS PAYABLE Date 2017 July 7

Explanation

Post Ref.

Debit

GJ1

Explanation

Post Ref.

Debit

GJ1

Explanation

3-6A

Explanation

Post Ref.

Debit

GJ1

4 0 0 00

8 0 0 00

Post Ref.

GJ1

Debit

211

Credit

DR CR

Balance

8 0 0 00

311

Credit

DR CR

Balance

6 0 0 0 00

Credit

Credit 4 0 0 0 00 5 0 0 0 00

312

DR CR

Balance

4 0 0 00

ACCOUNT NO.

GJ1

ACCOUNT NO.

NAME: SERVICES EARNED Date 2017 July 15 18

Balance

ACCOUNT NO.

NAME: J. LOWE, WITHDRAWALS Date 2017 July 28

DR CR

ACCOUNT NO.

NAME: J. LOWE, CAPITAL Date 2017 July 4

Credit

121

DR CR Cr Cr

411 Balance 4 0 0 0 00 9 0 0 0 00

EXERCISE 3-4A., Cont. NAME: SALARIES EXPENSE Date 2017 July 25

Explanation

ACCOUNT NO. Post Ref.

Debit

GJ1

1 8 0 0 00

Credit

511

DR CR

Balance

1 8 0 0 00

(c) LOWE COMPANY TRIAL BALANCE JULY 31, 2017 Cash Accounts Receivable Equipment Accounts Payable J. Lowe, Capital J. Lowe, Withdrawals Fees Earned Salaries Expense Totals

8 8 0 0 00 4 0 0 0 00 8 0 0 00 8 0 0 00 6 0 0 0 00 4 0 0 00 9 0 0 0 00 1 8 0 0 00 15 8 0 0 0 0 15 8 0 0 0 0

EXERCISE 3-5A. SUN CO. TRIAL BALANCE MARCH 31, 2015 Cash Accounts Receivable Accounts Payable A. Sun, Capital A. Sun, Withdrawals Services Earned Concessions Earned Rent Expense Salaries Expense Miscellaneous Expense Totals

10 0 0 0 0 0 1 2 0 0 00 2 0 0 0 00 6 5 0 0 00 3 0 0 00 4 7 0 0 00 2 5 0 0 00 4 0 0 00 2 5 0 0 00 1 3 0 0 00 15 7 0 0 0 0 15 7 0 0 0 0

EXERCISE 3-6.A Put line through both 800.00 figures. Change to 1,600.00 and initial.

3-7A

SOLUTIONS TO EXERCISES—SET B EXERCISE 3-1B. Date 2017 Oct 3

Account Title and Description

Post Ref.

Dr.

Cr.

90 0 0 0 00 8 0 0 0 00 98 0 0 0 00 50 0 0 0 00 50 0 0 0 00 26 0 0 0 00 26 0 0 0 00 8 0 0 00 8 0 0 00

EXERCISE 3-2B. Date 2016 Jan 4

3-8B

Post Ref.

Dr.

Cr.

21 0 0 0 0 0 21 0 0 0 0 0 9 0 0 0 00 9 0 0 0 00 5 0 0 0 00 5 0 0 0 00 1 2 0 0 00 1 2 0 0 00 9 8 0 00 9 8 0 00 5 0 0 00 5 0 0 00

EXERCISE 3-3B. Date 2015 Apr 6

Page 4 Account Title and Description

Cash A. King, Capital Cash investment Equipment Cash Accounts Payable Purchase of equipment

17 0 0 0 0 0 8 0 0 0 00 3 0 0 0 00 5 0 0 0 00

211

ACCOUNT NO. Explanation

Post Ref.

Debit

GJ4

17 0 0 0 0 0

Credit

DR CR Dr

3 0 0 0 00

GJ4

111 Balance

17 0 0 0 0 0 14 0 0 0 0 0

ACCOUNT NO. Explanation

Post Ref.

Debit

GJ4

8 0 0 0 00

Explanation

Credit

121

DR CR

Balance

8 0 0 0 00

ACCOUNT NO. Post Ref.

Debit

GJ4

5 0 0 0 00

NAME: A. KING, CAPITAL Date 2015 Apr 6

17 0 0 0 0 0

Cr.

111

NAME: ACCOUNTS PAYABLE Date 2015 Apr 13

111

121

NAME: EQUIPMENT Date 2015 Apr 13

Dr.

311

NAME: CASH Date 2015 Apr 6 13

Post Ref.

Credit

121

DR CR

Balance

5 0 0 0 00

ACCOUNT NO. Post Ref.

Debit

GJ4

17 0 0 0 0 0

Credit

311

DR CR

Balance

17 0 0 0 0 0

3-9B

SOLUTIONS TO EXERCISES—SET B, Cont. EXERCISE 3-4B. (a)

Page 1

Date 2017 July 4

Account Title and Description Cash J. Lowe, Capital Owner’s investment Equipment Accounts Payable Purchased equipment from Lax Co. on account Accounts Receivable Services Earned Services billed to Friend Co. Cash Services Earned Cash fees Salaries Expense Cash Salaries paid J. Lowe, Withdrawals Cash Personal withdrawals

Post Ref.

Dr.

111

7 0 0 0 00

Cr. 7 0 0 0 00

311

121

9 0 0 00 9 0 0 00

211

112

4 6 0 0 00 4 6 0 0 00

411

111

3 0 0 0 00 3 0 0 0 00

411

511

1 6 0 0 00 1 6 0 0 00

111

312

5 0 0 00 5 0 0 00

111

(b) NAME: CASH Date 2017 July 4 18 25 28

ACCOUNT NO. Explanation

Post Ref. GJ1 GJ1

Debit 7 0 0 0 00 3 0 0 0 00

GJ1

3-10B

Explanation

DR CR Dr Dr

1 6 0 0 00 5 0 0 00

GJ1

NAME: ACCOUNTS RECEIVABLE Date 2017 July 15

Credit

Dr Dr

Balance 7 0 0 0 00 10 0 0 0 0 0 8 4 0 0 00 7 9 0 0 00

ACCOUNT NO. Post Ref.

Debit

GJ1

4 6 0 0 00

Credit

111

112

DR CR

Balance

4 6 0 0 00

EXERCISE 3-4B., Cont. NAME: EQUIPMENT Date 2017 July 7

ACCOUNT NO. Explanation

Post Ref.

Debit

GJ1

9 0 0 00

NAME: ACCOUNTS PAYABLE Date 2017 July 7

Explanation

Post Ref.

Debit

GJ1

Explanation

Post Ref.

Debit

GJ1

Explanation

9 0 0 00

211

Credit

DR CR

Balance

9 0 0 00

311

Credit

DR CR

Balance

7 0 0 0 00

ACCOUNT NO. Post Ref.

Debit

GJ1

5 0 0 00

NAME: SERVICES EARNED Date 2017 July 15 18

Balance

ACCOUNT NO.

NAME: J. LOWE, WITHDRAWALS Date 2017 July 28

DR CR

ACCOUNT NO.

NAME: J. LOWE, CAPITAL Date 2017 July 4

Credit

121

Credit

312

DR CR

Balance

5 0 0 00

ACCOUNT NO. Post Ref. GJ1 GJ1

Debit

Credit 4 6 0 0 00 3 0 0 0 00

DR CR Cr Cr

411 Balance 4 6 0 0 00 7 6 0 0 00

3-11B

SOLUTIONS TO EXERCISES—SET B, Cont. EXERCISE 3-4B., Cont. NAME: SALARIES EXPENSE Date 2017 July 25

Explanation

ACCOUNT NO. Post Ref.

Debit

GJ1

1 6 0 0 00

Credit

511

DR CR

Balance

1 6 0 0 00

(c) LOWE COMPANY TRIAL BALANCE JULY 31, 2017 Cash Accounts Receivable Equipment Accounts Payable J. Lowe, Capital J. Lowe, Withdrawals Services Earned Salaries Expense Totals

7 9 0 0 00 4 6 0 0 00 9 0 0 00 9 0 0 00 7 0 0 0 00 5 0 0 00 7 6 0 0 00 1 6 0 0 00 15 5 0 0 0 0 15 5 0 0 0 0

EXERCISE 3-5B. SUN CO. TRIAL BALANCE MARCH 31, 2015 Cash Accounts Receivable Accounts Payable A. Sun, Capital A. Sun, Withdrawals Services Earned Concessions Earned Rent Expense Salaries Expense Miscellaneous Expense Totals

10 0 0 0 0 0 1 2 0 0 00 3 0 0 0 00 6 5 0 0 00 3 0 0 00 5 7 0 0 00 2 5 0 0 00 1 4 0 0 00 3 5 0 0 00 1 3 0 0 00 17 7 0 0 0 0 17 7 0 0 0 0

EXERCISE 3-6B. Put line through both 800.00 figures. Change to 1,600.00 and initial.

3-12B

PROBLEM 3A.1. JACK’S CLEANING SERVICE GENERAL JOURNAL Date 2016 Aug. 1

Account Title and Description

Page 1 Post Ref.

Dr.

Prepaid Rent Cash Rent paid in advance

9 0 0 0 00

Cleaning Equipment Accounts Payable Equipment from Ryan’s Supply House on account

4 0 0 0 00

Cr. 9 0 0 0 00

4 0 0 0 00

Cleaning Supplies Cash Purchased supplies

9 0 0 00

Cash Cleaning Fees Earned Fees for cash

1 9 0 0 00

Jack Lang, Withdrawals Cash Personal withdrawal

9 0 0 00

Advertising Expense Accounts Payable Advertising bill

4 0 0 00

9 0 0 00

1 9 0 0 00

9 0 0 00

4 0 0 00

3-13

PROBLEM 3A-1., Cont. JACK’S CLEANING SERVICE CENTRE GENERAL JOURNAL Date 2016 Aug 23

3-14

Account Title and Description Hydro Expense Cash Paid hydro expense Salaries Expense Cash Paid salaries

Page 2 Post Ref.

Dr. 9 0 00

9 0 00

7 0 0 00 7 0 0 00

Accounts Receivable Cleaning Fees Earned Fees earned to be paid in October

2 1 0 0 00

Accounts Payable Cash Partial payment to Ryan’s Supply House

2 0 0 0 00

Cr.

2 1 0 0 00

2 0 0 0 00

PROBLEM 3A-2 BETTY’S ART STUDIO GENERAL JOURNAL Date 2017 June 2

Account Title and Description Cash Betty Rice, Capital Cash investment Prepaid Rent Cash Rent paid in advance Equipment Accounts Payable Purchased equipment from Astor Co. on account Cash Art Fees Earned Fees for cash Art Supplies Cash Bought art supplies for cash Accounts Receivable Art Fees Earned Fees to Lester Co. on account Salaries Expense Cash Paid salaries Betty Rice, Withdrawals Cash Personal withdrawal Electrical Expense Cash Paid electric bill Telephone Expense Cash Paid telephone bill

Page 1 Post Ref.

Dr.

111

12 0 0 0 0 0 12 0 0 0 0 0

311

114

1 2 0 0 00 1 2 0 0 00

111

131

6 0 0 00 6 0 0 00

211

111

9 0 0 00 9 0 0 00

411

121

4 0 0 00 4 0 0 00

111

112

2 1 0 0 00 2 1 0 0 00

411

521

6 0 0 00 6 0 0 00

111

312

2 0 0 00 2 0 0 00

111

511

1 4 0 00 1 4 0 00

111

531 111

Cr.

2 1 0 00 2 1 0 00

3-15

PROBLEM 3A-2., Cont. GENERAL LEDGER OF BETTY’S ART STUDIO NAME: CASH Date 2017 June 2 3 6 9 10 16 27 30

ACCOUNT NO. Explanation

Post Ref.

Debit

GJ1

12 0 0 0 0 0 9 0 0 00

GJ1 GJ1 GJ1 GJ1

NAME: ACCOUNTS RECEIVABLE Date 2017

Explanation

June 10

Post Ref.

Debit

GJ1

2 1 0 0 00

Explanation

Post Ref.

Debit

GJ1

1 2 0 0 00

3-16

Dr. Dr. Dr.

Credit

Explanation

Post Ref.

Debit

GJ1

4 0 0 00

Credit

Balance

Dr.

2 1 0 0 00

Post Ref.

Debit

GJ1

6 0 0 00

Credit

114

DR CR

Balance

Dr.

1 2 0 0 00

121

DR CR

Balance

Dr.

4 0 0 00

ACCOUNT NO. Explanation

112

DR CR

ACCOUNT NO.

NAME: EQUIPMENT Date 2017 June 4

Dr.

12 0 0 0 0 0 10 8 0 0 0 0 11 7 0 0 0 0 11 3 0 0 0 0 10 7 0 0 0 0 10 5 0 0 0 0 10 3 6 0 0 0 10 1 5 0 0 0

ACCOUNT NO.

NAME: ART SUPPLIES Date 2017 June 9

Dr.

Balance

ACCOUNT NO.

NAME: PREPAID RENT Date 2017 June 3

Dr. Dr.

4 0 0 00 6 0 0 00 2 0 0 00 1 4 0 00 2 1 0 00

GJ1

DR CR Dr.

1 2 0 0 00

GJ1 GJ1

Credit

111

131

DR CR

Balance

Dr.

6 0 0 00

PROBLEM 3A-2., Cont. NAME: ACCOUNTS PAYABLE Date 2017 June 4

Explanation

ACCOUNT NO. Post Ref.

Debit

GJ1

NAME: BETTY RICE, CAPITAL Date 2017 June 2

Explanation

Post Ref.

Debit

GJ1

Explanation

Post Ref.

Debit

GJ1

2 0 0 00

Post Ref.

Debit

GJ1

Explanation

Cr.

6 0 0 00

311

Credit

DR CR

Balance

12 0 0 0 0 0

Cr.

12 0 0 0 0 0

Credit

312

DR CR

Balance

Dr.

2 0 0 00

Credit

DR CR Cr. Cr.

411 Balance 9 0 0 00 3 0 0 0 00

ACCOUNT NO. Post Ref.

Debit

GJ1

1 4 0 00

NAME: SALARIES EXPENSE Date 2017 June 10

6 0 0 00

9 0 0 00 2 1 0 0 00

GJ1

Explanation

Balance

ACCOUNT NO.

NAME: ELECTRICAL EXPENSE Date 2017 June 27

DR CR

ACCOUNT NO.

NAME: ART FEES EARNED Date 2017 June 6 10

Credit

ACCOUNT NO.

NAME: BETTY RICE, WITHDRAWALS Date 2017 June 16

211

Credit

511

DR CR

Balance

Dr.

1 4 0 00

ACCOUNT NO. Post Ref.

Debit

GJ1

6 0 0 00

Credit

521

DR CR

Balance

Dr.

6 0 0 00

3-17

PROBLEM 3A-2., Cont. NAME: TELEPHONE EXPENSE Date 2017 June 30

Explanation

ACCOUNT NO. Post Ref.

Debit

GJ1

2 1 0 00

Credit

531

DR CR

Balance

Dr.

2 1 0 00

BETTY’S ART STUDIO TRIAL BALANCE JUNE 30, 2017 Cash Accounts Receicable Prepaid Rent Art Supplies Equipment Accounts Payable Betty Rice, Capital Betty Rice, Withdrawals Art Fees Earned Electrical Expense Salaries Expense Telephone Expense Totals

3-18

10 1 5 0 0 0 2 1 0 0 00 1 2 0 0 00 4 0 0 00 6 0 0 00 6 0 0 00 12 0 0 0 0 0 2 0 0 00 3 0 0 0 00 1 4 0 00 6 0 0 00 2 1 0 00 15 6 0 0 0 0 15 6 0 0 0 0

PROBLEM 3A-3. A. FRENCH PLACEMENT AGENCY GENERAL JOURNAL Date 2015 June 1

Page 1 Post Ref.

Dr.

Cash A. French, Capital Owner investment

111

9 0 0 0 00

Equipment Accounts Payable Purchased equipment from Hook Co. on account

141

Accounts Receivable Placement Fees Earned Fees on account

112

A. French, Withdrawals Cash Personal withdrawals

321

Wages Expense Cash Paid wages

511

Cash Placement Fees Earned Cash fees

111

Supplies Accounts Payable Bought supplies from Lyon Co. on account

131

Telephone Expense Cash Paid telephone bill

521

Advertising Expense Accounts Payable Advertising bill received from Shale Co.

531

Account Title and Description

9 0 0 0 00

311

2 0 0 0 00 2 0 0 0 00

211

1 6 0 0 00 1 6 0 0 00

411

1 0 0 00 1 0 0 00

111

3 0 0 00 3 0 0 00

111

6 0 0 00 6 0 0 00

411

5 0 0 00 5 0 0 00

211

1 6 0 00 1 6 0 00

111

211

Cr.

9 0 0 00 9 0 0 00

3-19

PROBLEM 3A-3., Cont. GENERAL LEDGER OF A. FRENCH PLACEMENT AGENCY NAME: CASH Date 2015 June 1 5 8 11 28

ACCOUNT NO. Explanation

Post Ref.

Debit

GJ1

9 0 0 0 00

GJ1 GJ1 GJ1

Explanation

Post Ref.

Debit

GJ1

1 6 0 0 00

Explanation

Post Ref.

Debit

GJ1

5 0 0 00

3-20

1 6 0 00

Dr.

Credit

Explanation

Post Ref.

Debit

GJ1

2 0 0 0 00

Explanation

Credit

GJ1 GJ1 GJ1

Debit

Credit 2 0 0 0 00 5 0 0 00 9 0 0 00

9 0 0 0 00 8 9 0 0 00 8 6 0 0 00 9 2 0 0 00 9 0 4 0 00

112 Balance

Dr.

1 6 0 0 00

131

DR CR

Balance

Dr.

5 0 0 00

141

DR CR

Balance

Dr.

2 0 0 0 00

ACCOUNT NO. Post Ref.

Balance

DR CR

ACCOUNT NO.

NAME: ACCOUNTS PAYABLE Date 2015 June 1 15 29

Dr.

ACCOUNT NO.

NAME: EQUIPMENT Date 2015 June 1

1 0 0 00 3 0 0 00

ACCOUNT NO.

NAME: SUPPLIES Date 2015 June 15

DR CR Dr.

6 0 0 00

GJ1

NAME: ACCOUNTS RECEIVABLE Date 2015 June 4

Credit

111

DR CR Cr. Cr. Cr.

211 Balance 2 0 0 0 00 2 5 0 0 00 3 4 0 0 00

PROBLEM 3A-3., Cont. NAME: A. FRENCH, CAPITAL Date 2015 June 1

Explanation

ACCOUNT NO. Post Ref.

Debit

GJ1

9 0 0 0 00

NAME: A. FRENCH, WITHDRAWALS Date 2015 June 5

Explanation

Post Ref.

Debit

GJ1

1 0 0 00

Post Ref.

Debit

GJ1

Explanation

Post Ref.

Debit

GJ1

3 0 0 00

Explanation

9 0 0 0 00

321

DR CR

Balance

Dr.

1 0 0 00

Credit

DR CR Cr. Cr.

411 Balance 1 6 0 0 00 2 2 0 0 00

Credit

511

DR CR

Balance

Dr.

3 0 0 00

ACCOUNT NO. Post Ref.

Debit

GJ1

1 6 0 00

NAME: ADVERTISING EXPENSE Date 2015 June 29

Cr.

ACCOUNT NO.

NAME: TELEPHONE EXPENSE Date 2015 June 28

Credit

1 6 0 0 00 6 0 0 00

GJ1

Explanation

Balance

ACCOUNT NO.

NAME: WAGES EXPENSE Date 2015 June 8

DR CR

ACCOUNT NO.

NAME: PLACEMENT FEES EARNED Date 2015 June 4 11

Credit

311

Credit

521

DR CR

Balance

Dr.

1 6 0 00

ACCOUNT NO. Post Ref.

Debit

GJ1

9 0 0 00

Credit

531

DR CR

Balance

Dr.

9 0 0 00

3-21

PROBLEM 3A-3., Cont. A. FRENCH PLACEMENT AGENCY TRIAL BALANCE JUNE 30, 2015 Cash Accounts Receivable Supplies on Hand Equipment Accounts Payable A. French, Capital A. French, Withdrawals Placement Fees Earned Wages Expense Telephone Expense Advertising Expense Totals

3-22

9 0 4 0 00 1 6 0 0 00 5 0 0 00 2 0 0 0 00 3 4 0 0 00 9 0 0 0 00 1 0 0 00 2 2 0 0 00 3 0 0 00 1 6 0 00 9 0 0 00 14 6 0 0 0 0 14 6 0 0 0 0

PROBLEM 3B-1. JACK’S CLEANING SERVICE GENERAL JOURNAL Date 2016 April 1

Account Title and Description Cleaning Equipment Cash Jack Lang, Capital Owner’s investment

Page 1 Post Ref.

Dr. 6 0 0 0 00 3 0 0 0 00

9 0 0 0 00

Cleaning Supplies Accounts Payable Bought supplies from Rex Co. on account

5 0 0 00

Office Equipment Accounts Payable Equipment from Ross Stationery on account

4 0 0 00

5 0 0 00

4 0 0 00

Jack Lang, Withdrawals Cash Personal withdrawal

6 0 00

Cash Cleaning Fees Earned Cash fees

6 0 0 00

Advertising Expense Accounts Payable Advertising bill received

Cr.

6 0 00

6 0 0 00

7 5 00 7 5 00

3-23

PROBLEM 3B-1., Cont. JACK’S CLEANING SERVICE GENERAL JOURNAL Date 2016 April 23

3-24

Account Title and Description Hydro Expense Accounts Payable Hydro bill received

Page 2 Post Ref.

Dr. 9 0 00

9 0 00

Accounts Receivable Cleaning Fees Earned Fees re Eastgate School on account

7 0 0 00

Salaries Expense Cash Paid salaries

4 0 0 00

Accounts Payable Cash Reduced amount owed Ross by half

2 0 0 00

Cr.

7 0 0 00

4 0 0 00

2 0 0 00

PROBLEM 3B-2. BETTY’S ART STUDIO GENERAL JOURNAL Date 2017 June 2

Account Title and Description Cash Betty Rice, Capital Cash investment Prepaid Rent Cash Rent paid in advance Art Supplies Accounts Payable Purchasedsupplies from A.J.K. on account Equipment Accounts Payable Equipment from Reese Company on account Cash Art Fees Earned Cash fees Accounts Receivable Art Fees Earned Fees to Long Co. on account Betty Rice, Withdrawals Cash Personal withdrawal Salaries Expense Cash Paid salaries Telephone Expense Cash Paid telephone bill Electrical Expense Accounts Payable Electric bill received

Page 1 Post Ref.

Dr.

111

6 0 0 0 00 6 0 0 0 00

311

114

1 2 0 0 00 1 2 0 0 00

111

121

7 0 0 00 7 0 0 00

211

131

9 0 0 00 9 0 0 00

211

111

1 3 0 0 00 1 3 0 0 00

411

112

6 0 0 00 6 0 0 00

411

312

4 0 0 00 4 0 0 00

111

521

4 0 0 00 4 0 0 00

111

531

1 1 8 00 1 1 8 00

111

511 211

Cr.

1 2 0 00 1 2 0 00

3-25

PROBLEM 3B-2., Cont. GENERAL LEDGER OF BETTY’S ART STUDIO NAME: CASH Date 2017 June 2 2 9 13 16 27

ACCOUNT NO. Explanation

Post Ref.

Debit

GJ1

6 0 0 0 00 1 3 0 0 00

GJ1 GJ1

NAME: ACCOUNTS RECEIVABLE Date 2017 June 10

Explanation

Post Ref. GJ1

Debit

3-26

Dr. Dr.

DR CR Dr.

ACCOUNT NO. Explanation

Post Ref.

Debit

GJ1

1 2 0 0 00

Credit

Explanation

Post Ref.

Debit

GJ1

7 0 0 00

Credit

Post Ref.

Debit

GJ1

9 0 0 00

Credit

6 0 0 0 00 4 8 0 0 00 6 1 0 0 00 5 7 0 0 00 5 3 0 0 00 5 1 8 2 00

112 Balance 6 0 0 00

114 Balance

Dr.

1 2 0 0 00

121

DR CR

Balance

Dr.

7 0 0 00

ACCOUNT NO. Explanation

Balance

DR CR

ACCOUNT NO.

NAME: EQUIPMENT Date 2017 June 6

Credit

6 0 0 00

NAME: ART SUPPLIES Date 2017 June 3

Dr.

ACCOUNT NO.

NAME: PREPAID RENT Date 2017 June 2

Dr. Dr.

4 0 0 00 4 0 0 00 1 1 8 00

GJ1

DR CR Dr.

1 2 0 0 00

GJ1 GJ1

Credit

111

131

DR CR

Balance

Dr.

9 0 0 00

PROBLEM 3B-2., Cont. NAME: ACCOUNTS PAYABLE Date 2017 June 3 6 30

Explanation

ACCOUNT NO. Post Ref.

Debit

7 0 0 00 9 0 0 00 1 2 0 00

GJ1 GJ1 GJ1

NAME: BETTY RICE, CAPITAL Date 2017 June 2

Explanation

Post Ref.

Debit

GJ1

Explanation

Post Ref.

Debit

GJ1

4 0 0 00

Post Ref.

Debit

GJ1

Explanation

Post Ref.

Debit

GJ1

1 2 0 00

Explanation

DR CR

Balance

6 0 0 0 00

Cr.

6 0 0 0 00

Credit

312

DR CR

Balance

Dr.

4 0 0 00

Credit

DR CR Cr. Cr.

411 Balance 1 3 0 0 00 1 9 0 0 00

Credit

511

DR CR

Balance

Dr.

1 2 0 00

ACCOUNT NO. Post Ref.

Debit

GJ1

4 0 0 00

NAME: TELEPHONE EXPENSE Date 2017 June 27

311

ACCOUNT NO.

NAME: SALARIES EXPENSE Date 2017 June 16

Cr.

7 0 0 00 1 6 0 0 00 1 7 2 0 00

Credit

1 3 0 0 00 6 0 0 00

GJ1

Explanation

Cr.

ACCOUNT NO.

NAME: ELECTRICAL EXPENSE Date 2017 June 30

Cr.

Balance

ACCOUNT NO.

NAME: ART FEES EARNED Date 2017 June 9 10

DR CR

ACCOUNT NO.

NAME: BETTY RICE, WITHDRAWALS Date 2017 June 13

Credit

211

Credit

521

DR CR

Balance

Dr.

4 0 0 00

ACCOUNT NO. Post Ref.

Debit

GJ1

1 1 8 00

Credit

531

DR CR

Balance

Dr.

1 1 8 00

3-27

PROBLEM 3B-2., Cont. BETTY’S ART STUDIO TRIAL BALANCE JUNE 30, 2014 Cash Accounts Receivable Prepaid Rent Art Supplies Equipment Accounts Payable Betty Rice, Capital Betty Rice, Withdrawals Art Fees Earned Electrical Expense Salaries Expense Telephone Expense Totals

3-28

5 1 8 2 00 6 0 0 00 1 2 0 0 00 7 0 0 00 9 0 0 00 1 7 2 0 00 6 0 0 0 00 4 0 0 00 1 9 0 0 00 1 2 0 00 4 0 0 00 1 1 8 00 9 6 2 0 00

9 6 2 0 00

PROBLEM 3B-3. A. FRENCH PLACEMENT AGENCY GENERAL JOURNAL Date 2015 June 1

Page 1 Post Ref.

Dr.

Cash A. French, Capital Owner investment

111

6 0 0 0 00

Equipment Cash Purchased equipment for cash

141

Accounts Receivable Placement Fees Earned Fees to Avon Co. on account

112

Wages Expense Cash Paid wages

511

A. French, Withdrawals Cash Personal withdrawals

321

Cash Placement Fees Earned Cash fees

111

Supplies Cash Bought supplies for cash

131

Telephone Expense Accounts Payable Telephone bill owed

521

Advertising Expense Accounts Payable Advertising bill received

531

Account Title and Description

Cr. 6 0 0 0 00

311

3 5 0 00 3 5 0 00

111

2 1 0 0 00 2 1 0 0 00

411

4 0 0 00 4 0 0 00

111

6 9 00 6 9 00

111

9 0 0 00 9 0 0 00

411

3 5 0 00 3 5 0 00

111

1 8 5 00 1 8 5 00

211

2 0 0 00 2 0 0 00

3-29

PROBLEM 3B-3., Cont. GENERAL LEDGER OF A. FRENCH PLACEMENT AGENCY NAME: CASH Date 2015 June 1 4 8 11 12 15

ACCOUNT NO. Explanation

Post Ref.

Debit

GJ1

6 0 0 0 00

GJ1 GJ1

9 0 0 00

NAME: ACCOUNTS RECEIVABLE Date 2015 June 5

Explanation

Post Ref. GJ1

Debit

3-30

Dr.

DR CR Dr.

ACCOUNT NO. Explanation

Post Ref.

Debit

GJ1

3 5 0 00

Credit

Explanation

Post Ref.

Debit

GJ1

3 5 0 00

Explanation

Credit

GJ1 GJ1

Debit

Credit 1 8 5 00 2 0 0 00

6 0 0 0 00 5 6 5 0 00 5 2 5 0 00 5 1 8 1 00 6 0 8 1 00 5 7 3 1 00

112 Balance 2 1 0 0 00

131 Balance

Dr.

3 5 0 00

141

DR CR

Balance

Dr.

3 5 0 00

ACCOUNT NO. Post Ref.

Balance

DR CR

ACCOUNT NO.

NAME: ACCOUNTS PAYABLE Date 2015 June 28 29

Credit

2 1 0 0 00

NAME: EQUIPMENT Date 2015 June 4

Dr.

ACCOUNT NO.

NAME: SUPPLIES Date 2015 June 15

Dr.

3 5 0 00

GJ1

DR CR Dr.

3 5 0 00 4 0 0 00 6 9 00

GJ1

Credit

111

DR CR Cr. Cr.

211 Balance 1 8 5 00 3 8 5 00

PROBLEM 3B-3., Cont. NAME: A. FRENCH, CAPITAL Date 2015 June 1

Explanation

ACCOUNT NO. Post Ref.

Debit

GJ1

NAME: A FRENCH, WITHDRAWALS Date 2015 June 11

Explanation

Post Ref. GJ1

Explanation

Debit

Post Ref.

Debit

Explanation

Cr.

6 0 0 0 00

Credit

DR CR

321 Balance 6 9 00

Dr.

Credit

DR CR Cr. Cr.

411 Balance 2 1 0 0 00 3 0 0 0 00

ACCOUNT NO. Post Ref.

Debit

GJ1

4 0 0 00

Credit

511

DR CR

Balance

Dr.

4 0 0 00

ACCOUNT NO. Post Ref.

Debit

GJ1

1 8 5 00

NAME: ADVERTISING EXPENSE Date 2015 June 29

6 0 0 0 00

2 1 0 0 00 9 0 0 00

GJ1

NAME: TELEPHONE EXPENSE Date 2015 June 28

Balance

ACCOUNT NO.

GJ1

Explanation

DR CR

6 9 00

NAME: WAGES EXPENSE Date 2015 June 8

Credit

ACCOUNT NO.

NAME: PLACEMENT FEES EARNED Date 2015 June 5 12

311

Credit

521

DR CR

Balance

Dr.

1 8 5 00

ACCOUNT NO. Post Ref.

Debit

GJ1

2 0 0 00

Credit

531

DR CR

Balance

Dr.

2 0 0 00

3-31

PROBLEM 3B-3., Cont. A. FRENCH PLACEMENT AGENCY TRIAL BALANCE JUNE 30, 2015 Cash Accounts Receivable Supplies Equipment Accounts Payable A. French, Capital A. French, Withdrawals Placement Fees Earned Wages Expense Telephone Expense Advertising Expense Totals

3-32

5 7 3 1 00 2 1 0 0 00 3 5 0 00 3 5 0 00 3 8 5 00 6 0 0 0 00 6 9 00 3 0 0 0 00 4 0 0 00 1 8 5 00 2 0 0 00 9 3 8 5 00

9 3 8 5 00

PROBLEM 3C-1. STANDFORTH FINANCIAL PLANNING CENTRE GENERAL JOURNAL Date 2015 Mar. 2

Account Title and Description Cash Computer Equipment Etta Standforth, Capital Investment in business Computer Supplies Accounts Payable Computer supplies from Carry Co. on account Office Equipment Accounts Payable Office equipment from A-One Stationery on account Etta Standforth, Withdrawals Cash Personal withdrawal Cash Planning Fees Earned Fees for cash Advertising Expense Accounts Payable Advertising bill received

Post Ref.

Page 1 Dr.

Cr.

9 0 0 0 00 4 5 0 0 00 13 5 0 0 0 0

3 5 5 00 3 5 5 00

1 8 9 5 00 1 8 9 5 00

5 5 00 5 5 00

1 8 7 5 00 1 8 7 5 00

4 9 5 00 4 9 5 00

3-33

PROBLEM 3C-1., Cont. STANDFORTH FINANCIAL PLANNING CENTRE GENERAL JOURNAL Date 2015 Mar. 23

3-34

Account Title and Description Cleaning Expense Accounts Payable Received cleaning bill

Post Ref.

Page 2 Dr. 9 5 00 9 5 00

Accounts Receivable Planning Fees Earned Fees to Harriet Corp. on account

2 7 2 5 00

Salaries Expense Cash Paid salaries

2 1 0 0 00

2 7 2 5 00

2 1 0 0 00

Accounts Payable Cash Paid half of March 9 bill to A-One Stationery

9 4 7 50

Repairs Expense Accounts Payable Received bill for equipment repairs

2 5 0 00

Cr.

9 4 7 50

2 5 0 00

PROBLEM 3C-2. RODGER’S FITNESS TRAINING STUDIO GENERAL JOURNAL Date 2017 July 2

Account Title and Description Cash Rodger Baldwin, Capital Cash investment Prepaid Rent Cash Rent paid in advance Supplies Accounts Payable Supplies from Marlin Supplies on account Equipment Accounts Payable Equipment from Brinkley Company on account Cash Fees Earned Cash fees Accounts Receivable Fees Earned Fees to Short Co. on account Rodger Baldwin, Withdrawals Cash Personal withdrawal Salaries Expense Cash Paid salaries Telephone Expense Cash Paid telephone bill Electrical Expense Accounts Payable Received electric bill Advertising Expense Accounts Payable Received advertising bill from City Newspaper

Page 1 Post Ref.

Dr.

111

16 2 0 0 0 0 16 2 0 0 0 0

311

114

1 6 5 0 00 1 6 5 0 00

111

121

6 4 0 00 6 4 0 00

211

131

8 3 0 0 00 8 3 0 0 00

211

111

2 1 0 0 00 2 1 0 0 00

411

112

1 4 0 0 00 1 4 0 0 00

411

321

7 5 9 00 7 5 9 00

111

521

1 3 5 0 00 1 3 5 0 00

111

531

1 6 0 00 1 6 0 00

111

515

1 5 0 00 1 5 0 00

211

511 211

Cr.

3 2 5 00 3 2 5 00

3-35

PROBLEM 3C-2., Cont. GENERAL LEDGER OF RODGER’S FITNESS TRAINING STUDIO NAME: CASH Date 2017 July 2 3 8 14 15 28

ACCOUNT NO. Explanation

Post Ref.

Debit

GJ1

16 2 0 0 0 0 2 1 0 0 00

GJ1 GJ1

NAME: ACCOUNTS RECEIVABLE Date 2017 July 11

Explanation

Post Ref.

Debit

GJ1

1 4 0 0 00

Explanation

Post Ref.

Debit

GJ1

1 6 5 0 00

Explanation

Post Ref.

Debit

GJ1

6 4 0 00

3-36

Credit

Explanation

Post Ref. GJ1

Debit

Explanation

Credit

8 3 0 0 00

Balance

Dr.

1 4 0 0 00

GJ1 GJ1 GJ1 GJ1

Debit

Balance

Dr.

1 6 5 0 00

6 4 0 00 8 3 0 0 00 1 5 0 00 3 2 5 00

121

DR CR

Balance

Dr.

6 4 0 00

DR CR Dr.

Credit

114

DR CR

ACCOUNT NO. Post Ref.

112

DR CR

ACCOUNT NO.

NAME: ACCOUNTS PAYABLE Date 2017 July 4 7 29 31

Dr.

ACCOUNT NO.

NAME: EQUIPMENT Date 2017 July 7

Dr.

16 2 0 0 0 0 14 5 5 0 0 0 16 6 5 0 0 0 15 8 9 1 0 0 14 5 4 1 0 0 14 3 8 1 0 0

ACCOUNT NO.

NAME: SUPPLIES Date 2017 July 4

Dr.

Balance

ACCOUNT NO.

NAME: PREPAID RENT Date 2017 July 3

Dr. Dr.

7 5 9 00 1 3 5 0 00 1 6 0 00

GJ1

DR CR Dr.

1 6 5 0 00

GJ1 GJ1

Credit

111

DR CR Cr. Cr. Cr. Cr.

141 Balance 8 3 0 0 00

211 Balance 6 4 0 00 8 9 4 0 00 9 0 9 0 00 9 4 1 5 00

PROBLEM 3C-2., Cont. NAME: RODGER BALDWIN, CAPITAL Date 2017 July 2

Explanation

ACCOUNT NO. Post Ref.

Debit

GJ1

NAME: RODGER BALDWIN, WITHDRAWALS Date 2017 July 14

Explanation

Post Ref.

Debit

GJ1

7 5 9 00

Explanation

Post Ref.

Debit

GJ1

Explanation

Post Ref.

Debit

GJ1

3 2 5 00

Cr.

16 2 0 0 0 0

Credit

321

DR CR

Balance

Dr.

7 5 9 00

Explanation

Credit

DR CR Cr. Cr.

411 Balance 2 1 0 0 00 3 5 0 0 00

Credit

511

DR CR

Balance

Dr.

3 2 5 00

ACCOUNT NO. Post Ref.

Debit

GJ1

1 5 0 00

Credit

515

DR CR

Balance

Dr.

1 5 0 00

ACCOUNT NO. Post Ref.

Debit

GJ1

1 3 5 0 00

NAME: TELEPHONE EXPENSE Date 2017 July 28

16 2 0 0 0 0

ACCOUNT NO.

NAME: SALARIES EXPENSE Date 2017 July 15

Balance

2 1 0 0 00 1 4 0 0 00

GJ1

NAME: ELECTRICAL EXPENSE Date 2017 July 29

DR CR

ACCOUNT NO.

NAME: ADVERTISING EXPENSE Date 2017 July 31

Credit

ACCOUNT NO.

NAME: FEES EARNED Date 2017 July 8 11

311

Credit

521

DR CR

Balance

Dr.

1 3 5 0 00

ACCOUNT NO. Post Ref.

Debit

GJ1

1 6 0 00

Credit

531

DR CR

Balance

Dr.

1 6 0 00

3-37

PROBLEM 3C-2., Cont. RODGER’S FITNESS TRAINING TRIAL BALANCE JULY 31, 2017 Cash Accounts Receivable Prepaid Rent Supplies Equipment Accounts Payable Rodger Baldwin, Capital Rodger Baldwin, Withdrawals Fees Earned Advertising Expense Electrical Expense Salaries Expense Telephone Expense Totals

3-38

14 3 8 1 0 0 1 4 0 0 00 1 6 5 0 00 6 4 0 00 8 3 0 0 00 9 4 1 5 00 16 2 0 0 0 0 7 5 9 00 3 5 0 0 00 3 2 5 00 1 5 0 00 1 3 5 0 00 1 6 0 00 29 1 1 5 0 0 29 1 1 5 0 0

PROBLEM 3C-3. MATT NEPOOSE INVESTIGATIVE AGENCY GENERAL JOURNAL Date 2016 June 3

Page 1

Post Ref.

Dr.

Cash M. Nepoose, Capital Owner investment

111

15 0 0 0 0 0

Equipment Cash Purchased equipment

141

Accounts Receivable Investigative Fees Earned Fees on account

112

M. Nepoose, Withdrawals Cash Personal withdrawals

321

Cash Investigative Fees Earned Cash fees

111

Supplies Cash Bought supplies

131

Wages Expense Cash Paid wages

511

Cash Accounts Receivable Received partial payment on account

111

Telephone Expense Accounts Payable Telephone bill received

521

Advertising Expense Accounts Payable Advertising bill received

531

Account Title and Description

1 5 0 0 0 00

311

5 1 0 0 00 5 1 0 0 00

111

3 2 0 0 00 3 2 0 0 00

411

1 0 7 00 1 0 7 00

111

9 7 5 00 9 7 5 00

411

2 7 0 00 2 7 0 00

111

1 1 0 0 00 1 1 0 0 00

111

1 6 0 0 00 1 6 0 0 00

112

1 3 0 00 1 3 0 00

211

Cr.

5 2 5 00 5 2 5 00

3-39

PROBLEM 3C-3., Cont. GENERAL LEDGER OF MATT NEPOOSE INVESTIGATIVE AGENCY NAME: CASH Date 2016 June 3 4 10 11 14 18 25

ACCOUNT NO. Explanation

Post Ref.

Debit

GJ1

15 0 0 0 0 0

GJ1

9 7 5 00

GJ1 GJ1

1 6 0 0 00

NAME: ACCOUNTS RECEIVABLE Date 2016 June 7 25

Explanation

Post Ref.

Debit

GJ1

3 2 0 0 00

3-40

Dr.

15 0 0 0 0 0 9 9 0 0 00 9 7 9 3 00 10 7 6 8 0 0 10 4 9 8 0 0 9 3 9 8 00 10 9 9 8 0 0

Credit

DR CR Dr. Dr.

ACCOUNT NO. Explanation

Post Ref.

Debit

GJ1

2 7 0 00

Credit

Explanation

Post Ref.

Debit

GJ1

5 1 0 0 00

Explanation

Credit

GJ1 GJ1

Debit

Credit 1 3 0 00 5 2 5 00

Balance 3 2 0 0 00 1 6 0 0 00

131 Balance

Dr.

2 7 0 00

141

DR CR

Balance

Dr.

5 1 0 0 00

ACCOUNT NO. Post Ref.

112

DR CR

ACCOUNT NO.

NAME: ACCOUNTS PAYABLE Date 2016 June 27 28

Dr.

1 6 0 0 00

GJ1

NAME: EQUIPMENT Date 2016 June 4

Dr.

Balance

ACCOUNT NO.

NAME: SUPPLIES Date 2016 June 14

Dr.

2 7 0 00 1 1 0 0 00

GJ1

DR CR Dr.

5 1 0 0 00 1 0 7 00

GJ1

Credit

111

DR CR Cr. Cr.

211 Balance 1 3 0 00 6 5 5 00

PROBLEM 3C-3., Cont. NAME: M. NEPOOSE, CAPITAL Date 2016 June 3

Explanation

ACCOUNT NO. Post Ref.

Debit

GJ1

NAME: M. NEPOOSE, WITHDRAWALS Date 2016 June 10

Explanation

Post Ref.

Debit

GJ1

1 0 7 00

Post Ref.

Debit

GJ1

Explanation

Post Ref.

Debit

GJ1

1 1 0 0 00

Explanation

Cr.

15 0 0 0 0 0

Credit

321

DR CR

Balance

Dr.

1 0 7 00

Credit

DR CR Cr. Cr.

411 Balance 3 2 0 0 00 4 1 7 5 00

Credit

511

DR CR

Balance

Dr.

1 1 0 0 00

ACCOUNT NO. Post Ref.

Debit

GJ1

1 3 0 00

NAME: ADVERTISING EXPENSE Date 2016 June 28

15 0 0 0 0 0

ACCOUNT NO.

NAME: TELEPHONE EXPENSE Date 2016 June 27

Balance

3 2 0 0 00 9 7 5 00

GJ1

Explanation

DR CR

ACCOUNT NO.

NAME: WAGES EXPENSE Date 2016 June 18

Credit

ACCOUNT NO.

NAME: INVESTIGATIVE FEES EARNED Date 2016 June 7 11

311

Credit

521

DR CR

Balance

Dr.

1 3 0 00

ACCOUNT NO. Post Ref.

Debit

GJ1

5 2 5 00

Credit

531

DR CR

Balance

Dr.

5 2 5 00

3-41

PROBLEM 3C-3., Cont. MATT NEPOOSE INVESTIGATIVE AGENCY TRIAL BALANCE JUNE 30, 2016 Cash Accounts Receivable Supplies Equipment Accounts Payable M. Nepoose, Capital M. Nepoose, Withdrawals Investigative Fees Earned Wages Expense Telephone Expense Advertising Expense Totals

3-42

10 9 9 8 0 0 1 6 0 0 00 2 7 0 00 5 1 0 0 00 6 5 5 00 15 0 0 0 0 0 1 0 7 00 4 1 7 5 00 1 1 0 0 00 1 3 0 00 5 2 5 00 19 8 3 0 0 0 19 8 3 0 0 0

SOLUTIONS TO ON-THE-JOB TRAINING, #T-1. HAMPTON CO. TRIAL BALANCE JUNE 30, 2016 Cash Accounts Receivable Office Supplies Prepaid Rent Office Equipment Notes Payable Accounts Payable D. Hole, Capital D. Hole, Withdrawals Office Sales Wages Expense Rent Expense Utilities Expense Totals

3 4 8 0 00 5 7 8 0 00 2 4 0 00 3 6 0 00 8 4 0 0 00 2 4 0 0 00 3 4 8 0 00 11 5 6 0 0 0 1 1 0 0 00 5 7 2 0 00 2 6 0 0 00 9 4 0 00 2 6 0 00 23 1 6 0 0 0 23 1 6 0 0 0

Advice to Ken: Paul seems to require more training/experience before he can be trusted with the bookkeeping. Perhaps a course at a local college or technical institute would help. Advice to Paul: You need to be much more careful when doing bookkeeping. Pay strict attention to the rules of debit and credit, and exercise care when posting. Consider some formal training in bookkeeping procedures.

3-43

SOLUTIONS TO ON-THE-JOB TRAINING, #T-2. 1. Cash in trial balance is understated. Trial balance will not balance. 2. Computer supplies understated and computer equipment overstated. Trial balance will balance. 3. Wage expense overstated by $8 and trial balance will not balance. 4. Computer supplies understated and computer sales understated. Trial balance will balance. 5. Accounts payable is overstated and trial balance will not balance.

These errors can be prevented in the future by ensuring that the bookkeeping is done with care and attention to the rules of debit and credit. Also the posting of all amounts should be carefully thought out and carried through with precision. Some errors, such as the debit to Computer Supplies instead of Computer Equipment, may still slip through (no one is perfect), but the result should be a decrease in the number of errors. Errors such as this one can be caught at year or period end—See the next chapter for details.

3-44

CONTINUING PROBLEM 1.

PRECISION COMPUTER CENTRE - GENERAL JOURNAL

Date 2016 July 3

Account Title and Description Prepaid Rent Rent Expense Cash (Cheque #210) Rent paid for June, July and August Cash Service Revenue Cash fees for Invoice 12671 Cash Service Revenue Cash fees for Invoice 12672 Accounts Payable Cash Paid May telephone bill Cash Accounts Receivable Fees from Jeannine Sparks Accounts Payable Cash Paid Computer Connection account due Computer Shop Equipment Cash Paid Multi-Systems PO 200 Phone Expense Accounts Payable June phone bill received Utilities Expense Accounts Payable June utilities bill received Cash Service Revenue Cash fees for Invoice 12673 Accounts Receivable Service Revenue Fees to Dr. Anthony Pitale on account, re: Invoice 12674

Post Ref. 1025 5020

Page 1 Dr. 8 0 0 00 4 0 0 00 1 2 0 0 00

1000

3 2 5 00 3 2 5 00

4000

1000

2 2 0 00 2 2 0 00

4000

2000

1 5 5 00 1 5 5 00

1000

8 5 0 00 8 5 0 00

1020

2000

2 0 0 00 2 0 0 00

1000

1080

1 2 0 0 00 1 2 0 0 00

1000

5040

Cr.

6 5 00 6 5 00

2000

5030

9 5 00 9 5 00

2000

1000

1 4 0 00 1 4 0 00

4000

1020 4000

2 6 0 0 00 2 6 0 0 00

3-45

CONTINUING PROBLEM, Cont. 2.

GENERAL LEDGER OF PRECISION COMPUTER CENTRE

NAME: CASH Date 2016 July 1 3 5 8 10 12 15 17 26

ACCOUNT NO. Explanation

Post Ref.

Debit

✔

Balance

1 2 0 0 00

GJ1 GJ1 GJ1

3 2 5 00 2 2 0 00

Explanation

1 4 0 00

Post Ref.

Debit

GJ1

8 5 0 00

Explanation

Post Ref.

Debit

GJ1

8 0 0 00

Post Ref.

Debit

✔

Balance

Explanation

Debit

3-46

Credit

✔

Balance

GJ1

2 6 0 0 00

Explanation

Balance

8 0 0 00

Balance

DR CR

ACCOUNT NO. Post Ref.

✔

Debit

Credit

1025

DR CR

1 2 0 0 00

NAME: OFFICE EQUIPMENT

8 5 0 00

ACCOUNT NO. Post Ref.

1020

NAME: COMPUTER SHOP EQUIPMENT

July

Credit

2 8 6 5 00 1 6 6 5 00 1 9 9 0 00 2 2 1 0 00 2 0 5 5 00 2 9 0 5 00 2 7 0 5 00 1 5 0 5 00 1 6 4 5 00

Balance

ACCOUNT NO. Explanation

Date 2016

Credit

Balance

DR CR

ACCOUNT NO.

NAME: SUPPLIES

Date 2016 July 1 17

Credit

2 6 0 0 00

NAME: PREPAID RENT

Date 2016 July 1

ACCOUNT NO.

GJ1

Date 2016 July 3

✔

Balance

Dr Dr

2 0 0 00 1 2 0 0 00

GJ1 GJ1

8 5 0 00

GJ1

Dr Dr

1 5 5 00

GJ1 GJ1

DR CR Dr

NAME: ACCOUNTS RECEIVABLE Date 2016 July 1 12 30

Credit

1000

1030 Balance 4 5 0 00

1080 Balance 1 2 0 0 00 2 4 0 0 00

1090

DR CR

Balance

6 0 0 00

CONTINUING PROBLEM, Cont. GENERAL LEDGER OF PRECISION COMPUTER CENTRE, Cont. NAME: ACCOUNTS PAYABLE Date 2016 July 1 10 15 19 24

Explanation

ACCOUNT NO. Post Ref.

Debit

✔

Balance

GJ1 GJ1

GJ1

Post Ref.

Debit

Explanation

Post Ref.

Debit

Explanation

Post Ref.

Debit

3 2 5 00 2 2 0 00 1 4 0 00 2 6 0 0 00

GJ1 GJ1 GJ1

Explanation

Balance

4 5 0 0 00

3010

DR CR

Balance

1 0 0 00

DR CR

Cr Cr Cr Cr

4000 Balance 3 4 0 0 00 3 7 2 5 00 3 9 4 5 00 4 0 8 5 00 6 6 8 5 00

ACCOUNT NO. Post Ref.

Debit

Credit

✔

Balance

3000

DR CR

GJ1

5010

DR CR

Balance

1 4 0 0 00

ACCOUNT NO. Explanation

Balance

Credit

✔

Balance

ACCOUNT NO.

NAME: RENT EXPENSE Date 2016 July 1 3

Credit

✔

Balance

4 0 5 00 2 5 0 00 5 0 00 1 1 5 00 2 1 0 00

ACCOUNT NO.

NAME: ADVERTISING EXPENSE Date 2016 July 1

Credit

✔

Balance

NAME: SERVICE REVENUE Date 2016 July 1 5 8 26 30

Balance

ACCOUNT NO.

NAME: T. FREEDMAN, WITHDRAWALS Date 2016 July 1

6 5 00 9 5 00

GJ1

Explanation

DR CR Cr

1 5 5 00 2 0 0 00

NAME: T. FREEDMAN, CAPITAL Date 2016 July 1

Credit

2000

Post Ref.

Debit

✔ GJ1

Credit

DR CR Dr

4 0 0 00

5020 Balance 4 0 0 00 8 0 0 00

3-47

CONTINUING PROBLEM, Cont. GENERAL LEDGER OF PRECISION COMPUTER CENTRE, Cont. NAME: UTILITIES EXPENSE Date 2016 July 1 24

Explanation

ACCOUNT NO. Post Ref.

Debit

✔

Balance

GJ1

Explanation

9 5 00

ACCOUNT NO. Post Ref.

GJ1

Debit

Explanation

ACCOUNT NO. Post Ref.

Debit

July

3-48

Explanation

Credit

Balance

DR CR

ACCOUNT NO. Post Ref.

Debit

NAME: POSTAGE EXPENSE Date 2016

Credit

✔

Balance

DR CR Dr

NAME: INSURANCE EXPENSE Date 2016 July 1

Credit

6 5 00

NAME: SUPPLIES EXPENSE Date 2016

✔

Balance

DR CR Dr

NAME: PHONE EXPENSE Date 2016 July 1 19

Credit

✔

Debit

Credit

Balance 8 5 00 1 8 0 00

5040 Balance 1 5 5 00 2 2 0 00

5050 Balance

5060

DR CR

Balance

1 5 0 00

ACCOUNT NO. Post Ref.

5030

DR CR Dr

5070 Balance 5 0 00

CONTINUING PROBLEM, Cont. 3.

PRECISION COMPUTER CENTRE TRIAL BALANCE JULY 31, 2016

Cash Accounts Receivable Prepaid Rent Supplies Computer Shop Equipment Office Equipment Accounts Payable T. Freedman, Capital T. Freedman, Withdrawals Service Revenue Advertising Expense Rent Expense Utilities Expense Phone Expense Insurance Expense Postage Expense Totals

1 6 4 5 00 2 6 0 0 00 8 0 0 00 4 5 0 00 2 4 0 0 00 6 0 0 00 2 1 0 00 4 5 0 0 00 1 0 0 00 6 6 8 5 00 1 4 0 0 00 8 0 0 00 1 8 0 00 2 2 0 00 1 5 0 00 5 0 00 11 3 9 5 0 0 11 3 9 5 0 0

PRECISION COMPUTER CENTRE INCOME STATEMENT FOR THE THREE MONTHS ENDING JULY 31, 2016

Revenue: Service Revenue Operating Expenses: Advertising Expense Rent Expense Utilities Expense Phone Expense Insurance Expense Postage Expense Total Operating Expenses Net Income

$6 6 8 5 0 0 $1 4 0 0 0 0 8 0 0 00 1 8 0 00 2 2 0 00 1 5 0 00 5 0 00 2 8 0 0 00 $3 8 8 5 0 0

3-49

CONTINUING PROBLEM, Cont. 4., Cont. PRECISION COMPUTER CENTRE STATEMENT OF OWNER’S EQUITY FOR THE THREE MONTHS ENDING JULY 31, 2016 T. Freedman, Capital May 1, 2016 Net Income Less: T. Freedman, Withdrawals Net Increase in Capital T. Freedman, Capital July 31, 2016

$4 5 0 0 0 0 $3 8 8 5 0 0 1 0 0 00 3 7 8 5 00 $8 2 8 5 0 0

PRECISION COMPUTER CENTRE BALANCE SHEET JULY 31, 2016 ASSETS Assets: Cash Accounts Receivable Prepaid Rent Supplies Computer Shop Equipment Office Equipment Total Assets

3-50

LIABILITIES AND OWNER’S EQUITY Liabilities: $1 6 4 5 0 0 Accounts Payable 2 6 0 0 00 8 0 0 0 0 Owner’s Equity: 4 5 0 00 T. Freedman, Capital 2 4 0 0 00 6 0 0 00 Total Liabilities and $8 4 9 5 0 0 Owner’s Equity

$ 2 1 0 00

8 2 8 5 00

$8 4 9 5 0 0

4 The Accounting Cycle Continued: Preparing Worksheets and Financial Statements

ANSWERS TO DISCUSSION QUESTIONS AND CRITICAL THINKING/ETHICAL CASE 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

11.

Disagree; worksheets are optional (and often used), but are not required. The purpose of adjusting is to update accounts to the latest balance before financial reports are prepared, thus presenting an up-to-date picture in the financial reports. The internal transactions make it necessary to make adjustments. Example: Rent expiring over a period of time. An example would be an depreciation adjustment: Depreciation Expense goes on the income statement and Accumulated Depreciation goes on the balance sheet. We need the Accumulated Depreciation account because it records a history of depreciation that has been accumulated and aids in preserving the original cost of an asset in the ledger. False; Depreciation Expense goes on the income statement. Disagree; cost of equipment remains the same. Accrued salaries are salaries that are unpaid and unrecorded in an accounting period (and thus will need to be recorded by an adjustment) and will not come due for payment until the next accounting period. The balances of accounts, which appear on formal reports, were accumulated by the recording of debits or credits; it is not necessary to repeat this on the formal statements. The worksheet provides all the data to prepare the financial statements. The accountant rearranges the data from the worksheet to prepare the financial statements. Remember: The worksheet has the old figure for capital, which is updated when the statement of owner’s equity and balance sheet are prepared. All expenses that are incurred in the old year (whether paid or not) should be shown. Discussions should centre around expenses that could be postponed until next year to take advantage of accounting rules.

4-1

SOLUTIONS TO CLASSROOM DEMONSTRATION EXERCISES 1.

$700 -50 $650

Used up

1 Accounts Affected

2 Category

Office Supplies Office Supplies Exp.

$50

$700 Expired

A Exp.

5 T-Account

Cr.

Office Supplies 700 650

Dr.

Office Supplies Exp. 650

4 Rules

5 T-Account

2 Category

Prepaid Rent

Cr.

Prepaid Rent 1,200 700

Rent Exp.

Exp.

Dr.

Rent Exp. 700

4 Rules

5 T-Account

Cr.

Acc. Depn., Equip. 2,000 2,000

$500

Equipment.

Accumulated Depreciation, Equipment 1 Accounts Affected

2 Category

Acc. Depn., Equipment

A (C)

Depn. Exp., Equip.

4 Rules

1 Accounts Affected

Exp. $9,000 4,000 2,000

Dr.

Depn. Exp., Equip. 2,000

4 Rules

5 T-Account Salaries Exp. 1,400 300

Equipment Acc. Depn., Equip. Depn. Exp., Equip.

Dr. Cr. Dr.

1 Accounts Affected

2 Category

Salaries Expense

Exp.

Dr.

Accrued Salaries

Cr.

4-2

Salaries Expense Accrued Salaries

$1,700 300

Dr. Cr.

Salaries Payable 300

SOLUTIONS TO CLASSROOM DEMONSTRATION EXERCISES—Cont. 5.

a. b. c. d. e. f. g.

IC BC BD BD BC ID BC

h. i. j. k. l. m. n.

BD BD ID BC ID BC BC

On worksheet Equipment was in debit column and Accumulated Depreciation is in credit column. Formal reports have no debits and credits. Inside columns are only for subtotalling on the formal reports. A. Equipment and Accumulated Depreciation are listed separately on the worksheet, not the net difference. B. The $3 of total liabilities is not on the worksheet since each one is shown separately.

SOLUTIONS TO EXERCISES - SET A EXERCISE 4-1A. Account Accounts Payable Prepaid Rent Office Equipment Depreciation Expense B. Reel, Capital

Category Liability Asset Asset Expense Owner’s Equity

Normal Balance Cr. Dr. Dr. Dr. Cr.

B. Reel, Withdrawals Offjce Supplies Accumulated Depreciation

Owner’s Equity Asset Contra-Asset

Dr. Dr. Cr.

Found on which Financial Statement(s) Balance Sheet Balance Sheet Balance Sheet Income Statement Statement of Owner’s Equity Balance Sheet Statement of Owner’s Equity Balance Sheet Balance Sheet

EXERCISE 4-2A. a. b.

Accounts Affected Depreciation Expense Accumulated Depreciation Rent Expense Prepaid Rent

Category Expense Asset (Contra) Expense Asset

Rules Dr. $600 Cr. $600 Dr. $400 Cr. $400

EXERCISE 4-3A. a. Supplies used up $500. Debit Supplies Expense and Credit Supplies on Hand $500. b. Depreciation $200. Debit Depreciation Expense and Credit Accumulated Depreciation for $200. Store Equipment is not adjusted.

4-3A

SOLUTIONS TO EXERCISES—SET A, Cont. EXERCISE 4-4A. J. TRENT WORKSHEET FOR THE MONTH ENDED DECEMBER 31, 2017 Account Titles

Trial Balance D r.

Adjustments C r.

Cash Accounts Receivable Prepaid Insurance

9 00 2 00 7 00

Store Supplies Store Equipment Acc. Depn., Store Equip. Accounts Payable J. Trent, Capital J. Trent, Withdrawals Revenue from Clients Rent Expense Wage Expense

6 00 7 00

D r.

C r.

2 00 4 00 1 7 00

1 00

(c)

2 00

(a)

2 00

(d)

5 00 1 0 00

6 00 2 4 00 4 00 6 00 4 7 00

Depn. Exp., Store Equip. Insurance Expense Store Supplies Expense Accrued Wages

(d)

5 00

(a) (b) (c)

2 00 1 00 2 00

4 7 00

1 0 00 Net Income

4-4A

(b)

EXERCISE 4-4A., Cont. J. TRENT WORKSHEET - CONTINUED FOR MONTH ENDED DECEMBER 31, 2017 Adjusted Trial Balance D r. C r. 9 00 2 00 6 00 4 00 7 00

Income Statement D r. C r.

Balance Sheet D r.

C r. 9 2 6 4 7

00 00 00 00 00

4 00 4 00 1 7 00

6 00

6 00 2 4 00

2 4 00

4 00 1 1 00

2 00 1 00 2 00

5 4 00

5 00 5 4 00

2 0 00 4 00 2 4 00

2 4 00

3 4 00

2 4 00

3 4 00

5 3 0 4 3 4

00 00 00 00

4-5A

SOLUTIONS TO EXERCISES—SET A, Cont. EXERCISE 4-5A. a.

J. TRENT INCOME STATEMENT FOR THE MONTH ENDED DECEMBER 31, 2017

Revenue: Revenue From Clients Operating Expenses: Rent Expense Wage Expense Depreciation Expense, Equipment Insurance Expense Store Supplies Expense Total Operating Expenses Net Income

2 4 00

2 0 00 4 00

1 7 00

2 00 1 5 00

4 00 1 1 00 2 00 1 00 2 00

J. TRENT STATEMENT OF OWNER’S EQUITY FOR THE MONTH ENDED DECEMBER 31, 2017

J. Trent, Capital, Dec. 1, 2017 Net Income For December Less Withdrawals Decrease in Capital J. Trent, Capital, Dec. 31, 2017

4 00 6 00

J. TRENT BALANCE SHEET DECEMBER 31, 2017 ASSETS

Assets Cash Accounts Receivable Prepaid Insurance Store Supplies Store Equipment Less Acc. Depn.

LIABILITIES AND OWNER’S EQUITY $

7 00 4 00

Total Assets

4-6A

9 00 2 00 6 00 4 00

Liabilities Accounts Payable Accrued Wages Total Liabilities

3 00

Owner’s Equity J. Trent, Capital

2 4 00

Total Liabilities and Owner’s Equity

4 00 5 00 9 00

1 5 00

2 4 00

SOLUTIONS TO EXERCISES—SET B EXERCISE 4-1B. Account Cash Office Supplies Building Depreciation Expense B. Reel, Capital

Category Asset Asset Asset Expense Owner’s Equity

Normal Balance Dr. Dr. Dr. Dr. Cr.

B. Reel, Withdrawals Prepaid Insurance Accrued Salaries

Owner’s Equity Asset Contra-Asset

Dr. Dr. Cr.

Found on which Financial Statement(s) Balance Sheet Balance Sheet Balance Sheet Income Statement Statement of Owner’s Equity Balance Sheet Statement of Owner’s Equity Balance Sheet Balance Sheet

EXERCISE 4-2B. a. b.

Accounts Affected Depreciation Expense Accumulated Depreciation Insurance Expense Prepaid Insurance

Category Expense Asset (Contra) Expense Asset

Rules Dr. $800 Cr. $800 Dr. $300 Cr. $300

EXERCISE 4-3B. a. Supplies used up $800. Debit Supplies Expense and Credit Supplies on Hand $800. b. Depreciation $2,100. Debit Depreciation Expense and Credit Accumulated Depreciation for $2,100. Store Equipment is not adjusted.

4-7B

SOLUTIONS TO EXERCISES—SET B, Cont. EXERCISE 4-4B. J. TRENT WORKSHEET FOR THE MONTH ENDED DECEMBER 31, 2017 Account Titles

Trial Balance D r.

Cash Accounts Receivable Prepaid Insurance Store Supplies Store Equipment Acc. Depn., Store Equip. Accounts Payable J. Trent, Capital J. Trent, Withdrawals Revenue from Clients Rent Expense Wage Expense

Adjustments C r.

D r.

C r.

8 00 9 00 6 00 6 00 2 4 00 6 00 2 7 00 1 0 00

2 00

(c)

4 00

(a)

3 00

(d)

6 00 1 5 00

8 00 3 8 00 8 00 1 2 00 8 1 00

Depn. Exp., Store Equip. Insurance Expense Store Supplies Expense Accrued Wages

(d)

6 00

(a) (b) (c)

3 00 2 00 4 00

8 1 00

1 5 00 Net Income

4-8B

(b)

EXERCISE 4-4B., Cont. J. TRENT WORKSHEET - CONTINUED FOR MONTH ENDED DECEMBER 31, 2017 Adjusted Trial Balance D r. C r. 8 00 9 00 4 00 2 00 2 4 00

Income Statement D r. C r.

Balance Sheet D r.

C r.

8 9 4 2 2 4

00 00 00 00 00

9 00 2 7 00 1 0 00

8 00

8 00 3 8 00

3 8 00

8 00 1 8 00

3 00 2 00 4 00

9 0 00

6 00 9 0 00

3 5 00 3 00 3 8 00

3 8 00

5 5 00

3 8 00

5 5 00

6 5 2 3 5 5

00 00 00 00

4-9B

SOLUTIONS TO EXERCISES—SET B, Cont. EXERCISE 4-5B. a.

J. TRENT INCOME STATEMENT FOR THE MONTH ENDED DECEMBER 31, 2017

Revenue: Revenue From Clients Operating Expenses: Rent Expense Wage Expense Depreciation Expense, Equipment Insurance Expense Store Supplies Expense Total Operating Expenses Net Income

3 8 00

3 5 00 3 00

1 0 00

5 00 5 00

00 00 00 00 00

J. TRENT STATEMENT OF OWNER’S EQUITY FOR THE MONTH ENDED DECEMBER 31, 2017

J. Trent, Capital, Dec. 1, 2017 Net Income For December Less Withdrawals Decrease in Capital J. Trent, Capital, Dec. 31, 2017

3 00 8 00

J. TRENT BALANCE SHEET DECEMBER 31, 2017 ASSETS

Assets Cash Accounts Receivable Prepaid Insurance Store Supplies Store Equipment Less Acc. Depn.

LIABILITIES AND OWNER’S EQUITY $

2 4 00 9 00

Total Assets

4-10B

8 1 8 3 2 4

8 9 4 2

00 00 00 00

Liabilities Accounts Payable Accrued Wages Total Liabilities

1 5 00

Owner’s Equity J. Trent, Capital

3 8 00

Total Liabilities and Owner’s Equity

2 7 00 6 00 3 3 00

5 00

3 8 00

PROBLEM 4A-1. JILL’S FITNESS CENTRE WORKSHEET FOR THE MONTH ENDED DECEMBER 31, 2016 Trial Balance

Account Titles Cash Accounts Receivable Fitness Supplies Fitness Equipment Acc. Depn., Fitness Equipment J. Walsh, Capital J. Walsh, Withdrawals Fitness Fees Rent Expense Advertising Expense

Fitness Supplies Expense Depn. Expense, Fitness Equipment

10 6 5 9

D r. 0 0 0 00 0 0 0 00 4 0 0 00 2 0 0 00

Adjustments C r.

D r.

C r.

(a) 4 5 0 0 0 0 7 0 0 0 00 14 3 5 0 00

(b)

7 0 0 00

3 0 0 0 00 13 3 0 0 00 9 0 0 00 1 5 0 00 34 6 5 0 00

34 6 5 0 00

(a) 4 5 0 0 0 0 (b) 7 0 0 0 0 5 2 0 0 00

5 2 0 0 00

4-11

PROBLEM 4A-1., Cont. JILL’S FITNESS CENTRE WORKSHEET FOR THE MONTH ENDED DECEMBER 31, 2016 Adjusted Trial Balance D r. 10 0 0 0 00 6 0 0 0 00 9 0 0 00 9 2 0 0 00

C r.

7 7 0 0 00 14 3 5 0 00 3 0 0 0 00 13 3 0 0 00 9 0 0 00 1 5 0 00

4 5 0 0 00 7 0 0 00 35 3 5 0 00

4-12

35 3 5 0 00

Income Statement D r.

C r.

Balance Sheet D r.

C r.

PROBLEM 4A-2. LING’S LANDSCAPING SERVICE WORKSHEET FOR THE MONTH ENDED DECEMBER 31, 2015 Account Titles Cash Accounts Receivable Prepaid Rent Landscaping Supplies Landscaping Equipment Acc. Depn., Landscaping Equipment Accounts Payable A. Ling, Capital Landscaping Revenue Heat Expense Advertising Expense Wages Expense

Rent Expense Landscaping Supplies Expense Depn. Exp., Landscaping Equipment Accrued Wages

Trial Balance D r. 4 0 0 0 7 0 0 8 0 0 7 4 2 1 4 0 0

Adjustments C r.

1 0 6 0 8 3 6 3 2 5 0 4 3 5 6 4 0 0 2 0 0 1 2 6 0 9 5 0 2

D r.

00 00 00 00 00

00 00 00 00

(d)

4 0 0 00

(a) (b) (c)

6 0 0 00 5 4 2 00 3 0 0 00

C r.

(a) (b)

6 0 0 00 5 4 2 00

(c)

3 0 0 00

9 5 0 2 00

1 8 4 2 00

(d) 4 0 0 0 0 1 8 4 2 00

Net Income

4-13

PROBLEM 4A-2., Cont. LING’S LANDSCAPING SERVICE WORKSHEET FOR THE MONTH ENDED DECEMBER 31, 2015 Adjusted Trial Balance D r. 4 0 0 0 7 0 0 2 0 0 2 0 0 1 4 0 0

Income Statement

C r.

D r.

00 00 00 00 00 1 3 6 0 8 3 6 3 2 5 0 4 3 5 6

00 00 00 00

6 0 0 00 5 4 2 00 3 0 0 00

6 0 0 00 5 4 2 00 3 0 0 00 4 0 0 00 10 2 0 2 00

C r.

4 3 5 6 00 4 0 0 00 2 0 0 00 1 6 6 0 00

10 2 0 2 00

D r. 4 0 0 0 00 7 0 0 00 2 0 0 00 2 0 0 00 1 4 0 0 00

1 3 6 0 00 8 3 6 00 3 2 5 0 00

4 0 0 00 2 0 0 00 1 6 6 0 00

4-14

C r.

Balance Sheet

3 7 0 2 00 6 5 4 00 4 3 5 6 00

4 3 5 6 00

6 5 0 0 00

4 3 5 6 00

6 5 0 0 00

4 0 0 5 8 4 6 6 5 4 6 5 0 0

00 00 00 00

PROBLEM 4A-3. 1. KEVIN’S MOVING CO. WORKSHEET FOR THE MONTH ENDED OCTOBER 31, 2017 Account Titles Cash Prepaid Insurance Moving Supplies Moving Truck Acc. Depn., Moving Truck Accounts Payable K. Hoff, Capital K. Hoff, Withdrawals Revenue from Moving Wages Expense Rent Expense Advertising Expense

Insurance Expense Moving Supplies Expense Depn. Exp., Moving Truck Accrued Wages

Trial Balance D r. 5 0 0 0 2 5 0 0 1 2 0 0 11 0 0 0

Adjustments C r.

D r.

00 00 00 00 9 0 0 0 00 2 7 6 8 00 5 4 4 2 00

C r. (a) (b)

7 0 0 00 3 0 0 00

(c)

5 0 0 00

1 4 0 0 00 9 0 0 0 00 3 7 1 2 1 0 8 0 3 1 8 26 2 1 0

00 00 00 00

(d)

2 5 0 00

(a) (b) (c)

7 0 0 00 3 0 0 00 5 0 0 00

26 2 1 0 00

1 7 5 0 00

(d) 2 5 0 0 0 1 7 5 0 00

Net Income

4-15

PROBLEM 4A-3., Cont. KEVIN’S MOVING CO. WORKSHEET FOR THE MONTH ENDED OCTOBER 31, 2017 Adjusted Trial Balance D r. 5 0 0 0 1 8 0 0 9 0 0 11 0 0 0

Income Statement

C r.

D r.

C r.

00 00 00 00

Balance Sheet D r. 5 0 0 0 00 1 8 0 0 00 9 0 0 00 11 0 0 0 00

9 5 0 0 00 2 7 6 8 00 5 4 4 2 00

1 4 0 0 00

1 4 0 0 00 9 0 0 0 00

9 0 0 0 00

3 9 6 2 00 1 0 8 0 00 3 1 8 00

7 0 0 00 3 0 0 00 5 0 0 00

26 9 6 0 00

4-16

C r.

2 5 0 00 26 9 6 0 00

6 8 6 0 00 2 1 4 0 00 9 0 0 0 00

9 0 0 0 00

20 1 0 0 00

9 0 0 0 00

20 1 0 0 00

2 5 0 17 9 6 0 2 1 4 0 20 1 0 0

00 00 00 00

PROBLEM 4A-3., Cont. 2. KEVIN’S MOVING CO. INCOME STATEMENT FOR THE MONTH ENDED OCTOBER 31, 2017 Revenue: Revenue From Moving Operating Expenses: Wages Expense Rent Expense Advertising Expense Insurance Expense Moving Supplies Expense Depreciation Expense, Moving Truck Total Operating Expenses Net Income

$9 0 0 0 00 $3 9 6 2 00 1 0 8 0 00 3 1 8 00 7 0 0 00 3 0 0 00 5 0 0 00 6 8 6 0 00 $2 1 4 0 00

KEVIN’S MOVING CO. STATEMENT OF OWNER’S EQUITY FOR THE MONTH ENDED OCTOBER 31, 2017 K. Hoff, Capital, 10/1/17 Net Income For October Less Withdrawals Increase in Capital K. Hoff, Capital, 10/31/17

$5 4 4 2 00 $2 1 4 0 00 1 4 0 0 00 7 4 0 00 $6 1 8 2 00

KEVIN’S MOVING CO. BALANCE SHEET OCTOBER 31, 2017 ASSETS Assets Cash Prepaid Insurance Moving Supplies Moving Truck Less Acc. Depn.

Total Assets

LIABILITIES AND OWNER’S EQUITY $5 0 0 0 00 1 8 0 0 00 9 0 0 00

$ 11 0 0 0 0 0 (9 5 0 0 0 0)

1 5 0 0 00

$9 2 0 0 00

Liabilities Accounts Payable Accrued Wages Total Liabilities

$2 7 6 8 00 2 5 0 00 $3 0 1 8 00

Owner’s Equity K. Hoff, Capital

6 1 8 2 00

Total Liabilities and Owner’s Equity

$9 2 0 0 00

4-17

PROBLEM 4A-4. 1. DICK’S REPAIR SERVICE WORKSHEET FOR THE MONTH ENDED NOVEMBER 30, 2016 Account Titles Cash Prepaid Insurance Repair Supplies Repair Equipment Acc. Depn., Repair Equipment Accounts Payable D. Horn, Capital Revenue from Repairs Wages Expense Rent Expense Advertising Expense

Trial Balance D r. 3 2 0 0 4 0 0 0 4 6 0 0 3 0 0 0

Adjustments C r.

00 00 00 00

Insurance Expense Repair Supplies Expense Depn. Exp., Repair Equipment Accrued Wages

00 00 00 00

00 00 00 00 (d)

4-18

(c)

2 0 0 00

(d)

4 0 0 00 2 9 0 0 00

4 0 0 00

17 0 7 0 00 (a) 7 0 0 0 0 (b) 1 6 0 0 0 0 (c) 2 0 0 0 0 2 9 0 0 00

Net Income

C r. (a) 7 0 0 0 0 (b) 1 6 0 0 0 0

7 0 0 5 5 7 0 3 8 0 0 7 0 0 0 1 8 0 0 3 6 0 1 1 0 17 0 7 0

D r.

PROBLEM 4A-4., Cont. DICK’S REPAIR SERVICE WORKSHEET - CONTINUED FOR THE MONTH ENDED NOVEMBER 30, 2016 Adjusted Trial Balance D r. 3 2 0 0 3 3 0 0 3 0 0 0 3 0 0 0

Income Statement

C r.

D r.

Balance Sheet

C r.

D r. 3 2 0 0 00 3 3 0 0 00 3 0 0 0 00 3 0 0 0 00

00 00 00 00 9 0 0 5 5 7 0 3 8 0 0 7 0 0 0

00 00 00 00

9 0 0 00 5 5 7 0 00 3 8 0 0 00 7 0 0 0 00

2 2 0 0 00 3 6 0 00 1 1 0 00

7 0 0 00 1 6 0 0 00 2 0 0 00

17 6 7 0 00

4 0 0 00 17 6 7 0 00

C r.

5 1 7 0 00 1 8 3 0 00 7 0 0 0 00

7 0 0 0 00

12 5 0 0 00

7 0 0 0 00

12 5 0 0 00

4 0 0 10 6 7 0 1 8 3 0 12 5 0 0

00 00 00 00

4-19

PROBLEM 4A-4., Cont. 2. DICK’S REPAIR SERVICE INCOME STATEMENT FOR THE MONTH ENDED NOVEMBER 30, 2016 Revenue: Revenue From Repairs Operating Expenses: Wages Expense Rent Expense Advertising Expense Insurance Expense Repair Supplies Expense Depreciation Expense, Repair Euipment Total Operating Expenses Net Income

$7 0 0 0 0 0 $2 2 0 0 0 0 3 6 0 00 1 1 0 00 7 0 0 00 1 6 0 0 00 2 0 0 00 5 1 7 0 00 $1 8 3 0 0 0

DICK’S REPAIR SERVICE STATEMENT OF OWNER’S EQUITY FOR THE MONTH ENDED NOVEMBER 30, 2016

D. Horn, Capital, 11/1/16 Net Income For November D. Horn, Capital, 11/30/16

$3 8 0 0 0 0 1 8 3 0 00 $5 6 3 0 0 0

DICK’S REPAIR SERVICE BALANCE SHEET NOVEMBER 30, 2016 ASSETS Assets Cash Prepaid Insurance Repair Supplies Repair Equipment Less Acc. Depn.

$3 2 0 0 0 0 3 3 0 0 00 3 0 0 0 00 $3 0 0 0 0 0 ( 9 0 0 0 0)

Total Assets

4-20

LIABILITIES AND OWNER’S EQUITY

2 1 0 0 00

$11 6 0 0 0 0

Liabilities Accounts Payable Accrued Wages Total Liabilities

$5 5 7 0 0 0 4 0 0 00 5 9 7 0 00

Owner’s Equity D. Horn, Capital

5 6 3 0 00

Total Liabilities and Owner’s Equity

$11 6 0 0 0 0

PROBLEM 4B-1. JILL’S FITNESS CENTRE WORKSHEET FOR THE MONTH ENDED DECEMBER 31, 2016 Account Titles Cash Accounts Receivable Fitness Supplies Fitness Equipment Acc. Depn., Fitness Equipment J. Walsh, Capital J. Walsh, Withdrawals Fitness Fees Rent Expense Advertising Expense

Fitness Supplies Expense Depn. Expense, Fitness Equipment

Trial Balance D r. 6 0 0 0 2 0 0 0 4 2 0 0 8 0 0 0

Adjustments C r.

D r.

00 00 00 00

C r.

(a) 1 2 0 0 0 0 4 7 0 0 00 16 0 0 0 00

(b)

5 0 0 00

1 0 0 0 00 1 4 0 0 00 8 0 0 00 1 0 0 00 22 1 0 0 00

22 1 0 0 00

(a) 1 2 0 0 0 0 (b) 5 0 0 0 0 1 7 0 0 00

1 7 0 0 00

4-21

PROBLEM 4B-1., Cont. JILL’S FITNESS CENTRE WORKSHEET FOR THE MONTH ENDED DECEMBER 31, 2016 Adjusted Trial Balance D r. 6 0 0 0 2 0 0 0 3 0 0 0 8 0 0 0

C r. 00 00 00 00 5 2 0 0 00 16 0 0 0 00

1 0 0 0 00 1 4 0 0 00 8 0 0 00 1 0 0 00

1 2 0 0 00 5 0 0 00 22 6 0 0 00

4-22

22 6 0 0 00

Income Statement D r.

C r.

Balance Sheet D r.

C r.

PROBLEM 4B-2. LING’S LANDSCAPING SERVICE WORKSHEET FOR THE MONTH ENDED DECEMBER 31, 2015 Account Titles Cash Accounts Receivable Prepaid Rent Landscaping Supplies Landscaping Equipment Acc. Depn., Landscaping Equipment Accounts Payable A. Ling, Capital Landscaping Revenue Heat Expense Advertising Expense Wages Expense

Landscaping Supplies Expense Rent Expense Depn. Exp., Landscaping Equipment Accrued Wages

Trial Balance D r. 3 9 6 2 8 4 4 0 0 3 1 0 1 0 0 0

Adjustments C r.

2 0 0 3 4 6 4 5 6 4 6 8 0 6 3 2 1 2 0 0 1 4 6 0 5 6 8 2

D r.

00 00 00 00 00

00 00 00 00

(d)

1 1 5 00

(a) (b) (c)

2 5 0 00 1 5 0 00 2 0 0 00

C r.

(b) (a)

1 5 0 00 2 5 0 00

(c)

2 0 0 00

(d)

1 1 5 00 7 1 5 00

5 6 8 2 00

7 1 5 00 Net Income

4-23

PROBLEM 4B-2., Cont. LING’S LANDSCAPING SERVICE WORKSHEET FOR THE MONTH ENDED DECEMBER 31, 2015 Adjusted Trial Balance D r. 3 9 6 2 8 4 2 5 0 6 0 1 0 0 0

Income Statement

C r.

D r.

00 00 00 00 00 4 0 0 3 4 6 4 5 6 4 6 8 0

00 00 00 00

2 5 0 00 1 5 0 00 2 0 0 00

2 5 0 00 1 5 0 00 2 0 0 00 1 1 5 00 5 9 9 7 00

C r. 00 00 00 00 00

4 6 8 0 00 6 3 2 00 1 2 0 0 00 1 5 7 5 00

5 9 9 7 00

D r. 3 9 6 2 8 4 2 5 0 6 0 1 0 0 0

4 0 0 00 3 4 6 00 4 5 6 00

6 3 2 00 1 2 0 0 00 1 5 7 5 00

4-24

C r.

Balance Sheet

4 0 0 7 00 6 7 3 00 4 6 8 0 00

4 6 8 0 00

1 9 9 0 00

4 6 8 0 00

1 9 9 0 00

1 1 5 1 3 1 7 6 7 3 1 9 9 0

00 00 00 00

PROBLEM 4B-3. 1. KEVIN’S MOVING CO. WORKSHEET FOR THE MONTH ENDED OCTOBER 31, 2017 Account Titles Cash Prepaid Insurance Moving Supplies Moving Truck Acc. Depn., Moving Truck Accounts Payable K. Hoff, Capital K. Hoff, Withdrawals Revenue from Moving Wages Expense Rent Expense Advertising Expense

Insurance Expense Moving Supplies Expense Depn. Exp., Moving Truck Accrued Wages

Trial Balance D r. 3 9 2 0 3 2 8 8 1 4 0 0 10 6 5 8

Adjustments C r.

D r.

00 00 00 00

C r. (a) 6 0 0 0 0 (b) 1 0 9 0 0 0

3 6 6 0 00 1 3 1 2 00 17 4 8 2 00

(c)

5 8 0 00

(d)

4 1 0 00 2 6 8 0 00

4 2 4 0 00 8 1 6 2 00 5 7 1 2 1 0 8 0 3 1 8 30 6 1 6

00 00 00 00

(d)

4 1 0 00

30 6 1 6 00 (a) 6 0 0 0 0 (b) 1 0 9 0 0 0 (c) 5 8 0 0 0 2 6 8 0 00

Net Loss

4-25

PROBLEM 4B-3., Cont. KEVIN’S MOVING CO. WORKSHEET FOR THE MONTH ENDED OCTOBER 31, 2017 Adjusted Trial Balance D r. 3 9 2 0 2 6 8 8 3 1 0 10 6 5 8

Income Statement

C r.

D r.

C r.

00 00 00 00

Balance Sheet D r. 3 9 2 0 2 6 8 8 3 1 0 10 6 5 8

C r. 00 00 00 00

4 2 4 0 00 1 3 1 2 00 17 4 8 2 00

4 2 4 0 00

4 2 4 0 00 8 1 6 2 00

8 1 6 2 00

6 1 2 2 00 1 0 8 0 00 3 1 8 00

6 0 0 00 1 0 9 0 00 5 8 0 00

31 6 0 6 00

4 1 0 00 31 6 0 6 00

9 7 9 0 00 9 7 9 0 00

4-26

8 1 6 2 00 1 6 2 8 00 9 7 9 0 00

21 8 1 6 00 1 6 2 8 00 23 4 4 4 00

4 1 0 00 23 4 4 4 00 23 4 4 4 00

PROBLEM 4B-3., Cont. 2. KEVIN’S MOVING CO. INCOME STATEMENT FOR THE MONTH ENDED OCTOBER 31, 2017 Revenue: Revenue From Moving Operating Expenses: Wages Expense Rent Expense Advertising Expense Insurance Expense Moving Supplies Expense Depreciation Expense, Moving Truck Total Operating Expenses Net Loss

$8 1 6 2 0 0 $6 1 2 2 0 0 1 0 8 0 00 3 1 8 00 6 0 0 00 1 0 9 0 00 5 8 0 00 9 7 9 0 00 $1 6 2 8 0 0

KEVIN’S MOVING CO. STATEMENT OF OWNER’S EQUITY FOR THE MONTH ENDED OCTOBER 31, 2017 K. Hoff, Capital, 10/1/17 Net Loss For October Add Withdrawals Decrease in Capital K. Hoff, Capital, 10/31/17

$1 7 4 8 2 0 0 $1 6 2 8 0 0 4 2 4 0 00 5 8 6 8 00 $1 1 6 1 4 0 0

KEVIN’S MOVING CO. BALANCE SHEET OCTOBER 31, 2017 ASSETS Assets Cash Prepaid Insurance Moving Supplies Moving Truck Less Acc. Depn.

Total Assets

LIABILITIES AND OWNER’S EQUITY $3 9 2 0 0 0 2 6 8 8 00 3 1 0 00

$1 0 6 5 8 0 0 (4 2 4 0 0 0)

6 4 1 8 00

$1 3 3 3 6 0 0

Liabilities Accounts Payable Accrued Wages Total Liabilities

$1 3 1 2 0 0 4 1 0 00 1 7 2 2 00

Owner’s Equity K. Hoff, Capital

11 6 1 4 00

Total Liabilities and Owner’s Equity

$1 3 3 3 6 0 0

4-27

PROBLEM 4B-4. 1. DICK’S REPAIR SERVICE WORKSHEET FOR THE MONTH ENDED NOVEMBER 30, 2016 Account Titles Cash Prepaid Insurance Repair Supplies Repair Equipment Acc. Depn., Repair Equipment Accounts Payable D. Horn, Capital Revenue from Repairs Wages Expense Rent Expense Advertising Expense

Trial Balance D r. 3 2 0 4 4 0 0 0 7 7 0 3 1 0 6

Adjustments C r.

00 00 00 00 6 5 0 1 9 0 4 6 2 5 8 5 6 3 4

1 6 0 0 1 5 6 0 2 0 6 14 4 4 6

Insurance Expense Repair Supplies Expense Depn. Exp., Repair Equipment Accrued Wages

D r.

00 00 00 00

00 00 00 00 (d)

1 0 6 00

(a) (b) (c)

3 0 0 00 6 0 0 00 2 5 0 00

4-28

(a) (b)

3 0 0 00 6 0 0 00

(c)

2 5 0 00

14 4 4 6 00

1 2 5 6 00 Net Income

C r.

(d) 1 0 6 0 0 1 2 5 6 00

PROBLEM 4B-4., Cont. DICK’S REPAIR SERVICE WORKSHEET FOR THE MONTH ENDED NOVEMBER 30, 2016 Adjusted Trial Balance D r. 3 2 0 4 3 7 0 0 1 7 0 3 1 0 6

Income Statement

C r.

D r.

Balance Sheet

C r.

D r. 3 2 0 4 3 7 0 0 1 7 0 3 1 0 6

00 00 00 00 9 0 0 1 9 0 4 6 2 5 8 5 6 3 4

00 00 00 00

5 6 3 4 00 1 7 0 6 00 1 5 6 0 00 2 0 6 00

3 0 0 00 6 0 0 00 2 5 0 00

14 8 0 2 00

00 00 00 00 9 0 0 00 1 9 0 4 00 6 2 5 8 00

1 7 0 6 00 1 5 6 0 00 2 0 6 00

1 0 6 00 14 8 0 2 00

C r.

4 6 2 2 00 1 0 1 2 00 5 6 3 4 00

5 6 3 4 00

10 1 8 0 00

5 6 3 4 00

10 1 8 0 00

1 0 6 9 1 6 8 1 0 1 2 10 1 8 0

00 00 00 00

4-29

PROBLEM 4B-4., Cont. 2. DICK’S REPAIR SERVICE INCOME STATEMENT FOR THE MONTH ENDED NOVEMBER 30, 2016 Revenue: Revenue From Repairs Operating Expenses: Wages Expense Rent Expense Advertising Expense Insurance Expense Repair Supplies Expense Depreciation Expense, Repair Equipment Total Operating Expenses Net Income

$5 6 3 4 00 $1 7 0 6 00 1 5 6 0 00 2 0 6 00 3 0 0 00 6 0 0 00 2 5 0 00 4 6 2 2 00 $1 0 1 2 00

DICK’S REPAIR SERVICE STATEMENT OF OWNER’S EQUITY FOR THE MONTH ENDED NOVEMBER 30, 2016

D. Horn, Capital, 11/1/16 Net Income For November D. Horn, Capital, 11/30/16

$6 2 5 8 00 1 0 1 2 00 $7 2 7 0 00

DICK’S REPAIR SERVICE BALANCE SHEET NOVEMBER 30, 2016 ASSETS Assets Cash Prepaid Insurance Repair Supplies Repair Equipment Less Acc. Depn.

$3 2 0 4 00 3 7 0 0 00 1 7 0 00 $3 1 0 6 00 ( 9 0 0 0 0)

Total Assets

4-30

LIABILITIES AND OWNER’S EQUITY

2 2 0 6 00

$9 2 8 0 00

Liabilities Accounts Payable Accrued Wages Total Liabilities

$1 9 0 4 00 1 0 6 00 2 0 1 0 00

Owners Equity D. Horn, Capital

7 2 7 0 00

Total Liabilities and Owner’s Equity

$9 2 8 0 00

PROBLEM 4C-1. CJ’S MOUNTAIN SAFETY TRAINING WORKSHEET FOR THE MONTH ENDED DECEMBER 31, 2017 Account Titles Cash Accounts Receivable Supplies Safety Equipment Acc. Depn., Safety Equipment Chris Janz, Capital Chris Janz, Withdrawals Fees Earned Rent Expense Advertising Expense Utilities Expense

Supplies Expense Depn. Exp., Safety Equipment

Trial Balance D r. 12 1 0 0 00 1 3 7 0 00 2 1 7 0 00 3 1 8 0 00

Adjustments C r.

D r.

1 0 6 0 00 15 4 1 6 00

C r.

(a)

5 6 5 00

(b)

2 6 5 00

7 0 0 00 4 7 7 0 00 9 0 0 00 3 7 0 00 4 5 6 00 21 2 4 6 00

21 2 4 6 00 (a) (b)

5 6 5 00 2 6 5 00 8 3 0 00

8 3 0 00

Net Income

4-31

PROBLEM 4C-1., Cont. CJ’S MOUNTAIN SAFETY TRAINING WORKSHEET FOR THE MONTH ENDED DECEMBER 31, 2017 Adjusted Trial Balance D r. 12 1 0 0 1 3 7 0 1 6 0 5 3 1 8 0

C r. 00 00 00 00 1 3 2 5 00 15 4 1 6 00

7 0 0 00 4 7 7 0 00 9 0 0 00 3 7 0 00 4 5 6 00

5 6 5 00 2 6 5 00 21 5 1 1 00

4-32

21 5 1 1 00

Income Statement D r.

C r.

Balance Sheet D r.

C r.

PROBLEM 4C-2. THE DEBBIE ROSE ART STUDIO WORKSHEET FOR THE MONTH ENDED NOVEMBER 30, 2015 Account Titles Cash Accounts Receivable Prepaid Rent Painting Supplies Studio Equipment Acc. Depn., Studio Equip. Accounts Payable Debbie Rose Allen, Capital Painting Revenue Advertising Expense Utilities Expense Wages Expense

Painting Supplies Expense Rent Expense Depn. Exp., Studio Equip. Accrued Wages

Trial Balance D r. 3 8 1 3 2 8 2 0 8 5 0 9 2 1 5 9 8 5

Adjustments C r.

D r.

00 00 00 00 00 1 9 9 5 00 1 7 8 8 00 5 8 2 8 00 7 8 1 6 00

5 1 0 2 7 8 2 2 5 0 17 4 2 7

00 00 00 00

(d)

2 4 5 00

(a) (b) (c)

3 2 6 00 4 2 5 00 9 1 75

C r.

(b) (a)

4 2 5 00 3 2 6 00

(c)

9 1 75

17 4 2 7 00

1 0 8 7 75

(d) 2 4 5 0 0 1 0 8 7 75

Net Income

4-33

PROBLEM 4C-2., Cont. THE DEBBIE ROSE ART STUDIO FOR THE MONTH ENDED NOVEMBER 30, 2015 Adjusted Trial Balance D r. 3 8 1 3 2 8 2 0 4 2 5 5 9 5 5 9 8 5

Income Statement

C r.

D r.

00 00 00 00 00 2 0 8 6 1 7 8 8 5 8 2 8 7 8 1 6

75 00 00 00

3 2 6 00 4 2 5 00 9 1 75

3 2 6 00 4 2 5 00 9 1 75 2 4 5 00 17 7 6 3 75

C r.

7 8 1 6 00 5 1 0 00 2 7 8 00 2 4 9 5 00

17 7 6 3 75

D r. 3 8 1 3 00 2 8 2 0 00 4 2 5 00 5 9 5 00 5 9 8 5 00

2 0 8 6 75 1 7 8 8 00 5 8 2 8 00

5 1 0 00 2 7 8 00 2 4 9 5 00

4-34

C r.

Balance Sheet

4 1 2 5 75 3 6 9 0 25 7 8 1 6 00

7 8 1 6 00

13 6 3 8 00

7 8 1 6 00

13 6 3 8 00

2 4 5 9 9 4 7 3 6 9 0 13 6 3 8

00 75 25 00

PROBLEM 4C-3. 1. VIVIAN’S REPAIR CO. WORKSHEET FOR THE MONTH ENDED OCTOBER 31, 2016 Account Titles Cash Prepaid Insurance Repair Supplies Repair Equipment Acc. Depn., Repair Equipment Building Acc. Depn., Building Accounts Payable Vivian Hunter, Capital Vivian Hunter, Withdrawals Repair Fees Revenue Wages Expense Utilities Expense Advertising Expense

Insurance Expense Repair Supplies Expense Depn. Exp., Repair Equipment Depn. Exp., Building Accrued Wages

Trial Balance D r. 3 3 2 6 00 1 3 8 9 00 1 1 4 8 00 8 4 6 0 00

Adjustments C r.

D r.

C r. (a) (b)

3 4 7 25 3 5 3 00

3 9 5 2 00

(c)

6 0 50

12 5 0 0 00 2 7 2 4 00 43 0 8 5 00

(d)

8 3 33

50 0 0 0 00

13 4 0 0 00 28 6 8 5 00 10 8 9 0 00 8 4 1 00 1 4 9 2 00 90 9 4 6 00

(e) 1 0 6 4 0 0

90 9 4 6 00 (a) (b) (c) (d)

3 4 7 25 3 5 3 00 6 0 50 8 3 33

1 9 0 8 08

(e) 1 0 6 4 0 0 1 9 0 8 08

Net Income

4-35

PROBLEM 4C-3., Cont. VIVIAN’S REPAIR CO. WORKSHEET FOR THE MONTH ENDED OCTOBER 31, 2016 Adjusted Trial Balance D r. 3 3 2 6 1 0 4 1 7 9 5 8 4 6 0

Income Statement

C r.

D r.

C r.

00 75 00 00

Balance Sheet D r. 3 3 2 6 00 1 0 4 1 75 7 9 5 00 8 4 6 0 00

4 0 1 2 50

50 0 0 0 00

50 0 0 0 00 12 5 8 3 33 2 7 2 4 00 43 0 8 5 00

12 5 8 3 33 2 7 2 4 00 43 0 8 5 00

13 4 0 0 00

13 4 0 0 00 28 6 8 5 00

11 9 5 4 00 8 4 1 00 1 4 9 2 00

3 4 7 3 5 3 6 0 8 3

4-36

28 6 8 5 00 11 9 5 4 00 8 4 1 00 1 4 9 2 00

25 00 50 33

92 1 5 3 83

C r.

3 4 7 25 3 5 3 00 6 0 50 8 3 33 1 0 6 4 00 92 1 5 3 83

15 1 3 1 08 13 5 5 3 92 28 6 8 5 00

28 6 8 5 00

77 0 2 2 75

28 6 8 5 00

77 0 2 2 75

1 0 6 4 63 4 6 8 13 5 5 3 77 0 2 2

00 83 92 75

PROBLEM 4C-3., Cont. 2. VIVIAN’S REPAIR CO. INCOME STATEMENT FOR THE SIX MONTHS ENDED OCTOBER 31, 2016 Revenue: Repair Fees Operating Expenses: Wages Expense Utilities Expense Advertising Expense Insurance Expense Repair Supplies Expnse Depreciation Expense, Repair Equipment Depreciation Expense, Building Total Operating Expenses Net Income

$2 8 6 8 5 0 0 $1 1 9 5 4 0 0 8 4 1 00 1 4 9 2 00 3 4 7 25 3 5 3 00 6 0 50 8 3 33 15 1 3 1 08 $1 3 5 5 3 9 2

VIVIAN’S REPAIR CO. STATEMENT OF OWNER’S EQUITY FOR THE SIX MONTHS ENDED OCTOBER 31, 2016 Vivian Hunter, Capital, 10/1/16 Net Income For October Less Withdrawals Increase in Capital Vivian Hunter, Capital, 10/31/16

$4 3 0 8 5 0 0 $1 3 5 5 3 9 2 13 4 0 0 00 1 5 3 92 $4 3 2 3 8 9 2

VIVIAN’S REPAIR CO. BALANCE SHEET NOVEMBER 30, 2016 ASSETS Assets Cash Prepaid Insurance Repair Supplies Repair Equipment Less: Acc. Depn. Building Less: Acc. Depn. Total Assets

LIABILITIES AND OWNER’S EQUITY $3 3 2 6 0 0 1 0 4 1 75 7 9 5 00

$8 4 6 0 00 (4 0 1 2 5 0) $5 0 0 0 0 0 0 (12 5 8 3 3 3)

4 4 4 7 50

Liabilities Accounts Payable Accrued Wages Total Liabilities

$2 7 2 4 00 1 0 6 4 00 3 7 8 8 00

Owner’s Equity Vivian Hunter, Capital

43 2 3 8 92

Total Liabilities and Owner’s Equity

$4 7 0 2 6 9 2

37 4 1 6 67 $4 7 0 2 6 9 2

4-37

PROBLEM 4C-4. 1. MARITIME INTERNET ACCESS SERVICE WORKSHEET FOR THE THREE MONTHS ENDED AUGUST 31, 2015 Account Titles Cash Prepaid Insurance Computer Supplies Computer Equipment Acc. Depn., Computer Equipment Accounts Payable Lucy Northwest, Capital Lucy Northwest, Withdrawals Revenue From Services Provided Wages Expense Rent Expense Advertising Expense

Trial Balance D r. 7 0 8 00 1 0 5 0 00 4 2 6 00 11 4 8 0 00

Adjustments C r.

D r.

4 2 0 0 00 8 4 0 00 2 8 8 7 00

(a) (b)

3 5 0 00 1 5 8 00

6 3 0 00 2 4 5 00

1 4 7 8 00 14 3 8 5 00 4 7 6 0 00 1 4 8 5 00 9 2 5 00 22 3 1 2 00

Insurance Expense Computer Supplies Expense Depn. Exp., Computer Equipment Accrued Wages

(d)

9 6 0 00

(e)

2 4 5 00

(a) (b) (c)

3 5 0 00 1 5 8 00 6 3 0 00

22 3 1 2 00

2 3 4 3 00 Net Income

4-38

C r.

(d) 9 6 0 0 0 2 3 4 3 00

PROBLEM 4C-4., Cont. MARITIME INTERNET ACCESS SERVICE WORKSHEET FOR THE THREE MONTHS ENDED AUGUST 31, 2015 Adjusted Trial Balance D r. 7 0 8 7 0 0 2 6 8 11 4 8 0

C r.

Income Statement D r.

Balance Sheet

C r.

D r. 7 0 8 00 7 0 0 00 2 6 8 00 11 4 8 0 00

00 00 00 00 4 8 3 0 00 1 0 8 5 00 2 8 8 7 00

4 8 3 0 00 1 0 8 5 00 2 8 8 7 00

1 4 7 8 00

1 4 7 8 00 14 3 8 5 00

14 3 8 5 00

5 7 2 0 00 1 4 8 5 00 1 1 7 0 00

3 5 0 00 1 5 8 00 6 3 0 00

24 1 4 7 00

C r.

9 6 0 00 24 1 4 7 00

9 5 1 3 00 4 8 7 2 00 14 3 8 5 00

14 3 8 5 00

14 6 3 4 00

14 3 8 5 00

14 6 3 4 00

9 6 0 9 7 6 2 4 8 7 2 14 6 3 4

00 00 00 00

4-39

PROBLEM 4C-4., Cont. 2. MARITIME INTERNET ACCESS SERVICE INCOME STATEMENT FOR THE THREE MONTHS ENDED AUGUST 31, 2015 Revenue: Revenue From Services Provided Operating Expenses: Wages Expense Rent Expense Advertising Expense Insurance Expense Computer Supplies Expense Depreciation Expense, Computer Equipment Total Operating Expenses Net Income

$1 4 3 8 5 0 0 $5 7 2 0 00 1 4 8 5 00 1 1 7 0 00 3 5 0 00 1 5 8 00 6 3 0 00 9 5 1 3 00 4 8 7 2 00

MARITIME INTERNET ACCESS SERVICE STATEMENT OF OWNER’S EQUITY FOR THE THREE MONTHS ENDED AUGUST 31, 2015 Lucy Northwest, Capital, 06/1/15 Net Income For August Less Withdrawals Increase in Capital Lucy Northwest, Capital, 08/31/15

$2 8 8 7 00 $4 8 7 2 00 1 4 7 8 00 3 3 9 4 00 $6 2 8 1 00

MARITIME INTERNET ACCESS SERVICE BALANCE SHEET AUGUST 31, 2015 ASSETS Assets Cash Prepaid Insurance Computer Supplies Computer Equipment Less Acc. Depn.

$ 7 0 8 00 7 0 0 00 2 6 8 00 $ 11 4 8 0 0 0 (4 8 3 0 0 0)

Total Assets

4-40

LIABILITIES AND OWNER’S EQUITY

6 6 5 0 00

$8 3 2 6 0 0

Liabilities Accounts Payable Accrued Wages Total Liabilities

$1 0 8 5 00 9 6 0 00 $2 0 4 5 0 0

Owner’s Equity Lucy Northwest, Capital

6 2 8 1 00

Total Liabilities and Owner’s Equity

8 3 2 6 00

SOLUTIONS TO ON-THE-JOB TRAINING, #T-1. a. Policy No. 100

$480 48 months

= $10 per month

12 months X $10 = $120

Note: 14 months have elapsed since purchase of Policy No. 100. Two months of the insurance would have already been adjusted in the previous fiscal year. 200

$600 24

= $25 per month

8 months X 25 = 200

300

$240 12

= $20 per month

4 months X 20 = 80

Insurance Expense

420

Prepaid Insurance b.

420

Rent Expense

200

Prepaid Rent c.

$400

200

Storage Fees Receivable Storage Fees Earned

500 500

These adjustments must be made to reflect the state of affairs more accurately at year (or period) end. This is a basic feature of accrual accounting. If cash accounting were used (and this is not very common in Canada, due mainly to tax laws as well as generally accepted accounting principles), no adjustments would be made.

SOLUTIONS TO ON-THE-JOB TRAINING, #T-2. a. Advertising Expense = $300 + $1,900

= $2,200 - 600 $1,600

b. Interest Expense = $1,500 + $350 - $150 = $1,700 c. Rent Fees Earned = $2,300 + $500 - $300 = $2,500 Unearned Rent is a liability because, at year end, the business owes a service which has, in effect, been paid for in advance. It is true that no money needs to be paid, but this is not part of the definition of a liability. Many times a liability does mean that money must be disbursed in a future period, but not always is this the case — such as unearned rent. Another example of this sort of liability is a business which has offered a free premium (such as a “free” toy on sending in a coupon from a box of cereal.) A liability exists in respect of the boxes of cereal sold despite the fact that the toys are on hand waiting to be sent.

4-41

CONTINUING PROBLEM PRECISION COMPUTER CENTRE WORKSHEET FOR THREE MONTHS ENDED JULY 31, 2016 Account Titles Cash Accounts Receivable Prepaid Rent Supplies Computer Shop Equipment Office Equipment Accounts Payable T. Freedman, Capital T. Freedman, Withdrawals Service Revenue Advertising Expense Rent Expense Utilities Expense Phone Expense Insurance Expense Postage Expense

Trial Balance D r. 1 6 4 5 00 2 6 0 0 00 8 0 0 00 4 5 0 00 2 4 0 0 00 6 0 0 00

Adjustments C r.

D r.

(D) 4 0 0 0 0 (A) 3 6 0 0 0

2 1 0 00 4 5 0 0 00 1 0 0 00 6 6 8 5 00 1 4 0 0 00 8 0 0 00 1 8 0 00 2 2 0 00 1 5 0 00 5 0 00 11 3 9 5 00

Supplies Expense Depn. Exp., Computer Shop Equipment Accum. Depn., C.S. Equipment Depn. Exp., Office Equipment Accum. Depn., Office Equipment

(D) 4 0 0 0 0

11 3 9 5 00 (A) 3 6 0 0 0 (B) 9 9 00 (C)

(B)

9 9 00

(C)

2 0 00 8 7 9 00

Net Income

4-42

C r.

CONTINUING PROBLEM PRECISION COMPUTER CENTRE WORKSHEET - CONTINUED FOR THREE MONTHS ENDED JULY 31, 2016 Adjusted Trial Balance D r. 1 6 4 5 2 6 0 0 4 0 0 9 0 2 4 0 0 6 0 0

C r.

Income Statement D r.

Balance Sheet

C r.

D r. 1 6 4 5 00 2 6 0 0 00 4 0 0 00 9 0 00 2 4 0 0 00 6 0 0 00

00 00 00 00 00 00 2 1 0 00 4 5 0 0 00

2 1 0 00 4 5 0 0 00

1 0 0 00

1 0 0 00 6 6 8 5 00

1 4 0 0 1 2 0 0 1 8 0 2 2 0 1 5 0 5 0

6 6 8 5 00

00 00 00 00 00 00

1 4 0 0 00 1 2 0 0 00 1 8 0 00 2 2 0 00 1 5 0 00 5 0 00

3 6 0 00 9 9 00

3 6 0 00 9 9 00 9 9 00

2 0 00 11 5 1 4 00

C r.

9 9 00 2 0 00

2 0 00 11 5 1 4 00

3 6 7 9 00 3 0 0 6 00 6 6 8 5 00

6 6 8 5 00

7 8 3 5 00

6 6 8 5 00

7 8 3 5 00

2 0 4 8 2 9 3 0 0 6 7 8 3 5

00 00 00 00

4-43

CONTINUING PROBLEM, Cont. PRECISION COMPUTER CENTRE INCOME STATEMENT FOR THE THREE MONTHS ENDED JULY 31, 2016 Revenue: Service Revenue Operating Expenses: Advertising Expense Rent Expense Utilities Expense Phone Expense Insurance Expense Postage Expense Supplies Expense Depn. Exp., Computer Shop Equipment Depn. Exp., Office Equipment

$6 6 8 5 0 0 $1 4 0 0 0 0 1 2 0 0 00 1 8 0 00 2 2 0 00 1 5 0 00 5 0 00 3 6 0 00 9 9 00 2 0 00 3 6 7 9 00 $3 0 0 6 0 0

Net Income PRECISION COMPUTER CENTRE STATEMENT OF OWNER’S EQUITY FOR THE THREE MONTHS ENDED JULY 31, 2016 T. Freedman, Capital, May 1, 2016 Net Income Less: T. Freedman, Withdrawals Net Increase in Capital T. Freedman, Capital, July 31, 2016

4-44

$4 5 0 0 0 0 $3 0 0 6 0 0 1 0 0 00 2 9 0 6 00 $7 4 0 6 0 0

4-45

Total Assets

Cash Accounts Receivable Prepaid Rent Supplies Computer Shop Equipment Less Acc. Depn. Office Equipment Less Acc. Depn.

Assets

$2 4 0 0 00 9 9 00 6 0 0 00 2 0 00

ASSETS

CONTINUING PROBLEM, Cont.

$7 6 1 6 0 0

5 8 0 00

2 3 0 1 00

$1 6 4 5 0 0 2 6 0 0 00 4 0 0 00 9 0 00

$7 6 1 6 0 0

7 4 0 6 00

Owner’s Equity T. Freedman, Capital

Total Liabilities and Owner’s Equity

$ 2 1 0 00

Accounts Payable

Liabilities

LIABILITIES AND OWNER’S EQUITY

PRECISION COMPUTER CENTRE BALANCE SHEET JULY 31, 2016

5 The Accounting Cycle Completed: Adjusting, Closing and Post-Closing Trial Balance

ANSWERS TO DISCUSSION QUESTIONS AND CRITICAL THINKING/ETHICAL CASE 1. 2. 3.

4. 5. 6.

7. 8. 9. 10. 11.

Only the balances in the original trial balance are found in the general ledger. At this point, no adjustments have been journalized or posted. Adjusting entries must be journalized because the ledger needs to be brought up to date before the beginning of the next accounting cycle. Reject. Closing cleans up the ledger so that only permanent accounts have a balance carried into the next fiscal year. All temporary accounts are zero, which will, in the next period, allow accumulation of new data about revenue, expenses, and withdrawals. Temporary accounts have no balances carried forward to the new fiscal year; permanent accounts do have balances carried forward to the new fiscal year. The two major goals of the closing process are to update the Capital account in the ledger and clear all temporary accounts in the ledger to a zero balance. The four steps of closing are as follows: a. Revenue closed to Income Summary. b. Expenses closed to Income Summary. c. Balance in Income Summary transferred to Capital. d. Withdrawals directly closed to Capital. Income Summary summarizes revenue and expenses in the closing process. It is a temporary account located in the general ledger. All closing entries can be prepared from the worksheet. Note: The Income Summary account is not located on the worksheet. Assets, contra assets, liabilities, and the ending figure for capital are listed on a post-closing trial balance. Disagree; closing entries are only prepared at the end of the fiscal year. The question in the case is whether Todd should purchase 75% of his orders from Gem Company. Although Todd is offered a luxurious vacation, he should not let this affect his decision to purchase products from Gem. Also, Todd should not be influenced by the fact that he’s upset with his management. Thus, Todd should not purchase the supplies solely because he is offered a free vacation. This is a conflict of interest.

5-1

SOLUTIONS TO CLASSROOM DEMONSTRATION EXERCISES 1.

(Note: Explanations omitted intentionally) GENERAL JOURNAL

Page 3 Post Ref.

Date 2012 Account Title and Description Dec 31 Insurance Expense

510

Prepaid Insurance

514

Store Supplies

116

31 Depreciation Expense, Store Equipment

Accrued Salaries

GJ3

116 4

Acc. Depn., Store Equip. 119 13 GJ3

4 00 9 00 9 00 5 00

210

115

GJ3

4 00

516

Accrued Salaries

Store Supplies

6 00

119

31 Salaries Expense

GJ3

6 00

512

Accumulated Depreciation, Store Equipment

Ins. Exp. GJ3

5 00

210

Supplies Exp.

510

Depn. Exp., Store Equip. 512 GJ3

Salaries Exp. 9

9 GJ3

Step 1: Revenue ($200) is closed to Income Summary. Step 2: Expenses (each individual one — $100 + $60) are closed to Income Summary. Step 3: Balance in Income Summary (Net Income — $40) is closed to Capital. Step 4: Withdrawals ($15) are closed directly to Capital.

Dec.

31 31

5-2

Taxi Fare Income Income Summary

Income Summary Gas Expense Advertising Expense Depn. Expense, Taxi

Income Summary Mel Blanc, Capital

Mel Blanc, Capital Mel Blanc, Withdrawals

514

GJ3

C r.

115

31 Supplies Expense

Prepaid Ins.

Dr.

39 8 12 8 11 7

516

Income Summary 28 39 11

314

Mel Blanc, Capital

310 40

Temporary balance of $11 (Net Income) is cleared to capital by end of closing process. Income summary is a temporary account.

Final Balance

SOLUTIONS TO EXERCISES —SET A EXERCISE 5-1A. Date 2016 Dec 31 31 31 31

(Note: Explanations omitted intentionally) Post Ref.

Account Title and Description Rent Expense Prepaid Rent Office Supplies Expense Office Supplies Depreciation Expense, Equipment Accumulated Depreciation, Equipment Salaries Expense Accrued Salaries

Dr.

Cr.

9 0 0 00 9 0 0 00 3 0 0 00 3 0 0 00 2 0 0 00 2 0 0 00 2 0 0 00 2 0 0 00

EXERCISE 5-2A. TEMPORARY 1. Income Summary 2. Jen Rich, Capital 3. Salary Expense 4. Jen Rich, Withdrawals 5. Fees Earned 6. Accounts Payable 7. Cash

EXERCISE 5-3A. Date 2015 Dec 31 31

31 31

PERMANENT

WILL BE CLOSED

X X

X X X

X X X X X

(Note: Explanations omitted intentionally) Account Title and Description

Fees Earned Income Summary Income Summary Rent Expense Wages Expense Insurance Expense Depreciation Expense, Office Equipment Income Summary J. King, Capital J. King, Capital J. King, Withdrawals

Post Ref.

Dr.

Cr.

33 0 0 0 00 33 0 0 0 00 14 1 0 0 00 5 0 0 0 00 7 0 0 0 00 1 2 0 0 00 9 0 0 00 18 9 0 0 00 18 9 0 0 00 4 0 0 0 00 4 0 0 0 00

5-3A

SOLUTIONS TO EXERCISES—SET A, Cont. EXERCISE 5-4A. Date 2017 Dec 31 31

31 31

(Note: Explanations omitted intentionally) Account Title and Description

Salon Fees Income Summary Income Summary Insurance Expense Wages Expense Rent Expense Depreciation Expense, Equipment Income Summary M. Foster, Capital M. Foster, Capital M. Foster, Withdrawals

Post Ref.

Dr.

Cr.

1 3 0 0 00 1 3 0 0 00 6 0 0 00 5 0 00 1 0 0 00 2 0 0 00 2 5 0 00 7 0 0 00 7 0 0 00 1 0 0 00 1 0 0 00

EXERCISE 5-5A. WEY CO. POST-CLOSING TRIAL BALANCE DECEMBER 31, 2018 Dr. Cash Accounts Receivable Legal Library Office Equipment Accounts Payable P. Wey, Capital

Cr.

22 0 0 0 00 18 8 7 5 00 14 2 5 0 00 59 7 0 0 00 45 0 0 0 00 69 8 2 5 00 114 8 2 5 00 114 8 2 5 00

5-4A

SOLUTIONS TO EXERCISES —SET B EXERCISE 5-1B. Date 2016 Dec 31 31 31 31

(Note: Explanations omitted intentionally) Post Ref.

Account Title and Description Rent Expense Prepaid Rent Office Supplies Expense Office Supplies Expense Depreciation, Equipment Accumulated Depreciation, Equipment Salaries Expense Accrued Salaries

Dr.

Cr.

7 0 0 00 7 0 0 00 2 0 0 00 2 0 0 00 3 0 0 00 3 0 0 00 4 0 0 00 4 0 0 00

EXERCISE 5-2B. TEMPORARY 1. Store Supplies on Hand 2. Accrued Salaries 3. Jon Rich, Withdrawals 4. Income Summary 5. Commissions Earned 6. Accounts Payable 7. Accumulated Depreciation

EXERCISE 5-3B. Date 2015 Dec 31 31

31 31

PERMANENT

WILL BE CLOSED

X X X X X

(Note: Explanations omitted intentionally) Account Title and Description

Fees Earned Income Summary Income Summary Rent Expense Salaries Expense Insurance Expense Depreciation Expense, Office Equipment Income Summary J. King, Capital J. King, Capital J. King, Withdrawals

Post Ref.

Dr.

Cr.

46 0 0 0 00 46 0 0 0 00 17 2 0 0 00 6 0 0 0 00 9 0 0 0 00 8 0 0 00 1 4 0 0 00 28 8 0 0 00 28 8 0 0 00 5 0 0 0 00 5 0 0 0 00

5-5B

SOLUTIONS TO EXERCISES —SET B, Cont. EXERCISE 5-4B. Date 2017 Dec 31 31

31 31

(Note: Explanations omitted intentionally) Account Title and Description

Salon Fees Income Summary Income Summary Insurance Expense Wages Expense Rent Expense Depreciation Expense, Office Equipment Income Summary M. Foster, Capital M. Foster, Capital M. Foster, Withdrawals

Post Ref.

Dr.

C r.

2 4 0 0 00 2 4 0 0 00 1 2 5 0 00 8 0 00 6 5 0 00 2 2 0 00 3 0 0 00 1 1 5 0 00 1 1 5 0 00 2 0 0 00 2 0 0 00

EXERCISE 5-5B. WEY CO. POST-CLOSING TRIAL BALANCE DECEMBER 31, 2018 Dr. Cash Accounts Receivable Legal Library Office Equipment Accumulated Depn., Office Equipment Accounts Payable P. Wey, Capital

Cr.

8 2 3 0 00 8 7 5 0 00 6 8 3 0 00 15 7 0 0 00 3 0 0 0 00 5 2 0 0 00 37 3 1 0 00 39 5 1 0 00 45 5 1 0 00

5-6B

PROBLEM 5A-1. DEBBIE’S DANCE STUDIO WORKSHEET FOR THE MONTH ENDED JUNE 30, 2017 Account Titles Cash Accounts Receivable Prepaid Insurance Dance Supplies Dance Equipment Acc. Depn., Dance Equipment Accounts Payable D. Dee, Capital D. Dee, Withdrawals Dance Fees Earned Salaries Expense Telephone Expense Advertising Expense

Insurance Expense Dance Supplies Expense Depn. Exp., Dance Equipment Accrued Salaries

Trial Balance D r. 40 0 0 0 00 7 0 0 0 00 4 0 0 00 1 5 0 0 00 13 0 0 0 00

C r.

Adjustments D r.

C r.

(A) 3 0 0 0 0 (B) 8 0 0 0 0 11 9 0 0 00 21 0 0 0 00 13 2 0 0 00

8 0 0 00 19 8 0 0 00 1 6 0 0 00 (D) 4 0 0 0 0 1 0 0 0 00 6 0 0 00 65 9 0 0 00 65 9 0 0 00 (A) 3 0 0 0 0 (B) 8 0 0 0 0 (C) 5 0 0 0 0 (D) 4 0 0 0 0 2 0 0 0 00 2 0 0 0 00

Net Income

5-7

PROBLEM 5A-1., Cont. DEBBIE’S DANCE STUDIO WORKSHEET FOR THE MONTH ENDED JUNE 30, 2017 Adjusted Trial Balance D r.

C r.

Income Statement

Balance Sheet

D r.

C r.

40 0 0 0 00

7 0 0 0 00

1 0 0 00

7 0 0 00

13 0 0 0 00

C r.

12 4 0 0 00

21 0 0 0 00

13 2 0 0 00

8 0 0 00

8 0 0 00 19 8 0 0 00

19 8 0 0 00

2 0 0 0 00

1 0 0 0 00

6 0 0 00

3 0 0 00

8 0 0 00

5 0 0 00

5 0 0 00 4 0 0 00

4 0 0 00

66 8 0 0 00 66 8 0 0 00

5 2 0 0 00 19 8 0 0 00 61 6 0 0 00 47 0 0 0 00 14 6 0 0 00

14 6 0 0 00

19 8 0 0 00 19 8 0 0 00 61 6 0 0 00 61 6 0 0 00

5-8

PROBLEM 5A-1., Cont. DEBBIE’S DANCE STUDIO GENERAL JOURNAL Date 2017

Account Title and Description

Page 3 Post Ref.

Dr.

Cr.

Adjusting Entries June 30

Insurance Expense

3 0 0 00

Prepaid Insurance

3 0 0 00

Insurance expired 30

Dance Supplies Expense

8 0 0 00

Dance Supplies

8 0 0 00

Dance supplies used 30

Depreciation Expense, Dance Equipment

5 0 0 00

Accumulated Depreciation, Dance Equipment

5 0 0 00

Estimated depreciation 30

Salaries Expense

4 0 0 00

Accrued Salaries

4 0 0 00

Accrued salaries Closing Entries 30

Dance Fees Earned

19 8 0 0 00

Income Summary

19 8 0 0 00

To close income account 30

Income Summary

5 2 0 0 00

Salaries Expense

2 0 0 0 00

Telephone Expense

1 0 0 0 00

Advertising Expense

6 0 0 00

Insurance Expense

3 0 0 00

Dance Supplies Expense

8 0 0 00

Depreciation Expense, Dance Equipment

5 0 0 00

To close expense accounts 30

Income Summary

14 6 0 0 00

D. Dee, Capital

14 6 0 0 00

Net income closed to capital 30

D. Dee, Capital D. Dee, Withdrawals

8 0 0 00 8 0 0 00

Close withdrawals into capital

5-9

PROBLEM 5A-2. POTTER CLEANING SERVICE GENERAL JOURNAL Date 2016

Account Title and Description

Page 2 Post Ref.

Dr.

C r.

Adjusting Entries Mar. 31

Insurance Expense

517

Prepaid Insurance

1 8 0 00

114

1 8 0 00

Insurance expired 31

Cleaning Supplies Expense Cleaning Supplies

518

1 0 0 00

115

1 0 0 00

Cleaning supplies used 31

Depreciation Expense, Auto Accumulated Depreciation, Auto

519

1 5 0 00

122

1 5 0 00

Estimated depreciation 31

Salaries Expense

513

Accrued Salaries

1 6 0 00

213

1 6 0 00

Salaries to be paid Closing Entries 31

Cleaning Fees Income Summary

412

4 6 8 0 00

314

4 6 8 0 00

To close income account 31

Income Summary

314

2 6 5 0 00

Salaries Expense

513

1 6 0 0 00

Telephone Expense

514

2 6 4 00

Advertising Expense

515

1 9 6 00

Gas Expense

516

1 6 0 00

Insurance Expense

517

1 8 0 00

Cleaning Supplies Expense

518

1 0 0 00

Depreciation Expense, Auto

519

1 5 0 00

To close expense accounts 31

Income Summary

314

B. Potter, Capital

312

2 0 3 0 00 2 0 3 0 00

Net income closed to capital 31

B. Potter, Capital B. Potter, Withdrawals Close withdrawals into capital

5-10

312 313

4 6 0 00 4 6 0 00

PROBLEM 5A-2., Cont. POTTER CLEANING SERVICE GENERAL LEDGER NAME: CASH Date 2016 Mar. 31

ACCOUNT NO. Explanation

Post Ref.

Debit

✓

Balance

NAME: PREPAID INSURANCE Date 2016

Explanation

Post Ref.

Balance

✓

Adjusting

GJ2

Debit

Post Ref.

Balance

✓

Adjusting

GJ2

Debit

Post Ref.

Debit

NAME: ACCUMULATED DEPRECIATION, AUTO Explanation

Post Ref.

Balance

✓

Adjusting

GJ2

Debit

Explanation

Credit

1 5 0 00

NAME: ACCOUNTS PAYABLE

Balance

4 0 0 00

Balance

5 2 0 00

3 4 0 00

✓

Debit

Credit

115

DR CR

Balance

1 4 4 00

4 4 00

121

DR CR

Balance

2 7 2 0 00

122

DR CR

Balance

8 6 0 00

1 0 1 0 00

ACCOUNT NO. Post Ref.

114

DR CR

ACCOUNT NO.

Mar. 31

Credit

✓

Balance

Date 2016

ACCOUNT NO. Explanation

Date 2016

Credit

1 0 0 00

NAME: AUTO

Mar. 31

Balance

ACCOUNT NO.

Mar. 31

Date 2016

Credit

1 8 0 00

NAME: CLEANING SUPPLIES Explanation

ACCOUNT NO.

Mar. 31

Date 2016

Credit

112

212

DR CR

Balance

2 2 4 00

5-11

PROBLEM 5A-2., Cont. POTTER CLEANING SERVICE GENERAL LEDGER NAME: ACCRUED SALARIES Date 2016

Explanation

Mar. 31

Balance

ACCOUNT NO. Post Ref.

Debit

GJ2

NAME: B. POTTER, CAPITAL Date 2016

Explanation

Mar. 31

Balance

✓

Closing

GJ2

Closing

GJ2

Debit

Explanation

Post Ref.

Balance

✓

Closing

GJ2

Debit

Post Ref.

Debit

Mar. 31

Balance

GJ2

Closing

GJ2

2 6 5 0 00

Closing

GJ2

2 0 3 0 00

Explanation

Post Ref.

Balance

✓

Closing

GJ2

Debit

Post Ref.

Balance

✓

Adjusting

GJ2

Closing

GJ2

Credit

Debit

312

DR CR

Balance

5 4 0 00

2 5 7 0 00

2 1 1 0 00 313

DR CR

Balance

4 6 0 00

ACCOUNT NO.

314

Credit

DR CR

Balance

4 6 8 0 00

2 0 3 0 00

Credit

412

DR CR

Balance

4 6 8 0 00

O ACCOUNT NO.

Mar. 31

5-12

Credit

4 6 8 0 00

NAME: SALARIES EXPENSE Explanation

1 6 0 00

ACCOUNT NO.

Mar. 31

Date 2016

4 6 8 0 00

NAME: CLEANING FEES Date 2016

1 6 0 00

4 5 0 00

NAME: INCOME SUMMARY Explanation

Balance

ACCOUNT NO.

Mar. 31

Date 2016

DR CR

2 0 3 0 00

NAME: B. POTTER, WITHDRAWALS Date 2016

Credit

ACCOUNT NO. Post Ref.

213

Credit

1 6 0 00 1 6 0 0 00

513

DR CR

Balance

1 4 4 0 00

1 6 0 0 00

PROBLEM 5A-2., Cont. POTTER CLEANING SERVICE GENERAL LEDGER NAME: TELEPHONE EXPENSE Date 2016

Explanation

ACCOUNT NO. Post Ref.

Mar. 31

Balance

✓

Closing

GJ2

Debit

NAME: ADVERTISING EXPENSE Date 2016

Explanation

Post Ref.

Mar. 31

Balance

✓

Closing

GJ2

Debit

NAME: GAS EXPENSE Date 2016

Explanation

Post Ref.

Mar. 31

Balance

✓

Closing

GJ2

Debit

NAME: INSURANCE EXPENSE Date 2016

Explanation

Post Ref.

Debit 1 8 0 00

Mar. 31

Balance

GJ2

Adjusting

GJ2

NAME: CLEANING SUPPLIES EXPENSE Date 2016 Mar. 31 31

Post Ref.

Debit

Adjusting

GJ2

1 0 0 00

Closing

GJ2

Explanation

NAME: AMORTIZATION EXPENSE, AUTO Date 2016 Mar. 31 31

Post Ref.

Debit

Adjusting

GJ2

1 5 0 00

Closing

GJ2

Explanation

Credit

514

DR CR

Balance

2 6 4 00

ACCOUNT NO.

515

Credit

DR CR

Balance

1 9 6 00

ACCOUNT NO.

516

Credit

DR CR

Balance

1 6 0 00

ACCOUNT NO.

517

Credit

DR CR

Balance

1 8 0 00

ACCOUNT NO.

518

Credit

DR CR

Balance

1 0 0 00

ACCOUNT NO.

519

Credit

DR CR

Balance

1 5 0 00

O 5-13

PROBLEM 5A-2., Cont. POTTER CLEANING SERVICE POST-CLOSING TRIAL BALANCE MARCH 31, 2016 Cash

4 0 0 00

Prepaid Insurance

3 4 0 00

Cleaning Supplies

4 4 00

Auto

2 7 2 0 00

Accumulated Depreciation, Auto

1 0 1 0 00

Accounts Payable

2 2 4 00

Accrued Salaries

1 6 0 00

B. Potter, Capital

2 1 1 0 00

Totals

5-14

3 5 0 4 00

PROBLEM 5A-3. PETE’S PLOWING GENERAL JOURNAL Date 2015 Jan.

Page 1 Post Ref.

Dr.

Cash

111

7 0 0 0 00

Snow Equipment

123

6 0 0 0 00

Account Title and Description

Pete Mack, Capital

311

Cr.

13 0 0 0 00

Owner investment 3

Prepaid Rent

114

Cash

111

2 0 0 0 00 2 0 0 0 00

Rent paid in advance 5

Office Equipment Accounts Payable

121

7 2 0 0 00

211

7 2 0 0 00

Bought equipment from Ling Corp. on account 6

Snow Supplies Cash

115

7 0 0 00

111

7 0 0 00

Cash purchase of supplies 9

Cash Plowing Fees

111 1 5 0 0 0 0 0 411

15 0 0 0 00

Cash fees earned 12

Pete Mack, Withdrawals Cash

312

1 0 0 0 00

111

1 0 0 0 00

Cash withdrawal 20

Accounts Receivable

112

Plowing Fees

411

5 0 0 0 00 5 0 0 0 00

Fees earned on account - North East Co. 26

Salaries Expense Cash

511 111

1 8 0 0 00 1 8 0 0 00

Paid salaries

5-15

PROBLEM 5A-3., Cont. PETE’S PLOWING GENERAL JOURNAL Date 2015 Jan.

Account Title and Description

Accounts Payable Cash

Page 2 Post Ref.

Dr.

211

3 6 0 0 00

111

Cr.

3 6 0 0 00

Paid Ling Corp. 1/2 amount owed 30

Advertising Expense

512

Accounts Payable

211

9 0 0 00 9 0 0 00

Advertising bill received 31

Telephone Expense

513

Cash

2 1 0 00

111

2 1 0 00

Paid telephone bill Adjusting Entries 31

Snow Supplies Expense

515

Snow Supplies

3 0 0 00

115

3 0 0 00

Supplies used 31

Rent Expense

514

Prepaid Rent

6 0 0 00

114

6 0 0 00

Rent expired 31

Depreciation Expense, Office Equipment Accumulated Depreciation, Office Equipment

516

1 2 0 00

122

1 2 0 00

Estimated depreciation 31

Depreciation Expense, Snow Equipment Accumulated Depreciation, Snow Equipment

517

1 0 0 00

124

1 0 0 00

Estimated depreciation 31

Salaries Expense

511

Accrued Salaries

1 9 0 00

212

1 9 0 00

Salaries to be paid Closing Entries 31

Plowing Fees Income Summary To close income account

5-16

411 2 0 0 0 0 0 0 313

20 0 0 0 00

PROBLEM 5A-3., Cont. PETE’S PLOWING GENERAL JOURNAL Date 2015 Jan.

Account Title and Description Income Summary

Page 3 Post Ref.

Dr.

313

4 2 2 0 00

Cr.

Salaries Expense

511

1 9 9 0 00

Advertising Expense

512

9 0 0 00

Telephone Expense

513

2 1 0 00

Rent Expense

514

6 0 0 00

Snow Supplies Expense

515

3 0 0 00

Depreciation Expense, Office Equipment

516

1 2 0 00

Depreciation Expense, Snow Equipment

517

1 0 0 00

To close expense accounts 31

Income Summary Pete Mack, Capital

313 1 5 7 8 0 0 0 311

15 7 8 0 00

Net income closed to capital 31

Pete Mack, Capital Pete Mack, Withdrawals

311 312

1 0 0 0 00 1 0 0 0 00

Close withdrawals into capital

5-17

PROBLEM 5A-3., Cont. PETE’S PLOWING GENERAL LEDGER NAME: CASH Date 2015 Jan.

ACCOUNT NO. DR CR

Balance

7 0 0 0 00

2 0 0 0 00

5 0 0 0 00

7 0 0 00

4 3 0 0 00

19 3 0 0 00

1 0 0 0 00

18 3 0 0 00

GJ1

1 8 0 0 00

16 5 0 0 00

GJ2

3 6 0 0 00

12 9 0 0 00

GJ2

2 1 0 00

12 6 9 0 00

Post Ref.

Debit

GJ1

7 0 0 0 00

GJ1

Explanation

Date 2015

Explanation

ACCOUNT NO. Post Ref.

Debit

GJ1

5 0 0 0 00

NAME: PREPAID RENT Date 2015 Jan.

3 Adjusting

Post Ref.

Debit

GJ1

2 0 0 0 00

Jan.

Explanation 6

5-18

Adjusting

Credit

6 0 0 00

GJ2

NAME: SNOW SUPPLIES Date 2015

Credit

Balance

5 0 0 0 00

Debit

GJ1

7 0 0 00

GJ2

Credit

3 0 0 00

114

DR CR

Balance

2 0 0 0 00

1 4 0 0 00

ACCOUNT NO. Post Ref.

112

DR CR

ACCOUNT NO. Explanation

Credit

15 0 0 0 00

NAME: ACCOUNTS RECEIVABLE

Jan.

111

115

DR CR

Balance

7 0 0 00

4 0 0 00

PROBLEM 5A-3., Cont. PETE’S PLOWING GENERAL LEDGER NAME: OFFICE EQUIPMENT Date 2015 Jan.

Explanation 5

ACCOUNT NO. Post Ref.

Debit

GJ1

7 2 0 0 00

NAME: ACCUMULATED DEPRECIATION, OFFICE EQUIPMENT Date 2015 Jan.

NAME:

Explanation Adjusting

Debit

GJ2

Explanation

Jan.

Explanation Adjusting

Post Ref.

Debit

GJ2

6 0 0 0 00

Post Ref.

Debit

GJ2

Jan.

Explanation

7 2 0 0 00

122

Credit

DR CR

Balance

1 2 0 00

Credit

Balance

6 0 0 0 00

GJ1

GJ2

Debit

124

Credit

DR CR

Balance

1 0 0 00

ACCOUNT NO. Post Ref.

123

DR CR

ACCOUNT NO.

NAME: ACCOUNTS PAYABLE Date 2015

Balance

ACCOUNT NO.

NAME: ACCUMULATED DEPRECIATION, SNOW EQUIPMENT Date 2015

DR CR

ACCOUNT NO.

SNOW EQUIPMENT

Date 2015 Jan.

Post Ref.

Credit

121

211

Credit

DR CR

Balance

7 2 0 0 00

3 6 0 0 00

4 5 0 0 00

3 6 0 0 00 9 0 0 00

5-19

PROBLEM 5A-3., Cont. PETE’S PLOWING GENERAL LEDGER NAME: ACCRUED SALARIES Date 2015 Jan.

Explanation

Adjusting

ACCOUNT NO. Post Ref.

Debit

GJ2

NAME: PETE MACK, CAPITAL Date 2015 Jan.

Explanation 3

13 0 0 0 00

15 7 8 0 00

28 7 8 0 0 0

27 7 8 0 00

GJ3

1 0 0 0 00

ACCOUNT NO. Post Ref.

Debit

GJ1

1 0 0 0 00

GJ3

NAME: INCOME SUMMARY Date 2015 Jan.

Explanation

Post Ref.

Debit

Closing

GJ2

Closing

GJ3

4 2 2 0 00

Closing

GJ3

15 7 8 0 00

NAME: PLOWING FEES Date 2015 Jan.

Post Ref.

Debit

312

DR CR

Balance

1 0 0 0 00

ACCOUNT NO.

313

Credit

DR CR

Balance

20 0 0 0 00

21 0 0 0 00

15 7 8 0 00

411

Credit

DR CR

Balance

GJ1

15 0 0 0 00

GJ1

5 0 0 0 00

20 0 0 0 00

5-20

Credit

ACCOUNT NO. Explanation

311

Closing

1 9 0 00

13 0 0 0 00

GJ1 GJ3

1 9 0 00

Balance

Debit

NAME: PETE MACK, WITHDRAWALS

Jan.

Balance

DR CR

Closing

Explanation

DR CR

Credit

Date 2015

Credit

ACCOUNT NO. Post Ref.

212

Closing

GJ2

20 0 0 0 00

PROBLEM 5A-3., Cont. PETE’S PLOWING GENERAL LEDGER NAME: SALARIES EXPENSE Date 2015 Jan.

Explanation

ACCOUNT NO. Post Ref.

Debit

GJ1

Adjusting

GJ2

Closing

GJ3

DR CR

Balance

1 8 0 0 00

1 9 0 00

1 9 9 0 00

NAME: ADVERTISING EXPENSE Date 2015 Jan.

Explanation

30 31

Closing

Post Ref.

Debit

GJ2

9 0 0 00

GJ3

NAME: TELEPHONE EXPENSE Date 2015 Jan.

Explanation

31 31

Closing

Post Ref.

Debit

GJ2

2 1 0 00

GJ3

NAME: RENT EXPENSE Date 2015 Jan.

Explanation

Post Ref.

Debit 6 0 0 00

Adjusting

GJ2

Closing

GJ3

NAME: SNOW SUPPLIES EXPENSE Date 2015 Jan.

Explanation

Post Ref.

Debit 3 0 0 00

Adjusting

GJ2

Closing

GJ3

511

Credit

1 9 9 0 00

ACCOUNT NO.

512

Credit

DR CR

Balance

9 0 0 00

ACCOUNT NO.

513

Credit

DR CR

Balance

2 1 0 00

ACCOUNT NO.

514

Credit

DR CR

Balance

6 0 0 00

ACCOUNT NO.

515

Credit

DR CR

Balance

3 0 0 00

5-21

PROBLEM 5A-3., Cont. PETE’S PLOWING GENERAL LEDGER NAME: DEPRECIATION EXPENSE, OFFICE EQUIPMENT Date 2015 Jan.

Explanation

ACCOUNT NO.

Post Ref.

Debit 1 2 0 00

Adjusting

GJ2

Closing

GJ3

NAME: DEPRECIATION EXPENSE, SNOW EQUIPMENT Date 2015 Jan.

Explanation

Post Ref.

Debit 1 0 0 00

Adjusting

GJ2

Closing

GJ3

Credit

516

DR CR

Balance

1 2 0 00

ACCOUNT NO.

517

Credit

DR CR

Balance

1 0 0 00

PETE’S PLOWING INCOME STATEMENT FOR THE MONTH ENDED JANUARY 31, 2015 Revenue: Plowing Fees

$2 0 0 0 0 0 0

Operating Expenses: Salaries Expense

$1 9 9 0 0 0

Advertising Expense

9 0 0 00

Telephone Expense

2 1 0 00

Snow Supplies Expense

3 0 0 00

Rent Expense

6 0 0 00

Depreciation Expense, Office Equipment

1 2 0 00

Depreciation Expense, Snow Equipment

1 0 0 00

Total Operating Expenses

Net Income

5-22

4 2 2 0 00 $1 5 7 8 0 0 0

PROBLEM 5A-3., Cont. PETE’S PLOWING STATEMENT OF OWNER’S EQUITY FOR THE MONTH ENDED JANUARY 31, 2015

Pete Mack, Capital, 1/1/15 Net Income for January Less Withdrawals Increase in Capital Pete Mack, Capital, 1/31/15

$1 3 0 0 0 0 0 $1 5 7 8 0 0 0 1 0 0 0 00 14 7 8 0 00 $2 7 7 8 0 0 0

5-23

PROBLEM 5A-3., Cont. PETE’S PLOWING WORKSHEET FOR THE MONTH ENDED JANUARY 31, 2015 Account Titles Cash

Trial Balance D r.

C r.

Adjustments D r.

C r.

12 6 9 0 00

Accounts Receivable

5 0 0 0 00

Prepaid Rent

2 0 0 0 00

(B) 6 0 0 0 0

Snow Supplies

7 0 0 00

(A) 3 0 0 0 0

Office Equipment

7 2 0 0 00

Snow Equipment

6 0 0 0 00

Accounts Payable

4 5 0 0 00

Pete Mack, Capital

13 0 0 0 00

Pete Mack, Withdrawals

1 0 0 0 00

Plowing Fees

20 0 0 0 00

Salaries Expense

1 8 0 0 00

Advertising Expense

9 0 0 00

Telephone Expense

2 1 0 00

(E) 1 9 0 0 0

37 5 0 0 00 37 5 0 0 00

Snow Supplies Expense

(A) 3 0 0 0 0

Rent Expense

(B) 6 0 0 0 0

Depn. Exp., Office Equipment

Acc. Depn., Office Equipment Depn. Exp., Snow Equipment

Acc. Depn., Snow Equipment

(D) 1 0 0 0 0

Accrued Salaries

(E) 1 9 0 0 0 1 3 1 0 00

Net Income

5-24

1 3 1 0 00

PROBLEM 5A-3., Cont. PETE’S PLOWING WORKSHEET FOR THE MONTH ENDED JANUARY 31, 2015 Adjusted Trial Balance

Income Statement

D r.

C r.

Balance Sheet D r.

12 6 9 0 00

5 0 0 0 00

1 4 0 0 00

4 0 0 00

7 2 0 0 00

6 0 0 0 00

C r.

4 5 0 0 00

13 0 0 0 00

1 0 0 0 00

1 0 0 0 00 20 0 0 0 00

20 0 0 0 00

1 9 9 0 00

9 0 0 00

2 1 0 00

3 0 0 00

6 0 0 00

1 2 0 00

1 2 0 00 1 2 0 00

1 0 0 00

1 2 0 00 1 0 0 00

1 0 0 00

1 9 0 00

37 9 1 0 00 37 9 1 0 00

4 2 2 0 00 20 0 0 0 00 33 6 9 0 00 17 9 1 0 00 15 7 8 0 00

15 7 8 0 00

20 0 0 0 00 20 0 0 0 00 33 6 9 0 00 33 6 9 0 00

5-25

5-26

1 0 00

Less Accumulated Depreciation

Total Assets

$7 2 0 0 0 0 1 2 0 00 6 0 0 0 00

ASSETS

Assets Cash Accounts Receivable Prepaid Rent Snow Equipment Office Equipment Less Accumulated Depreciation Snow Equipment

PROBLEM 5A-3., Cont.

5 9 0 0 00 $3 2 4 7 0 0 0

7 0 8 0 00

$1 2 6 9 0 0 0 5 0 0 0 00 1 4 0 0 00 4 0 0 00

Total Liabilities and Owner’s Equity

Owner’s Equity Pete Mack, Capital

Liabilities Accounts Payable Accrued Salaries Total Payable

JANUARY 31, 2015

BALANCE SHEET

PETE’S PLOWING

$4 5 0 0 0 0 1 9 0 00

$3 2 4 7 0 0 0

27 7 8 0 00

$4 6 9 0 0 0

LIABILITIES & OWNER’S EQUITY

PROBLEM 5A-3., Cont. PETE’S PLOWING POST CLOSING TRIAL BALANCE JANUARY 31, 2015 Cash

12 6 9 0 00

Accounts Receivable

5 0 0 0 00

Prepaid Rent

1 4 0 0 00

Snow Supplies

4 0 0 00

Office Equipment

7 2 0 0 00

Accumulated Depreciation, Office Equipment Snow Equipment Accumulated Depreciation, Snow Equipment

1 2 0 00 6 0 0 0 00 1 0 0 00

Accounts Payable

4 5 0 0 00

Accrued Salaries

1 9 0 00

Pete Mack, Capital Totals

27 7 8 0 00 32 6 9 0 00 32 6 9 0 00

5-27

PROBLEM 5B-1. DEBBIE’S DANCE STUDIO WORKSHEET FOR THE MONTH ENDED JUNE 30, 2017 Account Titles Cash

Trial Balance D r.

Adjustments

C r.

D r.

C r.

10 1 5 0 00

Accounts Receivable

5 0 0 0 00

Prepaid Insurance

7 0 0 00

(A) 1 0 0 0 0

Dance Supplies

3 0 0 00

(B) 2 8 0 0 0

Dance Equipment

12 9 5 0 00

Acc. Depn., Dance Equipment

4 0 0 0 00

Accounts Payable

5 7 5 0 00

D. Dee, Capital

15 1 5 0 00

D. Dee, Withdrawals

4 0 0 00

Dance Fees Earned

5 2 0 0 00

Salaries Expense

4 5 0 00

Telephone Expense

7 0 00

Advertising Expense

8 0 00

(D) 4 9 0 0 0

30 1 0 0 00 30 1 0 0 00

Insurance Expense

(A) 1 0 0 0 0

Dance Supplies Expense

(B) 2 8 0 0 0

Depn. Exp., Dance Equipment

Accrued Salaries

(D) 4 9 0 0 0 1

Net Income

5-28

0 7 0 00

PROBLEM 5B-1., Cont. DEBBIE’S DANCE STUDIO WORKSHEET FOR THE MONTH ENDED JUNE 30, 2017 Adjusted Trial Balance D r.

C r.

Income Statement D r.

C r.

Balance Sheet D r.

10 1 5 0 00

5 0 0 0 00

6 0 0 00

2 0 00

12 9 5 0 00

C r.

4 2 0 0 00

5 7 5 0 00

15 1 5 0 00

4 0 0 00

4 0 0 00 5 2 0 0 00

5 2 0 0 00

9 4 0 00

7 0 00

8 0 00

1 0 0 00

2 8 0 00

2 0 0 00

2 0 0 00 4 9 0 00

30 7 9 0 00 30 7 9 0 00

4 9 0 00 1 6 7 0 00

5 2 0 0 00 29 1 2 0 00 25 5 9 0 00

3 5 3 0 00

5 2 0 0 00

5 2 0 0 00 29 1 2 0 00 29 1 2 0 00

5-29

PROBLEM 5B-1., Cont. DEBBIE’S DANCE STUDIO GENERAL JOURNAL Date 2017

Account Title and Description

Page 3 Post Ref.

Dr.

Cr.

Adjusting Entries June 30

Insurance Expense

1 0 0 00

Prepaid Insurance

1 0 0 00

Insurance expired 30

Dance Supplies Expense

2 8 0 00

Dance Supplies

2 8 0 00

Supplies used 30

Depreciation Expense, Dance Equipment

2 0 0 00

Accumulated Depreciation, Dance Equipment

2 0 0 00

Estimated depreciation 30

Salaries Expense

4 9 0 00

Accrued Salaries

4 9 0 00

Salaries to be paid Closing Entries 30

Dance Fees Earned

5 2 0 0 00

Income Summary

5 2 0 0 00

To close income account 30

Income Summary

1 6 7 0 00

Salaries Expense

9 4 0 00

Telephone Expense

7 0 00

Advertising Expense

8 0 00

Insurance Expense

1 0 0 00

Dance Supplies Expense

2 8 0 00

Depreciation Expense, Dance Equipment

2 0 0 00

To close expense accounts 30

Income Summary

3 5 3 0 00

D. Dee, Capital

3 5 3 0 00

Net income closed to capital 30

D. Dee, Capital D. Dee, Withdrawals Close withdrawals into capital

5-30

4 0 0 00 4 0 0 00

PROBLEM 5B-2. POTTER CLEANING SERVICE GENERAL JOURNAL Date 2016

Account Title and Description

Page 2 Post Ref.

Dr.

Cr.

Adjusting Entries Mar. 31

Insurance Expense

517

Prepaid Insurance

2 0 0 00

114

2 0 0 00

Insurance expired 31

Cleaning Supplies Expense Cleaning Supplies

518

6 0 0 00

115

6 0 0 00

Supplies used 31

Depreciation Expense, Auto Accumulated Depreciation, Auto

519

1 5 0 00

122

1 5 0 00

Estimated depreciation 31

Salaries Expense

513

Accrued Salaries

1 7 5 00

213

1 7 5 00

Salaries to be paid Closing Entries 31

Cleaning Fees Income Summary

412

3 7 0 0 00

314

3 7 0 0 00

To close income account 31

Income Summary

314

3 9 4 5 00

Salaries Expense

513

2 1 7 5 00

Telephone Expense

514

2 8 4 00

Advertising Expense

515

2 7 6 00

Gas Expense

516

2 6 0 00

Insurance Expense

517

2 0 0 00

Cleaning Supplies Expense

518

6 0 0 00

Depreciation Expense, Auto

519

1 5 0 00

To close expense accounts 31

B. Potter, Capital Income Summary

312

2 4 5 00

314

2 4 5 00

Close loss to capital 31

B. Potter, Capital B. Potter, Withdrawals

312 313

6 0 0 00 6 0 0 00

Close withdrawals into capital

5-31

PROBLEM 5B-2., Cont. POTTER CLEANING SERVICE GENERAL LEDGER NAME: CASH Date 2016

ACCOUNT NO. Explanation

Mar. 31

Post Ref.

Debit

NAME: PREPAID INSURANCE Explanation

Post Ref.

Balance

✓

Adjusting

GJ2

Debit

Explanation

Post Ref.

Balance

✓

Adjusting

GJ2

Debit

Post Ref.

Debit

Explanation

Post Ref.

Balance

✓

Adjusting

GJ2

Debit

1 5 0 00

NAME: ACCOUNTS PAYABLE Explanation Balance

Credit

Balance

3 5 0 00

1 5 0 00

✓

Debit

Credit

115

DR CR

Balance

8 0 0 00

2 0 0 00

121

DR CR

Balance

1 2 2 0 00

122

DR CR

Balance

6 6 0 00

8 1 0 00

ACCOUNT NO. Post Ref.

114

DR CR

ACCOUNT NO.

Mar. 31

5-32

Credit

✓

Balance

NAME: ACCUMULATED DEPRECIATION, AUTO

Mar. 31

1 7 2 4 00

ACCOUNT NO. Explanation

Date 2016

Credit

6 0 0 00

NAME: AUTO

Date 2016

ACCOUNT NO.

Mar. 31

Credit

2 0 0 00

NAME: CLEANING SUPPLIES

Date 2016

Balance

ACCOUNT NO.

Mar. 31

Date 2016

DR CR

✓

Balance

Date 2016

Credit

112

212

DR CR

Balance

6 7 4 00

PROBLEM 5B-2., Cont. POTTER CLEANING SERVICE GENERAL LEDGER NAME: ACCRUED SALARIES Date 2016 Mar. 31

Explanation Adjusting

ACCOUNT NO. Post Ref.

Debit

GJ2

NAME: B. POTTER, CAPITAL Date 2016

Explanation

Credit

DR CR

Balance

1 7 5 00

ACCOUNT NO. Post Ref.

Debit

213

Credit

312

DR CR

Balance

2 4 8 0 00

Mar. 31

Balance

✓

Closing

GJ2

2 4 5 00

2 2 3 5 00

Closing

GJ2

6 0 0 00

1 6 3 5 00

NAME: B. POTTER, WITHDRAWALS Date 2016

Explanation

ACCOUNT NO. Post Ref.

Mar. 31

Balance

✓

Closing

GJ2

Debit

NAME: INCOME SUMMARY Date 2016

Explanation

Post Ref.

Mar. 31

Closing

GJ2

Closing

GJ2

Closing

GJ2

Debit

Explanation

Post Ref.

Mar. 31

Balance

✓

Closing

GJ2

Explanation

6 0 0 00

ACCOUNT NO.

314

Credit

DR CR

Balance

3 7 0 0 00

2 4 5 00

ACCOUNT NO.

412

Credit

DR CR

Balance

3 7 0 0 00

NAME: SALARIES EXPENSE Date 2016

Balance

3 9 4 5 00

Debit

DR CR

6 0 0 00

3 7 0 0 00

NAME: CLEANING FEES Date 2016

Credit

ACCOUNT NO. Post Ref.

Mar. 31

Balance

✓

Adjusting

GJ2

Closing

GJ2

313

Debit

Credit

1 7 5 00 2 1 7 5 00

513

DR CR

Balance

2 0 0 0 00

2 1 7 5 00

5-33

PROBLEM 5B-2., Cont. POTTER CLEANING SERVICE GENERAL LEDGER NAME: TELEPHONE EXPENSE Date 2016

Explanation

ACCOUNT NO. Post Ref.

Mar. 31

Balance

✓

Closing

GJ2

Debit

NAME: ADVERTISING EXPENSE Date 2016

Explanation

Post Ref.

Mar. 31

Balance

✓

Closing

GJ2

Debit

NAME: GAS EXPENSE Date 2016

Explanation

Post Ref.

Mar. 31

Balance

✓

Closing

GJ2

Debit

NAME: INSURANCE EXPENSE Date 2016

Post Ref.

Debit

Adjusting

GJ2

2 0 0 00

Closing

GJ2

Explanation

Mar. 31 31

NAME: CLEANING SUPPLIES EXPENSE Date 2016

Post Ref.

Debit

Adjusting

GJ2

6 0 0 00

Closing

GJ2

Explanation

Mar. 31 31

NAME: DEPRECIATION EXPENSE, AUTO Date 2016 Mar. 31 31

5-34

Post Ref.

Debit

Adjusting

GJ2

1 5 0 00

Closing

GJ2

Explanation

Credit

514

DR CR

Balance

2 8 4 00

ACCOUNT NO.

515

Credit

DR CR

Balance

2 7 6 00

ACCOUNT NO.

516

Credit

DR CR

Balance

2 6 0 00

ACCOUNT NO.

517

Credit

DR CR

Balance

2 0 0 00

ACCOUNT NO.

518

Credit

DR CR

Balance

6 0 0 00

ACCOUNT NO.

519

Credit

1 5 0 00

DR CR

Balance

1 5 0 00

PROBLEM 5B-2., Cont. POTTER CLEANING SERVICE POST-CLOSING TRIAL BALANCE MARCH 31, 2016 Dr. Cash

1 7 2 0 00

Prepaid Insurance

1 5 0 00

Cleaning Supplies

2 0 0 00

Auto

Cr.

1 2 2 0 00

Accumulated Depreciation, Auto

8 1 0 00

Accounts Payable

6 7 4 00

Accrued Salaries

1 7 5 00

B. Potter, Capital

2 6 3 5 00

Totals

3 2 9 4 00

5-35

PROBLEM 5B-3., Cont. PETE’S PLOWING GENERAL JOURNAL Date 2015 Jan.

Post Ref.

Dr.

Cash

111

8 0 0 0 00

Snow Equipment

123

9 6 0 0 00

Account Title and Description

Page 1

Pete Mack, Capital

311

Cr.

17 6 0 0 00

Owner investment 3

Prepaid Rent

114

Cash

111

3 0 0 0 00 3 0 0 0 00

Rent paid in advance 5

Office Equipment Accounts Payable

121

6 0 0 0 00

211

6 0 0 0 00

Bought equipment from Ling Corp. on account 6

Snow Supplies Cash

115

3 5 0 00

111

3 5 0 00

Snow supplies for cash 9

Cash Plowing Fees

111

7 0 0 0 00

411

7 0 0 0 00

Cash fees earned 12

Pete Mack, Withdrawals Cash

312

7 0 00

111

7 0 00

Cash withdrawal for personal use 20

Accounts Receivable

112

Plowing Fees

411

6 5 0 0 00 6 5 0 0 00

Fees earned on account - Eastern Freight Co. 26

Advertising Expense

512

Accounts Payable

211

Advertising bill incurred

5-36

3 5 0 00 3 5 0 00

PROBLEM 5B-3., Cont. PETE’S PLOWING GENERAL JOURNAL Date 2015 Jan.

Account Title and Description 26

Salaries Expense Cash

Page 2 Post Ref.

Dr.

511

1 8 0 0 00

111

Cr.

1 8 0 0 00

Paid salaries 30

Accounts Payable

211

Cash

3 0 0 0 00

111

3 0 0 0 00

Paid Russell 1/2 amount owed 31

Telephone Expense

513

Cash

1 6 5 00

111

1 6 5 00

Paid telephone bill Adjusting Entries 31

Snow Supplies Expense

515

Snow Supplies

1 5 0 00

115

1 5 0 00

Supplies used 31

Rent Expense

514

Prepaid Rent

6 0 0 00

114

6 0 0 00

Rent expired 31

Depreciation Expense, Office Equipment Accumulated Depreciation, Office Equipment

516

1 2 5 00

122

1 2 5 00

Estimated depreciation 31

Depreciation Expense, Snow Equipment Accumulated Depreciation, Snow Equipment

517

4 0 0 00

124

4 0 0 00

Estimated depreciation 31

Salaries Expense

511

Accrued Salaries

3 0 0 00

212

3 0 0 00

Salaries to be paid Closing Entries 31

Plowing Fees Income Summary

411 1 3 5 0 0 0 0 313

13 5 0 0 00

To close income account

5-37

PROBLEM 5B-3., Cont. PETE’S PLOWING GENERAL JOURNAL Date 2015 Jan.

Account Title and Description

Income Summary

Page 3 Post Ref.

Dr.

313

3 8 9 0 00

Cr.

Salaries Expense

511

2 1 0 0 00

Advertising Expense

512

3 5 0 00

Telephone Expense

513

1 6 5 00

Rent

514

6 0 0 00

Snow Supplies Expense

515

1 5 0 00

Depreciation Expense, Office Equipment

516

1 2 5 00

Depreciation Expense, Snow Equipment

517

4 0 0 00

To close expense accounts 31

Income Summary Pete Mack, Capital

313

9 6 1 0 00

311

9 6 1 0 00

Net income closed to capital 31

Pete Mack, Capital Pete Mack, Withdrawals Close withdrawals into capital

5-38

311 312

7 0 00 7 0 00

PROBLEM 5B-3., Cont. PETE’S PLOWING GENERAL LEDGER NAME: CASH Date 2015 Jan.

ACCOUNT NO. Explanation

Balance

Post Ref.

Debit

GJ1

8 0 0 0 00

Balance

8 0 0 0 00

GJ1

3 0 0 0 00

5 0 0 0 00

GJ1

3 5 0 00

4 6 5 0 00

GJ1

11 6 5 0 00

GJ1

7 0 00

11 5 8 0 00

GJ2

1 8 0 0 00

9 7 8 0 00

GJ2

3 0 0 0 00

6 7 8 0 00

GJ2

1 6 5 00

6 6 1 5 00

Date 2015

7 0 0 0 00

Explanation

ACCOUNT NO. Post Ref.

Debit

GJ1

6 5 0 0 00

NAME: PREPAID RENT Date 2015 Jan.

3 Adjusting

Post Ref.

Debit

GJ1

3 0 0 0 00

Explanation 6

Adjusting

Credit

6 0 0 00

GJ2

NAME: SNOW SUPPLIES Date 2015

Credit

Balance

6 5 0 0 00

Debit

GJ1

3 5 0 00

GJ2

Credit

1 5 0 00

114

DR CR

Balance

2 0 0 0 00

2 4 0 0 00

ACCOUNT NO. Post Ref.

112

DR CR

ACCOUNT NO. Explanation

Jan.

DR CR

NAME: ACCOUNTS RECEIVABLE

Jan.

Credit

111

115

DR CR

Balance

3 5 0 00

2 0 0 00

5-39

PROBLEM 5B-3., Cont. PETE’S PLOWING GENERAL LEDGER NAME: OFFICE EQUIPMENT Date 2015 Jan.

Explanation 5

ACCOUNT NO. Post Ref.

Debit

GJ1

6 0 0 0 00

NAME: ACCUMULATED DEPRECIATION, OFFICE EQUIPMENT Date 2015 Jan.

Explanation

Adjusting

Post Ref.

Debit

GJ2

NAME: SNOW EQUIPMENT Date 2015 Jan.

Explanation

Jan.

Explanation

Adjusting

Post Ref.

Debit

GJ1

9 6 0 0 00

Post Ref.

Debit

GJ2

Jan.

5-40

Explanation

Balance

6 0 0 0 00

ACCOUNT NO. DR CR

Balance

1 2 5 00

Credit

Debit

123

DR CR

Balance

9 6 0 0 00

124

Credit

DR CR

Balance

4 0 0 00

ACCOUNT NO. Post Ref.

122

Credit

ACCOUNT NO.

NAME: ACCOUNTS PAYABLE Date 2015

DR CR

ACCOUNT NO.

NAME: ACCUMULATED DEPRECIATION, SNOW EQUIPMENT Date 2015

Credit

121

211

Credit

DR CR

Balance

GJ1

6 0 0 0 00

GJ1

3 5 0 00

6 3 5 0 00

GJ2

3 3 5 0 00

3 0 0 0 00

PROBLEM 5B-3., Cont. PETE’S PLOWING GENERAL LEDGER NAME: ACCRUED SALARIES Date 2015 Jan.

Explanation

Adjusting

ACCOUNT NO. Post Ref.

Debit

GJ2

NAME: PETE MACK, CAPITAL Date 2015 Jan.

Explanation 3

17 6 0 0 00

9 6 1 0 00

27 2 1 0 00

27 1 4 0 00

GJ3

7 0 00

ACCOUNT NO. Post Ref. GJ1

Debit

GJ3

Jan.

Explanation

Post Ref.

Debit

Closing

GJ2

Closing

GJ3

3 8 9 0 00

Closing

GJ3

9 6 1 0 00

NAME: PLOWING FEES Date 2015 Jan.

Credit

7 0 00

NAME: INCOME SUMMARY Date 2015

DR CR

Post Ref.

Debit

312 Balance 7 0 00

7 0 00

ACCOUNT NO.

313

Credit

DR CR

Balance

13 5 0 0 00

9 6 1 0 00

ACCOUNT NO. Explanation

311

Closing

3 0 0 00

17 6 0 0 00

GJ1 GJ3

3 0 0 00

Balance

Debit

NAME: PETE MACK, WITHDRAWALS

Jan.

Balance

DR CR

Closing

Explanation

DR CR

Credit

Date 2015

Credit

ACCOUNT NO. Post Ref.

212

411

Credit

DR CR

Balance

GJ1

7 0 0 00

7 0 0 0 00

GJ1

6 5 0 0 00

13 5 0 0 00

Closing

GJ2

13 5 0 0 00

5-41

PROBLEM 5B-3., Cont. PETE’S PLOWING GENERAL LEDGER NAME: SALARIES EXPENSE Date 2015 Jan.

Explanation

ACCOUNT NO. Post Ref.

Debit

GJ2

Adjusting

GJ2

Closing

GJ3

DR CR

Balance

1 8 0 0 00

3 0 0 00

2 1 0 0 00

NAME: ADVERTISING EXPENSE Date 2015 Jan.

Explanation

23 31

Closing

Post Ref.

Debit

GJ1

3 5 0 00

Jan.

Explanation

31 31

Closing

Post Ref.

Debit

GJ2

1 6 5 00

GJ3

Jan.

Explanation

Post Ref.

Debit 6 0 0 00

Adjusting

GJ2

Closing

GJ3

NAME: SNOW SUPPLIES EXPENSE Date 2015 Jan.

5-42

Explanation

Post Ref.

Debit 1 5 0 00

Adjusting

GJ2

Closing

GJ3

2 1 0 0 00

ACCOUNT NO.

512

Credit

DR CR

Balance

3 5 0 00

ACCOUNT NO.

NAME: RENT EXPENSE Date 2015

Credit

3 5 0 00

GJ3

NAME: TELEPHONE EXPENSE Date 2015

511

Credit

513

DR CR

Balance

1 6 5 00

ACCOUNT NO.

514

Credit

DR CR

Balance

6 0 0 00

ACCOUNT NO.

515

Credit

1 5 0 00

DR CR

Balance

1 5 0 00

PROBLEM 5B-3., Cont. PETE’S PLOWING GENERAL LEDGER

NAME:

DEPRECIATION EXPENSE, OFFICE EQUIPMENT

Date 2015 Jan.

Explanation

Debit 1 2 5 00

Adjusting

GJ2

Closing

GJ3

Explanation

Debit 4 0 0 00

Adjusting

GJ2

Closing

GJ3

DR CR

Balance

1 2 5 00

ACCOUNT NO.

Post Ref.

Credit

516

1 2 5 00

DEPRECIATION EXPENSE, SNOW EQUIPMENT

Date 2015 Jan.

Post Ref.

NAME:

ACCOUNT NO.

Credit

517

DR CR

Balance

4 0 0 00

5-43

PROBLEM 5B-3., Cont. PETE’S PLOWING INCOME STATEMENT FOR THE MONTH ENDED JANUARY 31, 2015 Revenue: Plowing Fees

$1 3 5 0 0 0 0

Operating Expenses: Salaries Expense

$2 1 0 0 0 0

Advertising Expense

3 5 0 00

Telephone Expense

1 6 5 00

Rent Expense

6 0 0 00

Snow Supplies Expense

1 5 0 00

Depreciation Expense, Office Equipment

1 2 5 00

Depreciation Expense, Snow Equipment

4 0 0 00

Total Operating Expenses

3 8 9 0 00 $9 6 1 0 0 0

Net Income

PETE’S PLOWING STATEMENT OF OWNER’S EQUITY FOR THE MONTH ENDED JANUARY 31, 2015

Pete Mack, Capital, 1/1/15 Net Income for January Less Withdrawals Increase in Capital Pete Mack, Capital, 1/31/15

5-44

$1 7 6 0 0 0 0 $9 6 1 0 0 0 7 0 00 9 5 4 0 00 $2 7 1 4 0 0 0

PROBLEM 5B-3. PETE’S PLOWING WORKSHEET FOR THE MONTH ENDED JANUARY 31, 2015 Account Titles

Trial Balance D r.

C r.

Adjustments D r.

C r.

Cash

6 6 1 5 00

Accounts Receivable

6 5 0 0 00

Prepaid Rent

3 0 0 0 00

(B) 6 0 0 0 0

Snow Supplies

3 5 0 00

(A) 1 5 0 0 0

Office Equipment

6 0 0 0 00

Snow Equipment

9 6 0 0 00

Accounts Payable

3 3 5 0 00

Pete Mack, Capital

17 6 0 0 00

Pete Mack, Withdrawals

7 0 00

Plowing Fees

13 5 0 0 00

Salaries Expense

1 8 0 0 00

Advertising Expense

3 5 0 00

Telephone Expense

1 6 5 00

(E) 3 0 0 0 0

34 4 5 0 00 34 4 5 0 00

Snow Supplies Expense

(A) 1 5 0 0 0

Rent Expense

(B) 6 0 0 0 0

Depn. Exp., Office Equipment

Acc. Depn., Office Equipment Depn. Exp., Snow Equipment

Acc. Depn., Snow Equipment

(D) 4 0 0 0 0

Accrued Salaries

(E) 3 0 0 0 0 1 5 7 5 00

1 5 7 5 00

Net Income

5-45

PROBLEM 5B-3., Cont. PETE’S PLOWING WORKSHEET FOR THE MONTH ENDED JANUARY 31, 2015 Adjusted Trial Balance

Income Statement

D r.

C r.

Balance Sheet D r.

6 6 1 5 00

6 5 0 0 00

2 4 0 0 00

2 0 0 00

6 0 0 0 00

9 6 0 0 00

C r.

3 3 5 0 00

17 6 0 0 00

7 0 00

7 0 00 13 5 0 0 00

13 5 0 0 00

2 1 0 0 00

3 5 0 00

1 6 5 00

1 5 0 00

6 0 0 00

1 2 5 00

1 2 5 00 1 2 5 00

4 0 0 00

1 2 5 00 4 0 0 00

4 0 0 00

3 0 0 00

35 2 7 5 00 35 2 7 5 00

3 8 9 0 00 13 5 0 0 00 31 3 8 5 00 21 7 7 5 00 9 6 1 0 00

9 6 1 0 00

13 5 0 0 00 13 5 0 0 00 31 3 8 5 00 31 3 8 5 00

5-46

5-47

4 0 0 00

Less Accumulated Depreciation

Total Assets

$6 0 0 0 0 0 1 2 5 00 9 6 0 0 00

ASSETS

Assets Cash Accounts Receivable Prepaid Rent Snow Equipment Office Equipment Less Accumulated Depreciation Snow Equipment

PROBLEM 5B-3., Cont.

$3 0 7 9 0 0 0

9 2 0 0 00

5 8 7 5 00

$9 6 1 5 0 0 6 5 0 0 00 2 4 0 0 00 2 0 0 00

Total Liabilities and Owner’s Equity

Owner’s Equity Pete Mack, Capital

Liabilities Accounts Payable Accrued Salaries Total Payable

JANUARY 31, 2015

BALANCE SHEET

PETE’S PLOWING

$3 3 5 0 0 0 3 0 0 00

$3 0 7 9 0 0 0

27 1 4 0 00

$3 6 5 0 0 0

LIABILITIES & OWNER’S EQUITY

PROBLEM 5B-3., Cont. PETE’S PLOWING POST CLOSING TRIAL BALANCE JANUARY 31, 2015 Cash

6 6 1 5 00

Accounts Receivable

6 5 0 0 00

Prepaid Rent

2 4 0 0 00

Snow Supplies

2 0 0 00

Office Equipment

6 0 0 0 00

Accumulated Depreciation, Office Equipment Snow Equipment Accumulated Depreciation, Snow Equipment

1 2 5 00 9 6 0 0 00 4 0 0 00

Accounts Payable

3 3 5 0 00

Accrued Salaries

3 0 0 00

Pete Mack, Capital Totals

5-48

27 1 4 0 00 31 3 1 5 00 31 3 1 5 00

PROBLEM 5C-1. ECO DOCUMENT DISPOSAL COMPANY WORKSHEET FOR THE MONTH ENDED MAY 31, 2017 Account Titles Cash

Trial Balance D r.

Adjustments C r.

D r.

C r.

22 2 1 0 00

Accounts Receivable

1 2 0 0 00

Prepaid Insurance

6 8 1 00

(A)

5 1 0 75

Disposal Supplies

1 5 4 2 00

(B)

8 1 9 00

Disposal Equipment

11 7 4 0 00 (C)

8 7 6 25

Acc. Depn., Disposal Equipment Building

7 0 1 0 00 48 0 0 0 00

Acc. Depn., Building

20 7 0 0 00

Accounts Payable

4 6 6 0 00

A. Hoang, Capital

48 6 8 1 00

A. Hoang, Withdrawals

16 7 4 2 00

Disposal Fees Revenue

52 7 2 0 00

Wages Expense

28 2 4 0 00

Utilities Expense

2 5 4 4 00

Advertising Expense

(D) 1 1 5 0 0 0

(E) 1 3 6 8 0 0

8 7 2 00 133 7 7 1 00 133 7 7 1 00

Insurance Expense

(A)

5 1 0 75

Disposal Supplies Expense

(B)

8 1 9 00

Depn. Exp., Disposal Equipment

(C)

8 7 6 25

Depn. Exp., Building

(D) 1 1 5 0 0 0

Accrued Wages

(E) 1 3 6 8 0 0 4 7 2 4 00

4 7 2 4 00

Net Income

5-49

PROBLEM 5C-1., Cont. ECO DOCUMENT DISPOSAL COMPANY WORKSHEET FOR THE MONTH ENDED MAY 31, 2017 Adjusted Trial Balance

Income Statement

D r.

C r.

Balance Sheet D r.

22 2 1 0 00

1 2 0 0 00

1 7 0 25

7 2 3 00

11 7 4 0 00

11 7 4 0 00 7 8 8 6 25

7 8 8 6 25

48 0 0 0 00

48 0 0 0 00 21 8 5 0 00

21 8 5 0 00

4 6 6 0 00

48 6 8 1 00

16 7 4 2 00

16 7 4 2 00 52 7 2 0 00

52 7 2 0 00

29 6 0 8 00

2 5 4 4 00

8 7 2 00

5 1 0 75

8 1 9 00

8 7 6 25

1 1 5 0 00

1 1 5 0 00 1 3 6 8 00

137 1 6 5 25 137 1 6 5 25

5-50

C r.

1 3 6 8 00 36 3 8 0 00

52 7 2 0 00 100 7 8 5 25

84 4 4 5 25

16 3 4 0 00

52 7 2 0 00

52 7 2 0 00 100 7 8 5 25 100 7 8 5 25

PROBLEM 5C-1., Cont. ECO DOCUMENT DISPOSAL COMPANY GENERAL JOURNAL Date 2017

Account Title and Description

Post Ref.

Page 1 Dr.

Cr.

Adjusting Entries May

Insurance Expense

5 1 0 75

Prepaid Insurance

5 1 0 75

Insurance expired 31

Disposal Supplies Expense

8 1 9 00

Disposal Supplies

8 1 9 00

Supplies used 31

Depn. Exp., Disposal Equipment

8 7 6 25

Acc. Depn., Disposal Equipment

8 7 6 25

Estimated depreciation 31

Depn. Exp., Building

1 1 5 0 00

Acc. Depn., Building

1 1 5 0 00

Estimated depreciation 31

Wages Expense

1 3 6 8 00

Accrued Wages

1 3 6 8 00

Wages to be paid Closing Entries 31

Disposal Fees Revenue

52 7 2 0 00

Income Summary

52 7 2 0 00

To close income account 31

Income Summary

36 3 8 0 00

Wages Expense

29 6 0 8 00

Utilities Expense

2 5 4 4 00

Advertising Expense

8 7 2 00

Insurance Expense

5 1 0 75

Disposal Supplies Expense

8 1 9 00

Depreciation Expense, Disposal Equipment

8 7 6 25

Depreciation Expense, Building

1 1 5 0 00

To close expense accounts 31

Income Summary

16 3 4 0 00

A. Hoang, Capital

16 3 4 0 00

Net income closed to capital 31

A. Hoang, Capital A. Hoang, Withdrawals

16 7 4 2 00 16 7 4 2 00

Close withdrawals into capital

5-51

PROBLEM 5C-2. CHALKE’S COMPUTER REPAIR SERVICE GENERAL JOURNAL Date 2015 Nov

Account Title and Description

5-52

Adjusting Entries Bank Charges Expense Cash To correct bank account Depreciation Expense, Van Accumulated Depreciation, Van Estimated depreciation Insurance Expense Prepaid Insurance Insurance expired Supplies Expense Repair Parts and Supplies Supplies used Salaries Expense Accrued Salaries Salaries to be paid Advertising Expense Accounts Payable Accrued charge Closing Entries Repair Revenue Income Summary To close income accounts Income Summary Advertising Expense Automotive Expense Cleaning Expense Miscellaneous Expense Postage and Office Expense Salaries Expense Insurance Expense Bank Charges Expense Depreciation Expense, Van Supplies Expense To close expense accounts Income Summary Tricia Chalke, Capital Net income closed to capital Tricia Chalke, Capital Tricia Chalke, Withdrawals Close withdrawals into capital

Post Ref.

Page 1 Dr.

5114 1100

3 6 84

5125 1250

3 4 7 40

5140 1120

2 3 8 19

5185 1160

5 4 0 27

5180 2150

4 2 0 00

5100 2100

2 4 3 00

Cr.

3 6 84

3 4 7 40

2 3 8 19

5 4 0 27

4 2 0 00

2 4 3 00

4100 1 6 4 5 8 7 0 3199 16 4 5 8 70 3199 5100 5112 5120 5145 5160 5180 5140 5114 5125 5185

9 5 9 3 30

3199 3100

6 8 6 5 40

3100 3150

2 6 0 0 00

9 5 7 38 2 3 4 5 51 3 7 5 00 1 7 8 14 2 8 4 17 4 2 9 0 40 2 3 8 19 3 6 84 3 4 7 40 5 4 0 27

6 8 6 5 40

2 6 0 0 00

PROBLEM 5C-2., Cont. CHALKE’S COMPUTER REPAIR SERVICE GENERAL LEDGER NAME: CASH Date 2015 Nov.

ACCOUNT NO. Explanation

Post Ref.

Balance

✓

Adjusting

GJ1

Debit

Nov.

Explanation

Post Ref.

Balance

✓

Adjusting

GJ1

Debit

Nov.

Post Ref.

Debit

NAME: REPAIR PARTS AND SUPPLIES

Nov.

Explanation

Post Ref.

Balance

✓

Adjusting

GJ1

Debit

Post Ref.

Debit

Credit

✓

Balance

NAME: ACCUMULATED DEPRECIATION, VAN

Nov.

2 3 5 9 64

Explanation

Balance

7 1 4 56

4 7 6 37

Balance

✓

Adjusting

GJ1

Debit

Credit

3 4 7 40

1140

DR CR

Balance

5 2 7 7 42

1160

DR CR

Balance

1 5 9 7 47

1 0 5 7 20

1200

DR CR

Balance

21 6 7 5 00

ACCOUNT NO. Post Ref.

1120

DR CR

ACCOUNT NO. Explanation

Date 2015

Credit

5 4 0 27

NAME: VAN

Nov.

2 3 9 6 48

ACCOUNT NO.

Date 2015

ACCOUNT NO.

✓

Balance

Date 2015

Credit

2 3 8 19

NAME: ACCOUNTS RECEIVABLE Explanation

Balance

ACCOUNT NO.

Date 2015

DR CR

3 6 84

NAME: PREPAID INSURANCE Date 2015

Credit

1100

1250

DR CR

Balance

8 1 0 3 65

8 4 5 1 05

5-53

PROBLEM 5C-2., Cont. CHALKE’S COMPUTER REPAIR SERVICE GENERAL LEDGER NAME: ACCOUNTS PAYABLE Date 2015 Nov.

Explanation

ACCOUNT NO. Post Ref.

Balance

✓

Adjusting

GJ1

Debit

2 4 3 00

NAME: ACCRUED SALARIES Date 2015 Nov.

Explanation

Adjusting

Post Ref.

Debit

GJ1

Nov.

Explanation

Post Ref.

Balance

✓

Closing

GJ1

Closing

GJ1

Debit

Nov.

Post Ref.

Balance

✓

Closing

GJ1

Nov.

5-54

Debit

Post Ref.

Debit

Closing

GJ1

Closing

GJ1

9 5 9 3 30

Closing

GJ1

6 8 6 5 40

4 0 4 5 60

2150

DR CR

Balance

4 2 0 00

Credit

2 6 0 0 00

NAME: INCOME SUMMARY Explanation

3 8 0 2 60

Credit

3100

DR CR

Balance

13 6 6 3 58

20 5 2 8 98

17 9 2 8 98

ACCOUNT NO.

Date 2015

Credit

6 8 6 5 40

NAME: TRICIA CHALKE, WITHDRAWALS Explanation

Balance

ACCOUNT NO.

Date 2015

DR CR

ACCOUNT NO.

NAME: TRICIA CHALKE, CAPITAL Date 2015

Credit

2100

3150

DR CR

Balance

2 6 0 0 00

ACCOUNT NO.

3199

Credit

DR CR

Balance

16 4 5 8 00

16 4 5 8 70

6 8 6 5 40

PROBLEM 5C-2., Cont. CHALKE’S COMPUTER REPAIR SERVICE GENERAL LEDGER NAME: REPAIR REVENUE Date 2015 Nov.

Explanation

ACCOUNT NO. Post Ref.

Balance

✓

Closing

GJ1

Debit

Nov.

Explanation

Post Ref.

Balance

✓

Adjusting

GJ1

Closing

GJ1

Debit

Nov.

Post Ref.

Balance

✓

Closing

GJ1

Debit

NAME: BANK CHARGES EXPENSE Date 2015 Nov.

Explanation

Post Ref.

Adjusting

GJ1

Closing

GJ1

Debit

Nov.

Explanation

Post Ref.

Balance

✓

Closing

GJ1

Debit

NAME: DEPRECIATION EXPENSE, VAN Date 2015 Nov.

Explanation

Post Ref.

Debit 3 4 7 40

Adjusting

GJ1

Closing

GJ1

Credit

16 4 5 8 70

5100

DR CR

Balance

7 1 4 38

9 5 7 38

ACCOUNT NO.

5112

Credit

DR CR

Balance

2 3 4 5 51

ACCOUNT NO.

5114

Credit

3 6 84

NAME: CLEANING EXPENSE Date 2015

2 4 3 00

NAME: AUTOMOTIVE EXPENSE Explanation

Balance

ACCOUNT NO.

Date 2015

DR CR

16 4 5 8 70

NAME: ADVERTISING EXPENSE Date 2015

Credit

4100

DR CR

Balance 3 6 84

3 6 84

ACCOUNT NO.

5120

Credit

DR CR

Balance

3 7 5 00

ACCOUNT NO.

5125

Credit

DR CR

Balance

3 4 7 40

O 5-55

PROBLEM 5C-2., Cont. CHALKE’S COMPUTER REPAIR SERVICE GENERAL LEDGER NAME: INSURANCE EXPENSE Date 2015 Nov.

Explanation

ACCOUNT NO. Post Ref.

Debit 2 3 8 19

Adjusting

GJ1

Closing

GJ1

NAME: MISCELLANEOUS EXPENSE Date 2015 Nov.

Explanation

Post Ref.

Balance

✓

Closing

GJ1

Debit

NAME: POSTAGE AND OFFICE EXPENSE Date 2015 Nov.

Explanation

Post Ref.

Balance

✓

Closing

GJ1

Debit

NAME: SALARIES EXPENSE Date 2015 Nov.

Explanation

Post Ref.

Balance

✓

Adjusting

GJ1

Closing

GJ1

Debit

Nov.

5-56

Explanation

Post Ref.

Debit 5 4 0 27

Adjusting

GJ1

Closing

GJ1

DR CR

Balance

2 3 8 19

ACCOUNT NO.

5145

Credit

DR CR

Balance

1 7 8 14

ACCOUNT NO.

5160

Credit

DR CR

Balance

2 8 4 17

ACCOUNT NO.

5180

Credit

DR CR

Balance

3 8 7 0 40

4 2 0 00

NAME: SUPPLIES EXPENSE Date 2015

Credit

5140

4 2 9 0 40 4 2 9 0 40

ACCOUNT NO.

5185

Credit

5 4 0 27

DR CR

Balance

5 4 0 27

PROBLEM 5C-2., Cont. CHALKE’S COMPUTER REPAIR SERVICE POST-CLOSING TRIAL BALANCE NOVEMBER 30, 2015 Cash

2 3 5 9 64

Prepaid Insurance

4 7 6 37

Accounts Receivable

5 2 7 7 42

Repair Parts and Supplies

1 0 5 7 20

Van

21 6 7 5 00

Accumulated Depreciation, Van

8 4 5 1 05

Accounts Payable

4 0 4 5 60

Accrued Salaries

4 2 0 00

Tricia Chalke, Capital Totals

17 9 2 8 98 30 8 4 5 63 30 8 4 5 63

5-57

PROBLEM 5C-3. MIKE’S PLUMBING GENERAL JOURNAL Date 2016 May

Account Title and Description

Page 1 Post Ref.

Dr.

Cash

111 1 0 0 0 0 0 0

Plumbing Equipment

123

Mike Quinlan, Capital

Cr.

7 4 0 0 00

311

17 4 0 0 00

Owner investment 1

Prepaid Rent

114

Cash

111

1 9 8 0 00 1 9 8 0 00

Paid rent in advance 3

Office Equipment Accounts Payable

121

3 8 0 0 00

211

3 8 0 0 00

Purchased office equipment from MacKenzie Co. 7

Plumbing Supplies Cash

115

1 6 4 5 00

111

1 6 4 5 00

Purchased plumbing supplies 8

Cash Plumbing Fees

111

3 6 0 0 00

411

3 6 0 0 00

Collected plumbing service fees 9

Mike Quinlan, Withdrawals Cash

312

1 2 2 00

111

1 2 2 00

Paid personal expenses 10

Accounts Receivable

112

Plumbing Fees

411

9 6 0 0 00 9 6 0 0 00

Billed Western Construction for plumbing services 14

Advertising Expense

512

Accounts Payable

211

Received bill for advertising from ABCD Radio

5-58

4 2 0 00 4 2 0 00

PROBLEM 5C-3., Cont. MIKE’S PLUMBING GENERAL JOURNAL Date 2016 May

Account Title and Description Cash Accounts Receivable

Page 2 Post Ref.

Dr.

111

4 8 0 0 00

112

Cr.

4 8 0 0 00

Received partial payment from Western Construction 28

Accounts Payable

211

Cash

1 9 0 0 00

111

1 9 0 0 00

Paid MacKenzie Co. one-half owed 31

Telephone Expense

513

Cash

1 8 4 00

111

1 8 4 00

Paid telephone bill 31

Cleaning Expense

514

Accounts Payable

2 1 5 00

211

2 1 5 00

Received bill from George’s Cleaning 31

Salaries Expense

511

Cash

4 1 0 0 00

111

4 1 0 0 00

Paid salaries for May Adjusting Entries May

Plumbing Supplies Expense Plumbing Supplies

515

1 3 1 7 00

115

1 3 1 7 00

Supplies used 31

Rent Expense Prepaid Rent

516

4 9 5 00

114

4 9 5 00

Rent expired 31

Depreciation Expense, Office Equipment Accumulated Depreciation, Office Equipment

517

5 5 00

122

5 5 00

Estimated depreciation 31

Depreciation Expense, Plumbing Equipment Accumulated Depreciation, Plumbing Equipment

518 124

2 0 5 56 2 0 5 56

Estimated depreciation

5-59

PROBLEM 5C-3., Cont. MIKE’S PLUMBING GENERAL JOURNAL Date 2016

Account Title and Description

Page 3 Post Ref.

Dr.

Cr.

Adjusting Entries May

Salaries Expense

511

Accrued Salaries

8 2 0 00

212

8 2 0 00

Salaries to be paid Closing Entries May

Plumbing Fees Income Summary

411 1 3 2 0 0 0 0 313

13 2 0 0 00

To close income account 31

Income Summary

313

7 8 1 1 56

Salaries Expense

511

4 9 2 0 00

Advertising Expense

512

4 2 0 00

Telephone Expense

513

1 8 4 00

Cleaning Expense

514

2 1 5 00

Plumbing Supplies Expense

515

1 3 1 7 00

Rent Expense

516

4 9 5 00

Depreciation Expense, Office Equipment

517

5 5 00

Depreciation Expense, Plumbing Equipment

518

2 0 5 56

To close expense account 31

Income Summary Mike Quinlan, Capital

313

5 3 8 8 44

311

5 3 8 8 44

Net income closed to capital 31

Mike Quinlan, Capital Mike Quinlan, Withdrawals Close withdrawals into capital

5-60

311 312

1 2 2 00 1 2 2 00

PROBLEM 5C-3., Cont. GENERAL LEDGER OF MIKE’S PLUMBING NAME: CASH Date 2016 May

ACCOUNT NO. DR CR

Balance

10 0 0 0 00

1 9 8 0 00

8 0 2 0 00

1 6 4 5 00

6 3 7 5 00

9 9 7 5 00

9 8 5 3 00

14 6 5 3 00

1 9 0 0 00

12 7 5 3 00

GJ2

1 8 4 00

12 5 6 9 00

GJ2

4 1 0 0 00

8 4 6 9 00

Post Ref.

Debit

GJ1

10 0 0 0 00

GJ1

GJ2

31 31

Explanation

1 2 2 00 4 8 0 0 00

May

ACCOUNT NO. Post Ref.

Debit

GJ1

9 6 0 0 00

GJ2

Explanation

May

1 Adjusting

Post Ref.

Debit

GJ1

1 9 8 0 00 4 9 5 00

GJ2

NAME: PLUMBING SUPPLIES Date 2016 May

Explanation 7

Adjusting

Credit

Balance

9 6 0 0 00

4 8 0 0 00

Debit

GJ1

1 6 4 5 00

GJ2

Credit

1 3 1 7 00

114

DR CR

Balance

1 9 8 0 00

1 4 8 5 00

ACCOUNT NO. Post Ref.

112

DR CR

ACCOUNT NO. Explanation

Credit

4 8 0 0 00

NAME: PREPAID RENT Date 2016

Credit

3 6 0 0 00

NAME: ACCOUNTS RECEIVABLE Date 2016

111

115

DR CR

Balance

1 6 4 5 00

3 2 8 00

5-61

PROBLEM 5C-3., Cont. GENERAL LEDGER OF MIKE’S PLUMBING, Cont. NAME: OFFICE EQUIPMENT Date 2016 May

Explanation 3

ACCOUNT NO. Post Ref.

Debit

GJ1

3 8 0 0 00

NAME: ACCUMULATED DEPRECIATION, OFFICE EQUIPMENT Date 2016 May

Explanation

Adjusting

Post Ref.

Debit

May

Explanation

May

Explanation

Adjusting

Post Ref.

Debit

GJ1

7 4 0 0 00

Post Ref.

Debit

GJ2

NAME: ACCOUNTS PAYABLE Date 2016 May

5-62

Explanation

Balance

3 8 0 0 00

Credit

DR CR Cr

ACCOUNT NO.

NAME: ACCUMULATED DEPRECIATION, PLUMBING EQUIPMENT Date 2016

DR CR

ACCOUNT NO.

5 5 00

GJ2

NAME: PLUMBING EQUIPMENT Date 2016

Credit

Debit

122 Balance 5 5 00

123

DR CR

Balance

7 4 0 0 00

ACCOUNT NO.

124

Credit

DR CR

Balance

2 0 5 56

ACCOUNT NO. Post Ref.

121

211

Credit

DR CR

Balance

GJ1

3 8 0 0 00

GJ1

4 2 0 00

4 2 2 0 00

GJ2

2 3 2 0 00

GJ2

2 5 3 5 00

1 9 0 0 00 2 1 5 00

PROBLEM 5C-3., Cont. GENERAL LEDGER OF MIKE’S PLUMBING, Cont. NAME: ACCRUED SALARIES Date 2016 May

Explanation

Adjusting

ACCOUNT NO. Post Ref.

Debit

GJ3

NAME: MIKE QUINLAN, CAPITAL Date 2016 May

Explanation 1

17 4 0 0 00

5 3 8 8 44

22 7 8 8 00

22 6 6 6 44

Debit

1 2 2 00

NAME: MIKE QUINLAN, WITHDRAWALS

ACCOUNT NO. Post Ref.

Debit

GJ1

1 2 2 00

GJ3

NAME: INCOME SUMMARY Date 2016 May

Explanation

Post Ref.

Debit

Closing

GJ3

Closing

GJ3

7 8 1 1 56

Closing

GJ3

5 3 8 8 44

NAME: PLUMBING FEES Date 2016 May

Explanation

311

GJ3

Closing

8 2 0 00

17 4 0 0 00

Closing

GJ1

8 2 0 00

Balance

GJ3

May

Balance

DR CR

Closing

Explanation

DR CR

Credit

Date 2016

Credit

ACCOUNT NO. Post Ref.

212

Credit

DR CR

Balance

1 2 2 00

ACCOUNT NO.

313

Credit

DR CR

Balance

13 2 0 0 00

5 3 8 8 44

ACCOUNT NO. Post Ref.

Debit

312

411

Credit

DR CR

Balance

GJ1

3 6 0 0 00

GJ1

9 6 0 0 00

13 2 0 0 00

Closing

GJ3

13 2 0 0 00

5-63

PROBLEM 5C-3., Cont. GENERAL LEDGER OF MIKE’S PLUMBING, Cont. NAME: SALARIES EXPENSE Date 2016 May

Explanation

ACCOUNT NO. Post Ref.

Debit

GJ2

Adjusting

GJ3

Closing

GJ3

DR CR

Balance

4 1 0 0 00

8 2 0 00

4 9 2 0 00

NAME: ADVERTISING EXPENSE Date 2016 May

Explanation

14 31

Closing

Post Ref.

Debit

GJ1

4 2 0 00

GJ3

NAME: TELEPHONE EXPENSE Date 2016 May

Explanation

31 31

Closing

Post Ref.

Debit

GJ2

1 8 4 00

GJ3

NAME: CLEANING EXPENSE Date 2016 May

Explanation

31 31

Closing

Post Ref.

Debit

GJ2

2 1 5 00

GJ3

NAME: PLUMBING SUPPLIES EXPENSE Date 2016 May

5-64

Explanation

Post Ref.

Debit 1 3 1 7 00

Adjusting

GJ2

Closing

GJ3

511

Credit

4 9 2 0 00

ACCOUNT NO.

512

Credit

DR CR

Balance

4 2 0 00

ACCOUNT NO.

513

Credit

DR CR

Balance

1 8 4 00

ACCOUNT NO.

514

Credit

DR CR

Balance

2 1 5 00

ACCOUNT NO.

515

Credit

1 3 1 7 00

DR CR

Balance

1 3 1 7 00

PROBLEM 5C-3., Cont. GENERAL LEDGER OF MIKE’S PLUMBING, Cont. NAME: RENT EXPENSE Date 2016 May

ACCOUNT NO. Explanation

Post Ref.

Debit 4 9 5 00

Adjusting

GJ2

Closing

GJ3

NAME: DEPRECIATION EXPENSE, OFFICE EQUIPMENT Date 2016 May

Explanation

Post Ref.

Adjusting

GJ2

Closing

GJ3

Debit

May

Explanation

Post Ref.

Debit 2 0 5 56

Adjusting

GJ2

Closing

GJ3

DR CR

Balance

4 9 5 00

ACCOUNT NO.

517

Credit

5 5 00

NAME: DEPRECIATION EXPENSE, PLUMBING EQUIPMENT Date 2016

Credit

516

DR CR

Balance 5 5 00

5 5 00

ACCOUNT NO.

518

Credit

DR CR

Balance

2 0 5 56

5-65

PROBLEM 5C-3., Cont. MIKE’S PLUMBING WORKSHEET FOR THE MONTH ENDED MAY 31, 2016 Account Titles

Trial Balance D r.

Adjustments

C r.

D r.

C r.

Cash

8 4 6 9 00

Accounts Receivable

4 8 0 0 00

Prepaid Rent

1 9 8 0 00

(B)

Plumbing Supplies

1 6 4 5 00

(A) 1 3 1 7 0 0

Office Equipment

3 8 0 0 00

Plumbing Equipment

7 4 0 0 00

Accounts Payable

2 5 3 5 00

Mike Quinlan, Capital Mike Quinlan, Withdrawals

4 9 5 00

17 4 0 0 00 1 2 2 00

Plumbing Fees

13 2 0 0 00

Salaries Expense

4 1 0 0 00

Advertising Expense

4 2 0 00

Telephone Expense

1 8 4 00

Cleaning Expense

2 1 5 00

(E)

8 2 0 00

33 1 3 5 00 33 1 3 5 00

Plumbing Supplies Expense

(A) 1 3 1 7 0 0

Rent Expense

(B)

4 9 5 00

Depn. Exp., Office Equipment

(C)

5 5 00

Acc. Depn., Office Equipment Depn. Exp., Plumbing Equipment

(D)

Accrued Salaries

(D)

2 0 5 56

(E) 2 8 9 2 56

5-66

5 5 00

2 0 5 56

Acc. Depn., Plumbing Equipment

Net Income

(C)

8 2 0 00 2 8 9 2 56

PROBLEM 5C-3., Cont. MIKE’S PLUMBING WORKSHEET FOR MONTH ENDED MAY 31, 2016 Adjusted Trial Balance

Income Statement

D r.

C r.

Balance Sheet D r.

8 4 6 9 00

4 8 0 0 00

1 4 8 5 00

3 2 8 00

3 8 0 0 00

7 4 0 0 00

C r.

2 5 3 5 00

17 4 0 0 00

1 2 2 00

1 2 2 00 13 2 0 0 00

13 2 0 0 00

4 9 2 0 00

4 2 0 00

1 8 4 00

2 1 5 00

1 3 1 7 00

4 9 5 00

5 5 00

5 5 00 5 5 00

2 0 5 56

5 5 00 2 0 5 56

2 0 5 56

8 2 0 00

34 2 1 5 56 34 2 1 5 56

7 8 1 1 56 13 2 0 0 00 26 4 0 4 00 21 0 1 5 56 5 3 8 8 44

5 3 8 8 44

13 2 0 0 00 13 2 0 0 00 26 4 0 4 00 26 4 0 4 00

5-67

PROBLEM 5C-3., Cont. MIKE’S PLUMBING INCOME STATEMENT FOR THE MONTH ENDED MAY 31, 2016 Revenue: Plumbing Fees

$1 3 2 0 0 0 0

Operating Expenses: Salaries Expense Advertising Expense Telephone Expense Cleaning Expense Plumbing Supplies Expense Rent Expense Depreciation Expense, Office Equipment Depreciation Expense, Plumbing Euipment Total Operating Expenses

$4 9 2 0 0 0 4 2 0 00 1 8 4 00 2 1 5 00 1 3 1 7 00 4 9 5 00 5 5 00 2 0 5 56 7 8 1 1 56 $5 3 8 8 4 4

Net Income

MIKE’S PLUMBING STATEMENT OF OWNER’S EQUITY FOR THE MONTH ENDED MAY 31, 2016 Mike Quinlan, Capital, 5/1/16 Net Income for May Less Withdrawals Increase in Capital Mike Quinlan, Capital, 5/31/16

5-68

$1 7 4 0 0 0 0 $5 3 8 8 4 4 1 2 2 00 5 2 6 6 44 $2 2 6 6 6 4 4

5-69

Total Assets

Less Acc. Depn.

Plumbing Equipment

Less Acc. Depn.

Office Equipment

$3 8 0 0 0 0

2 0 5 56

7 4 0 0 00

5 5 00

$2 6 0 2 1 4 4

7 1 9 4 44

3 7 4 5 00

3 2 8 00

1 4 8 5 00

Prepaid Rent

Plumbing Supplies

4 8 0 0 00

Accounts Receivable

Owner’s Equity

Total Liabilities and

Mike Quinlan, Capital

Owner’s Equity

Total Liabilities

Accrued Salaries

Accounts Payable

Cash

$8 4 6 9 0 0

Liabilities

ASSETS

MAY 31, 2016

BALANCE SHEET

MIKE’S PLUMBING

Assets

PROBLEM 5C-3., Cont.

8 2 0 00

$2 5 3 5 0 0

$2 6 0 2 1 4 4

22 6 6 6 44

$3 3 5 5 0 0

LIABILITIES & OWNER’S EQUITY

PROBLEM 5C-3., Cont. MIKE’S PLUMBING POST-CLOSING TRIAL BALANCE MAY 31, 2016 Cash

8 4 6 9 00

Accounts Receivable

4 8 0 0 00

Prepaid Rent

1 4 8 5 00

Plumbing Supplies

3 2 8 00

Office Equipment

3 8 0 0 00

Accumulated Depreciation, Office Equipment Plumbing Equipment Accumulated Depreciation, Plumbing Equipment

5 5 00 7 4 0 0 00 2 0 5 56

Accounts Payable

2 5 3 5 00

Accrued Salaries

8 2 0 00

Mike Quinlan, Capital Totals

5-70

22 6 6 6 44 26 2 8 2 00 26 2 8 2 00

SOLUTIONS TO ON-THE-JOB TRAINING, #T-1. 1. 2. 3. 4.

Request -- to see current as well as past financial reports. Unadjusted trial balance not adequate. Need up-to-date information. In proportion to fees, salaries appear very high and cash is low. Would like to know why no withdrawal account. Would like to see a projected set of figures for future financial report.

SOLUTIONS TO ON-THE-JOB TRAINING, #T-2. Beg. Capital + Net Income

$34,400 $ 19,300 - 14,360

4,940 39,340

- Withdrawals Ending Capital

8,000 $31,340

Recommend that all the closing entries be completed after the closing journal entries have been recorded in the journal.

5-71

CONTINUING PROBLEM PRECISION COMPUTER CENTRE - GENERAL JOURNAL Date 2016 July

Account Title and Description

31 31

Supplies Expense

5050

Depn. Exp., Computer Shop Equipment

Depn. Exp., Office Equipment Accum. Depn., Office Equipment

Cr.

3 6 0 00

1030

Accum. Depn., Computer Shop Equipment 31

Dr.

Adjusting Entries

Supplies 31

Post Ref.

Page 2

Rent Expense

5080

9 9 00

1081 5090

9 9 00 2 0 00

1091 5020

Prepaid Rent

3 6 0 00

2 0 00 4 0 0 00

1025

4 0 0 00

Closing Entries 31

Service Revenue Income Summary

Income Summary

3020 3020

6 6 8 5 00 3 6 7 9 00

5010

1 4 0 0 00

Rent Expense

5020

1 2 0 0 00

Utilities Expense

5030

1 8 0 00

Phone Expense

5040

2 2 0 00

Insurance Expense

5060

1 5 0 00

Postage Expense

5070

5 0 00

Supplies Expense

5050

3 6 0 00

Depn. Expense, Computer Shop Equipment

5080

9 9 00

Depn. Expense, Office Equipment

5090

2 0 00

Income Summary

Freedman, Capital T. Freedman, Withdrawals

5-72

6 6 8 5 00

Advertising Expense

T. Freedman, Capital 31

4000

3020

3 0 0 6 00

3000 3000 3010

3 0 0 6 00 1 0 0 00 1 0 0 00

CONTINUING PROBLEM, Cont. GENERAL LEDGER OF PRECISION COMPUTER CENTER NAME: CASH Date 2016 July

ACCOUNT NO. Explanation

Post Ref.

Debit

✓

Balance

NAME: ACCOUNTS RECEIVABLE Date 2016 July

Explanation

Post Ref.

Debit

NAME: PREPAID RENT

July

Post Ref.

Balance

✓

Adjusting

GJ2

Debit

Post Ref.

Balance

✓

Adjusting

GJ2

Debit

Explanation

Explanation Adjusting

1 6 4 5 00

Post Ref.

Debit

Credit

Post Ref. GJ2

Debit

Balance

2 6 0 0 00

9 9 00

1025

DR CR

Balance

8 0 0 00

4 0 0 00

1030

DR CR

Balance

4 5 0 00

9 0 00

1080

DR CR

Balance

2 4 0 0 00

ACCOUNT NO. Credit

1020

DR CR

ACCOUNT NO.

NAME: ACCUM. DEPRECIATION, COMPUTER SHOP EQUIPMENT

July

Credit

✓

Balance

Date 2016

Credit

3 6 0 00

NAME: COMPUTER SHOP EQUIPMENT

July

ACCOUNT NO. Explanation

Date 2016

Credit

4 0 0 00

NAME: SUPPLIES

July

Balance

ACCOUNT NO. Explanation

Date 2016

DR CR

ACCOUNT NO.

✓

Balance

Date 2016

Credit

1000

DR CR

1081 Balance

9 9 00

5-73

CONTINUING PROBLEM, Cont. GENERAL LEDGER OF PRECISION COMPUTER CENTER NAME: OFFICE EQUIPMENT Date 2016 July

Explanation

ACCOUNT NO. Post Ref.

Debit

✓

Balance

NAME: ACCUMULATED DEPRECIATION, OFFICE EQUIPMENT Date 2016 July

Explanation

Adjusting

Post Ref.

Debit

July

Explanation

July

Explanation

Post Ref.

Balance

✓

Closing

GJ2

Closing

GJ2

Debit

July

Credit

3 0 0 6 00 1 0 0 00

NAME: T. FREEDMAN, WITHDRAWALS Explanation

6 0 0 00

DR CR Cr

Balance

✓

Closing

GJ2

Debit

Credit

1 0 0 00

2 0 00

2000

2 1 0 00

3000

DR CR

Balance

4 5 0 0 00

7 5 0 6 00

7 4 0 6 00 3010

DR CR

Balance

1 0 0 00

Cr Cr

5-74

Balance

ACCOUNT NO. Post Ref.

1091

DR CR

ACCOUNT NO.

Date 2016

Balance

ACCOUNT NO.

NAME: T. FREEDMAN, CAPITAL Date 2016

Credit

✓

Balance

DR CR

ACCOUNT NO.

2 0 00

GJ2

NAME: ACCOUNTS PAYABLE Date 2016

Credit

1090

CONTINUING PROBLEM, Cont. GENERAL LEDGER OF PRECISION COMPUTER CENTER NAME: INCOME SUMMARY Date 2016 July

Explanation

ACCOUNT NO. Post Ref.

Debit

Closing (Revenue)

GJ2

Closing (Expense)

GJ2

3 6 7 9 00

Closing (Income)

GJ2

3 0 0 6 00

NAME: SERVICE REVENUE Date 2016 July

Explanation

Post Ref.

Balance

✓

Closing

GJ2

Debit

July

Post Ref.

Balance

✓

Closing

GJ2

Debit

NAME: RENT EXPENSE Explanation

Balance

6 6 8 5 00

3 0 0 6 00

Credit

Post Ref.

4000

DR CR

Balance

6 6 8 5 00

ACCOUNT NO.

Date 2016

DR CR

6 6 8 5 00

NAME: ADVERTISING EXPENSE Explanation

Credit

ACCOUNT NO.

Date 2016

3020

Debit

Credit

5010

DR CR

Balance

1 4 0 0 00

ACCOUNT NO.

5020

Credit

DR CR

Balance

✓

Adjusting

GJ2

Closing

1 2 0 0 00

NAME: UTILITIES EXPENSE

ACCOUNT NO.

5030

July

Date 2016 July

Explanation

Post Ref.

Balance

✓

Closing

GJ2

4 0 0 00

Debit

Credit

8 0 0 00

1 2 0 0 00

DR CR

Balance

1 8 0 00

5-75

CONTINUING PROBLEM, Cont. GENERAL LEDGER OF PRECISION COMPUTER CENTER NAME: PHONE EXPENSE Date 2016 July

Explanation

ACCOUNT NO. Post Ref.

Balance

✓

Closing

GJ2

Debit

NAME: SUPPLIES EXPENSE Date 2016 July

Explanation

Post Ref.

Debit 3 6 0 00

Adjusting

GJ2

Closing

GJ2

NAME: INSURANCE EXPENSE Date 2016 July

Explanation

Post Ref.

Balance

✓

Closing

GJ2

Debit

NAME: POSTAGE EXPENSE Date 2016 July

Explanation

Post Ref.

Balance

✓

Closing

GJ2

Debit

July

Explanation

Post Ref.

Adjusting

GJ2

Closing

GJ2

Debit

July

5-76

Explanation

Post Ref.

Adjusting

GJ2

Closing

GJ2

Balance

2 2 0 00

ACCOUNT NO.

5050

Credit

DR CR

Balance

3 6 0 00

ACCOUNT NO.

5060

Credit

DR CR

Balance

1 5 0 00

ACCOUNT NO.

5070

Credit

DR CR

Debit

Balance 5 0 00

5 0 00

ACCOUNT NO.

5080

Credit

9 9 00

NAME: DEPRECIATION EXPENSE, OFFICE EQUIPMENT Date 2016

DR CR

NAME: DEPRECIATION EXPENSE, COMPUTER SHOP EQUIPMENT Date 2016

Credit

5040

DR CR Dr

Balance 9 9 00

9 9 00

ACCOUNT NO.

5090

Credit

2 0 00

DR CR Dr

2 0 00

Balance 2 0 00

CONTINUING PROBLEM, Cont. PRECISION COMPUTER CENTRE POST-CLOSING TRIAL BALANCE JULY 31, 2016 Cash

1 6 4 5 00

Accounts Receivable

2 6 0 0 00

Prepaid Rent Supplies Computer Shop Equipment

4 0 0 00 9 0 00 2 4 0 0 00

Accumulated Depreciation, Computer Shop Equipment Office Equipment

9 9 00 6 0 0 00

Accumulated Depreciation, Office Equipment

2 0 00

Accounts Payable

2 1 0 00

T. Freedman, Capital Totals

7 4 0 6 00 7 7 3 5 00

7 7 3 5 00

5-77

MINI PRACTICE SET: SULLIVAN REALTY, Cont. SULLIVAN REALTY GENERAL JOURNAL Date 2016 June

Post Ref.

Dr.

Cash

111

20 0 0 0 00

Office Equipment

121

4 0 0 0 00

Account Title and Description

Page 1

John Sullivan, Capital

311

Cr.

24 0 0 0 00

Owner investment 3

Prepaid Rent

114

Cash

111

3 0 0 0 00 3 0 0 0 00

Rent paid in advance, Cheque #601 4

Automobile

123

Cash

111

14 0 0 0 00 14 0 0 0 00

Auto purchased , Cheque #602 4

Office Supplies Cash

115

3 0 0 00

111

3 0 0 00

Supplies purchased for cash, Cheque #603 5

Office Supplies Accounts Payable

115

1 5 0 00

211

1 5 0 00

Supplies purchased on account 6

Cash Commissions Earned

111

6 0 0 0 00

411

6 0 0 0 00

Cash fees 7

Gas Expense

513

Cash

111

2 2 00 2 2 00

Paid gas bill, Cheque #604 14

Salaries Expense Cash Paid salary, Cheque #605

5-78

512 111

3 5 0 00 3 5 0 00

MINI PRACTICE SET: SULLIVAN REALTY, Cont. SULLIVAN REALTY GENERAL JOURNAL Date 2016 June 18

Account Title and Description Accounts Receivable Commissions Earned

Page 2 Post Ref.

Dr.

112

6 5 0 0 00

411

Cr.

6 5 0 0 00

Charge fees 21

John Sullivan, Withdrawals Cash

312

1 0 0 0 00

111

1 0 0 0 00

Cash withdrawal for personal use, Cheque #606 21

Cash Commissions Earned

111

3 5 0 0 00

411

3 5 0 0 00

Cash fee 24

Gas Expense

513

Cash

111

2 5 00 2 5 00

Paid gas bill, Cheque #607 25

Repairs Expense Cash

514

6 0 0 00

111

6 0 0 00

Cash repairs, Cheque #608 28

Salaries Expense Cash

512

3 5 0 00

111

3 5 0 00

Paid salary, Cheque #609 28

Telephone Expense Cash

515

5 1 0 00

111

5 1 0 00

Paid telephone bill, Cheque #610 28

Advertising Expense

516

Accounts Payable

211

1 2 0 0 00 1 2 0 0 00

Advertising bill incurred

5-79

MINI PRACTICE SET: SULLIVAN REALTY SULLIVAN REALTY WORKSHEET FOR MONTH ENDED JUNE 30, 2016 Account Titles

Trial Balance D r.

Cash

9 3 4 3 00

Accounts Receivable

6 5 0 0 00

Prepaid Rent

3 0 0 0 00

Office Supplies

4 5 0 00

Office Equipment

4 0 0 0 00

Automobile

(A) 1 0 0 0 0 0 (B)

4 0 0 00

(C)

1 0 0 00

(D)

2 0 0 00

1 0 0 0 00 16 0 0 0 00 7 0 0 00 4 7 00

Repairs Expense

6 0 0 00

Telephone Expense

5 1 0 00

Advertising Expense

C r.

24 0 0 0 00

Commissions Earned

Gas Expense

D r.

1 3 5 0 00

John Sullivan, Capital

Salaries Expense

C r.

14 0 0 0 00

Accounts Payable

John Sullivan, Withdrawals

Adjustments

1 2 0 0 00 41 3 5 0 00 41 3 5 0 00

Rent Expense

(A) 1 0 0 0 0 0

Office Supplies Expense

(B)

4 0 0 00

Depn. Exp., Office Equipment

(C)

1 0 0 00

Acc. Depn., Office Equipment Depn. Exp., Automobile

(D)

2 0 0 00

Acc. Depn., Automobile 1 7 0 0 00 Net Income

5-80

1 7 0 0 00

MINI PRACTICE SET: SULLIVAN REALTY, Cont. SULLIVAN REALTY WORKSHEET - CONTINUED FOR MONTH ENDED JUNE 30, 2016 Adjusted Trial Balance

Income Statement

D r.

C r.

Balance Sheet D r.

9 3 4 3 00

6 5 0 0 00

2 0 0 0 00

5 0 00

4 0 0 0 00

14 0 0 0 00

C r.

1 3 5 0 00

24 0 0 0 00

1 0 0 0 00

1 0 0 0 00 16 0 0 0 00

16 0 0 0 00

7 0 0 00

4 7 00

6 0 0 00

5 1 0 00

1 2 0 0 00

1 0 0 0 00

4 0 0 00

1 0 0 00

1 0 0 00 1 0 0 00

2 0 0 00

1 0 0 00 2 0 0 00

2 0 0 00

41 6 5 0 00 41 6 5 0 00

4 7 5 7 00 16 0 0 0 00 36 8 9 3 00 25 6 5 0 00 11 2 4 3 00

11 2 4 3 00

16 0 0 0 00 16 0 0 0 00 36 8 9 3 00 36 8 9 3 00

5-81

MINI PRACTICE SET: SULLIVAN REALTY, Cont. SULLIVAN REALTY GENERAL JOURNAL Date 2016

Account Title and Description

Page 3 Post Ref.

Dr.

511

1 0 0 0 00

Cr.

Adjusting Entries June 30

Rent Expense Prepaid Rent

114

1 0 0 0 00

Rent expired 30

Office Supplies Expense

517

Office Supplies

4 0 0 00

115

4 0 0 00

Supplies used 30

Depreciation Expense, Office Equipment Accumulated Depreciation, Office Equipment

518

1 0 0 00

122

1 0 0 00

Estimated depreciation 30

Depreciation Expense, Auto Accumulated Depreciation, Auto

519

2 0 0 00

124

2 0 0 00

Estimated depreciation Closing Entries 30

Commissions Earned

411

Income Summary

313

16 0 0 0 00 16 0 0 0 00

To close income account 30

Income Summary

313

4 7 5 7 00

Rent Expense

511

1 0 0 0 00

Salaries Expense

512

7 0 0 00

Gas Expense

513

4 7 00

Repairs Expense

514

6 0 0 00

Telephone Expense

515

5 1 0 00

Advertising Expense

516

1 2 0 0 00

Office Supplies Expense

517

4 0 0 00

Depreciation Expense, Office Equipment

518

1 0 0 00

Depreciation Expense, Auto

519

2 0 0 00

To close expense accounts 30

Income Summary John Sullivan, Capital

313

11 2 4 3 00

311

11 2 4 3 00

Net income closed to capital 30

John Sullivan, Capital John Sullivan, Withdrawals Close withdrawals into capital

5-82

311 312

1 0 0 0 00 1 0 0 0 00

MINI PRACTICE SET: SULLIVAN REALTY, Cont. SULLIVAN REALTY GENERAL JOURNAL Date 2016 July

Account Title and Description 2

Accounts Payable Cash

Page 4 Post Ref.

211

Dr.

Cr.

1 5 0 00

111

1 5 0 00

Paid for June supplies, Cheque #611 2

Office Supplies Accounts Payable

115

7 0 0 00

211

7 0 0 00

Supplies purchased on account 2

Accounts Payable Cash

211

1 2 0 0 00

111

1 2 0 0 00

Paid advertising bill from June, Cheque #612 4

Cash Commissions Earned

111

6 6 0 0 00

411

6 6 0 0 00

Cash fees 5

Gas Expense

513

Cash

111

2 9 00 2 9 00

Paid gas bill, Cheque #613 9

Cash Accounts Receivable

111

6 5 0 0 00

112

6 5 0 0 00

Collected cash from June 18 commission 12

Miscellaneous Expense Cash

524

3 0 0 00

111

3 0 0 00

Realtor’s workshop, Cheque #614 15

Salaries Expense Cash

512 111

3 5 0 00 3 5 0 00

Paid salary, Cheque #615

5-83

MINI PRACTICE SET: SULLIVAN REALTY, Cont. SULLIVAN REALTY GENERAL JOURNAL Date 2016 July

Account Title and Description

Accounts Receivable Commissions Earned

Page 5 Post Ref.

Dr.

112

2 4 0 0 00

411

Cr.

2 4 0 0 00

Fees on account 19

Cash Commissions Earned

111

7 0 0 0 00

411

7 0 0 0 00

Cash fees 23

Miscellaneous Expense Cash

524

4 0 00

111

4 0 00

Sponsor local road race, Cheque #616 26

Repairs Expense Cash

514

5 9 0 00

111

5 9 0 00

Paid for auto repairs, Cheque #617 29

John Sullivan, Withdrawals Cash

312

1 8 0 0 00

111

1 8 0 0 00

Personal withdrawals, Cheque #618 31

Salaries Expense Cash

512

3 5 0 00

111

3 5 0 00

Paid salary, Cheque #619 31

Telephone Expense Cash

515

2 3 6 00

111

2 3 6 00

Paid telephone bill, Cheque #620 31

Advertising Expense

516

Accounts Payable

211

Advertising bill received

5-84

1 4 0 0 00 1 4 0 0 00

MINI PRACTICE SET: SULLIVAN REALTY, Cont. SULLIVAN REALTY GENERAL JOURNAL Date 2016

Account Title and Description

Page 6 Post Ref.

Dr.

511

1 0 0 0 00

Cr.

Adjusting Entries July

Rent Expense Prepaid Rent

114

1 0 0 0 00

Rent expired 31

Office Supplies Expense

517

Office Supplies

6 6 0 00

115

6 6 0 00

Supplies used 31

Depreciation Expense, Office Equipment Accumulated Depreciation, Office Equipment

518

1 0 0 00

122

1 0 0 00

Estimated depreciation 31

Depreciation Expense, Auto Accumulated Depreciation, Auto

519

2 0 0 00

124

2 0 0 00

Estimated depreciation Closing Entries 31

Commissions Earned

411

Income Summary

313

16 0 0 0 00 16 0 0 0 00

To close income account 31

Income Summary

313

5 2 5 5 00

Rent Expense

511

1 0 0 0 00

Salaries Expense

512

7 0 0 00

Gas Expense

513

2 9 00

Repairs Expense

514

5 9 0 00

Telephone Expense

515

2 3 6 00

Advertising Expense

516

1 4 0 0 00

Office Supplies Expense

517

6 6 0 00

Depreciation Expense, Office Equipment

518

1 0 0 00

Depreciation Expense, Auto

519

2 0 0 00

Miscellaneous

524

3 4 0 00

To close expense accounts 31

Income Summary John Sullivan, Capital

313

10 7 4 5 00

311

10 7 4 5 00

Net income closed to capital 31

John Sullivan, Capital John Sullivan, Withdrawals

311 312

1 8 0 0 00 1 8 0 0 00

Close withdrawals into capital

5-85

MINI PRACTICE SET: SULLIVAN REALTY, Cont. SULLIVAN REALTY WORKSHEET FOR MONTH ENDED JULY 31, 2016 Account Titles Cash

Trial Balance D r.

Adjustments

C r.

D r.

C r.

24 3 9 8 00

Accounts Receivable

2 4 0 0 00

Prepaid Rent

2 0 0 0 00

Office Supplies

7 5 0 00

Office Equipment

4 0 0 0 00

Acc. Depn., Office Equipment Automobile

Accounts Payable

1 0 0 00

(C)

1 0 0 00

2 0 0 00

(D)

2 0 0 00

34 2 4 3 00 1 8 0 0 00

Commissions Earned

Gas Expense

6 6 0 00

2 1 0 0 00

John Sullivan, Capital

Salaries Expense

(B)

14 0 0 0 00

Acc. Depn., Automobile

John Sullivan, Withdrawals

(A) 1 0 0 0 0 0

16 0 0 0 00 7 0 0 00 2 9 00

Repairs Expense

5 9 0 00

Telephone Expense

2 3 6 00

Advertising Expense

1 4 0 0 00

Miscellaneous Expense

3 4 0 00 52 6 4 3 00 52 6 4 3 00

Rent Expense

(A) 1 0 0 0 0 0

Office Supplies Expense

(B)

6 6 0 00

Depn. Exp., Office Equipment

(C)

1 0 0 00

Depn. Exp., Automobile

(D)

2 0 0 00

Net Income

5-86

1 9 6 0 00

MINI PRACTICE SET: SULLIVAN REALTY, Cont. SULLIVAN REALTY WORKSHEET FOR MONTH ENDED JULY 31, 2016 Adjusted Trial Balance

Income Statement

D r.

C r.

Balance Sheet D r.

24 3 9 8 00

2 4 0 0 00

1 0 0 0 00

9 0 00

4 0 0 0 00

4 0 0 0 00 2 0 0 00

C r.

2 0 0 00

14 0 0 0 00

14 0 0 0 00 4 0 0 00

4 0 0 00

2 1 0 0 00

34 2 4 3 00

1 8 0 0 00

1 8 0 0 00 16 0 0 0 00

16 0 0 0 00

7 0 0 00

2 9 00

5 9 0 00

2 3 6 00

1 4 0 0 00

3 4 0 00

1 0 0 0 00

6 6 0 00

1 0 0 00

2 0 0 00

52 9 4 3 00 52 9 4 3 00

5 2 5 5 00 16 0 0 0 00 47 6 8 8 00 36 9 4 3 00 10 7 4 5 00

10 7 4 5 00

16 0 0 0 00 16 0 0 0 00 47 6 8 8 00 47 6 8 8 00

5-87

MINI PRACTICE SET: SULLIVAN REALTY, Cont. GENERAL LEDGER OF SULLIVAN REALTY NAME: CASH Date 2016 June

July

5-88

ACCOUNT NO.

111

DR CR

Balance

20 0 0 0 00

3 0 0 0 00

17 0 0 0 00

GJ1

14 0 0 0 00

3 0 0 0 00

GJ1

3 0 0 00

2 7 0 0 00

GJ1

8 7 0 0 00

GJ1

2 2 00

8 6 7 8 00

GJ1

3 5 0 00

8 3 2 8 00

GJ2

1 0 0 0 00

7 3 2 8 00

GJ2

10 8 2 8 00

GJ2

2 5 00

10 8 0 3 00

GJ2

6 0 0 00

10 2 0 3 00

GJ2

3 5 0 00

9 8 5 3 00

GJ2

5 1 0 00

9 3 4 3 00

GJ4

1 5 0 00

9 1 9 3 00

GJ4

1 2 0 0 00

7 9 9 3 00

GJ4

14 5 9 3 00

GJ4

14 5 6 4 00

GJ4

21 0 6 4 00

GJ4

3 0 0 00

20 7 6 4 00

GJ4

3 5 0 00

20 4 1 4 00

GJ5

27 4 1 4 00

GJ5

4 0 00

27 3 7 4 00

GJ5

5 9 0 00

26 7 8 4 00

GJ5

1 8 0 0 00

24 9 8 4 00

GJ5

3 5 0 00

24 6 3 4 00

GJ5

2 3 6 00

24 3 9 8 00

Post Ref.

Debit

GJ1

20 0 0 0 00

GJ1

Explanation

Credit

6 0 0 0 00

3 5 0 0 00

6 6 0 0 00 2 9 00 6 5 0 0 00

7 0 0 0 00

MINI PRACTICE SET: SULLIVAN REALTY, Cont. NAME: ACCOUNTS RECEIVABLE Date 2016

ACCOUNT NO. Post Ref.

Debit

June 18

GJ2

6 5 0 0 00

July

GJ4

GJ5

Explanation

May

2 4 0 0 00

Post Ref.

Debit

GJ1

3 0 0 0 00

6 5 0 0 00

O Dr

Credit

2 4 0 0 00

114

DR CR

Balance

3 0 0 0 00

Adjusting

GJ3

1 0 0 0 00

2 0 0 0 00

Adjusting

GJ6

1 0 0 0 00

NAME: OFFICE SUPPLIES Date 2016 June

July

ACCOUNT NO. Debit

GJ1

3 0 0 00

GJ1

1 5 0 00

4 5 0 00

5 0 00

7 5 0 00

9 0 00

Adjusting

4 0 0 00

GJ3

GJ4

Adjusting

7 0 0 00 6 6 0 00

GJ6

NAME: OFFICE EQUIPMENT Date 2016

Explanation 3

Credit

DR CR

115

Post Ref.

Explanation

June

Balance

ACCOUNT NO. Explanation

June

DR CR

6 5 0 0 00

NAME: PREPAID RENT Date 2016

Credit

112

ACCOUNT NO. Post Ref.

Debit

GJ1

4 0 0 0 00

Credit

Balance

121

DR CR

Balance

4 0 0 0 00

5-89

MINI PRACTICE SET: SULLIVAN REALTY, Cont. NAME: ACCUMULATED DEPRECIATION, OFFICE EQUIPMENT

ACCOUNT NO.

Date 2016

Credit

DR CR

Explanation

Post Ref.

Debit

122 Balance

June 30

Adjusting

GJ3

1 0 0 00

July

Adjusting

GJ6

1 0 0 00

2 0 0 00

NAME: AUTOMOBILE Date 2016 June

ACCOUNT NO. Explanation

Post Ref.

Debit

GJ1

14 0 0 0 00

NAME: ACCUMULATED DEPRECIATION, AUTOMOBILE Date 2016

Explanation

Post Ref.

Credit

DR CR

Balance

14 0 0 0 00

ACCOUNT NO. Debit

123

124

Credit

DR CR

Balance

June 30

Adjusting

GJ3

2 0 0 00

July

Adjusting

GJ6

2 0 0 00

4 0 0 00

NAME: ACCOUNTS PAYABLE Date 2016 June

Explanation

ACCOUNT NO. Post Ref.

Debit

Credit

DR CR

Balance

Adjusting

GJ1

1 5 0 00

Adjusting

GJ2

1 2 0 0 00

1 3 5 0 00

1 2 0 0 00

1 9 0 0 00

7 0 0 00

2 1 0 0 00

July

GJ4

GJ5

1 5 0 00 7 0 0 00 1 2 0 0 00 1 4 0 0 00

NAME: ACCRUED SALARIES Date 2016

5-90

211

Explanation

ACCOUNT NO. Post Ref.

Debit

Credit

DR CR

212 Balance

MINI PRACTICE SET: SULLIVAN REALTY, Cont. NAME: JOHN SULLIVAN, CAPITAL Date 2016 June

July

Explanation 3

ACCOUNT NO. Credit

DR CR

Balance

GJ1

24 0 0 0 00

11 2 4 3 00

35 2 4 3 00

34 2 4 3 00

44 9 8 8 00

43 1 8 8 00

Post Ref.

Closing

GJ3

Closing

GJ3

Closing

GJ6

Closing

GJ6

Debit

1 0 0 0 00 10 7 4 5 00 1 8 0 0 00

NAME: JOHN SULLIVAN, WITHDRAWALS Date 2016

Explanation

June 21 30 July

Closing

ACCOUNT NO. Post Ref.

Debit

GJ2

1 0 0 0 00

GJ5

Closing

1 8 0 0 00

GJ6

NAME: INCOME SUMMARY Date 2016

Explanation

Post Ref.

Debit

June 30

Closing

GJ3

Closing

GJ3

4 7 5 7 00

Closing

GJ3

11 2 4 3 00

Closing

GJ6

Closing

GJ6

5 2 5 5 00

Closing

GJ6

10 7 4 5 00

July

NAME:

COMMISSIONS EARNED

Date 2016

Explanation

June

DR CR

Balance

1 0 0 0 00

O 1 8 0 0 00

1 8 0 0 00

ACCOUNT NO.

313

Credit

DR CR

Balance

16 0 0 0 00

11 2 4 3 00

O 16 0 0 0 00

16 0 0 0 00

10 7 4 5 00

O ACCOUNT NO.

Post Ref.

Debit

Credit

DR CR

411 Balance

GJ1

6 0 0 0 00

GJ2

6 5 0 0 00

12 5 0 0 00

GJ2

3 5 0 0 00

16 0 0 0 00

30 July

Credit

312

1 0 0 0 00

GJ3

311

Closing

GJ3

16 0 0 0 00

GJ4

6 6 0 0 00

GJ4

2 4 0 0 00

9 0 0 0 00

GJ4

7 0 0 0 00

16 0 0 0 00

Closing

GJ6

16 0 0 0 00

O 5-91

MINI PRACTICE SET: SULLIVAN REALTY, Cont. NAME: RENT EXPENSE Date 2016

Post Ref.

Debit

Adjusting

GJ3

1 0 0 0 00

Closing

GJ3

Adjusting

GJ6

Closing

GJ6

Explanation

June 30

July

ACCOUNT NO.

1 0 0 0 00

June 14

GJ1

GJ2

July

Closing

O Dr

1 0 0 0 00

512

DR CR

Balance

3 5 0 00

7 0 0 00

Credit

7 0 0 00

GJ3

GJ4

3 5 0 00

GJ5

3 5 0 00

7 0 0 00

Closing

7 0 0 00

GJ6

NAME: GAS EXPENSE Date 2016 June

ACCOUNT NO. Explanation

Post Ref.

Debit

Credit

DR CR

513 Balance

GJ1

2 2 00

GJ2

2 5 00

4 7 00

30 July

Closing

GJ4

Closing

2 9 00

GJ6

NAME: REPAIRS EXPENSE Date 2016

Explanation

June 25 30

Closing

26 31

Post Ref.

Debit

GJ2

6 0 0 00

Closing

GJ6

2 9 00

ACCOUNT NO.

514

Credit

DR CR

Balance

6 0 0 00

5 9 0 00

6 0 0 00

GJ3 GJ5

4 7 00

GJ3

5 31

5-92

1 0 0 0 00

15 31

July

ACCOUNT NO. Debit

Balance

1 0 0 0 00

Post Ref.

Explanation

DR CR

1 0 0 0 00

NAME: SALARIES EXPENSE Date 2016

Credit

511

5 9 0 00 5 9 0 00

MINI PRACTICE SET: SULLIVAN REALTY, Cont. NAME: TELEPHONE EXPENSE Date 2016

Explanation

June 28 30 July

Closing

Post Ref.

Debit

GJ2

5 1 0 00

GJ5

Closing

GJ6

Explanation

June 28 30 July

Closing

Post Ref.

Debit

GJ2

1 2 0 0 00

GJ5

Closing

July

Debit

Adjusting

GJ2

4 0 0 00

Closing

GJ3

Adjusting

GJ6

Closing

GJ6

Debit

Adjusting

GJ3

1 0 0 00

Closing

GJ3

Adjusting

GJ6

Closing

GJ6

June 30

July

ACCOUNT NO.

516

Credit

DR CR

Balance

1 2 0 0 00

O Dr

Credit

1 4 0 0 00

DR CR Dr

6 6 0 00

Post Ref.

Explanation

517 Balance 4 0 0 00

4 0 0 00

NAME: DEPRECIATION EXPENSE, OFFICE EQUIPMENT Date 2016

2 3 6 00

ACCOUNT NO. Post Ref.

June 30

2 3 6 00

1 4 0 0 00

GJ6

Explanation

5 1 0 00

O Dr

1 4 0 0 00

NAME: OFFICE SUPPLIES EXPENSE Date 2016

Balance

1 2 0 0 00

GJ3

DR CR Dr

2 3 6 00

NAME: ADVERTISING EXPENSE Date 2016

Credit

515

5 1 0 00

GJ3

31 31

ACCOUNT NO.

6 6 0 00

ACCOUNT NO.

518

Credit

DR CR Dr

Balance 1 0 0 00

1 0 0 00 1 0 0 00

1 0 0 00

5-93

MINI PRACTICE SET: SULLIVAN REALTY, Cont. NAME: DEPRECIATION EXPENSE, AUTOMOBILE Date 2016

Post Ref.

Debit

Adjusting

GJ3

2 0 0 00

Closing

GJ3

Adjusting

GJ6

Closing

GJ6

Explanation

June 30

July

ACCOUNT NO. DR CR Dr

2 0 0 00

Balance 2 0 0 00

2 0 0 00

NAME: MISCELLANEOUS EXPENSE Date 2016

Credit

519

2 0 0 00

ACCOUNT NO.

524

DR CR

Post Ref.

Debit

July 12

GJ4

3 0 0 00

GJ5

4 0 00

3 4 0 00

Explanation

5-94

Closing

GJ6

Credit

3 4 0 00

Balance

MINI PRACTICE SET: SULLIVAN REALTY, Cont. SULLIVAN REALTY INCOME STATEMENT FOR THE MONTH ENDED JUNE 30, 2016 Revenue: Commissions Earned

$1 6 0 0 0 0 0

Operating Expenses: Salaries Expense

$ 7 0 0 00

Gas Expense

4 7 00

Repairs Expense

6 0 0 00

Telephone Expense

5 1 0 00

Advertising Expense

1 2 0 0 00

Rent Expense

1 0 0 0 00

Office Supplies Expense

4 0 0 00

Depreciation Expense, Office Equipment

1 0 0 00

Depreciation Expense, Automobile

2 0 0 00

Total Operating Expsenes

4 7 5 7 00

$1 1 2 4 3 0 0

Net Income

SULLIVAN REALTY STATEMENT OF OWNER’S EQUITY FOR THE MONTH ENDED JUNE 30, 2016

John Sullivan, Capital, 6/1/16

$2 4 0 0 0 0 0

Net Income for June

$1 1 2 4 3 0 0

Less Withdrawals

1 0 0 0 00

Increase in Capital

10 2 4 3 00

John Sullivan, Capital, 6/30/16

$3 4 2 4 3 0 0

5-95

5-96

Total Assets

Less Acc. Depn.

Automobile

Less Acc. Depn.

Office Equipment

$4 0 0 0 00

2 0 0 00

$1 4 0 0 0 0 0

1 0 0 00

$3 5 5 9 3 0 0

13 8 0 0 00

3 9 0 0 00

5 0 00

2 0 0 0 00

Prepaid Rent

Office Supplies

6 5 0 0 00

Owner’s Equity

Total Liabilities and

John Sullivan, Capital

Owner’s Equity

Accounts Payable

Cash

Accounts Receivable

Liabilities

$9 3 4 3 0 0

JUNE 30, 2016

BALANCE SHEET

SULLIVAN REALTY

Assets

ASSETS

MINI PRACTICE SET: SULLIVAN REALTY, Cont.

$3 5 5 9 3 0 0

34 2 4 3 00

$ 1 3 5 0 00

LIABILITIES & OWNER’S EQUITY

MINI PRACTICE SET: SULLIVAN REALTY, Cont. SULLIVAN REALTY POST-CLOSING TRIAL BALANCE JUNE 30, 2016 Cash

9 3 4 3 00

Accounts Receivable

6 5 0 0 00

Prepaid Rent

2 0 0 0 00

Office Supplies

5 0 00

Office Equipment

4 0 0 0 00

Accumulated Depreciation, Office Equipment

1 0 0 00

Automobile

14 0 0 0 00

Accumulated Depreciation, Automobile

2 0 0 00

Accounts Payable

1 3 5 0 00

John Sullivan, Capital

34 2 4 3 00 35 8 9 3 00 35 8 9 3 00

Totals

SULLIVAN REALTY POST-CLOSING TRIAL BALANCE JULY 31, 2016 Cash

24 3 9 8 00

Accounts Receivable

2 4 0 0 00

Prepaid Rent

1 0 0 0 00

Office Supplies Office Equipment

9 0 00 4 0 0 0 00

Accumulated Depreciation, Office Equipment Automobile Accumulated Depreciation, Automobile Accounts Payable John Sullivan, Capital Totals

2 0 0 00 14 0 0 0 00 4 0 0 00 2 1 0 0 00 43 1 8 8 00 45 8 8 8 00 45 8 8 8 00

5-97

MINI PRACTICE SET: SULLIVAN REALTY, Cont. SULLIVAN REALTY INCOME STATEMENT FOR THE MONTH ENDED JULY 31, 2016 Revenue: Commissions Earned

$1 6 0 0 0 0 0

Operating Expenses: Salaries Expense

$ 7 0 0 00

Gas Expense

2 9 00

Repairs Expense

5 9 0 00

Telephone Expense

2 3 6 00

Advertising Expense

1 4 0 0 00

Miscellaneous Expense

3 4 0 00

Rent Expense

1 0 0 0 00

Office Supplies Expense

6 6 0 00

Depreciation Expense, Office Equipment

1 0 0 00

Depreciation Expense, Automobile

2 0 0 00 5 2 5 5 00

Total Operating Expenses

$1 0 7 4 5 0 0 Net Income

SULLIVAN REALTY STATEMENT OF OWNER’S EQUITY FOR THE MONTH ENDED JULY 31, 2013 $3 4 2 4 3 0 0 John Sullivan, Capital, 7/1/16 Net Income for July

$1 0 7 4 5 0 0 1 8 0 0 00

Less Withdrawals Increase in Capital John Sullivan, Capital, 7/31/16

5-98

8 9 4 5 00 $4 3 1 8 8 0 0

5-99

Total Assets

Less Acc. Depn.

Automobile

Less Acc. Depn.

Office Equipment

$4 0 0 0 0 0

4 0 0 00

14 0 0 0 00

2 0 0 00

$4 5 2 8 8 0 0

13 6 0 0 00

3 8 0 0 00

9 0 00

1 0 0 0 00

Prepaid Rent

Office Supplies

2 4 0 0 00

Owner’s Equity

Total Liabilities and

John Sullivan, Capital

Owner’s Equity

Accounts Payable

Cash

Accounts Receivable

Liabilities

$2 4 3 9 8 0 0

JULY 31, 2016

BALANCE SHEET

SULLIVAN REALTY

Assets

ASSETS

MINI PRACTICE SET: SULLIVAN REALTY, Cont.

$4 5 2 8 8 0 0

43 1 8 8 00

$2 1 0 0 0 0

LIABILITIES & OWNER’S EQUITY

6 Special Journals: The Basics, Part 1

ANSWERS TO DISCUSSION QUESTIONS AND CRITICAL THINKING/ETHICAL CASE 1. 2. 3. 4.

5. 6. 7. 8. 9. 10. 11. 12. 13.

Records reductions of sales caused by returns or discounts taken. Dr. Balance. Sales Discounts and Sales Returns and Allowances are contra-revenue accounts. A discount period is a short period within which a business receives a discount if it pays its bill. This encourages early payment. A credit period, which is longer than a discount period, represents the total time allowed to pay the full amount due on an invoice. 2/10, n/30: 2 percent off the bill if paid within 10 days or total bill due within 30 days. n/10, EOM: Full amount of bill is due not later than 10 days after the end of the month. A general journal records Returns and Allowances from Debit or Credit Memoranda. The sum of the accounts receivable ledger at the end of the month should equal the balance in the controlling account in the general ledger. Net sales is calculated as follows: Sales - Sales Returns and Allowances - Sales Discounts. By placing the accounts receivable ledger in alphabetical order, it is easier to locate specific companies or persons so that the balance can be updated. An invoice is a bill for a sale on account. It is used as a source document to update the sales journal of the seller and the purchases journal of the buyer. Sales Returns and Allowances, Accounts Receivable, and the accounts receivable ledger account. A schedule of accounts receivable is a list of who owes money and how much. The sum of the schedule should equal the balance in the controlling account in the general ledger at the end of the month. The question is whether Amy should ask the accountant to put the first two weeks of sales in January back into the previous December. Although Amy wants to improve sales production, this is not the way to go about it. It is extremely unethical for Amy to ask the accountant to switch the sales production. I would advise Amy not to behave in this manner. Remember, a sale is recorded when it is earned whether or not cash is received.

6-1

SOLUTIONS TO CLASSROOM DEMONSTRATION EXERCISES 1.

Sales

Revenue

Cr.

Temp.

Sales Returns and Allowances

Revenue (Contra)

Dr.

Temp.

Sales Discount

Revenue (Contra)

Dr.

Temp.

Gross sales

$30

- SRA

-8

- SD

-2

= Net sales

$20

a. 4, 6 b. 1,2,3 c. 2,4,5

4. SALES JOURNAL Date 2017 May 4 7 13 22 25 30

Sales Invoice No. 801 802 803 804 805 806

Terms

Account Debited

n30 n30 n30 n30 n30 n30

Francine Company Joshua Enterprises Charlize Company Francine Company Kirkhouse Consulting Charlize Company

Page 5 Post Ref.

Accounts Receivable - Dr. Sales - Cr. 2 0 0 00 3 0 0 00 1 0 0 00 3 5 0 00 4 0 0 00 2 5 0 00 1 6 0 0 00 (120)/(400)

5. DRISCOLL COMPANY SALES JOURNAL Date 2016 Feb 3 7 11 15 19 24 28

6-2

Invoice No. 301 302 303 304 305 306 307

Terms 2/10,n3 2/10,n3 2/10,n3 2/I0,n3 2/10,n3 2/10,n3 2/10,n3

Customer’s Name Parkay Management Ferlow Inspections Merlet Waste Management Parkay Management Arkadia Company Snake Creek & Co. Merlet Waste Management

Post Ref.

Page 1 Accounts Receivable Dr. 3 0 0 00 6 0 0 00 7 0 0 00 9 0 0 00 7 0 0 00 5 5 0 00 7 5 0 00 4 5 0 0 00 (1400)

Helmut Sales Cr. 2 0 0 00 3 5 0 00 1 5 0 00 6 0 0 00 4 0 0 00 5 0 0 00 2 2 0 0 00 (4100)

Safety Shoe Sales Cr. 1 0 0 00 2 5 0 00 5 5 0 00 3 0 0 00 7 0 0 00 1 5 0 00 2 5 0 00 2 3 0 0 00 (4200)

6. DRISCOLL COMPANY CASH RECEIPTS JOURNAL Date 2016 Feb

Cash Dr.

Accounts Receivable Cr.

Sales Cr.

5 10 0 0 0 0 0 12 2 9 4 00 3 0 0 00 20 6 8 6 00 7 0 0 00 27 6 0 0 00 6 0 0 00 10 5 8 0 0 0 1 6 0 0 0 0 (1000) (1200)

Page 1

Sales Discounts Dr.

Description of Receipt

Peter Driscoll, Owner 6 0 0 Parkay Management 1 4 0 0 Merlet Waste Management Ferlow Inspections 2 0 00 (4500)

Post Ref.

Sundry Cr.

3000

10 0 0 0 0 0

✓ ✓ ✓

10 0 0 0 0 0

AVE CO. SCHEDULE OF ACCOUNTS RECEIVABLE MAY31, 2015 Bliss Co. Rowe Co.

$ 3 0 00 6 0 00 $ 9 0 00

SOLUTIONS TO EXERCISES SET A EXERCISE 6-1A. Kevin Stone Co. 4/18 SJ1 600

Accounts Receivable 4/30 SJ1 1,500

Bill Valley Co. 4/19 SJ1 900

Sales

112

412 1,500 SJ1 4/30

EXERCISE 6-2A. SALES JOURNAL Date 2017 June

Account Debited 3 3 17

Boston Co. Gary Co. Boston Co.

Page 1

Terms

Invoice No.

Post Ref.

2/10, n/30 2/10, n/30 2/10, n/30

218 219 220

✓ ✓ ✓

Dr. - Accounts Receivable Cr. - Sales 7 0 0 1 1 0 0 6 0 0 2 4 0 0

00 00 00 00

6-3

SOLUTIONS TO EXERCISES—SET A, Cont. EXERCISE 6-2A, Cont. CASH RECEIPTS JOURNAL Date 2017 June

Sales Discounts Dr.

Cash Dr. 2 5 0 0 0 00 6 2 0 0 00 10 4 9 0 00 16 4 0 0 00 6 0 9 0 00 (111)

Date 2017 June 9

Accounts Receivable Cr.

Sales Cr.

Sundry Account Names

Post Ref.

Amount Cr.

311

5 0 0 0 00

1 0 00

5 0 0 00

Edna Cares, Capital 2 0 0 0 0 Cash Sales Boston Co. 4 0 0 0 0 Cash Sale 6 0 0 00

(413)

(113)

(411)

(X)

GENERAL JOURNAL

Page 1

1 0 00

5 0 0 00

Account Titles and Description Sales Returns and Allowances Accounts Receivable, Boston Co. Issued Credit Memo #24

ACCOUNTS RECEIVABLE LEDGER Boston Co. 6/03 SJ1 700 6/17 SJ1 600

200 GJ1 6/09 500 CRJ1 6/10 Gary Co.

6/03 SJ1 1,100

EDNA CO. SCHEDULE OF ACCOUNTS RECEIVABLE JUNE 30, 2017 Boston Co. $ 600 Gary Co. 1,100 Total Accounts Receivable $ 1,700

6-4

Page 1

X ✓ X

5 0 0 0 00

Post Ref.

Dr.

412

2 0 000

Cr.

2 0 0 00

113/✓

PARTIAL GENERAL LEDGER Cash 6/30 CRJ1 6,090

111

Accounts Receivable 6/30 SJ1 2,400

113 200 GJ1 6/09 500 CRJ1 6/30

Edna Cares, Capital

311 5,000 CRJ1 6/02

Sales

411 2,400 SJ1 6/30 600 CRJ1 6/30

Sales Returns & Allowances 6/9 GJ1 200

412

Sales Discount 6/30 CRJ1 10

413

EXERCISE 6-3A. Discount = ($3,200 − 400) × .03 = $84 Payment required = $3,200 − 400 − 84 = $2,716 BLUE CO. GENERAL JOURNAL Date 2015 Mar 7

Page 15 Post Ref.

Account Title and Description Sales Returns and Allowances Accounts Receivable, Frost Foundation Issued Credit Memorandum #103

EXERCISE 6-4A. Date 2016 Jan 11

4 0 0 00

Terms

HLJ Company

Cr.

4 0 000

GLASSIERE CO. SALES JOURNAL Account Debited

Dr.

2/10, n30

Page 9 Invoice No. 3275

Post Ref.

Dr. Acc. Receivable Cr. Sales 2 9 9 0 00

GLASSIERE CO. GENERAL JOURNAL

Page 13

Date Account Title and Description 2016 Jan 14 Sales Returns and Allowances Accounts Receivable, HLJ Company Issued Credit Memorandum #202

Post Ref.

Dr.

Cr.

3 0 000 3 0 0 00

GLASSIERE CO. CASH RECEIPTS JOURNAL Date 2016 Jan

Cash Dr. 20

Accounts Receivable Cr.

Sales Cr.

2 6 3 6 20 2 6 9 0 00

Sales Discounts Dr.

Page 5 Description of Receipt

5 3 8 0 HLJ Company

Post Ref.

Sundry Cr.

✓

ACCOUNTS RECEIVABLE LEDGER 01/14

HLJ Company 2,990 01/13 1/20

6-5

SOLUTIONS TO EXERCISES—SET A, Cont. EXERCISE 6-5A.

AIR WELL COMPANY SALES JOURNAL

Page 9

Date Invoice Post Accounts Lathes Sales Milling Sales Surfacing Sales Account Debited Terms 2017 No. Ref. Receivable - Dr. Cr. Cr. Cr. ✓ Aug 2 Amaxe Engineering 2/10,n30 601 9 7 0 0 00 3 0 0 0 00 4 2 0 0 00 2 5 0 0 00 ✓ 5 Willow Productions 2/10,n30 602 5 3 5 0 00 2 6 5 0 00 1 8 0 0 00 9 0 0 00 ✓ 10 5 0 0 0 0 4 1 0 0 0 0 3 6 0 0 0 0 2 8 0 0 0 0 9 Stencle Machinery 2/10,n30 603 ✓ 11 Macro-El Holdings 2/10,n30 604 7 0 0 0 00 2 7 0 0 00 4 3 0 0 00 ✓ 14 Amaxe Engineering 2/10,n30 605 8 0 0 0 00 3 6 0 0 00 2 7 0 0 00 1 7 0 0 00 ✓ 11 9 0 0 0 0 5 7 0 0 0 0 6 2 0 0 0 0 19 Naroco Company 2/10,n30 606 ✓ 22 Willow Productions 2/10,n30 607 9 6 0 0 00 3 3 0 0 00 3 5 0 0 00 2 8 0 0 00 ✓ 24 Macro-El Holdings 2/10,n30 608 6 7 0 0 00 3 2 0 0 00 8 0 0 00 2 7 0 0 00 ✓ 29 Amaxe Engineering 2/10,n30 609 5 4 0 0 00 2 5 0 0 00 2 9 0 0 00 74 1 5 0 0 0 25 5 5 0 0 0 28 0 0 0 0 0 20 6 0 0 0 0 1200 4010 4020 4030 74,150

ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER Amaxe Engineering 08/02 SJ9 9,700 08/14 SJ9 8,000 08/29 SJ9 5,400

74,150

PARTIAL GENERAL LEDGER Accounts Receivable 08/31 SJ9 74,150

1200

23,100

Macro-El Holdings 08/11 SJ9 7,000 08/24SJ9 6,700

Lathe Sales

4010 25,550 SJ9 08/31

Naroco Company 08/19 SJ9 11,900

Milling Sales

4020 28,000 SJ9 08/31

Stencle Machinery 08/09 SJ9 10,500

Surfacing Sales

4030 20,600 SJ9 08/31

Willow Productions 08/05 SJ9 5,350 08/22 SJ9 9,600

Sales Discounts

4450

13,700

14,950

6-6

9,700 CRJ5 08/11

Naroco Company 08/19 SJ9 11,900 11,900 CRJ5 08/27

13,700

08/11 SJ9 7,000 08/24 SJ9 6,700

Lathe Sales Cr.

Milling Sales Cr.

67,450

10,500 CRJ5 08/19

9,600

08/05 SJ9 5,350 08/22 SJ9 9,600

5,350 CRJ5 08/25

Willow Productions

08/09 SJ9 10,500

Stencle Machinery

Lathe Sales

Bank Loan Payable

36,700

08/31 SJ9 74,150

Accounts Receivable

08/31 CRJ5 66,808

Cash

Description of Receipt

✓

Post Ref.

08/31 CRJ5 642

30,000 CRJ5 08/31

25,550 SJ9 08/31

4010

Sales Discounts

Surfacing Sales

Milling Sales

4020

4450

20,600 SJ9 08/31

4030

28,000 SJ9 08/31

30 0 0 0 0 0 (X)

2200

37,450 CRJ5 08/31

1200

1100

Sundry Cr.

Page 5

30 0 0 0 0 0

PARTIAL GENERAL LEDGER

Bank Loan re inventory purch. 1 9 4 0 0 Amaxe Engineering 2 1 0 0 0 Stencle Machinery Willow Productions 2 3 8 0 0 Naroco Company 6 4 2 00 (4450)

Sales Discounts Dr.

67,450

Surfacing Sales Cr.

CASH RECEIPTS JOURNAL

ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER

Macro-El Holdings

13,400

08/02 SJ9 9,700 08/14 SJ9 8,000 08/29 SJ9 5,400

Accounts Receivable Cr.

3 30 0 0 0 0 0 11 9 5 0 6 0 0 9 7 0 0 0 0 19 10 2 9 0 0 0 10 5 0 0 0 0 25 5 3 5 0 0 0 5 3 5 0 0 0 27 11 6 6 2 0 0 11 9 0 0 0 0 66 8 0 8 0 0 37 4 5 0 0 0 (1100) (1200)

Cash Dr.

Amaxe Engineering

Aug

Date 2017

EXERCISE 6-6A., Cont.

AIRWELL COMPANY

SOLUTIONS TO EXERCISES—SET B EXERCISE 6-1B. Kevin Stone Co.

Accounts Receivable

4/18 SJ1 800

112

4/30 SJ1 1,500

Bill Valley Co.

Sales

412

4/19 SJ1 700

1,500 SJ1 4/30

EXERCISE 6-2B. SALES JOURNAL

Date 2017 June 3 3 17

Account Debited

Page 1

Terms

Boston Co. Gary Co. Boston Co.

2/10, n/30 2/10, n/30 2/10, n/30

Invoice No. 218 219 220

Post Ref.

Accounts Receivable - Dr. Sales - Cr.

✓

8 0 0 1 2 0 0 7 0 0 2 7 0 0

✓ ✓

00 00 00 00

(113) (411)

CASH RECEIPTS JOURNAL Date 2017 June

Cash Dr. 2 6 0 0 0 00 6 3 0 0 00 10 6 3 7 00 16 5 0 0 00 7 4 3 7 00 (111)

6-8

Sales Discounts Dr.

Accounts Receivable Cr.

Sales Cr.

Sundry Account Names

1 3 00

6 5 0 00

1 3 00

6 5 0 00

Edna Cares, Capital 3 0 0 0 0 Cash Sale Boston Co. 5 0 0 0 0 Cash Sale 8 0 0 00

(413)

(113)

(411)

Page 1 Post Ref.

Amount Cr.

311

6 0 0 0 00

X ✓ X

6 0 0 0 00 (X)

EXERCISE 6-2B., Cont. GENERAL JOURNAL Date 2017 June 9

Page 1

Account Titles and Description Sales Returns and Allowances Accounts Receivable, Boston Co. Issued Credit Memo #24

ACCOUNTS RECEIVABLE LEDGER Boston Co. 6/03 SJ1 800 6/17 SJ1 700

150 GJ1 6/09 650 CRJ1 6/10

Gary Co. 6/03 SJ1 1,200

EDNA CO. SCHEDULE OF ACCOUNTS RECEIVABLE JUNE 30, 2017 Boston Co. $ 700 Gary Co. 1,200 Total Accounts Receivable $ 1,900

Post Ref.

Dr.

412

1 5 000

Cr.

1 5 0 00

113/✓

PARTIAL GENERAL LEDGER Cash 6/30 CRJ1 7,437

111

Accounts Receivable 6/30 SJ1 2,700

113 150 GJ1 6/09 650 CRJ1 6/30

Edna Cares, Capital

311 6,000 CRJ1 6/02

Sales

411 2,700 SJ1 6/30 800 CRJ1 6/30

Sales Returns & Allowances 6/9 GJ1 150

412

Sales Discount 6/30 CRJ1 13

413

EXERCISE 6-3B. Discount = ($4,600 − 500) × .03 = $123 Payment required = $4,600 − 500 − 123 = $3,977 BLUE CO. GENERAL JOURNAL Date 2015 Mar 7

Account Title and Description Sales Returns and Allowances Accounts Receivable, Frost Foundation Issued Credit Memo #103

Page 15 Post Ref.

Dr.

Cr.

5 0 000 5 0 0 00

6-9

SOLUTIONS TO EXERCISES—SET B, Cont.

EXERCISE 6-4B. Date 2016 Jan 11

GLASSIERE CO. SALES JOURNAL Account Debited

Terms

HLJ Company

2/10, n30

Page 9 Invoice No. 3275

Post Ref.

Dr. Acc. Receivable Cr. Sales 2 2 8 0 00

GLASSIERE CO. GENERAL JOURNAL Date Account Title and Description 2016 Jan 14 Sales Returns and Allowances Accounts Receivable, HLJ Company Issued Credit Memorandum #202

Page 13 Post Ref.

Dr.

Cr.

2 0 000 2 0 0 00

GLASSIERE CO. CASH RECEIPTS JOURNAL Date 2016 Jan

Cash Dr. 20

Accounts Receivable Cr.

Sales Cr.

2 0 3 8 40 2 0 8 0 00

01/14

6-10

Description of Receipt

4 1 6 0 HLJ Company

ACCOUNTS RECEIVABLE LEDGER HLJ Company 2,280 01/13 1/20

Sales Discounts Dr.

Page 5

200 2,080

Post Ref. ✓

Sundry Cr.

EXERCISE 6-5B.

AIRWELL COMPANY SALES JOURNAL

Page 9

Date Invoice Post Accounts Lathes Sales Milling Sales Surfacing Sales Account Debited Terms 2017 No. Ref. Receivable - Dr. Cr. Cr. Cr. ✓ 11 3 0 0 0 0 4 0 0 0 0 0 5 4 0 0 0 0 1 9 0 0 0 0 Aug 2 Amaxe Engineering 2/10,n30 601 ✓ 5 Willow Productions 2/10,n30 602 7 3 5 0 00 3 8 5 0 00 2 7 0 0 00 8 0 0 00 ✓ 11 1 0 0 0 0 3 7 0 0 0 0 5 6 0 0 0 0 1 8 0 0 0 0 9 Stencle Machinery 2/10,n30 603 ✓ 11 Macro-El Holdings 2/10,n30 604 9 0 0 0 00 3 6 0 0 00 5 4 0 0 00 ✓ 10 0 0 0 0 0 4 3 0 0 0 0 3 2 0 0 0 0 2 5 0 0 0 0 14 Amaxe Engineering 2/10,n30 605 ✓ 10 5 0 0 0 0 4 8 0 0 0 0 5 7 0 0 0 0 19 Naroco Company 2/10,n30 606 ✓ 22 Willow Productions 2/10,n30 607 8 9 6 0 00 4 2 0 0 00 2 9 0 0 00 1 8 6 0 00 ✓ 24 Macro-El Holdings 2/10,n30 608 8 5 0 0 00 4 4 0 0 00 2 3 0 0 00 1 8 0 0 00 ✓ 6 0 0 0 00 3 3 0 0 00 2 7 0 0 00 29 Amaxe Engineering 2/10,n30 609 82 7 1 0 0 0 29 2 5 0 0 0 34 7 0 0 0 0 18 7 6 0 0 0 1200 4010 4020 4030 82,710

ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER Amaxe Engineering 08/02 SJ9 11,300 08/14 SJ9 10,000 08/29 SJ9 6,000

82,710

PARTIAL GENERAL LEDGER Accounts Receivable 08/31 SJ9 82,710

1200

27,300

Macro-El Holdings 08/11 SJ9 9,000 08/24 SJ9 8,500

Lathe Sales

4010 29,250 SJ9 08/31

Naroco Company 08/19 SJ9 10,500

Milling Sales

4020 34,700 SJ9 08/31

Stencle Machinery 08/09 SJ9 11,100

Surfacing Sales

4030 18,600 SJ9 08/31

Willow Productions 08/05 SJ9 7,350 08/22 SJ9 8,960

Sales Discounts

4450

17,500

16,310

6-11

3 11 19 25 27

11,300 CRJ5 08/11

Naroco Company 08/19 SJ9 10,500 10,500 CRJ5 08/27

17,500

08/11 SJ9 9,000 08/24 SJ9 8,500

Lathe Sales Cr.

Milling Sales Cr.

65,250

11,100 CRJ5 08/19

8,960

08/05 SJ9 7,350 08/22 SJ9 8,960

7,350 CRJ5 08/25

Willow Productions

08/09 SJ9 11,100

Stencle Machinery

Lathe Sales

Bank Loan Payable

42,460

08/31 SJ9 82,710

Accounts Receivable

08/31 CRJ5 64,592

Cash

Description of Receipt

✓

Post Ref.

08/31 CRJ5 658

25,000 CRJ5 08/31

29,250 SJ9 08/31

4010

Sales Discounts

Surfacing Sales

Milling Sales

4020

4450

18,600 SJ9 08/31

4030

34,700 SJ9 08/31

25 0 0 0 0 0 (X)

2200

40,250 CRJ5 08/31

1200

1100

Sundry Cr.

Page 5

25 0 0 0 0 0

PARTIAL GENERAL LEDGER

Bank Loan re inventory purch. 2 2 6 0 0 Amaxe Engineering 2 2 2 0 0 Stencle Machinery Willow Productions 2 1 0 0 0 Naroco Company 6 5 8 00 (4450)

Sales Discounts Dr.

65,250

Surfacing Sales Cr.

CASH RECEIPTS JOURNAL

AIRWELL COMPANY

ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER

Macro-El Holdings

16,000

08/02 SJ9 11,300 08/14 SJ9 10,000 08/29 SJ9 6,000

Accounts Receivable Cr.

25 0 0 0 0 0 11 0 7 4 0 0 11 3 0 0 0 0 10 8 7 8 0 0 11 1 0 0 0 0 7 3 5 0 00 7 3 5 0 00 10 2 9 0 0 0 10 5 0 0 0 0 64 5 9 2 0 0 40 2 5 0 0 0 (1100) (1200)

Cash Dr.

Amaxe Engineering

Aug

Date 2017

EXERCISE 6-6B, Cont.

PROBLEM 6A-1. FOOD ON THE GO SALES JOURNAL Date Invoice Customer’s Name 2016 No. June 1 702 Joe Kase Co. 4 703 Sue Moore Co. 8 704 Long Co. 15 705 Sue Moore Co. 18 706 Long Co. 25 707 Joe Kase Co.

Page 1 Post Ref. ✓ ✓ ✓ ✓ ✓ ✓

Accounts Sales Cr. Receivable Dr. 4 0 0 00 4 0 0 00 6 0 0 00 6 0 0 00 7 0 0 00 7 0 0 00 1 8 0 00 1 8 0 00 3 0 0 00 3 0 0 00 1 2 0 0 00 1 2 0 0 00 3 3 8 0 00 3 3 8 0 00 (112)

(410)

FOOD ON THE GO. GENERAL JOURNAL Date Account Title and Description 2016 June 11 Sales Returns and Allowances Accounts Receivable, Joe Kase Co. Issued Credit Memo #34

Page 1 Post Ref.

Dr.

412

1 5 0 00

112/✓

Cr.

1 5 0 00

6-13

PROBLEM 6A-1., Cont. FOOD ON THE GO ACCOUNTS RECEIVABLE LEDGER NAME ADDRESS Date 2016 June 1 11 25

NAME ADDRESS Date 2016 June 8 16

NAME ADDRESS Date 2016 June 4 15

6-14

JOE KASE CO. 101 VICTORIA ST., OSHAWA, ON L1G 8J3 Explanation

Post Ref.

Debit

SJ1

4 0 0 00

GJ1 SJ1

Credit

Dr. Balance

1 5 0 00

4 0 0 00 2 5 0 00 1 4 5 0 00

Credit

Dr. Balance

1 2 0 0 00

LONG CO. 8 JOSS AVE., OSHAWA, ON L1J 2X1 Explanation

Post Ref. SJ1 SJ1

Debit 7 0 0 00 3 0 0 00

7 0 0 00 1 0 0 0 00

SUE MOORE CO. 10 LOST RD., OSHAWA, ON L1H 3B4 Explanation

Post Ref. SJ1 SJ1

Debit 6 0 0 00 1 8 0 00

Credit

Dr. Balance 6 0 0 00 7 8 0 00

PROBLEM 6A-1., Cont. FOOD ON THE GO PARTIAL GENERAL LEDGER NAME: ACCOUNTS RECEIVABLE Date 2016 June 11 30

ACCOUNT NO.

Explanation

Post Ref.

Debit

Credit 1 5 0 00

GJ1 SJ1

3 3 8 0 00

NAME: SALES Date 2016 June 30

Balance 1 5 0 00 3 2 3 0 00

ACCOUNT NO. Explanation

Post Ref.

Debit

Credit 3 3 8 0 00

SJ1

NAME: SALES RETURNS AND ALLOWANCES Date 2016 June 11

DR CR Cr Dr

112

Explanation

DR CR Cr

410 Balance 3 3 8 0 00

ACCOUNT NO. Post Ref.

Debit

GJ1

1 5 0 00

Credit

DR CR Dr

412 Balance 1 5 0 00

FOOD ON THE GO SCHEDULE OF ACCOUNTS RECEIVABLE JUNE 30, 2016 Joe Kase Co. Long Co. Sue Moore Co. Total Accounts Receivable

$1 4 5 0 1 0 0 0 7 8 0 $3 2 3 0

00 00 00 00

6-15

PROBLEM 6A-2.

PEAKER’S SNEAKER SHOP SALES JOURNAL Date Sales 2015 Invoice No. May 4 160 4 161 8 162 21 163 29 164

Terms 1/10,n/30 1/10,n/30 1/10,n/30 1/10,n/30 1/10,n/30

Account Debited B. Dale Ron Lester Jim Zon Pam Pry Ron Lester

Page 5 Post Ref. ✓ ✓ ✓ ✓ ✓

Dr. - Acct. Receivable Cr. - Sales 9 0 0 00 5 0 0 00 2 0 0 00 3 0 0 0 00 4 0 0 0 00 8 6 0 0 00 (12) (40)

PEAKER’S SNEAKER SHOP GENERAL JOURNAL Date Account Title and Description 2015 May 25 Sales Returns and Allowances Accounts Receivable, Pam Pry Issued Credit Memo #31 31 Sales Returns and Allowances Accounts Receivable, Ron Lester Issued Credit Memo #32

6-16

Page 1 Post Ref. 44

Dr. 2 0 0 0 00

2 0 0 0 00

12/✓

44 12/✓

Cr.

7 0 0 00 7 0 0 00

SOLUTION TO PROBLEM 6A-2., Cont.

PEAKER’S SNEAKER SHOP CASH RECEIPTS JOURNAL Date 2015 May

Cash Dr.

Accounts Receivable Cr.

Sales Cr.

1 12 0 0 0 0 0 11 8 9 1 00 9 0 0 00 22 5 0 0 00 5 0 0 00 22 3 0 0 0 0 0 3 0 0 0 00 25 7 0 0 0 0 0 7 0 0 0 00 28 9 9 0 00 1 0 0 0 00 28 3 0 0 00 24 6 8 1 0 0 2 4 0 0 0 0 10 0 0 0 0 0 (10)

(12)

(40)

Sales Discounts Dr.

Page 2

Description of Receipt

Post Ref.

Sundry Account Cr.

Mark Peaker, Capital 9 0 0 B. Dale Ron Lester Cash Sales Cash Sales 1 0 0 0 Pam Pry Sneaker Rack Equipment 1 9 00

12 0 0 0 0 0

✓ ✓ X X ✓ 14

3 0 0 00 12 3 0 0 0 0

(42)

(X)

PEAKER’S SNEAKER SHOP ACCOUNTS RECEIVABLE LEDGER NAME ADDRESS Date 2015 May 1 4 11

NAME ADDRESS Date 2015 May 1 4 22 29 31

B. DALE 1822 THE NARROWS ROAD, DARTMOUTH, NS B2X 7L5 Explanation

Post Ref.

Debit

Credit

Dr. Balance

9 0 0 00

4 0 0 00 1 3 0 0 00 4 0 0 00

Credit

Dr. Balance

5 0 0 00

8 0 0 00 1 3 0 0 00 8 0 0 00 4 8 0 0 00 4 1 0 0 00

✓

Balance

SJ5

9 0 0 00

CRJ2

RON LESTER 18 MASS AVE., KINGSTON, NS B2A 2G3 Explanation Balance

Post Ref.

Debit

✓ SJ5

5 0 0 00

CRJ2 SJ5 GJ1

4 0 0 0 00 7 0 0 00

6-17

PROBLEM 6A-2., Cont. NAME ADDRESS Date 2015 May 1 21 25 28

PAM PRY OLD MILL ROAD, GREENFIELD, QUEENS CO., NS BOT 3E0 Debit

Credit

Dr. Balance

2 0 0 0 00 1 0 0 0 00

6 0 0 00 3 6 0 0 00 1 6 0 0 00 6 0 0 00

Credit

Dr. Balance

✓

Balance

SJ5

3 0 0 0 00

GJ1 CRJ2

NAME ADDRESS Date 2015 May 1 8

Post Ref.

Explanation

JIM ZON 2 CHESTNUT ST., HALIFAX, NS B3K 3D5 Post Ref.

Explanation

Debit

✓

Balance

4 0 0 00 6 0 0 00

2 0 0 00

SJ5

PEAKER’S SNEAKER SHOP PARTIAL GENERAL LEDGER NAME: CASH Date 2015 May 1 31

ACCOUNT NO. Explanation

Post Ref.

Debit

✓

Balance

CRJ2

24 6 8 1 0 0

NAME: ACCOUNTS RECEIVABLE Date 2015 May 1 25 29 31 31

6-18

Credit

Explanation Balance

DR CR Dr Dr

ACCOUNT NO. Post Ref.

Debit

Credit

✓

2 0 0 0 00 7 0 0 00

GJ1 GJ1 SJ5 CRJ2

8 6 0 0 00 2 4 0 0 00

DR CR Dr Dr Cr Dr Dr

10 Balance 15 5 0 0 0 0 40 1 8 1 0 0

12 Balance 2 2 0 0 00 2 0 0 00 5 0 0 00 8 1 0 0 00 5 7 0 0 00

PROBLEM 6A-2., Cont. NAME: SNEAKER RACK EQUIPMENT Date 2015 May 1 28

Explanation

ACCOUNT NO. Post Ref.

Debit

✓

Balance

3 0 0 00

CRJ2

NAME: MARK PEAKER, CAPITAL Date 2015 May 1 1

Explanation

Post Ref.

Debit

12 0 0 0 0 0

CRJ2

Balance 1 0 0 0 00 7 0 0 00

DR CR Cr Cr

30 Balance 40 0 0 0 0 0 52 0 0 0 0 0

ACCOUNT NO. Explanation

Balance

Credit

✓

Balance

DR CR Dr Dr

ACCOUNT NO.

NAME: SALES Date 2015 May 1 31 31

Credit

Post Ref.

Debit

Credit

✓ SJ5 CRJ2

8 6 0 0 00 10 0 0 0 0 0

DR CR Cr Cr Cr

40 Balance 2 2 0 0 00 10 8 0 0 0 0 20 8 0 0 0 0

6-19

PROBLEM 6A-2., Cont. PEAKER’S SNEAKER SHOP PARTIAL GENERAL LEDGER NAME: SALES DISCOUNTS Date 2015 May 31

ACCOUNT NO.

Explanation

Post Ref. CRJ2

Debit

Credit

1 9 00

NAME: SALES RETURNS AND ALLOWANCES Date 2015 May 25 31

Explanation

DR CR Dr

Balance 1 9 00

ACCOUNT NO. Post Ref. GJ1 GJ1

Debit

Credit

2 0 0 0 00 7 0 0 00

DR CR Dr Dr

44 Balance 2 0 0 0 00 2 7 0 0 00

PEAKER’S SNEAKER SHOP SCHEDULE OF ACCOUNTS RECEIVABLE MAY 31, 2015 B. Dale Ron Lester Pam Pry Jim Zon Total Accounts Receivable

6-20

$ 4 0 0 4 1 0 0 6 0 0 6 0 0 $5 7 0 0

00 00 00 00 00

6-21

Aug

2 4 5 10 13 17 22 26 28 30

Date 2016

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Inv. No.

Terms

2/10,n30 3/15,n45 2/10,n30 2/10,n30 2/10,n30 2/10,n30 3/15,n45 3/15,n45 2/10,n30 2/10,n30

PROBLEM 6A-3

August Totals for Salespersons

Monthly Totals

JIW Enterprises Case-5 Electronics Advanced Technologies in Motion Manfred Communications JIW Enterprises Advanced Technologies in Motion WMJ Sales Case-5 Electronics Manfred Communications Advanced Technologies in Motion

Customer’s Account

HW PJ Total

HW PJ PJ HW HW PJ HW PJ HW PJ

Salesperson

✓

Post Ref.

Cr. 4,000.00 3,200.00

Dr. 9,500.00 7,400.00 4,100.00 9,450.00 5,750.00 3,430.00 9,300.00 6,200.00 8,730.00 5,530.00

(4100)

(1300) 42,730.00 26,660.00 69,390.00

20,710.00

69,390.00

2,550.00 1,430.00

3,000.00 1,400.00 930.00 4,200.00

Cellphones’ Sales

Accounts Receivable

CHAN’S IMPORTED TECHNOLOGY SALES JOURNAL

(4200)

36,850.00

Cr. 5,500.00 1,600.00 2,900.00 4,750.00 3,500.00 1,400.00 3,800.00 6,200.00 4,400.00 2,800.00

Tablet Computers’ Sales

(4300)

11,830.00

1,780.00 1,300.00

2,600.00 1,200.00 1,700.00 850.00 1,100.00 1,300.00

Cr.

Portable Music Players’ Sales

Page 1

PROBLEM 6A-3., Cont. CHAN’S IMPORTED TECHNOLOGY GENERAL JOURNAL Date Account Title and Description 2016 Aug 6 Sales Returns and Allowances Accounts Receivable, JIW Enterprises Issued Credit Memorandum No. 101

Date 2016 Aug 5 17 30

NAME ADDRESS Date 2016 Aug 4 26

6-22

Post Ref.

Dr.

4500

1 5 0 00

Cr.

1 5 0 00

1300/✓

20 Sales Returns and Allowances Accounts Receivable, Manfred Communications Issued Credit Memorandum No. 102

NAME ADDRESS

Page 1

7 5 00

4500

7 5 00

1300/✓

CHAN’S IMPORTED TECHNOLOGY ACCOUNTS RECEIVABLE LEDGER ADVANCED TECHNOLOGIES IN MOTION 1120 PHILIP AVE., SARNIA, ON N7T 7M7 Explanation

Post Ref. SJ1 SJ1 SJ1

Debit

Credit

4 1 0 0 00 3 4 3 0 00 5 5 3 0 00

Dr. Balance 4 1 0 0 00 7 5 3 0 00 13 0 6 0 0 0

CASE-5 ELECTRONICS 656 ONTARIO ST., SARNIA, ON N7T 5B5 Explanation

Post Ref. SJ1 SJ1

Debit 7 4 0 0 00 6 2 0 0 00

Credit

Dr. Balance 7 4 0 0 00 13 6 0 0 0 0

PROBLEM 6A-3., Cont. CHAN’S IMPORTED TECHNOLOGY ACCOUNTS RECEIVABLE LEDGER NAME ADDRESS Date 2016 Aug 2 6 13

NAME ADDRESS Date 2016 Aug 10 20 28

NAME ADDRESS Date 2016 Aug 22

JIW ENTERPRISES 2275 CONFEDERATION ST., SARNIA, ON N7S 7T9 Explanation

Post Ref. SJ1

Debit

Dr. Balance

1 5 0 00

9 5 0 0 00 9 3 5 0 00 15 1 0 0 0 0

Credit

Dr. Balance

9 5 0 0 00

GJ1 SJ1

Credit

5 7 5 0 00

MANFRED COMMUNICATIONS 999 MCGREGOR RD., SARNIA, ON N7V 1A1 Explanation

Post Ref. SJ1

Debit 9 4 5 0 00

7 5 00

GJ1 SJ1

8 7 3 0 00

9 4 5 0 00 9 3 7 5 00 18 1 0 5 0 0

WMJ SALES 62 MITTON ST. S, SARNIA, ON N7S 2R3 Explanation

Post Ref. SJ1

Debit 9 3 0 0 00

Credit

Dr. Balance 9 3 0 0 00

CHAN’S IMPORTED TECHNOLOGY SCHEDULE OF ACCOUNTS RECEIVABLE AUGUST 31, 2016 Advanced Technologies in Motion Case-5 Electronics JIW Enterprises Manfred Communications WMJ Sales

13 0 6 0 13 6 0 0 15 1 0 0 18 1 0 5 9 3 0 0 69 1 6 5

00 00 00 00 00 00

6-23

PROBLEM 6A-3., Cont. CHAN’S IMPORTED TECHNOLOGY PARTIAL GENERAL LEDGER NAME: ACCOUNTS RECEIVABLE Date 2016 Aug 6 20 31

Explanation

ACCOUNT NO. Post Ref.

Debit

1 5 0 00 7 5 00

GJ1 GJ1 SJ1

69 3 9 0 0 0

NAME: CELL PHONES’SALES Date 2016 Aug 31

Explanation

Post Ref.

Debit

Post Ref.

Debit

Post Ref.

Debit

6-24

Credit 11 8 3 0 0 0

SJ1

Explanation

DR CR Cr

ACCOUNT NO.

NAME: SALES RETURNS AND ALLOWANCES Date 2016 Aug 6 20

Credit 36 8 5 0 0 0

SJ1

Explanation

DR CR Cr

ACCOUNT NO.

NAME: PORTABLE MUSIC PLAYERS’ SALES Date 2016 Aug 31

Credit 20 7 1 0 0 0

SJ1

Explanation

DR CR Cr Cr Dr

ACCOUNT NO.

NAME: TABLET COMPUTERS’ SALES Date 2016 Aug 31

Credit

DR CR Cr

ACCOUNT NO. Post Ref. GJ1 GJ1

Debit 1 5 0 00 7 5 00

Credit

DR CR Dr Dr

1300 Balance 1 5 0 00 2 2 5 00 69 1 6 5 0 0

4100 Balance 20 7 1 0 0 0

4200 Balance 36 8 5 0 0 0

4300 Balance 11 8 3 0 0 0

4500 Balance 1 5 0 00 2 2 5 00

PROBLEM 6A-3., Cont. NAME: SALES DISCOUNTS Date

ACCOUNT NO. Post Ref.

Explanation

Debit

DR CR

Credit

4550 Balance

PROBLEM 6A-4 CHAN’S IMPORTED TECHNOLOGY CASH RECEIPTS JOURNAL Accounts Date Cash Receivable 2016 Dr. Cr. Aug 3 50 0 0 0 0 0 11 9 1 6 3 0 0 9 3 5 0 0 0 14 4 0 1 8 0 0 4 1 0 0 0 0 18 7 1 7 8 0 0 7 4 0 0 0 0 21 9 1 8 7 5 0 9 3 7 5 0 0 23 5 6 3 5 0 0 5 7 5 0 0 0 26 3 3 6 1 4 0 3 4 3 0 0 0 31 4 5 1 0 5 0 4 6 5 0 0 0 93 0 5 3 4 0 44 0 5 5 0 0 (1100) (1300)

Date 2016 Aug 5 14 17 26 30

Sundry Account

1 8 7 00 8 2 00 2 2 2 00 1 8 7 50 1 1 5 00 6 8 60 1 3 9 50 1 0 0 1 60 (4550)

94,055.00

NAME ADDRESS

Sales Discounts Cr.

Sales Cr.

Page 1

Owner, W. Chan JIW Enterprises Advanced Tech. Case-5 Electronics Manfred Comm. JIW Enterprises Advanced Tech. WM J Sales

Post Ref.

Amount Cr.

3000

50 0 0 0 0 0

✓ ✓ ✓ ✓ ✓ ✓ ✓

50 0 0 0 0 0 (X)

94,055.00

CHAN’S IMPORTED TECHNOLOGY ACCOUNTS RECEIVABLE LEDGER ADVANCED TECHNOLOGIES IN MOTION 1120 PHILIP AVE., SARNIA, ON N7T 7M7 Explanation

Post Ref. SJ1

Debit 4 1 0 0 00 3 4 3 0 00

SJ1

5 5 3 0 00

0 3 4 3 0 00

3 4 3 0 00

CRJ1

Dr. Balance 4 1 0 0 00

4 1 0 0 00

CRJ1 SJ1

Credit

0 5 5 3 0 00

6-25

PROBLEM 6A-4., Cont.

NAME ADDRESS Date 2016 Aug 4 18 26

NAME ADDRESS Date 2016 Aug 2 6 11 13 23

NAME ADDRESS Date 2016 Aug 10 20 21 28

NAME ADDRESS Date 2016 Aug 22 31

6-26

CHAN’S IMPORTED TECHNOLOGY ACCOUNTS RECEIVABLE LEDGER CASE-5 ELECTRONICS 656 ONTARIO ST., SARNIA, ON N7T 5B5 Explanation

Post Ref. SJ1

Debit 7 4 0 0 00

Dr. Balance 7 4 0 0 00

7 4 0 0 00

CRJ1 SJ1

Credit

6 2 0 0 00

0 6 2 0 0 00

JIW ENTERPRISES 2275 CONFEDERATIONST., SARNIA, ON N7S 7T9 Explanation

Post Ref. SJ1

Debit 9 5 0 0 00

1 5 0 00 9 3 5 0 00

GJ1 CRJ1 SJ1

Credit

5 7 5 0 00

CRJ1

Dr. Balance 9 5 0 0 00 9 3 5 0 00

0 5 7 5 0 00

5 7 5 0 00

Credit

Dr. Balance

MANFRED COMMUN1CATIONS 999 MCGREGOR RD., SARNIA, ON N7V1A1 Explanation

Post Ref. SJ1

Debit 9 4 5 0 00

7 5 00 9 3 7 5 00

GJ1 CRJ1 SJ1

8 7 3 0 00

9 4 5 0 00 9 3 7 5 00

0 8 7 3 0 00

WMJ SALES 62 MITTONST. S, SARNIA, ON N7S2R3 Explanation

Post Ref. SJ1 CRJ1

Debit

Credit

Dr. Balance

4 6 5 0 00

9 3 0 0 00 4 6 5 0 00

9 3 0 0 00

PROBLEM 6A-4., Cont. CHAN’S IMPORTED TECHNOLOGY SCHEDULE OF ACCOUNTS RECEIVABLE AUGUST 31, 2016 Advanced Technologies in Motion Case-5 Electronics Manfred Communications WMJ Sales

5 5 3 0 6 2 0 0 8 7 3 0 4 6 5 0 25 1 1 0

00 00 00 00 00

CHAN’S IMPORTED TECHNOLOGY PARTIAL GENERAL LEDGER NAME: CASH Date 2016 Aug 31

ACCOUNT NO. Explanation

Post Ref.

Debit

CRJ1

93 0 5 3 4 0

Credit

NAME: ACCOUNTS RECEIVABLE Date 2016 Aug 6 20 31 31

Explanation

Post Ref.

Debit

1 5 0 00 7 5 00

GJ1 SJ1

69 3 9 0 0 0 44 0 5 5 0 0

CRJ1

Post Ref.

Debit

Credit 50 0 0 0 0 0

CRJ1

Explanation

93 0 5 3 4 0

DR CR CR CR DR DR

1300 Balance 1 5 0 00 2 2 5 00 69 1 6 5 0 0 25 1 1 0 0 0

ACCOUNT NO.

NAME: CELL PHONES’ SALES Date 2016 Aug 31

Credit

GJ1

Explanation

Balance

ACCOUNT NO.

NAME: OWNER’S EQUITY, W. CHAN Date 2016 Aug 3

DR CR DR

1100

DR CR CR

3000 Balance 50 0 0 0 0 0

ACCOUNT NO. Post Ref. SJ1

Debit

Credit 20 7 1 0 0 0

DR CR CR

4100 Balance 20 7 1 0 0 0

6-27

PROBLEM 6A-4., Cont. CHAN’S IMPORTED TECHNOLOGY PARTIAL GENERAL LEDGER NAME: TABLET COMPUTERS’ SALES Date 2016 Aug 31

Explanation

Post Ref.

Debit

Explanation

Post Ref.

Debit

Post Ref. GJ1 GJ1

6-28

Explanation

DR CR CR

ACCOUNT NO. Debit

Credit

1 5 0 00 7 5 00

NAME: SALES DISCOUNTS Date 2016 Aug 31

Credit 11 8 3 0 0 0

SJ1

Explanation

DR CR CR

ACCOUNT NO.

NAME: SALES RETURNS AND ALLOWANCES Date 2016 Aug 6 20

Credit 36 8 5 0 0 0

SJ1

NAME: PORTABLE MUSIC PLAYERS’ SALES Date 2016 Aug 31

ACCOUNT NO.

DR CR DR CR

ACCOUNT NO. Post Ref. CRJ1

Debit

Credit 1 0 0 1 60

DR CR CR

4200 Balance 36 8 5 0 0 0

4300 Balance 11 8 3 0 0 0

4500 Balance 1 5 0 00 2 2 5 00

4550 Balance 1 0 0 1 60

PROBLEM 6B-1.

FOOD ON THE GO SALES JOURNAL Date Invoice Customer’s Name 2016 No. June 3 1 Joe Kase Co. 4 2 Sue Moore Co. 7 3 Long Co. 14 4 Sue Moore Co. 18 5 Long Co.

Page 1 Post Ref. ✓ ✓ ✓ ✓ ✓

Accounts Receivable Dr. 8 0 0 00 5 5 0 00 9 0 0 00 7 0 0 00 2 5 0 00 3 2 0 0 00 (112)

Sales Cr. 8 0 0 00 5 5 0 00 9 0 0 00 7 0 0 00 2 5 0 00 3 2 0 0 00 (410)

FOOD ON THE GO GENERAL JOURNAL Date Account Title and Description 2016 June 11 Sales Returns and Allowances Accounts Receivable, Joe Kase Co. Issued Credit Memo #1

Page 1 Post Ref.

Dr.

412

1 6 0 00

112/✓

Cr.

1 6 0 00

6-29

PROBLEM 6B-1., Cont. FOOD ON THE GO ACCOUNTS RECEIVABLE LEDGER NAME ADDRESS Date 2016 June 1 11

NAME ADDRESS Date 2016 June 7 18

NAME ADDRESS Date 2016 June 4 14

6-30

JOE KASE CO. 101 VICTORIA ST., OSHAWA, ON L1G 8J3 Explanation

Post Ref.

Debit

SJ1

8 0 0 00

Credit

1 6 0 00

GJ1

Dr. Balance 8 0 0 00 6 4 0 00

LONG CO. 8 JOSS AVE., OSHAWA, ON L1J 2X1 Explanation

Post Ref. SJ1 SJ1

Debit

Credit

9 0 0 00 2 5 0 00

Dr. Balance 9 0 0 00 1 1 5 0 00

SUE MOORE CO. 10 LOST RD., OSHAWA, ON L1H 3B4 Explanation

Post Ref. SJ1 SJ1

Debit 5 5 0 00 7 0 0 00

Credit

Dr. Balance 5 5 0 00 1 2 5 0 00

PROBLEM 6B-1., Cont. FOOD ON THE GO PARTIAL GENERAL LEDGER NAME: ACCOUNTS RECEIVABLE Date 2016 June 11 30

ACCOUNT NO.

Explanation

Post Ref.

Debit

Credit 1 6 0 00

GJ1 SJ1

3 2 0 0 00

NAME: SALES Date 2016 June 30

Balance 1 6 0 00 3 0 4 0 00

ACCOUNT NO. Explanation

Post Ref.

Debit

Credit 3 2 0 0 00

SJ1

NAME: SALES RETURNS AND ALLOWANCES Date 2016 June 11

DR CR Cr Dr

112

Explanation

DR CR Cr

410 Balance 3 2 0 0 00

ACCOUNT NO. Post Ref.

Debit

GJ1

1 6 0 00

Credit

DR CR Dr

412 Balance 1 6 0 00

FOOD ON THE GO SCHEDULE OF ACCOUNTS RECEIVABLE JUNE 30, 2016 Joe Kase Co. Long Co. Sue Moore Co. Total Accounts Receivable

$ 6 4 0 1 1 5 0 1 2 5 0 $3 0 4 0

00 00 00 00

6-31

PROBLEM 6B-2.

PEAKER’S SNEAKER SHOP SALES JOURNAL Date Sales 2015 Invoice No. May 3 60 4 61 8 62 18 63 29 64

Terms 1/10,n/30 1/10,n/30 1/10,n/30 1/10,n/30 1/10,n/30

Account Debited B. Dale Ron Lester Jim Zon Pam Pry Ron Lester

Page 5 Post Ref. ✓ ✓ ✓ ✓ ✓

Dr. - Acct. Receivable Cr. - Sales 2 0 0 0 00 9 0 0 00 6 0 0 00 4 0 0 0 00 6 0 0 0 00 13 5 0 0 0 0 (12) (40)

PEAKER’S SNEAKER SHOP GENERAL JOURNAL Date Account Title and Description 2015 May 25 Sales Returns and Allowances Accounts Receivable, Pam Pry Issued Credit Memo #1 31 Sales Returns and Allowances Accounts Receivable, Ron Lester Issued Credit Memo #2

6-32

Page 1 Post Ref.

Dr.

5 0 0 00 5 0 0 00

12/✓

44 12/✓

Cr.

8 0 0 00 8 0 0 00

6-33

May

Date 2015

Accounts Receivable Cr. Sales Cr.

(10)

(12)

(40)

1 14 0 0 0 0 0 11 1 9 8 0 0 0 2 0 0 0 0 0 21 9 0 0 00 9 0 0 00 22 6 0 0 0 0 0 6 0 0 0 00 25 3 4 6 5 0 0 3 5 0 0 0 0 28 12 0 0 0 0 0 12 0 0 0 0 0 28 2 0 0 00 38 5 4 5 0 0 6 4 0 0 0 0 18 0 0 0 0 0

Cash Dr.

Description of Receipt

(42)

Mark Peaker, Capital 2 0 0 0 B. Dale Ron Lester Cash Sales 3 5 0 0 Pam Pry Cash Sales Sneaker Rack Equipment 5 5 00

Sales Discounts Dr.

PEAKER’S SNEAKER SHOP CASH RECEIPTS JOURNAL

SOLUTION TO PROBLEM 6B-2., Cont.

✓

Post Ref.

(X)

2 0 0 00 14 2 0 0 0 0

14 0 0 0 0 0

Sundry Account Cr.

Page 2

PROBLEM 6B-2., Cont. PEAKER’S SNEAKER SHOP ACCOUNTS RECEIVABLE LEDGER NAME ADDRESS Date 2015 May 1 3 11

NAME ADDRESS Date 2015 May 1 4 21 29 31

NAME ADDRESS Date 2015 May 1 18 25 25

NAME ADDRESS Date 2015 May 1 8

6-34

B. DALE 1822 THE NARROWS ROAD, DARTMOUTH, NS B2X 7L5 Explanation

Post Ref.

Debit

Credit

Dr. Balance

2 0 0 0 00

4 0 0 00 2 4 0 0 00 4 0 0 00

Credit

Dr. Balance

9 0 0 00 8 0 0 00

8 0 0 00 1 7 0 0 00 8 0 0 00 6 8 0 0 00 6 0 0 0 00

Credit

Dr. Balance

5 0 0 00 3 5 0 0 00

6 0 0 00 4 6 0 0 00 4 1 0 0 00 6 0 0 00

Credit

Dr. Balance

✓

Balance

SJ5

2 0 0 0 00

CRJ2

RON LESTER 18 MASS AVE., KINGSTON, NS B2A 2G3 Explanation

Post Ref.

Debit

✓

Balance

SJ5

9 0 0 00

CRJ2 SJ5

6 0 0 0 00

GJ1

PAM PRY OLD MILL ROAD, GREENFIELD, QUEENS CO., NS BOT 3E0 Explanation

Post Ref.

Debit

✓

Balance

SJ5

4 0 0 0 00

GJ1 CRJ2

JIM ZON 2 CHESTNUT ST., HALIFAX, NS B3K 3D5 Explanation Balance

Post Ref.

Debit

✓ SJ5

6 0 0 00

4 0 0 00 1 0 0 0 00

PROBLEM 6B-2., Cont. PEAKER’S SNEAKER SHOP PARTIAL GENERAL LEDGER NAME: CASH Date 2015 May 1 31

ACCOUNT NO. Explanation

Post Ref.

Debit

Credit

✓

Balance

CRJ2

38 5 4 5 0 0

NAME: ACCOUNTS RECEIVABLE Date 2015 May 1 25 31 31 31

Explanation

Post Ref.

Debit

5 0 0 00 8 0 0 00

GJ1 SJ5

13 5 0 0 0 0 6 4 0 0 00

CRJ2

Explanation

Post Ref.

Debit

2 0 0 00

CRJ2

Explanation

Post Ref.

Debit

14 0 0 0 0 0

CRJ2

Balance 2 2 0 0 00 1 7 0 0 00 9 0 0 00 14 4 0 0 0 0 8 0 0 0 00

DR CR Dr Dr

14 Balance 1 0 0 0 00 8 0 0 00

DR CR Cr Cr

30 Balance 40 0 0 0 0 0 54 0 0 0 0 0

ACCOUNT NO. Explanation

Balance

Credit

✓

Balance

DR CR Dr Dr Dr Dr Dr

ACCOUNT NO.

NAME: SALES Date 2015 May 1 31 31

Credit

✓

Balance

15 5 0 0 0 0 54 0 4 5 0 0

ACCOUNT NO.

NAME: MARK PEAKER, CAPITAL Date 2015 May 1 1

Credit

GJ1

NAME: SNEAKER RACK EQUIPMENT Date 2015 May 1 28

Balance

ACCOUNT NO.

✓

Balance

DR CR Dr Dr

Post Ref.

Debit

Credit

✓ SJ5 CRJ2

13 5 0 0 0 0 18 0 0 0 0 0

DR CR Cr Cr Cr

40 Balance 2 2 0 0 00 15 7 0 0 0 0 33 7 0 0 0 0

6-35

PROBLEM 6B-2., Cont.

PEAKER’S SNEAKER SHOP PARTIAL GENERAL LEDGER NAME: SALES DISCOUNTS Date 2015 May 31

ACCOUNT NO.

Explanation

Post Ref. CRJ2

Debit

Credit

5 5 00

NAME: SALES RETURNS AND ALLOWANCES Date 2015 May 25 31

Explanation

DR CR Dr

Balance 5 5 00

ACCOUNT NO. Post Ref. GJ1 GJ1

Debit

Credit

5 0 0 00 8 0 0 00

DR CR Dr Dr

44 Balance 5 0 0 00 1 3 0 0 00

PEAKER’S SNEAKER SHOP SCHEDULE OF ACCOUNTS RECEIVABLE MAY 31, 2015 B. Dale Ron Lester Pam Pry Jim Zon Total Accounts Receivable

6-36

$ 4 0 0 6 0 0 0 6 0 0 1 0 0 0 $8 0 0 0

00 00 00 00 00

6-37

Aug

2 5 6 10 12 16 23 26 29 30

Date 2016

4001 4002 4003 4004 4005 4006 4007 4008 4009 4010

Inv. No.

Terms

2/10,n30 3/15,n45 2/10,n30 2/10,n30 2/10,n30 2/10,n30 3/15,n45 3/15,n45 2/10,n30 2/10,n30

PROBLEM 6B-3

August Totals for Salespersons

Monthly Totals

Customer’s Account

HW PJ Total

HW PJ PJ HW HW PJ HW PJ HW PJ

Salesperson

✓

Post Ref.

Cr. 3,000.00 2,600.00

Dr. 7,600.00 7,000.00 5,100.00 8,800.00 5,610.00 5,300.00 10,000.00 5,300.00 9,210.00 5,940.00

(4100)

(1300) 41,220.00 28,640.00 69,860.00

20,540.00

69,860.00

3,150.00 1,840.00

2,800.00 1,750.00 1,700.00 3,700.00

Cellphones’ Sales

Accounts Receivable

CHAN’S IMPORTED TECHNOLOGY SALES JOURNAL

(4200)

39,400.00

Cr. 4,600.00 3,600.00 3,700.00 4,800.00 2,900.00 2,400.00 4,800.00 5,300.00 4,600.00 2,700.00

Tablet Computers’ Sales

(4300)

9,920.00

1,460.00 1,400.00

800.00 1,400.00 1,200.00 960.00 1,200.00 1,500.00

Cr.

Portable Music Players’ Sales

Page 1

PROBLEM 6B-3., Cont. CHAN’S IMPORTED TECHNOLOGY GENERAL JOURNAL Date Account Title and Description 2016 Aug 8 Sales Returns and Allowances Accounts Receivable, JIW Enterprises Issued Credit Memorandum No. 101

Date 2016 Aug 6 16 30

NAME ADDRESS Date 2015 Aug 5 26

6-38

Post Ref.

Dr.

4500

2 2 0 00

Cr.

2 2 0 00

1300/✓

21 Sales Returns and Allowances Accounts Receivable, Manfred Communications Issued Credit Memorandum No. 102

NAME ADDRESS

Page 1

6 0 00

4500

6 0 00

1300/✓

CHAN’S IMPORTED TECHNOLOGY ACCOUNTS RECEIVABLE LEDGER ADVANCED TECHNOLOGIES IN MOTION 1120 PHILIP AVE., SARNIA, ON N7T 7M7 Explanation

Post Ref. SJ1 SJ1 SJ1

Debit

Credit

5 1 0 0 00 5 3 0 0 00 5 9 4 0 00

Dr. Balance 5 1 0 0 00 10 4 0 0 0 0 16 3 4 0 0 0

CASE-5 ELECTRONICS 656 ONTARIO ST., SARNIA, ON N7T 5B5 Explanation

Post Ref. SJ1 SJ1

Debit 7 0 0 0 00 5 3 0 0 00

Credit

Dr. Balance 7 0 0 0 00 12 3 0 0 0 0

PROBLEM 6B-3., Cont. CHAN’S IMPORTED TECHNOLOGY ACCOUNTS RECEIVABLE LEDGER NAME ADDRESS Date 2016 Aug 2 8 12

NAME ADDRESS Date 2016 Aug 10 21 29

NAME ADDRESS Date 2016 Aug 23

JIW ENTERPRISES 2275 CONFEDERATION ST., SARNIA, ON N7S 7T9 Explanation

Post Ref. SJ1

Debit

Dr. Balance

2 2 0 00

7 6 0 0 00 7 3 8 0 00 12 9 9 0 0 0

Credit

Dr. Balance

7 6 0 0 00

GJ1 SJ1

Credit

5 6 1 0 00

MANFRED COMMUNICATIONS 999 MCGREGOR RD., SARNIA, ON N7V 1A1 Explanation

Post Ref. SJ1

Debit 8 8 0 0 00

6 0 00

GJ1 SJ1

9 2 1 0 00

8 8 0 0 00 8 7 4 0 00 17 9 5 0 0 0

WMJ SALES 62 MITTON ST. S, SARNIA, ON N7S 2R3 Explanation

Post Ref.

Debit

SJ1

10 0 0 0 0 0

Credit

Dr. Balance 10 0 0 0 0 0

CHAN’S IMPORTED TECHNOLOGY SCHEDULE OF ACCOUNTS RECEIVABLE AUGUST 31, 2016 Advanced Technologies in Motion Case-5 Electronics JIW Enterprises Manfred Communications WMJ Sales

16 3 4 0 12 3 0 0 12 9 9 0 17 9 5 0 10 0 0 0 69 5 8 0

00 00 00 00 00 00

6-39

PROBLEM 6B-3., Cont. CHAN’S IMPORTED TECHNOLOGY PARTIAL GENERAL LEDGER NAME: ACCOUNTS RECEIVABLE Date 2016 Aug 8 21 31

Explanation

ACCOUNT NO. Post Ref.

Debit

2 2 0 00 6 0 00

GJ1 GJ1 SJ1

69 8 6 0 0 0

NAME: CELL PHONES’ SALES Date 2016 Aug 31

Explanation

Post Ref.

Debit

Post Ref.

Debit

Post Ref.

Debit

6-40

Credit 9 9 2 0 00

SJ1

Explanation

DR CR Cr

ACCOUNT NO.

NAME: SALES RETURNS AND ALLOWANCES Date 2016 Aug 8 21

Credit 39 4 0 0 0 0

SJ1

Explanation

DR CR Cr

ACCOUNT NO.

NAME: PORTABLE MUSIC PLAYERS’ SALES Date 2016 Aug 31

Credit 20 5 4 0 0 0

SJ1

Explanation

DR CR Cr Cr Dr

ACCOUNT NO.

NAME: TABLET COMPUTERS’ SALES Date 2016 Aug 31

Credit

DR CR Cr

ACCOUNT NO. Post Ref. GJ1 GJ1

Debit 2 2 0 00 6 0 00

Credit

DR CR Dr Dr

1300 Balance 2 2 0 00 2 8 0 00 69 5 8 0 0 0

4100 Balance 20 5 4 0 0 0

4200 Balance 39 4 0 0 0 0

4300 Balance 9 9 2 0 00

4500 Balance 2 2 0 00 2 8 0 00

PROBLEM 6B-3., Cont. NAME: SALES DISCOUNTS Date

ACCOUNT NO. Post Ref.

Explanation

Debit

DR CR

Credit

4550 Balance

PROBLEM 6B-4 CHAN’S IMPORTED TECHNOLOGY CASH RECEIPTS JOURNAL Accounts Date Cash Receivable 2016 Dr. Cr. Aug 3 40 0 0 0 0 0 10 7 2 3 2 4 0 7 3 8 0 0 0 14 4 9 9 8 0 0 5 1 0 0 0 0 18 6 7 9 0 0 0 7 0 0 0 0 0 22 8 5 6 5 2 0 8 7 4 0 0 0 22 5 4 9 7 8 0 5 6 1 0 0 0 25 5 1 9 4 0 0 5 3 0 0 0 0 31 4 8 5 0 0 0 5 0 0 0 0 0 83 1 2 7 4 0 44 1 3 0 0 0 (1100) (1300)

Date 2016 Aug 6 14 16 25 31

Sundry Account

1 4 7 60 1 0 2 00 2 1 0 00 1 7 4 80 1 1 2 20 1 0 6 00 1 5 0 00 1 0 0 2 60 (4550)

84,130.00

NAME ADDRESS

Sales Discounts Cr.

Sales Cr.

Page 1

Owner, W. Chan JIW Enterprises Advanced Tech. Case-5 Electronics Manfred Comm. JIW Enterprises Advanced Tech. WMJ Sales

Post Ref.

Amount Cr.

3000

40 0 0 0 0 0

✓ ✓ ✓ ✓ ✓ ✓ ✓

40 0 0 0 0 0 (X)

84,130.00

CHAN’S IMPORTED TECHNOLOGY ACCOUNTS RECEIVABLE LEDGER ADVANCED TECHNOLOGIES IN MOTION 1120 PHILIP AVE., SARNIA, ON N7T 7M7 Explanation

Post Ref. SJ1

Debit 5 1 0 0 00 5 3 0 0 00

SJ1

5 9 4 0 00

0 5 3 0 0 00

5 3 0 0 00

CRJ1

Dr. Balance 5 1 0 0 00

5 1 0 0 00

CRJ1 SJ1

Credit

0 5 9 4 0 00

6-41

PROBLEM 6B-4., Cont.

NAME ADDRESS Date 2016 Aug 5 18 26

NAME ADDRESS Date 2016 Aug 2 8 10 12 22

NAME ADDRESS Date 2016 Aug 10 20 22 29

NAME ADDRESS Date 2016 Aug 23 31

6-42

CHAN’S IMPORTED TECHNOLOGY ACCOUNTS RECEIVABLE LEDGER CASE-5 ELECTRONICS 656 ONTARIO ST., SARNIA, ON N7T 5B5 Explanation

Post Ref. SJ1

Debit 7 0 0 0 00

Dr. Balance 7 0 0 0 00

7 0 0 0 00

CRJ1 SJ1

Credit

5 3 0 0 00

0 5 3 0 0 00

JIW ENTERPRISES 2275 CONFEDERATIONST., SARNIA, ON N7S 7T9 Explanation

Post Ref. SJ1

Debit 7 6 0 0 00

2 2 0 00 7 3 8 0 00

GJ1 CRJ1 SJ1

Credit

5 6 1 0 00

CRJ1

Dr. Balance 7 6 0 0 00 7 3 8 0 00

0 5 6 1 0 00

5 6 1 0 00

Credit

Dr. Balance

MANFRED COMMUN1CATIONS 999 MCGREGOR RD., SARNIA, ON N7V1A1 Explanation

Post Ref. SJ1

Debit 8 8 0 0 00

6 0 00 8 7 4 0 00

GJ1 CRJ1 SJ1

9 2 1 0 00

8 8 0 0 00 8 7 4 0 00

0 9 2 1 0 00

WMJ SALES 62 MITTONST. S, SARNIA, ON N7S2R3 Explanation

Post Ref.

Debit

SJ1

10 0 0 0 0 0

CRJ1

Credit

Dr. Balance

5 0 0 0 00

10 0 0 0 0 0 5 0 0 0 00

PROBLEM 6B-4., Cont. CHAN’S IMPORTED TECHNOLOGY SCHEDULE OF ACCOUNTS RECEIVABLE AUGUST 31, 2016 Advanced Technologies in Motion Case-5 Electronics Manfred Communications WMJ Sales

5 9 4 0 5 3 0 0 9 2 1 0 5 0 0 0 25 4 5 0

00 00 00 00 00

CHAN’S IMPORTED TECHNOLOGY PARTIAL GENERAL LEDGER NAME: CASH Date 2016 Aug 31

ACCOUNT NO. Explanation

Post Ref.

Debit

CRJ1

83 1 2 7 4 0

Credit

NAME: ACCOUNTS RECEIVABLE Date 2016 Aug 8 21 31 31

Explanation

Post Ref.

Debit

2 2 0 00 6 0 00

GJ1 SJ1

69 8 6 0 0 0 44 1 3 0 0 0

CRJ1

Post Ref.

Debit

Credit 40 0 0 0 0 0

CRJ1

Explanation

83 1 2 7 4 0

DR CR CR CR DR DR

1300 Balance 2 2 0 00 2 8 0 00 69 5 8 0 0 0 25 4 5 0 0 0

ACCOUNT NO.

NAME: CELL PHONES’ SALES Date 2016 Aug 31

Credit

GJ1

Explanation

Balance

ACCOUNT NO.

NAME: OWNER’S EQUITY, W. CHAN Date 2016 Aug 3

DR CR DR

1100

DR CR CR

3000 Balance 40 0 0 0 0 0

ACCOUNT NO. Post Ref. SJ1

Debit

Credit 20 5 4 0 0 0

DR CR CR

4100 Balance 20 5 4 0 0 0

6-43

PROBLEM 6B-4., Cont. CHAN’S IMPORTED TECHNOLOGY PARTIAL GENERAL LEDGER NAME: TABLET COMPUTERS’ SALES Date 2016 Aug 31

Explanation

Post Ref.

Debit

Explanation

Post Ref.

Debit

Post Ref. GJ1 GJ1

6-44

Explanation

DR CR CR

ACCOUNT NO. Debit

Credit

2 2 0 00 6 0 00

NAME: SALES DISCOUNTS Date 2016 Aug 31

Credit 9 9 2 0 00

SJ1

Explanation

DR CR CR

ACCOUNT NO.

NAME: SALES RETURNS AND ALLOWANCES Date 2016 Aug 8 21

Credit 39 4 0 0 0 0

SJ1

NAME: PORTABLE MUSIC PLAYERS’ SALES Date 2016 Aug 31

ACCOUNT NO.

DR CR DR DR

ACCOUNT NO. Post Ref. CRJ1

Debit

Credit 1 0 0 2 60

DR CR CR

4200 Balance 39 4 0 0 0 0

4300 Balance 9 9 2 0 00

4500 Balance 2 2 0 00 2 8 0 00

4550 Balance 1 0 0 2 60

PROBLEM 6C-1.

LODGE CO. SALES JOURNAL Date Invoice Customer’s Name 2016 No. July 2 115 Joan Timkins Co. 5 116 Chris Cowan Co. 9 117 Cross & Co. 15 118 Chris Cowan Co. 19 119 Cross & Co. 23 120 Joan Timkins Co.

Page 3 Post Ref. ✓ ✓ ✓ ✓ ✓ ✓

Accounts Receivable Dr. 1 6 0 0 00 8 2 5 00 1 9 5 0 00 9 2 5 00 9 3 0 00 2 0 2 5 00 8 2 5 5 00

Carpet Sales Cr.

Upholstery Sales Cr. 1 6 0 0 00

2 0 2 5 00 3 7 7 5 00

4 4 8 0 00

(12)

(40)

(41)

8 2 5 00 1 9 5 0 00 9 2 5 00 9 3 0 00

LODGE CO. GENERAL JOURNAL Date Account Title and Description 2016 July 12 Sales Returns and Allowances Accounts Receivable, Joan Timkins Co. Issued Credit Memo #1

Page 2 Post Ref.

Dr.

4 0 0 00

12/✓

Cr.

4 0 0 00

6-45

PROBLEM 6C-1., Cont. LODGE CO. ACCOUNTS RECEIVABLE LEDGER NAME ADDRESS Date 2016 July 5 15

NAME ADDRESS Date 2016 July 9 19

NAME ADDRESS Date 2016 July 2 12 23

6-46

CHRIS COWAN CO. 56 SPADIN AVE., EDMONTON, AB T5A 2R7 Explanation

Post Ref.

Debit

Credit

8 2 5 00 9 2 5 00

SJ3 SJ3

Dr. Balance 8 2 5 00 1 7 5 0 00

CROSS & CO. 18 VERLUX STREET, ST. ALBERT, AB T8N 5E3 Explanation

Post Ref. SJ3 SJ3

Debit

Credit

1 9 5 0 00 9 3 0 00

Dr. Balance 1 9 5 0 00 2 8 8 0 00

JOAN TIMKINS CO. 1120 PATRICK ST., MEDICINE HAT, AB T1A 4S6 Explanation

Post Ref. SJ3

Debit

Dr. Balance

4 0 0 00

1 6 0 0 00 1 2 0 0 00 3 2 2 5 00

1 6 0 0 00

GJ2 SJ3

Credit

2 0 2 5 00

PROBLEM 6C-1., Cont. LODGE CO. PARTIAL GENERAL LEDGER NAME: ACCOUNTS RECEIVABLE Date 2016 July 12 31

ACCOUNT NO.

Explanation

Post Ref.

Debit

Credit 4 0 0 00

GJ2 SJ3

8 2 5 5 00

NAME: CARPET SALES Date 2016 July 31

Explanation

Post Ref.

Debit

Credit 3 7 7 5 00

SJ3

4 0 0 00 7 8 5 5 00

DR CR Cr

40 Balance 3 7 7 5 00

ACCOUNT NO.

Explanation

Post Ref.

Debit

Credit 4 4 8 0 00

SJ3

NAME: SALES RETURNS AND ALLOWANCES Date 2016 July 12

Balance

ACCOUNT NO.

NAME: UPHOLSTERY SALES Date 2016 July 31

DR CR Cr Dr

Explanation

DR CR Cr

41 Balance 4 4 8 0 00

ACCOUNT NO. Post Ref.

Debit

GJ2

4 0 0 00

Credit

DR CR Dr

42 Balance 4 0 0 00

LODGE COMPANY SCHEDULE OF ACCOUNTS RECEIVABLE JULY 31, 2016 Chris Cowan Co. Cross & Co. Joan Timkins Co. Total Accounts Receivable

00 00 00 00

6-47

PROBLEM 6C-2.

BEDFORD SAUSAGE SUPPLY CO. SALES JOURNAL Date Sales 2017 Invoice No. Sept 3 460 5 461 8 462 19 463 29 464 30

Terms

Account Debited

1/10,n/30 1/10,n/30 1/10,n/30 1/10,n/30 1/10,n/30

Petra’s Meat Market Chapman’s Deli Valemont Variety Meats Discount Meats Chapman’s Deli

Page 5 Post Ref. ✓ ✓ ✓ ✓ ✓

Dr. - Acct. Receivable Cr. - Sales 1 8 5 0 00 8 2 5 00 9 3 0 00 1 5 0 0 00 1 6 2 0 00 6 7 2 5 00 (125) (400)

BEDFORD SAUSAGE SUPPLY CO. GENERAL JOURNAL Date Account Title and Description 2017 Sept 23 Sales Returns and Allowances Accounts Receivable, Discount Meats Issued Credit Memo #101 30 Sales Returns and Allowances Accounts Receivable, Chapman’s Deli Issued Credit Memo #102

6-48

Page 7 Post Ref.

Dr.

404

3 0 0 00 3 0 0 00

125/✓

404 125/✓

Cr.

4 2 0 00 4 2 0 00

6-49

Sept

Date 2017

Accounts Receivable Cr. Sales Cr.

(110)

(125)

(400)

2 15 0 0 0 0 0 12 1 8 3 1 5 0 1 8 5 0 0 0 22 8 2 5 00 8 2 5 00 23 6 3 8 00 6 3 8 00 25 1 1 8 8 0 0 1 2 0 0 0 0 25 8 1 3 00 8 1 3 00 26 9 0 0 00 21 1 9 5 5 0 3 8 7 5 0 0 1 4 5 1 0 0

Cash Dr.

Description of Receipt

(402)

Karen Blum, Capital 1 8 5 0 Petra’s Meat Market Chapman’s Deli Cash Sales 1 2 0 0 Discount Meats Cash Sales Meat Cooling Equipment 3 0 50

Sales Discounts Dr.

BEDFORD SAUSAGE SUPPLY CO. CASH RECEIPTS JOURNAL

SOLUTION TO PROBLEM 6C-2., Cont.

140

✓

300

Post Ref.

(X)

9 0 0 00 15 9 0 0 0 0

15 0 0 0 0 0

Sundry Account Cr.

Page 2

PROBLEM 6C-2., Cont. BEDFORD SAUSAGE SUPPLY CO. ACCOUNTS RECEIVABLE LEDGER NAME ADDRESS Date 2017 Sept 1 5 22 29 30 NAME ADDRESS Date 2017 Sept 1 19 23 25

NAME ADDRESS Date 2017 Sept 1 3 12

NAME ADDRESS Date 2017 Sept 1 8

6-50

CHAPMAN’S DELI 23 FORTUNE AVE., ST. JOHN, NB E2M 2J6 Explanation

Post Ref.

Debit

Credit

Dr. Balance

8 2 5 00 4 2 0 00

7 6 4 00 1 5 8 9 00 7 6 4 00 2 3 8 4 00 1 9 6 4 00

Credit

Dr. Balance

3 0 0 00 1 2 0 0 00

1 5 6 8 00 3 0 6 8 00 2 7 6 8 00 1 5 6 8 00

Credit

Dr. Balance

1 8 5 0 00

1 2 3 5 00 3 0 8 5 00 1 2 3 5 00

Credit

Dr. Balance

✓

Balance

8 2 5 00

SJ5 CRJ2 SJ5

1 6 2 0 00

GJ7

DISCOUNT MEATS 56 TOWNSHIP BLVD., FREDERICTON, NB E3A 3S7 Explanation

Post Ref.

Debit

✓

Balance

SJ5

1 5 0 0 00

GJ7 CRJ2

PETRA’S MEAT MARKET 45 MAIN STREET, FREDERICTON, NB E3B 5H2 Explanation

Post Ref.

Debit

✓

Balance

SJ5

1 8 5 0 00

CRJ2

VALEMONT VARIETY MEATS 137 FOREST RD., CHIPMAN, NB E0E 3H1 Explanation Balance

Post Ref.

Debit

✓ SJ5

9 3 0 00

3 8 7 60 1 3 1 7 60

PROBLEM 6C-2., Cont. BEDFORD SAUSAGE SUPPLY CO. PARTIAL GENERAL LEDGER NAME: CASH Date 2017 Sept 1 30

ACCOUNT NO. Explanation

Post Ref.

Debit

Credit

✓

Balance

CRJ2

21 1 9 5 5 0

NAME: ACCOUNTS RECEIVABLE Date 2017 Sept 1 23 30 30 30

Explanation

Post Ref.

Debit

3 0 0 00 4 2 0 00

GJ7 SJ5

6 7 2 5 00 3 8 7 5 00

CRJ2

Explanation

Post Ref.

Debit

9 0 0 00

CRJ2

Explanation

Post Ref.

Debit

15 0 0 0 0 0

CRJ2

Balance 3 9 5 4 60 3 6 5 4 60 3 2 3 4 60 9 9 5 9 60 6 0 8 4 60

DR CR Dr Dr

140 Balance 9 1 2 5 00 8 2 2 5 00

DR CR Cr Cr

300 Balance 50 0 0 0 0 0 65 0 0 0 0 0

ACCOUNT NO. Explanation

Balance

Credit

✓

Balance

DR CR Dr Dr Dr Dr Dr

125

ACCOUNT NO.

NAME: SALES Date 2017 Sept 1 30 30

Credit

✓

Balance

8 7 6 2 37 29 9 5 7 8 7

ACCOUNT NO.

NAME: KAREN BLUM, CAPITAL Date 2017 Sept 1 2

Credit

GJ7

NAME: MEAT COOLING EQUIPMENT Date 2017 Sept 1 26

Balance

ACCOUNT NO.

✓

Balance

DR CR Dr Dr

110

Post Ref.

Debit

Credit

✓ SJ5 CRJ2

6 7 2 5 00 1 4 5 1 00

DR CR Cr Cr Cr

400 Balance 41 7 4 5 8 2 48 4 7 0 8 2 49 9 2 1 8 2

6-51

PROBLEM 6C-2., Cont.

BEDFORD SAUSAGE SUPPLY CO. PARTIAL GENERAL LEDGER NAME: SALES DISCOUNTS Date 2017 Sept 30

ACCOUNT NO.

Explanation

Post Ref. CRJ2

Debit

Credit

3 0 50

NAME: SALES RETURNS AND ALLOWANCES Date 2017 Sept 23 30

Explanation

DR CR Dr

Balance 3 0 50

ACCOUNT NO. Post Ref. GJ7 GJ7

Debit

Credit

3 0 0 00 4 2 0 00

DR CR Dr Dr

402

404 Balance 3 0 0 00 7 2 0 00

BEDFORD SAUSAGE SUPPLY CO. SCHEDULE OF ACCOUNTS RECEIVABLE SEPTEMBER 31, 2017 Chapman’s Deli Discount Meats Petra’s Meat Market Valemont Variety Meats Total Accounts Receivable

6-52

$1 9 6 4 1 5 6 8 1 2 3 5 1 3 1 7 $6 0 8 4

00 00 00 60 60

6-53

Nov

1 2 4 6 10 12 14 16 18 23 25 26 29 30

Date 2016

5001 5002 5003 5004 5005 5006 5007 5008 5009 5010 5011 5012 5013 5014

Inv. No.

Terms

2/10,n30 3/12,n36 3/12,n36 2/10,n30 2/10,n30 2/10,n30 3/12.n36 2/10,n30 2/10.n30 3/12,n36 3/12,n36 3/12,n36 2/10,n30 2/10,n30

PROBLEM 6C-3

November Totals for Salespersons

Monthly Totals

West Calgary Tribal Council KGC Investigations South Calgary School District Leisure Light Technologies West Calgary Tribal Council North Calgary College South Calgary School District Leisure Light Technologies KGC Investigations SKH Management Company South Calgary School District KGC Investigations West Calgary Tribal Council Leisure Light Technologies

Customer’s Account

FJ CT GM Total

FJ CT GM CT FJ GM GM CT CT FJ GM CT FJ CT

Salesperson

✓

Post Ref.

46,186.00 66,191.00 45,462.00 157,839.00

157,839.00 (1500)

Accounts Receivable Dr. 12,946.00 16,536.00 12,145.00 8,390.00 11,388.00 11,061.00 11,200.00 11,096.00 8,867.00 8,116.00 11,056.00 8,382.00 13,736.00 12,920.00

CALGARY CAMERA COMPANY SALES JOURNAL

61,476.00 (4000)

49,541.00 (4100)

17,238.00 (4200)

29,584.00 (4300)

Point & Shoot Digital Single- Surveillance Video Cameras Sales Lens Sales Cameras Sales Sales Cr. Cr. Cr. 3,542.00 3,670.00 5,734.00 5,730.00 2,825.00 6,340.00 1,641.00 7,420.00 4,725.00 4,630.00 3,760.00 3,742.00 4,896.00 2,750.00 4,830.00 3,764.00 2,467.00 2,418.00 3,465.00 3,480.00 1,837.00 2,830.00 3,560.00 4,706.00 4,626.00 2,416.00 1,825.00 2,840.00 3,582.00 1,694.00 4,608.00 6,448.00 4,006.00 4,376.00 7,836.00 3,570.00 2,330.00 2,418.00 4,660.00 5,002.00 840.00

Page 1

PROBLEM 6C-3., Cont. CALGARY CAMERA COMPANY GENERAL JOURNAL Date Account Title and Description 2016 Nov 8 Sales Returns and Allowances Accounts Receivable, KGC Investigations Issued Credit Memorandum No. 1001

Date 2016 Nov 2 8 18 26

NAME ADDRESS Date 2016 Nov 6 16 30

6-54

Post Ref.

Dr.

4900

4 8 0 00

4900

Cr.

4 8 0 00

1500/✓

21 Sales Returns and Allowances Accounts Receivable, North Calgary College Issued Credit Memorandum No. 1002

NAME ADDRESS

Page 1

1 6 5 00 1 6 5 00

1500/✓

CHAN’S IMPORTED TECHNOLOGY ACCOUNTS RECEIVABLE LEDGER KGC INVESTIGATIONS 2141 - 34 A VE. NE, CALGAR Y, AB T2E 0M1 Explanation

Post Ref.

Debit

SJ1

16 5 3 6 0 0 4 8 0 00

GJ1 SJ1 SJ1

Credit

8 8 6 7 00 8 3 8 2 00

Dr. Balance 16 5 3 6 0 0 16 0 5 6 0 0 24 9 2 3 0 0 33 3 0 5 0 0

LEISURE LIGHT TECHNOLOGIES 4014 - 13 ST. NE, CALGARY, AB T2E 8A1 Explanation

Post Ref. SJ1 SJ1 SJ1

Debit 8 3 9 0 00 11 0 9 6 0 0 12 9 2 0 0 0

Credit

Dr. Balance 8 3 9 0 00 19 4 8 6 0 0 32 4 0 6 0 0

PROBLEM 6C-3., Cont.

NAME ADDRESS Date 2016 Nov 12 21

NAME ADDRESS Date 2016 Nov 23

NAME ADDRESS Date 2016 Nov 4 14 25

NAME ADDRESS Date 2016 Nov 1 10 29

CHAN’S IMPORTED TECHNOLOGY ACCOUNTS RECEIVABLE LEDGER NORTH CALGARY COLLEGE 811 - 16 AVE. NW, CALGARY, AB T1Y4C4 Explanation

Post Ref.

Debit

SJ1

11 0 6 1 0 0

GJ1

Credit

Dr. Balance

1 6 5 00

11 0 6 1 0 0 10 8 9 6 0 0

Credit

Dr. Balance

SKH MANAGEMENT COMPANY #2101, 101 - 8 ST. SW, CALGARY, AB T2H 2T1 Explanation

Post Ref. SJ1

Debit 8 1 1 6 00

8 1 1 6 00

SOUTH CALGARY SCHOOL DISTRICT 5099 - 10 ST. SE, CALGAR Y, AB T2H 2T1 Explanation

Post Ref. SJ1 SJ1 SJ1

Debit

Credit

12 1 4 5 0 0 11 2 0 0 0 0 11 0 5 6 0 0

Dr. Balance 12 1 4 5 0 0 23 3 4 5 0 0 34 4 0 1 0 0

WEST CALGARY TRIBAL COUNCIL 911 - 12AVE. SW, CALGARY, AB T2T 5S7 Explanation

Post Ref. SJ1 SJ1 SJ1

Debit 12 9 4 6 0 0 11 3 8 8 0 0 13 7 3 6 0 0

Credit

Dr. Balance 12 9 4 6 0 0 24 3 3 4 0 0 38 0 7 0 0 0

6-55

PROBLEM 6C-3., Cont.

CALGARY CAMERA COMPANY SCHEDULE OF ACCOUNTS RECEIVABLE NOVEMBER 30, 2016 KGC Investigations Leisure Light Technologies North Calgary College SKH Management Company South Calgary School District West Calgary Tribal Council

33 3 0 5 32 4 0 6 10 8 9 6 8 1 1 6 34 4 0 1 38 0 7 0 157 1 9 4

00 00 00 00 00 00 00

CALGARY CAMERA COMPANY PARTIAL GENERAL LEDGER NAME: ACCOUNTS RECEIVABLE Date 2016 Nov 8 21 30

Explanation

ACCOUNT NO. Post Ref.

Debit

4 8 0 00 1 6 5 00

GJ1 GJ1 SJ1

157 8 3 9 0 0

NAME: POINT & SHOOT SALES Date 2016 Nov 30

Explanation

Post Ref.

Debit

6-56

Credit 61 4 7 6 0 0

SJ1

Explanation

DR CR Cr Cr Dr

ACCOUNT NO.

NAME: DIGITAL SINGLE-LENS SALES Date 2016 Nov 30

Credit

DR CR Cr

ACCOUNT NO. Post Ref. SJ1

Debit

Credit 49 5 4 1 0 0

DR CR Cr

1500 Balance 4 8 0 00 6 4 5 00 157 1 9 4 0 0

4000 Balance 61 4 7 6 0 0

4100 Balance 49 5 4 1 0 0

PROBLEM 6C-3., Cont. CHAN’S IMPORTED TECHNOLOGY PARTIAL GENERAL LEDGER NAME: SURVEILLANCE CAMERAS’ SALES Date 2016 Nov 30

Explanation

Post Ref.

Debit

Credit 17 2 3 8 0 0

SJ1

NAME: VIDEO CAMERAS’ SALES Date 2016 Nov 30

Explanation

Post Ref.

Debit

Credit 29 5 8 4 0 0

SJ1

Explanation

Post Ref. GJ1 GJ1

Explanation

Balance 17 2 3 8 0 0

DR CR Cr

4300 Balance 29 5 8 4 0 0

ACCOUNT NO. Debit

Credit

4 8 0 00 1 6 5 00

NAME: SALES DISCOUNTS Date

DR CR Cr

4200

ACCOUNT NO.

NAME: SALES RETURNS AND ALLOWANCES Date 2016 Nov 8 21

ACCOUNT NO.

DR CR Dr Dr

4900 Balance 4 8 0 00 6 4 5 00

ACCOUNT NO. Post Ref.

Debit

Credit

DR CR

4950 Balance

6-57

PROBLEM 6C-4., Cont. CALGARY CAMERA COMPANY CASH RECEIPTS JOURNAL Cash Dr.

Date Nov

Accounts Receivable Cr.

3 45 0 0 0 0 0 10 12 6 8 7 0 8 12 11 15 7 3 4 8 8 16 16 11 7 8 0 6 5 12 21 11 1 6 0 2 4 11 22 10 6 7 8 0 8 10 25 8 3 9 0 0 0 8 26 5 0 0 0 0 0

Sales Discounts Cr.

Sales Cr.

9 4 6 00 0 5 6 00 1 4 5 00 3 8 8 00 8 9 6 00 3 9 0 00

2 5 8 92 3 2 1 12 3 6 4 35 2 2 7 76 2 1 7 92

28 10 8 6 4 0 0 11 2 0 0 0 0 30 8 6 0 0 9 9 8 6 0 0 9 9 1 39 8 9 5 9 0 91 6 2 1 9 9 (1100) (1500)

NAME ADDRESS Date 2016 Nov 2 8 11 18 26 30

NAME ADDRESS Date 2016 Nov 6 16 25 30

6-58

Page 1 Sundry Account W. Chan, Owner W Calgary Tribal KGC Investigations S Calgary SD W Calgary Tribal N Calgary College Leisure Light Advertising

3 3 6 0 0 S Calgary SD KGC Invesigations

Post Ref.

Amount Cr.

3300

45 0 0 0 0 0

✓ ✓ ✓ ✓ ✓ ✓ 5001

5 0 0 0 00

✓ ✓

1 7 2 6 07 (4950)

50 0 0 0 0 0 (X)

CALGARY CAMERA COMPANY ACCOUNTS RECEIVABLE LEDGER KGC INVESTIGATIONS 2141 - 34 AVE. NE, CALGARY, AB T2E 0M1 Explanation

Post Ref.

Debit

SJ1

16 5 3 6 0 0 4 8 0 00 16 0 5 6 0 0

GJ1 CRJ1 SJ1 SJ1

Credit

8 8 6 7 00 8 3 8 2 00

CRJ1

Dr. Balance 16 5 3 6 0 0 16 0 5 6 0 0

8 6 0 0 99

8 8 6 7 00 17 2 4 9 0 0 8 6 4 8 01

Credit

Dr. Balance

LEISURE LIGHT TECHNOLOGIES 4014 - 13 ST. NE, CALGARY, AB T2E 8A1 Explanation

Post Ref. SJ1 SJ1

Debit 8 3 9 0 00 11 0 9 6 0 0

8 3 9 0 00

CRJ1 SJ1

12 9 2 0 0 0

8 3 9 0 00 19 4 8 6 0 0 11 0 9 6 0 0 24 0 1 6 0 0

PROBLEM 6C-4., Cont.

NAME ADDRESS Date 2016 Nov 12 21 22

NAME ADDRESS Date 2016 Nov 23

NAME ADDRESS Date 2016 Nov 4 14 16 25 28

NAME ADDRESS Date 2016 Nov 1 10 10 21 29

CALGARY CAMERA COMPANY ACCOUNTS RECEIVABLE LEDGER NORTH CALGARY COLLEGE 811 - 16 AVE. NW, CALGARY, AB T1Y 4C4 Explanation

Post Ref.

Debit

SJ1

11 0 6 1 0 0

Credit

1 6 5 00 10 8 9 6 0 0

GJ1 CRJ1

Dr. Balance 10 0 6 1 0 0 10 8 9 6 0 0

SKH MANAGEMENT COMPANY #2101, 101 - 8 ST. SW, CALGARY, AB T2H 2T1 Explanation

Post Ref. SJ1

Debit

Credit

8 1 1 6 00

Dr. Balance 8 1 1 6 00

SOUTH CALGARY SCHOOL DISTRICT 5099 - 10ST. SE, CALGARY, AB T2H 2T1 Explanation

Post Ref. SJ1 SJ1

Debit

Dr. Balance

12 1 4 5 0 0 11 2 0 0 0 0

12 1 4 5 0 0 23 3 4 5 0 0 11 2 0 0 0 0 22 2 5 6 0 0 11 0 5 6 0 0

Credit

Dr. Balance

12 1 4 5 0 0 11 2 0 0 0 0

CRJ1 SJ1

Credit

11 0 5 6 0 0

CRJ1

WEST CALGARY TRIBAL COUNCIL 911 - 12 AVE. SW, CALGARY, AB T2T 5S7 Explanation

Post Ref. SJ1 SJ1

Debit 12 9 4 6 0 0 11 3 8 8 0 0

12 9 4 6 0 0 11 3 8 8 0 0

CRJ1 CRJ1 SJ1

13 7 3 6 0 0

12 9 4 6 0 0 14 3 3 4 0 0 11 3 8 8 0 0

0 13 7 3 6 0 0

6-59

PROBLEM 6C-4., Cont. CALGARY CAMERA COMPANY SCHEDULE OF ACCOUNTS RECEIVABLE NOVEMBER 30, 2016 KGC Investigations Leisure Light Technologies SKH Management Company South Calgary School District West Calgary Tribal Council

8 6 4 8 24 0 1 6 8 1 1 6 11 0 5 6 13 7 3 6 65 5 7 2

01 00 00 00 00 01

CALGARY CAMERA COMPANY PARTIAL GENERAL LEDGER NAME: CASH Date 2016 Nov 30

ACCOUNT NO. Explanation

Post Ref.

Debit

CRJ1

139 8 9 5 9 0

NAME: ACCOUNTS RECEIVABLE Date 2016 Nov 8 21 30 30

Explanation

Post Ref.

Debit

GJ1 SJ1

157 8 3 9 0 0 91 6 2 1 9 9

CRJ1

Post Ref.

Debit

6-60

Credit 45 0 0 0 0 0

CRJ1

Explanation

DR CR CR CR DR DR

ACCOUNT NO.

NAME: POINT & SHOOT SALES Date 2016 Nov 30

Credit 4 8 0 00 1 6 5 00

GJ1

Explanation

DR CR DR

ACCOUNT NO.

NAME: OWNER’S EQUITY, M. KUERTI Date 2016 Nov 3

Credit

DR CR CR

ACCOUNT NO. Post Ref. SJ1

Debit

Credit 61 4 7 6 0 0

DR CR CR

1100 Balance 139 8 9 5 9 0

1500 Balance 4 8 0 00 1 6 5 00 157 1 9 4 0 0 65 5 7 2 0 1 3300 Balance 45 0 0 0 0 0

4000 Balance 61 4 7 6 0 0

PROBLEM 6C-4., Cont.

CALGARY CAMERA COMPANY PARTIAL GENERAL LEDGER

NAME: DIGITAL SINGLE-LENS SALES Date 2016 Nov 30

Explanation

ACCOUNT NO. Post Ref.

Debit

Credit 61 4 7 6 0 0

SJ1

NAME: SURVEILLANCE CAMERAS’ SALES Date 2016 Nov 30

Explanation

ACCOUNT NO. Post Ref.

Debit

Credit 17 2 3 8 0 0

SJ1

NAME: VIDEO CAMERAS’SALES Date 2016 Nov 30

Explanation

Post Ref.

Debit

Credit 29 5 8 4 0 0

SJ!

Explanation

Post Ref. GJ1

Debit

Credit

4 8 0 00 1 6 5 00

NAME: SALES DISCOUNTS Explanation

Post Ref.

Debit

Credit 1 7 2 6 07

CRJ1

Explanation

DR CR DR DR

Balance 61 4 7 6 0 0

4200 Balance 17 2 3 8 0 0

4300 Balance 29 5 8 4 0 0

4900 Balance 4 8 0 00 6 4 5 00

ACCOUNT NO.

NAME: ADVERTISING EXPENSE Date 2016 Nov 26

DR CR CR

ACCOUNT NO.

GJ1

Date 2016 Nov 30

DR CR CR

ACCOUNT NO.

NAME: SALES RETURNS AND ALLOWANCES Date 2016 Nov 8

DR CR CR

4100

DR CR CR

4950 Balance 1 7 2 6 07

ACCOUNT NO. Post Ref. CRJ1

Debit

Credit

5 0 0 0 00

DR CR DR

5001 Balance 5 0 0 0 00

6-61

SOLUTIONS TO ON-THE-JOB TRAINING, #T-1. 1. 2. 3. 4. 5.

The Accounts Receivable ledger account will be overstated, and, when bills are sent to customers, the mistake will surface. The Schedule of Accounts Receivable will not match the controlling account. The Schedule of Accounts Receivable will not match the controlling account. The Schedule of Accounts Receivable will not match the controlling account. If this is a multicolumn Sales Journal, then cross-footing should indicate an error. If it is a one-column Sales Journal, the Schedule of Accounts Receivable will not match the balance in the controlling account. The trial balance will not balance.

CONTINUING PROBLEM PRECISION COMPUTER CENTRE SALES JOURNAL Date Account Debited 2016 Sept. 3 Taylor Golf 10 Anthony Pitale 23 Vita Needle 30 Anthony Pitale 30

Terms 2/10, n/30 2/10, n/30 4/10, n/30 2/10, n/30

Invoice No. 12680 12681 12682 12683

Page 1 Post Ref.

Dr. Acc. Receivable Cr. Sales 7 0 0 00 3 0 0 0 00 4 0 0 0 00 1 6 0 0 00 9 3 0 0 00 (1020) (4010)

PRECISION COMPUTER CENTRE CASH RECEIPTS JOURNAL Date 2016 Sept.

Cash Dr.

9 2 5 0 0 00 10 12 0 0 0 0 0 17 2 9 4 0 0 0 30 3 8 4 0 0 0 30 21 2 8 0 0 0 (1000)

Sales Disc. Dr.

Acc. Rec. Cr.

Sundry

Sales Cr.

2 5 0 0 00

Page 1 Post Ref.

Account Taylor Golf

12 0 0 0 0 0 6 0 00 1 6 0 00 2 2 0 00 (4030)

3 0 0 0 00 Anthony Pitale 4 0 0 0 00 Vita Needle 9 5 0 0 0 0 12 0 0 0 0 0 (1020) (4010)

PRECISION COMPUTER CENTRE GENERAL JOURNAL Date Account Title and Description 2016 Sept. 17 Accounts Payable (Computer Connection, PO 4012) Purchases Returns and Allowances Debit memo #10 re PO 4012 27 Sales Returns and Allowances Accounts Receivable - Taylor Golf Return by Taylor Golf re Invoice #12680

6-62

Amount Cr.

Page 3 Post Ref.

Dr.

2000

1 0 0 00 1 0 0 00

5610

4020 1020/✓

Cr.

4 0 0 00 4 0 0 00

CONTINUING PROBLEM, Cont.

NAME ADDRESS Date 2016 Sept. 1

NAME ADDRESS Date 2016 Sept. 1 10 17 30

NAME ADDRESS Date 2016 Sept. 1 3 9 27

PRECISION COMPUTER CENTRE ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER ACCU PAC, INC. AC101 11151 - 118 STREET, EDMONTON, AB T5S 2S2 Explanation

Post Ref.

Debit

Credit

✓

Balance

CARSON ENGINEERING CORP. 9939 EDMONTON WAY, EDMONTON, AB T5A 9A2 Explanation

Post Ref.

CA101

Debit

Credit

✓

Balance

Dr. Balance

Dr. Balance 6 2 4 0 00

ANTHONY J. PITALE P1101 229 DIAMOND RICH AVENUE, EDMONTON, AB T4K 2L7 Explanation

Post Ref.

Debit

Credit

✓

Balance

SJ1

0 3 0 0 0 00

SJ1

1 6 0 0 00

TAYLOR GOLF 232 TAYLOR HEIGHTS, EDMONTON, AB T6E 6R2 Explanation

Post Ref.

3 0 0 0 00 1 6 0 0 00

TA101

Debit

Credit

Dr. Balance

2 5 0 0 00 4 0 0 00

2 5 0 0 00 3 2 0 0 00 7 0 0 00 3 0 0 00

✓ SJ1 CRJ1 GJ9

3 0 0 0 00

CRJ1

Balance

Dr. Balance

7 0 0 00

6-63

CONTINUING PROBLEM, Cont.

PRECISION COMPUTER CENTRE ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER VITA NEEDLE COMPANY VI101 SUITE 204, 10091 89 STREET, EDMONTON, AB T6F 1S1

NAME ADDRESS Date 2016 Sept. 1 23 30

Post Ref.

Explanation

Debit

Credit

Dr. Balance

✓

Balance

SJ1

0 4 0 0 0 00

4 0 0 0 00 4 0 0 0 00

CRJ1

PRECISION COMPUTER CENTRE SCHEDULE OF ACCOUNTS RECEIVABLE SEPTEMBER 30, 2016 Carson Engineering Corp. Anthony J. Pitale Taylor Golf

6 2 4 0 1 6 0 0 3 0 0 8 1 4 0

00 00 00 00

PRECISION COMPUTER CENTRE PARTIAL GENERAL LEDGER NAME: CASH Date 2016 Sept. 1 30

ACCOUNT NO. Explanation

Post Ref.

Debit

✓

Balance

CRJ1

21 2 8 0 0 0

NAME: ACCOUNTS RECEIVABLE Date 2016 Sept. 1 27 30 30

6-64

Credit

Explanation Balance

DR CR Dr Dr

ACCOUNT NO. Post Ref.

Debit

Credit

✓

4 0 0 00

GJ9 SJ1 CRJ

9 3 0 0 00 9 5 0 0 00

DR CR Dr Dr Dr Dr

1000 Balance 1 1 9 5 00 22 4 7 5 0 0

1020 Balance 8 7 4 0 00 8 3 4 0 00 17 6 4 0 0 0 8 1 4 0 00

CONTINUING PROBLEM, Cont. PRECISION COMPUTER CENTRE PARTIAL GENERAL LEDGER NAME: PREPAID RENT Date 2016 Sept. 1

Explanation

ACCOUNT NO. Post Ref.

Debit

✓

Balance

NAME: SUPPLIES Date 2016 Sept. 1

Explanation

Post Ref.

Debit

Explanation

Post Ref.

Debit

Credit

✓

Balance

Explanation

DR CR Cr

ACCOUNT NO. Post Ref.

Debit

Credit

✓

Balance

DR CR Dr

ACCOUNT NO.

NAME: SALES Date 2016 Sept. 30 30

Credit

✓

Balance

NAME: OTHER AMOUNTS PAYABLE Date 2016 Sept. 1

DR CR Dr

ACCOUNT NO.

NAME: ACCOUNTS PAYABLE Date 2016 Sept. 1

Credit

DR CR Cr

ACCOUNT NO. Explanation

Post Ref. SJ1 CRJ1

Debit

Credit 9 3 0 0 00 12 0 0 0 0 0

DR CR Cr Cr

1025 Balance

1030 Balance 4 5 0 00

2000 Balance 1 0 4 1 00

2030 Balance 1 8 1 0 18

4010 Balance 9 3 0 0 00 21 3 0 0 0 0

6-65

CONTINUING PROBLEM, Cont.

PRECISION COMPUTER CENTRE PARTIAL GENERAL LEDGER NAME: SALES RETURNS AND ALLOWANCES Date 2016 Sept. 27

Explanation

Post Ref.

Debit

GJ9

4 0 0 00

NAME: SALES DISCOUNTS Date 2016 Sept. 30

Explanation

Post Ref.

Debit

CRJ1

2 2 0 00

6-66

Credit

Post Ref.

Debit

Credit

✓

Balance

Explanation Balance

DR CR Dr

ACCOUNT NO.

NAME: UTILITIES EXPENSE Date 2016 Sept. 1

Credit

ACCOUNT NO.

NAME: RENT EXPENSE Date 2016 Sept. 1

ACCOUNT NO.

DR CR Dr

ACCOUNT NO. Post Ref. ✓

Debit

Credit

DR CR Dr

4020 Balance 4 0 0 00

4030 Balance 2 2 0 00

5020 Balance 4 0 0 00

5030 Balance 9 5 00

7 Special Journals: The Basics, Part 2

ANSWERS TO DISCUSSION QUESTIONS AND CRITICAL THINKING/ETHICAL CASE 1. 2. 3. 4.

5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19.

Records reductions of purchases caused by returns or discounts taken. Cr. Balance. Purchases Discounts and Purchases Returns and Allowances are contra-expense accounts. A discount period is a short period within which a business receives a discount if it pays its bill. This encourages early payment. A credit period, which is longer than a discount period, represents the total time allowed to pay the full amount due on an invoice. 2/10, n/30: 2 percent off the bill if paid within 10 days or total bill due within 30 days. n/10, EOM: Full amount of bill is due not later than 10 days after the end of the month. A general journal records Returns and Allowances from Debit or Credit Memoranda. The sum of the accounts payable ledger at the end of the month should equal the balance in the controlling account in the general ledger. Net purchases is calculated as follows: Purchases - Purchases Returns and Allowances - Purchases Discounts. By placing the accounts payable ledger in alphabetical order, it is easier to locate specific companies or persons so that the balance can be updated. A purchases journal is used to record the buying of merchandise or other items on account. An invoice is a bill for a sale on account. It is used as a source document to update the sales journal of the seller and the purchases journal of the buyer. F.O.B. shipping point means the buyer pays the cost of shipping; F.O.B. destination means the seller is responsible for the cost of shipping. The purchase requisition is a document that initiates the request to prepare a purchase order. Credit. Purchases Returns and Allowances, Accounts payable, and the accounts payable ledger account. The cash receipts journal records inward flow of cash from any source while the cash payments journal records outward flow of cash. When the transaction is entered. To show that the purchaser does not owe as much because the item is being reduced in price or returned. A schedule of accounts payable is a list of who the company owes and how much. The sum of the schedule should equal the balance in the controlling account in the general ledger at the end of the month.

7-1

SOLUTIONS TO CLASSROOM DEMONSTRATION EXERCISES Purchase Returns and Allowances Purchases

Contra Expense

Cr.

Temp.

Expense

Dr.

Temp.

Purchase Discounts

Contra Expense

Cr.

Temp.

Gross purchases - PRA - PD = Net purchases

$64 -7 -3 $54

a. 1, 2, 3

b. 1, 2, 3 c. 4, 5

a. 5 b. 3 c. 3 d. 2 e. 4 f. 5

AVE CO. SCHEDULE OF ACCOUNTS PAYABLE MAY 31, 2015 Bloss Co. $40 60 100

Rowe Co. Total Accts. Pay.

6. LONG CO. - GENERAL JOURNAL Purchases

Page 10 3 0 0 00

Accounts Payable

3 0 0 00

BLUE CO. - GENERAL JOURNAL Accounts Receivable Sales

7-2

Page 5 3 0 0 00 3 0 0 00

SOLUTIONS TO EXERCISES,—SET A EXERCISE 7-1A. ACCOUNTS PAYABLE SUBSIDIARY LEDGER

PARTIAL GENERAL LEDGER

Corrine AxelI Co.

Accounts Payable

700.00 04/14 PJ1

222 1200.00 04/30 PJ1

Mill Village Co.

Purchases

500.00 04/21 PJ1

601

PJ1 04/30 1200.00

EXERCISE 7-2A. EDNA CO. PURCHASES JOURNAL

Date 2017 June

Account Credited

Date of lnv. Inv. No.

Terms

Post Ref.

Accounts Payable Cr. 8 0 0 00

Page 1 Sundry

Purchases Dr.

Regina Co.

743 2%10,n30

✔

Barstow Co.

3118

✔

7 0 0 00

Garry Co.

819 3%15,n45

✔

1 4 0 0 00

Regina Co.

784 2%10,n30

✔

n30

Account Name

Post Ref.

8 0 0 00

1 2 0 0 00

4 1 0 0 00

( 21 1)

(511)

EDNA CO. GENERAL JOURNAL Date 2017 June 6

Account Title and Description Accounts Payable (Regina Co.) Purchases Returns and Allowances Debit memo No. 101 re invoice No. 743. Accounts Payable (Barstow Co.) Purchases Returns and Allowances Debit memo No. 102 re invoice 3118. Accounts Payable (Garry Co.) Purchases Returns and Allowances Debit memo Nov. 103 re invoice No. 819.

Amount Dr.

Page 1 Post Ref. 211/✔

Dr. 2 0 0 00

2 0 0 00

513

211/✔

1 0 0 00 1 0 0 00

513

211/✔ 513

Cr.

3 0 0 00 3 0 0 00

7-3

SOLUTIONS TO EXERCISES,—SET A, Cont. EXERCISE 7-2A., Cont EDNA CO. CASH PAYMENTS JOURNAL

Date 2017 June 10 17

Chq. No. 831 832

Post Ref.

Accounts Debited Regina Co. Garry Co.

Sundry Accounts Dr.

✔ ✔

ACCOUNTS PAYABLE SUBSID1AR Y LEDGER

Accounts Payable Dr. 6 0 0 00 1 1 0 0 00 1 7 0 0 00 (21 1)

Purchases Discounts Dr. 1 2 00 3 3 00 4 5 00 (51 2)

Cash Cr. 5 8 8 00 1 0 6 7 00 1 6 5 5 00 (111)

PARTIAL GENERAL LEDGER

Barstow Co. GJ1 06/09 100.00

Page 1

Cash

111

700.00 06/03 PJ1

Purchases

1655.00 06/30 CPJ1

511 4100.00 06/30 PJ1

600.00

Garry Co. GJ1 06/14 300.00

Accounts Payable

211

GJ1 06/06 200.00

4100.00 06/30 PJ1

Purchases Discounts

512

45.00 06/30 CPJ1

GJ1 06/09 100.00

1400.00 06/04 PJ1

GJ1 06/14 300.00 CPJ1 06/30 1 700.00

CPJ1 06/17 1100.00

1800.00

0.00

Purchases Returns & Allowances 513 200.00 06/06 GJ1 100.00 06/09 GJ1

Regina Co.

300.00 06/14 GJ1

GJ1 06/06 200.00

800.00 06/02 PJ1

CPJ1 06/10 600.00

1200.00 06/13 PJ1

600.00

1200.00

EDNA CO. SCHEDULE OF ACCOUNTS PAYABLE JUNE 30, 2017 Barstow Co. Regina Co.

7-4A

6 0 0 00 1 2 0 0 00 1 8 0 0 00

EXERCISE 7-3A. $3,000.00 -200.00 2,800.00 3 .02 = 56.00 $2,800 - 56.00 = $2,744 paid April 13.

EXERCISE 7-4A. HUSTON CO. GENERAL JOURNAL Date 2017 July

Page 1

Account Title and Description

Post Ref.

Accounts Payable (Park Co.)

211/✔

Purchases Return and Allowances Debit memo No. 1 re invoice No. 709.

Dr.

Cr.

4 0 0 00 4 0 0 00

513

ACCOUNTS PAYABLE SUBSIDIARY LEDGER

PARTIAL GENERAL LEDGER Accounts Payable

Park Co.

211

GJ1 07/08 400.00

Purchases Returns & Allowances 513 400.00 07/08 GJ1

EXERCISE 7-5A. MORGAN’S CLOTHING CASH PAYMENTS JOURNAL

Date 2017 April 2 9 16

Chq. No. 20 21 22

Accounts Debited A. James Company Flott Advertising B. Foss

Post Ref.

Sundry Accounts Dr.

✔ 610

Page 2

Accounts Payable Dr. 1 0 0 0 00

Purchases Discounts Cr. 2 0 00

4 0 0 00 1 4 0 0 00 (21 0)

2 0 00 (51 1)

1 0 0 00

✔ 1 0 0 00 (X)

Cash Cr. 9 8 0 00 1 0 0 00 4 0 0 00 1 4 8 0 00 (11 0)

7-5A

EXERCISE 7-5A., Cont. ACCOUNTS PAYABLE SUBSIDIARY LEDGER

PARTIAL GENERAL LEDGER Cash

B. Foss CPJ2 04/16 400

110 3,000

1,480 04/30 CPJ2

Accounts Payable

210

CPJ2 04/30 1,400

2,500

400 1,520

A. James CPJ2 04/02 1,000

1,000

1,100

J. Ranch

Purchases Discount 900

511 20 04/30 CPJ2

B. Swanson

Advertising Expense 200

610

CPJ2 04/09 100

EXERCISE 7-6A. MORGAN’S CLOTHING SCHEDULE OF ACCOUNTS PAYABLE APRIL 30, 2017 J. Ranch B. Swanson

EXERCISE 7-7A. $4,000 *.3 = $1,200 $4,000 - $1,200 = $2,800 $2,800 *.03 = $84 $2,800 - $84 = $2,716 The actual cost of buying the merchandise was $2,716.

7-6A

9 0 0 00 2 0 0 00 1 1 0 0 00

SOLUTIONS TO EXERCISES, Set B EXERCISE 7-1B. ACCOUNTS PAYABLE SUBSIDIARY LEDGER

PARTIAL GENERAL LEDGER

Conine Axell Co.

Accounts Payable

222

900.00 04/12 PJ1

1600.00 04/30 PJ1

Mill Village Co.

Purchases

700.00 04/25 PJ1

601

PJ1 04/30 1600.00

EXERCISE 7-2B. EDNA CO. PURCHASES JOURNAL

Date 2017 June 2 3 5 12

Account Credited Regina Co. Barstow Co. Garry Co. Regina Co.

Date of Inv. Inv. No. Terms 743 2%10,n30 3118 n30 819 3%15,n45 784 2%10

Post Ref.

✔ ✔ ✔ ✔

Accounts Payable Cr. 9 0 0 00 1 0 0 0 00 1 6 0 0 00 1 5 0 0 00 5 0 0 0 00 (211)

Page 1 Sundry Purchases Account Dr. Name 9 0 0 00 1 0 0 0 00 1 6 0 0 00 1 5 0 0 00 5 0 0 0 00 (511)

Post Ref.

EDNA CO. GENERAL JOURNAL Date 2017 June 6

Account Title and Description

Page 1 Post Ref.

Accounts Payable (Regina Co.)

211/✔ 513

Purchases Returns and Allowances Debit memo No. 101 re invoice No. 743. Accounts Payable (Barstow Co.)

Purchases Returns and Allowances Debit memo No. 102 re invoice 3118. Accounts Payable (Garry Co.) Purchases Returns and Allowances Debit memo Nov. 103 re invoice No. 819.

Amount Dr.

211/✔

Dr. 3 0 0 00

3 0 0 00 2 0 0 00 2 0 0 00

513

211/

✔

513

Cr.

4 0 0 00 4 0 0 00

7-7B

SOLUTIONS TO EXERCISES,—SET B, Cont. EXERCISE 7-2B., Cont. EDNA CO. CASH PAYMENTS JOURNAL

Date 2017 June 10 17

Chq. No. 831 832

Post Ref.

Accounts Debited Regina Co. Garry Co.

Sundry Accounts Dr.

✔ ✔

ACCOUNTS PAYABLE SUBSIDIARY LEDGER

Page 1

Accounts Payable Dr. 6 0 0 00 1 2 0 0 00 1 8 0 0 00 (211)

Purchases Discounts Cr. 1 2 00 3 6 00 4 8 00 (512)

Cash Cr. 5 8 8 00 1 1 6 4 00 1 7 5 2 00 (111)

PARTIAL GENERAL LEDGER

Barstow Co.

Cash

111

GJ1 06/08 200.00 1000.00 06/03 PJ1

Purchases

1752.00 06/30 CPJ1

511 5000.00 06/30 PJ1

800.00

Garry Co. GJ1 06/13 400.00 1600.00 06/05 PJ1 CPJ1 06/17 1200.00

0.00

Accounts Payable

211

GJ1 06/06 300.00

5000.00 06/30 PJ1

Purchases Discounts

512

48.00 06/30 CPJ1

GJ1 06/08 200.00 GJ1 06/13 400.00

2300.00

CPJ1 06/30 1800.00 Purchases Returns & Allowances 513 Regina Co.

300.00 06/06 GJ1

GJ1 06/06 300.00

900.00 06/02 PJ1 CPJ1 06/10 600.00 1500.00 06/12 PJ1 1500.00

200.00 06/08 GJ1 400.00 06/13 GJ1 900.00

EDNA CO. SCHEDULE OF ACCOUNTS PAYABLE JUNE 30, 2017 Barstow Co. Regina Co.

7-8B

8 0 0 00 1 5 0 0 00 2 3 0 0 00

EXERCISE 7-3B. $5,000.00 -$400.00 $4,600.00 3 .02 = $92.00 $4,600 - 92 = $4,508 paid April 13.

EXERCISE 7-4B. HUSTON CO. GENERAL JOURNAL Date 2017 July 10

Page 1 Post Ref.

Account Title and Description Accounts Payable (Park Co.)

211/✔

Purchases Return and Allowances Debit memo No. 1 re invoice No. 731.

ACCOUNTS PAYABLE SUBSIDIARY LEDGER

Dr.

Cr.

6 0 0 00 6 0 0 00

513

PARTIAL GENERAL LEDGER

Park Co.

Accounts Payable

GJ1 07/10 600.00

211

GJ1 07/10 600.00

Purchases Returns & Allowances

513

600.00 07/10 GJ1

EXERCISE 7-5B. MORGAN’S CLOTHING CASH PAYMENTS JOURNAL

Date 2017 April 3 10 17

Chq. No. 201 202 203

Accounts Debited A. James Company Flott Advertising B. Foss

Post Ref.

Sundry Accounts Dr.

✔ 610

Page 2

Accounts Payable Dr. 1 3 0 0 00

Purchases Discounts Cr. 2 6 00

5 0 0 00 1 8 0 0 00 (211)

2 6 00 (512)

1 0 0 00

✔ 1 0 0 00 (X)

Cash Cr. 1 2 7 4 00 1 0 0 00 5 0 0 00 1 8 7 4 00 (111)

7-9B

SOLUTIONS TO EXERCISES,—SET B, Cont. EXERCISE 7-5B., Cont. ACCOUNTS PAYABLE SUBSIDIARY LEDGER

PARTIAL GENERAL LEDGER

B. Foss CP J2 04/17 500

Cash

500

110 5,000

1,874 04/30 CPJ2

3,126 A. James CPJ2 04/03 1,300

Accounts Payable

1,300

210

CPJ2 04/30 1,800 2,900 1,100

J. Ranch

Purchases Discount

800

511

26 04/30 CPJ2

B. Swanson

Advertising Expense

300

610

CPJ2 04/10 100

EXERCISE 7-6B. MORGAN’S CLOTHING SCHEDULE OF ACCOUNTS PAYABLE APRIL 30, 2017 J. Ranch B. Swanson

EXERCISE 7-7B. $6,000 *.3 = $1,800 $6,000 - $1,800 = $4,200 $4,200 *.02 = $84 $4,200 - $84 = $4,116 The actual cost of buying the merchandise was $4,116.

8 0 0 00 3 0 0 00 1 1 0 0 00

7-11B

Date 2017 June 3 4 8 14

Account Credited Bennet Co. Frank Co. Beamer Co. Bennet Co.

PROBLEM 7A-1.

Date of Inv. Invoice No. Terms 06/03 7041 2/10,n30 06/04 672 06/07 3710 2/10,n/30 06/13 7186 ✔

✔

Post Ref.

Accounts Payable Cr. 1 6 4 0 00 2 9 6 0 00 1 4 7 0 00 9 5 0 00 7 0 2 0 00 (210) 3 1 1 0 00 (510)

1 4 7 0 00

Purchases Dr. 1 6 4 0 00

ELY GOLDMAN’S SPECIALTY FOODS PURCHASES JOURNAL

Store Supplies

Store Equipment

Account

130

151

Post Ref.

Sundry Dr.

9 5 0 00 3 9 1 0 00 (X)

2 9 6 0 00

Amount

Page 1

PROBLEM 7A-1, Cont. ELY GOLDMAN SPECIALTY FOODS ACCOUNTS PAYABLE LEDGER NAME ADDRESS Date 2017 June 8

NAME ADDRESS Date 2017 June 3 14

NAME ADDRESS Date 2017 June 4

7-12

BEAMER CO. 275 GRAYSON ST., BRANTFORD, ON N3R 2T2 Post Ref.

Explanation

Debit

PJ1

Credit

Cr. Balance

1 4 7 0 00

Credit

Cr. Balance

1 6 4 0 00 9 5 0 00

1 6 4 0 00 2 5 9 0 00

Credit

Cr. Balance

2 9 6 0 00

BENNET CO. 1125 SMITH RD., BRANTFORD, ON N3R 2T2 Post Ref.

Explanation

Debit

PJ1 PJ1

FRANK CO. 339B BAKER ST., OTTAWA, ON Explanation

K2A 4N1 Post Ref. PJ1

Debit

PROBLEM 7A-L, Cont. ELY GOLDMAN SPECIALTY FOODS PARTIAL GENERAL LEDGER NAME: STORE SUPPLIES Date 2017 June 14

Explanation

ACCOUNT NO. Post Ref.

Debit

PJ1

9 5 0 00

NAME: STORE EQUIPMENT Date 2017 June 4

Explanation

Post Ref.

Debit

PJ1

2 9 6 0 00

Balance

9 5 0 00

Credit

151 DR CR

Balance

2 9 6 0 00

ACCOUNT NO. Post Ref.

Debit

PJ1

NAME: PURCHASES Date 2017 June 30

DR CR

ACCOUNT NO.

NAME: ACCOUNTS PAYABLE Date 2017 June 30

Credit

130

210

Credit

DR CR

Balance

7 0 2 0 00

ACCOUNT NO. Explanation

Post Ref.

Debit

PJ1

3 1 1 0 00

Credit

510 DR CR

Balance

3 1 1 0 00

7-13

7-14

Date 2016 May 8 11 14 18 24

Date 2016 May 15

Account Credited Stanton Co. Kenn Co. Stacy Co. King Co. Stacy Co.

PROBLEM 7A-2.

✔ ✔ ✔ ✔ ✔

Post Ref.

2 4 4 0 00 (510)

Purchases Dr. 9 0 0 00 1 5 4 0 00

SARA’S CUPCAKES GENERAL JOURNAL

Accounts Payable Cr. 9 0 0 00 1 5 4 0 00 1 0 5 0 00 1 8 3 7 00 9 4 0 00 6 2 6 7 00 (210)

Purchase Returns and Allowances Debit memo No. 5 re invoice 1475.

Account Title and Description Accounts Payable (Stanton Co.)

Date of Inv. Inv. No. Terms 05/06 1416 2/10,n60 05/11 618 2/10,n60 05/13 741 05/18 1110 05/23 780 2/10,n30

SARA’S CUPCAKES PURCHASES JOURNAL

512

210/✔

Post Ref.

3 0 0 00

Cr.

Page 2

120

Post Ref.

Sundry

Office Equipment

Account Name

Dr. 3 0 0 00

9 4 0 00 1 9 9 0 00 (110)

1 0 5 0 00

Store Supplies Dr.

1 8 3 7 00 (X)

1 8 3 7 00

Amount Dr.

Page 10

PROBLEM 7A-2., Cont. SARA’S CUPCAKES PARTIAL GENERAL LEDGER NAME: ADDRESS: Date 2016 May 1 11

NAME: ADDRESS: Date 2016 May 1 18

NAME: ADDRESS: Date 2016 May 1 14 24

NAME: ADDRESS: Date 2016 May 1 8 15

KENN CO. 120 LAKEVIEW AVE, COLD LAKE, AB Explanation

T9M 7T7

Post Ref.

Debit

Cr. Balance

1 5 4 0 00

1 2 4 0 00 2 7 8 0 00

Credit

Cr. Balance

1 8 3 7 00

8 4 5 00 2 6 8 2 00

Credit

Cr. Balance

1 0 5 0 00 9 4 0 00

2 6 1 5 00 3 6 6 5 00 4 6 0 5 00

Credit

Cr. Balance

9 0 0 00

7 9 0 00 1 6 9 0 00 1 3 9 0 00

✔

Balance

PJ10

KING CO. 401 FIRST ST., BONNYVILLE, AB Explanation

T9N 3G4 Post Ref.

Debit

✔

Balance

PJ10

STACY CO. 15 SECOND AVENUE, COLD LAKE, AB Explanation

T9M 6A1

Post Ref.

Debit

✔

Balance

PJ10 PJ10

STANTON CO. 241 AIRFORCE RD, RR1, COLD LAKE, AB Explanation Balance

Credit

Post Ref.

T9M 5S8 Debit

✔ PJ10 GJ2

3 0 0 00

7-15

PROBLEM 7A-2., Cont. SARA’S CUPCAKES PARTIAL GENERAL LEDGER NAME: STORE SUPPLIES Date 2016 May 1 31

ACCOUNT NO.

Explanation

Post Ref.

Debit

✔

Balance

PJ10

1 9 9 0 00

Explanation

Post Ref.

Debit

PJ10

1 8 3 7 00

Explanation

Post Ref.

Debit

Credit

✔

Balance

GJ2

3 0 0 00

Post Ref.

Debit

Credit

✔

Balance

PJ10

1 8 3 7 00

DR CR

Explanation

Post Ref.

DR CR Dr

2 4 4 0 00

ACCOUNT NO. Debit

GJ2

120

ACCOUNT NO. Explanation

7 2 0 00 2 7 1 0 00

Balance

6 2 6 7 00

PJ10

Balance

DR CR

NAME: PURCHASES RETURNS AND ALLOWANCES Date 2016 May 15

Credit

ACCOUNT NO.

NAME: PURCHASES Date 2016 May 1 31

ACCOUNT NO.

NAME: ACCOUNTS PAYABLE Date 2016 May 1 15 31

DR CR Dr

NAME: OFFICE EQUIPMENT Date 2016 May 18

Credit

110

210 Balance 5 4 9 0 00 5 1 9 0 00 11 4 5 7 0 0 510 Balance 21 4 1 0 0 0 23 8 5 0 0 0 512

Credit

DR CR

Balance

3 0 0 00

SARA’S CUPCAKES SCHEDULE OF ACCOUNTS PAYABLE MAY 31, 2016 Kenn Co. King Co. Stacy Co. Stanton Co.

2 7 8 0 00 2 6 8 2 00 4 6 0 5 00 1 3 9 0 00 11 4 5 7 0 0

7-16

7-17

Date Chq. 2016 No. Account Debited May 3 211 Marrk Co. 3 212 Ring Motors Co. 7 213 Dart Co. 18 214 Tack Co. 24 215 P. Mark Co. 27 216 Downtown Realty Trust 28 217 City Utility Co. 31 218 JNS Co.

PROBLEM 7A-3.

✔

620

10 2 0 0 0 0 (X)

1 8 0 0 00 4 0 0 00

610

✔

8 0 0 0 00

150

✔

Post Ref.

Sundry Dr.

3 5 0 00 3 4 0 0 00 (210)

2 5 0 0 00

Accounts Payable Dr. 5 5 0 00

PETER DAL Y PHOTO PRINTING CASH PAYMENTS JOURNAL

5 7 0 0 00 (510)

3 9 0 0 00 1 8 0 0 00

Purchases Dr.

1 1 00 (512)

Purchases Discounts Cr. 1 1 00

Cash Cr. 5 3 9 00 8 0 0 0 00 3 9 0 0 00 1 8 0 0 00 2 5 0 0 00 1 8 0 0 00 4 0 0 00 3 5 0 00 19 2 8 9 0 0 (110)

Page 5

PROBLEM 7A-3., Cont. PETER DALY PHOTO PRINTING PARTIAL GENERAL LEDGER NAME: ADDRESS: Date 2016 May 1

CHEDD CO. 174 GOLDSTREAM AVE., WHITEHORSE, YT Y1A

Date 2016 May 1 31

JNS CO. 422 FIRST ST., WHITEHORSE, YT Y1A

Credit

Cr. Balance 2 4 0 0 00

5H2 Post Ref.

Explanation

Debit

Credit

Cr. Balance

✔

Balance

7 0 0 00 3 5 0 00

3 5 0 00

CPJ5

MARRK CO. 1010 SECOND AVENUE, WHITEHORSE, YT Y1A Post Ref.

Explanation

Debit

Credit

Cr. Balance

✔

Balance

CPJ5

NAME: ADDRESS: Date 2016 May 1 24

Debit

✔

Balance

NAME: ADDRESS: Date 2016 May 1 3

Post Ref.

Explanation

NAME: ADDRESS:

4H1

P. MARK CO. 303 MOUNTAIN RD, RR1, WHITEHORSE, YT Y1A Post Ref.

Explanation

1 1 0 0 00 5 5 0 00

5 5 0 00

4H9

Debit

Credit

Cr. Balance

✔

Balance

CPJ5

2 5 0 0 00 0

2 5 0 0 00

PARTIAL GENERAL LEDGER NAME: CASH Date 2016 May 1 31

7-18

ACCOUNT NO. Explanation

Balance

Post Ref.

Debit

Credit

✔ CPJ5

110

DR CR Dr

19 2 8 9 0 0

Balance 17 0 0 0 0 0 2 2 8 9 00

PROBLEM 7A-3., Cont. PARTIAL GENERAL LEDGER NAME: DELIVERY TRUCK Date 2016 May

Explanation

ACCOUNT NO. Post Ref.

Debit

CPJ5

8 0 0 0 00

NAME: ACCOUNTS PAYABLE Date 2016 May 1 31

Explanation

Post Ref.

Debit

CPJ5

3 4 0 0 00

Explanation

Post Ref.

Debit

CPJ5

5 7 0 0 00

8 0 0 0 00

DR CR

Explanation

Post Ref.

Debit

CPJ5

Explanation

Credit

Debit

CPJ5

1 8 0 0 00

Debit

DR CR

1 1 0 0

CPJ5

4 0 0 00

Credit

510

5 7 0 0 00

512 Balance 1 1 00

610

DR CR

Balance

1 8 0 0 00

ACCOUNT NO. Post Ref.

6 7 0 0 00 3 3 0 0 00

Credit

Balance

ACCOUNT NO. Post Ref.

210

DR CR

ACCOUNT NO.

NAME: UTILITIES EXPENSE Date 2016 May 28

ACCOUNT NO.

NAME: RENT EXPENSE Date 2016 May 27

Balance

NAME: PURCHASES DISCOUNTS Date 2016 May 31

Credit

✔

Balance

DR CR

ACCOUNT NO.

NAME: PURCHASES Date 2016 May 31

Credit

150

620

DR CR

Balance

4 0 0 00

7-19

PROBLEM 7A-3., Cont. PETER DALY PHOTO PRINTING SCHEDULE OF ACCOUNTS PAYABLE MAY 31, 2016 Cliedd Co. JNS Co. Marrk Co.

2 4 0 0 00 3 5 0 00 5 5 0 00 3 3 0 0 00

PROBLEM 7A-4. MARY’S CARD HOUSE SALES JOURNAL

Date Invoice Customer’s 2016 No. Name Mar 2 601 Jas Investors 6 602 Paton Lee 9 603 Jas Investors 16 604 Gayle Herbert 22 605 Jas Investors 23 606 Gayle Herbert 31 607 You vilie Company

Page 1

Terms 2/10, n/30 2/10, n/30 2/10, n/30 2/10, n/30 2/10, n/30 2/10, n/30 2/10, n/30

Post Ref.

✔ ✔ ✔ ✔ ✔ ✔ ✔

Accounts Receivable Dr. 1 8 0 0 00 7 0 0 00 9 0 0 00 4 0 0 0 00 9 0 0 00 1 1 0 0 00 3 0 0 0 00 12 4 0 0 0 0 (1200)

MARY’S CARD HOUSE GENERAL JOURNAL Date 2016 Mar 12

Account Title and Description Sales Returns and Allowances Accounts Receivable (Paton Lee)

Card Sates Cr. 1 8 0 0 00 7 0 0 00 9 0 0 00 4 0 0 0 00 9 0 0 00 1 1 0 0 00 3 0 0 0 00 12 4 0 0 0 0 (4100)

Page I Post Ref. 4120

Dr.

Cr.

3 0 0 00 3 0 0 00

1200/✔

Credit memo No. 1 re invoice No. 602. 15

Accounts Payable (Kaelynn Imports) Purchases Returns and Allowances Debit memo No. 1 re invoice No. 311

7-20

2100/✔ 5120

1 0 0 0 00 1 0 0 0 00

7-21

Date 2016 Mar 1 8 12 19 26 29

Account Credited X-Card Company X-Card Company Kaelynn Imports Halifax Auto Benson & Mclntyre X-Card Company

PROBLEM 7A-4., Cont.

Date of Inv. Invoice No. Marl 710 Mar 7 716 Mar 12 311 Mar 19 1471 Mar 26 211 Mar 26 736 2/10,n30

Terms 2/10,n30 2/10,n30 1/15,n60 ✔ ✔ ✔ ✔ ✔ ✔

Post Ref.

Accounts Payable Cr. 5 0 0 0 00 1 5 0 0 00 4 0 0 0 00 14 0 0 0 0 0 4 8 0 0 00 1 4 0 0 00 30 7 0 0 0 0 (2100) 4 8 0 0 00 1 4 0 0 00 16 7 0 0 0 0 (5100)

Card Purchases Dr. 5 0 0 0 00 1 5 0 0 00 4 0 0 0 00

MARY’S CARD HOUSE PURCHASES JOURNAL

Delivery Truck

Account

Amount

14 0 0 0 0 0 (X)

1620 14 0 0 0 0 0

Sundry Dr.

Page 1

7-22

Date 2016 Mar 1 13 14 16 16 16 26 27 Cash Dr. 15 0 0 0 0 0 20 0 0 0 0 0 1 3 0 0 00 4 0 0 0 00 3 9 2 00 1 8 0 0 00 8 8 2 00 1 0 7 8 00 44 4 5 2 0 0 (1100)

PROBLEM 7A-4., Cont.

4 0 0 00 1 8 0 0 00 9 0 0 00 1 1 0 0 00 4 2 0 0 00 (1200)

Accounts Receivable Cr.

5 3 0 0 00 (4100)

1 3 0 0 00 4 0 0 0 00

Card Sales Cr.

Description of Receipt Mary James, Capital Royal Bank Bank Loan

8 0 0 Paton Lee Jas Investors 1 8 0 0 Jas Investors 2 2 0 0 Gayle Herbert 4 8 00 (4130)

Sales Discounts Dr.

MARY’S CARD HOUSE CASH RECEIPTS JOURNAL

✔ ✔ ✔ ✔

2200

3000

Post Ref

35 0 0 0 0 0 (X)

Sundry Cr. 15 0 0 0 0 0 20 0 0 0 0 0

Page 1

PROBLEM 7A-4., Cont. ACCOUNTS RECEIVABLE LEDGER NAME ADDRESS

GAYLE HERBERT 1300 ISLEVILLE ST, HALIFAX, NS

Date 2016 Mar 16 23 27

NAME ADDRESS

Debit

SJ1 CRJ1

JAS INVESTORS 120 PERCY ST, HALIFAX, NS

B3N

Post Ref.

Debit

SJ1 CRJ1

CRJ1

B3P

Post Ref.

Debit

SJ1

7 0 0 00

Explanation

1 8 0 0 00 9 0 0 00

1 8 0 0 00 2 7 0 0 00 9 0 0 00 1 8 0 0 00 9 0 0 00

Credit

Dr. Balance

3 0 0 00 4 0 0 00

CRJ1

Date 2016 Mar 31

Dr. Balance

1N1

GJ1

YOUVILLE COMPANY 28 WINCHESTER AVE, HALIFAX, NS

Credit

9 0 0 00

SJ1

Explanation

1 1 0 0 00

4 0 0 0 00 5 1 0 0 00 4 0 0 0 00

1 8 0 0 00 9 0 0 00

SJ1

Dr. Balance

2S2

Explanation

PATON LEE 3211 HARVARD ST, HALIFAX,

Credit

4 0 0 0 00 1 1 0 0 00

SJ1

Date 2016 Mar 6 12 16

NAME ADDRESS

Post Ref.

Explanation

Date 2016 Mar 2 9 16 22 26 NAME ADDRESS

B3K 3X9

B3A

7 0 0 00 4 0 0 00 0

8T2

Post Ref.

Debit

SJ1

3 0 0 0 00

Credit

Dr. Balance 3 0 0 0 00

MARY’S CARD HOUSE SCHEDULE OF ACCOUNTS RECEIVABLE MARCH 31, 2016 Gayle Herbert Jas Investors Youville Company

4 0 0 0 00 9 0 0 00 3 0 0 0 00 7 9 0 0 00

7-23

7-24

Date 2016 Mar 1 9 11 15 23 24 30

Chq. No. 1001 1002 1003 1004 1005 1006 1007 6100

3 0 0 0 00 7 0 0 0 00 15 0 0 0 0 0 (2100)

✔

5 0 0 0 00

Accounts Payable Dr.

✔

3 6 6 0 00 (X)

6 0 0 00

1450 6150

Sundry Dr. 2 7 0 0 00 3 6 0 00

Post Ref.

6 0 0 00 (5100)

6 0 0 00

Card Purchases Dr.

MARY’S CARD HOUSE CASH PAYMENTS JOURNAL

Account Debited Harbour Realty Able Cleaning Service X-Card Company Salaries Kaelynn Imports AMR Supplies Halifax Auto

PROBLEM 7A-4., Cont.

1 3 0 00 (5130)

3 0 00

1 0 0 00

Purchases Discounts Cr.

Cash Cr. 2 7 0 0 00 3 6 0 00 4 9 0 0 00 6 0 0 00 2 9 7 0 00 6 0 0 00 7 0 0 0 00 19 1 3 0 0 0 (1100)

Page 1

PROBLEM 7A-4., Cont. MARY’S CARD HOUSE ACCOUNTS PAYABLE LEDGER NAME: ADDRESS:

BENSON AND MCINTYRE 455 BATTERY ST, HALIFAX, NS

Date 2016 Mar 26

NAME: ADDRESS:

Post Ref.

Debit

PJ1

HALIFAX AUTO 60 LAKE ROAD, HALIFAX, NS

B3T

Post Ref.

Debit

PJ1 CPJ1

KAELYNN IMPORTS 626 HARBOUR ST, HALIFAX, NS

B3A

CPJ1

Date 2016 Mar 1 8 11 29

Explanation

B3K

4 8 0 0 00

Credit

Cr. Balance

14 0 0 0 0 0

14 0 0 0 0 0 7 0 0 0 00

Credit

Cr. Balance

4 0 0 0 00

4 0 0 0 00 3 0 0 0 00 0

Credit

Cr. Balance

5 0 0 0 00 1 5 0 0 00

5 0 0 0 00 6 5 0 0 00 1 5 0 0 00 2 9 0 0 00

7 0 0 0 00

Debit

PJ1 GJ1

X-CARD COMPANY 75 ISLEVILLE ST, HALIFAX, NS

Cr. Balance

2M4 Post Ref.

Explanation

Credit

6N1

Explanation

Date 2016 Mar 12 15 23 NAME: ADDRESS:

1N1

Explanation

Date 2016 Mar 19 30

NAME: ADDRESS:

B3P

1 0 0 0 00 3 0 0 0 00

1Z4 Post Ref.

Debit

PJ1 PJ1 CPJ1

5 0 0 0 00 1 4 0 0 00

PJ1

MARY’S CARD HOUSE SCHEDULE OF ACCOUNTS PAYABLE MARCH 31, 2016 Benson and Mcintyre Halifax Auto X-Card Company

4 8 0 0 7 0 0 0 2 9 0 0 14 7 0 0

00 00 00 00

7-25

PROBLEM 7A-4., Cont. MARY’S CARD HOUSE - PARTIAL GENERAL LEDGER NAME: CASH Date 2016 Mar 31 31

ACCOUNT NO. Explanation

Post Ref.

Debit

CRJ1

44 4 5 2 00

Explanation

Post Ref.

Debit

SJ1

12 4 0 0 0 0

Explanation

Debit

CPJ1

2 7 0 0 00

7-26

Explanation

Credit

Post Ref.

Debit

PJ1

14 0 0 0 0 0

Credit

Debit

GJ1

1 0 0 0 00 15 0 0 0 0 0

3 0 0 00 12 1 0 0 0 0 7 9 0 0 00

Balance

2 7 0 0 00

1620

DR CR

Balance

14 0 0 0 0 0

2100

DR CR Dr

30 7 0 0 0 0

PJ1 CPJ1

Credit

Balance

DR CR

ACCOUNT NO. Post Ref.

44 4 5 2 0 0 25 3 2 2 0 0

1450

ACCOUNT NO.

NAME: ACCOUNTS PAYABLE Date 2016 Mar 15 31 31

DR CR

ACCOUNT NO. Post Ref.

Balance

1200

4 2 0 0 00

CPJ1

NAME: DELIVERY TRUCK Date 2016 Mar 19

Credit 3 0 0 00

GJ1

Explanation

ACCOUNT NO.

NAME: PREPAID RENT Date 2016 Mar 1

DR CR Dr

19 1 3 0 0 0

CPJ1

NAME: ACCOUNTS RECEIVABLE Date 2016 Mar 12 31 31

Credit

1100

Cr Cr

Balance 1 0 0 0 00 29 7 0 0 0 0 14 7 0 0 0 0

PROBLEM 7A-4., Cont. MARY’S CARD HOUSE - PARTIAL GENERAL LEDGER NAME: BANK LOAN PAYABLE Date 2016 Mar 13

Explanation

ACCOUNT NO. Post Ref.

Debit

CRJ1

NAME: M. JAMES, CAPITAL Date 2016 Mar 1

Explanation

Post Ref.

Debit

CRJ1

Explanation

Post Ref.

Debit

Balance

20 0 0 0 0 0

3000

Credit

DR CR

Balance

15 0 0 0 0 0

Explanation

Credit

4100

DR CR

12 4 0 0 0 0 5 3 0 0 00

SJ1 CRJ1

Cr Cr

ACCOUNT NO. Post Ref.

Debit

GJ1

3 0 0 00

NAME: SALES DISCOUNTS Date 2016 Mar 31

DR CR

ACCOUNT NO.

NAME: SALES RETURNS AND ALLOWANCES Date 2016 Mar 12

Credit

ACCOUNT NO.

NAME: CARD SALES Date 2016 Mar 31 31

2200

Credit

CRJ1

Debit 4 8 00

Credit

12 4 0 0 0 0 17 7 0 0 0 0

4120

DR CR

Balance

3 0 0 00

ACCOUNT NO. Post Ref.

Balance

DR CR

4130 Balance

4 8 00

7-27

PROBLEM 7A-4., Cont. MARY’S CARD HOUSE - PARTIAL GENERAL LEDGER NAME: CARD PURCHASES Date 2016 Mar 31 31

Explanation

ACCOUNT NO. Post Ref. PJ1 CPJ1

Debit 16 7 0 0 0 0 6 0 0 00

NAME: PURCHASES RETURNS AND ALLOWANCES Date 2016 Mar 15

Explanation

Post Ref.

Debit

GJ1

Explanation

Post Ref.

Debit

CPJ1

Explanation

7-28

Explanation

Post Ref.

Debit

CPJ1

6 0 0 00

Debit

CPJ1

3 6 0 00

16 7 0 0 0 0 17 3 0 0 0 0

Credit

DR CR

Balance

1 0 0 0 00

5130

Credit

DR CR

Balance

1 3 0 00

Credit

6100

DR CR

Balance

6 0 0 00

ACCOUNT NO. Post Ref.

Balance

5120

ACCOUNT NO.

NAME: CLEANING EXPENSE Date 2016 Mar 9

ACCOUNT NO.

NAME: SALARIES EXPENSE Date 2016 Mar 15

DR CR

ACCOUNT NO.

NAME: PURCHASES DISCOUNTS Date 2016 Mar 31

Credit

5100

6150

DR CR

Balance

3 6 0 00

7-29

Date 2017 June 2 4 7 15

Account Credited Beamer Co. Frank Co. Bennet Co. Beamer Co.

PROBLEM 7B-1.

Date of Inv. Invoice No. Terms 06/02 3683 2/10,n30 06/04 653 06/07 7089 2/10,n/30 06/13 3721 ✔

✔

Post Ref.

Accounts Payable Cr. 2 8 4 5 00 3 1 2 5 00 1 9 8 0 00 7 5 0 00 8 7 0 0 00 (21 0) 4 8 2 5 00 (51 0)

1 9 8 0 00

Purchases Dr. 2 8 4 5 00

EL Y GOLDMAN’S SPECIALTY FOODS PURCHASES JOURNAL

Store Supplies

Store Equipment

Account

130

151

Post Ref.

Sundry Dr.

7 5 0 00 3 8 7 5 00 (X)

3 I 2 5 00

Amount

Page 1

PROBLEM 7B-L, Cont. ELY GOLDMAN SPECIALTY FOODS ACCOUNTS PAYABLE LEDGER NAME ADDRESS Date 2017 June 2 15

NAME ADDRESS Date 2017 June 7

NAME ADDRESS Date 2017 June 4

7-30

BEAMER CO. 275 GRAYSON ST., BRANTFORD, ON N3R 2T2 Post Ref.

Explanation

Debit

PJ1 PJ1

BENNET CO. 1125 SMITH RD.,

BRANTFORD, ON

N3R Post Ref.

Explanation

Cr. Balance

2 8 4 5 00 7 5 0 00

2 8 4 5 00 3 5 9 5 00

Credit

Cr. Balance

1 9 8 0 00

Credit

Cr. Balance

3 1 2 5 00

2T2 Debit

PJ1

FRANK CO. 339B BAKER ST., OTTAWA, ON

Credit

K2A 4N1 Post Ref. PJ1

Debit

PROBLEM 7B-1, Cont. ELY GOLDMAN SPECIALTY FOODS PARTIAL GENERAL LEDGER NAME: STORE SUPPLIES Date 2017 June 15

Explanation

ACCOUNT NO. Post Ref.

Debit

PJ1

7 5 0 00

NAME: STORE EQUIPMENT Date 2017 June 4

Explanation

Post Ref.

Debit

PJ1

3 1 2 5 00

Balance

7 5 0 00

Credit

151

DR CR

Balance

3 1 2 5 00

ACCOUNT NO. Post Ref.

Debit

PJ1

NAME: PURCHASES Date 2017 June 30

DR CR

ACCOUNT NO.

NAME: ACCOUNTS PAYABLE Date 2017 June 30

Credit

130

210

Credit

DR CR

Balance

8 7 0 0 00

ACCOUNT NO. Explanation

Post Ref.

Debit

PJ1

4 8 2 5 00

Credit

510

DR CR

Balance

4 8 2 5 00

7-31

7-32

Date 2016 May 7 10 14 19 23

Date 2016 May 15

Account Credited Kenn Co. Stanton Co. Stacy Co. King Co. Stacy Co.

PROBLEM 7B-2.

✔ ✔ ✔ ✔ ✔

Post Ref.

1 8 0 0 00 ( 51 0)

Purchases Dr. 7 5 0 00 1 0 5 0 00

SARA’S CUPCAKES GENERAL JOURNAL

Accounts Payable Cr. 7 5 0 00 1 0 5 0 00 1 1 4 5 00 2 5 6 9 00 8 7 5 00 6 3 8 9 00 ( 21 0)

Purchase Returns and Allowances Debit memo No. 5 re invoice 1475.

Accounts Payable (Stanton Co.)

Account Title and Description

Date of Inv. Inv. No. Terms 05/07 589 2/10,n60 05/10 1475 2/10,n60 05/13 713 05/18 1160 05/23 786 2/10,n30

512

210/✔

Post Ref.

Dr.

2 5 0 00

Cr.

Page 2

120

Post Ref.

Sundry

Office Equipment

Account Name

2 5 0 00

8 7 5 00 2 0 2 0 00 ( 11 0)

1 1 4 5 00

Store Supplies Dr.

SARA’S CUPCAKES PURCHASES JOURNAL

2 5 6 9 00 ( X)

2 5 6 9 00

Amount Dr.

Page 10

PROBLEM 7B-2., Cont SARA’S CUPCAKES ACCOUNTS PAYABLE LEDGER NAME: ADDRESS: Date 2016 May 1 7

NAME: ADDRESS: Date 2016 May 1 19

NAME: ADDRESS: Date 2016 May 1 14 23

NAME: ADDRESS: Date 2016 May 1 10 15

KENN CO. 120 LAKEVIEW AVE., COLD LAKE, AB

T9M 7T7 Post Ref.

Explanation

Debit

Cr. Balance

7 5 0 00

1 2 4 0 00 1 9 9 0 00

Credit

Cr. Balance

2 5 6 9 00

8 4 5 00 3 4 1 4 00

Credit

Cr. Balance

1 1 4 5 00 8 7 5 00

2 6 1 5 00 3 7 6 0 00 4 6 3 5 00

Credit

Cr. Balance

1 0 5 0 00

7 9 0 00 1 8 4 0 00 1 5 9 0 00

✔

Balance

PJ10

KING CO. 401 FIRST ST., BONNYVILLE, AB

T9N 3G4 Post Ref.

Explanation

Debit

✔

Balance

PJ10

STACY CO. 15 SECOND AVENUE, COLD LAKE, AB

T9M 6A1 Post Ref.

Explanation

Debit

✔

Balance

PJ10 PJ10

STANTON CO. 241 AIRFORCE RD, RR1, COLD LAKE, AB Explanation Balance

Credit

T9M 5S8 Post Ref.

Debit

✔ PJ10 GJ2

2 5 0 00

7-33

PROBLEM 7B-2., Cont. SARA’S CUPCAKES PARTIAL GENERAL LEDGER NAME: STORE SUPPLIES Date 2016 May 1 31

ACCOUNT NO.

Explanation

Post Ref.

Debit

✔

Balance

PJ10

2 0 2 0 00

Explanation

Post Ref.

Debit

PJ10

2 5 6 9 00

Explanation

Post Ref.

Debit

Credit

GJ2

Balance

2 5 6 9 00

210

DR CR Cr

2 5 0 00

6 3 8 9 00

PJ1O

ACCOUNT NO. Explanation

Post Ref.

Debit

Credit

✔

Balance

PJ1O

Explanation

Post Ref.

DR CR

ACCOUNT NO. Debit

GJ2

Balance 5 4 9 0 00 5 2 4 0 00 11 6 2 9 0 0 510

1 8 0 0 00

7 2 0 00 2 7 4 0 00

DR CR

✔

Balance

NAME: PURCHASES RETURNS AND ALLOWANCES Date 2016 May 15

Credit

Balance

120

ACCOUNT NO.

NAME: PURCHASES Date 2016 May 1 31

ACCOUNT NO.

NAME: ACCOUNTS PAYABLE Date 2016 May 1 15 31

DR CR Dr

NAME: OFFICE EQUIPMENT Date 2016 May 19

Credit

110

Balance 21 4 1 0 0 0 23 2 1 0 0 0 512

Credit

DR CR

Balance

2 5 0 00

SARA’S CUPCAKES SCHEDULE OF ACCOUNTS PAYABLE MAY 31, 2016 Kenn Co. King Co. Stacy Co. Stanton Co.

7-34

1 9 9 0 00 3 4 1 4 00 4 6 3 5 00 1 5 9 0 00 11 6 2 9 0 0

7-35

Chq. Date 2016 No. May 3 721 3 722 7 723 18 724 24 725 27 726 28 727 31 728 Account Debited Ring Motors Co. Marrk Co. Dart Co. Tack Co. P. Mark Co. Downtown Realty Trust JNS Co. City Utility Co.

PROBLEM 7B-3.

620

✔

610

✔

150

Post Ref.

3 2 5 00 10 3 2 5 0 0 (X )

1 5 0 0 00

Sundry Dr. 8 5 0 0 00

3 4 0 0 00 ( 21 0)

3 5 0 00

2 5 0 0 00

5 5 0 00

Accounts Payable Dr.

PETER DALY PHOTO PRINTING CASH PAYMENTS JOURNAL

3 2 8 0 00 ( 51 0)

2 7 8 0 00 5 0 0 00

Purchases Dr.

9 1 50 ( 51 2)

7 5 00

1 6 50

Purchases Discounts Cr.

Cash Cr. 8 5 0 0 00 5 3 3 50 2 7 8 0 00 5 0 0 00 2 4 2 5 00 1 5 0 0 00 3 5 0 00 3 2 5 00 16 9 1 3 5 0 (11 0)

Page 5

PROBLEM 7B-3., Cont. PETER DALY PHOTO PRINTING ACCOUNTS PAYABLE LEDGER NAME: ADDRESS: Date 2016 May 1

CHEDD CO. 174 GOLDSTREAM AVE., WHITEHORSE, YT Y1A 4H1 Cr. Balance 2 4 0 0 00

Post Ref.

Explanation

Debit

Credit

Cr. Balance

✔

Balance

7 0 0 00 3 5 0 00

3 5 0 00

CPJ5

MARRK CO. 1010 SECOND AVENUE, WHITEHORSE, YT Y1A Post Ref.

Explanation

Debit

Credit

Cr. Balance

✔

Balance

CPJ5

NAME: ADDRESS: Date 2016 May 1 24

Credit

JNS CO. 422 FIRST ST., WHITEHORSE, YT Y1A 5H2

NAME: ADDRESS: Date 2016 May 1 3

Debit

✔

Balance

NAME: ADDRESS: Date 2016 May 1 28

Post Ref.

Explanation

1 1 0 0 00 5 5 0 00

5 5 0 00

P. MARK CO. 303 MOUNTAIN RD, RR1, WHITEHORSE, YT Y1A 4H9 Post Ref.

Explanation

Debit

Credit

Cr. Balance

✔

Balance

CPJ5

2 5 0 0 00 0

2 5 0 0 00

PARTIAL GENERAL LEDGER NAME: CASH Date 2016 May 1 31

7-36

ACCOUNT NO. Explanation

Balance

Post Ref.

Debit

Credit

DR CR

16 9 1 3 5 0

✔ CPJ5

110 Balance 17 0 0 0 00 8 6 50

PROBLEM 7B-3., Cont. PARTIAL GENERAL LEDGER NAME: DELIVERY TRUCK Date 2016 May 3

ACCOUNT NO.

Explanation

Post Ref.

Debit

CPJ5

8 5 0 0 00

NAME: ACCOUNTS PAYABLE Date 2016 May 1 31

Explanation

Post Ref.

Debit

CPJ5

8 5 0 0 00

Credit

210

DR CR Cr Cr

ACCOUNT NO. Explanation

Post Ref.

Debit

CPJ5

3 2 8 0 00

Explanation

Credit

Post Ref.

Debit

Credit

Balance

3 2 8 0 00

511

DR CR

Post Ref.

Debit

CPJ5

1 5 0 0 00

Credit

Post Ref.

Debit

CPJ5

3 2 5 00

Credit

9 1 50

610

DR CR

Balance

1 5 0 0 00

ACCOUNT NO.

Explanation

Balance

ACCOUNT NO.

Explanation

6 7 0 0 00 3 3 0 0 00

DR CR

9 1 50

CPJ5

Balance

510

ACCOUNT NO.

NAME: UTILITIES EXPENSE Date 2016 May 28

3 4 0 0 00

NAME: RENT EXPENSE Date 2016 May 27

Balance

✔

Balance

NAME: PURCHASES DISCOUNTS Date 2016 May 31

DR CR

ACCOUNT NO.

NAME: PURCHASES Date 2016 May 31

Credit

150

620

DR CR

Balance

3 2 5 00

PETER DALY PHOTO PRINTING SCHEDULE OF ACCOUNTS PAYABLE MAY 31, 2016 Chedd Co. JNS Co. Marrk Co.

2 4 0 0 00 3 5 0 00 5 5 0 00 3 3 0 0 00

7-37

PROBLEM 7B-4. MARY’S CARD HOUSE SALES JOURNAL Date 2016 Mar

Invoice No.

3 6 9 16 22 23 31

401 402 403 404 405 406 407

Customer’s Name Jas Investors Paton Lee Jas Investors Gayle Herbert Jas Investors Gayle Herbert Youville Company

Page 1

Terms

Post Ref.

2/10, n/30 2/10, n/30 2/10, n/30 2/10, n/30 2/10, n/30 2/10, n/30 2/10, n/30

✔ ✔ ✔ ✔ ✔ ✔ ✔

Accounts Receivable Dr. 2 0 0 0 00 9 0 0 00 1 1 0 0 00 3 6 0 0 00 1 1 0 0 00 1 3 0 0 00 3 2 0 0 00 13 2 0 0 0 0 (1200)

MARY’S CARD HOUSE GENERAL JOURNAL Date 2016 Mar 11

Account Title and Description Sales Returns and Allowances Accounts Receivable (Paton Lee)

Card Sales Cr. 2 0 0 0 00 9 0 0 00 1 1 0 0 00 3 6 0 0 00 1 1 0 0 00 1 3 0 0 00 3 2 0 0 00 13 2 0 0 0 0 (4100)

Page 1 Post Ref. 4120

Dr. 2 0 0 00

Cr. 2 0 0 00

1200/✔

Credit memo No. 1 re invoice No. 402. 15

7-38

Accounts Payable (Kaelynn Imports) Purchases Returns and Allowances Debit memo No. 1 re invoice No. 411.

1200/✔ 5120

1 2 0 0 00 1 2 0 0 00

7-39

Date 2016 Mar 2 8 13 19 26 29

Account Credited X-Card Company X-Card Company Kaelynn Imports Halifax Auto Benson & Mclntyre X-Card Company

PROBLEM 7B-4., Cont.

Date of Inv. Invoice No. Terms Mar 1 810 2/10, n30 Mar 7 816 2/10, n30 Mar 12 411 1/15, n60 Mar 19 3211 Mar 26 311 Mar 26 836 2/10, n30 ✔ ✔ ✔ ✔ ✔ ✔

Post Ref.

Accounts Payable Cr. 3 5 0 0 00 1 7 5 0 00 4 2 0 0 00 13 5 0 0 0 0 5 0 0 0 00 1 6 0 0 00 29 5 5 0 0 0 (2100)

Card Purchases Dr. 3 5 0 0 00 1 7 5 0 00 4 2 0 0 00 5 0 0 0 00 1 6 0 0 00 16 0 5 0 0 0 (5100)

MARY’S CARD HOUSE PURCHASES JOURNAL

Delivery Truck

Account

1620

Sundry Dr.

13 5 0 0 0 0 (X)

13 5 0 0 0 0

Amount

Page 1

7-40

Date 2016 Mar 1 13 14 16 16 16 26 26

Cash Dr. 12 0 0 0 0 0 15 0 0 0 0 0 1 5 0 0 00 4 2 0 0 00 6 8 6 00 2 0 0 0 00 1 0 7 8 00 1 2 7 4 00 37 7 3 8 0 0 (1100)

PROBLEM 7B-4., Cont.

7 0 0 00 2 0 0 0 00 1 1 0 0 00 1 3 0 0 00 5 1 0 0 00 (1200)

Accounts Receivable Cr.

5 7 0 0 00 (4100)

1 5 0 0 00 4 2 0 0 00

Card Sales Cr. Description of Receipt Mary James, Capital Royal Bank Bank Loan

1 4 0 0 Paton Lee Jas Investors 2 2 0 0 Jas Investors 2 6 0 0 Gayle Herbert 6 2 00 (4130)

Sales Discounts Dr.

MARY’S CARD HOUSE CASH RECEIPTS JOURNAL

✔ ✔ ✔ ✔

3000 2200

Post Ref.

27 0 0 0 0 0 (X)

Sundry Cr. 12 0 0 0 0 0 15 0 0 0 0 0

Page 1

PROBLEM 7B-4., Cont. ACCOUNTS RECEIVABLE LEDGER NAME ADDRESS

GAYLE HERBERT 1300 ISLEVILLEST, HALIFAX, NS

Date 2016 Mar 16 23 26

NAME ADDRESS

SJ1 SJ1

Debit

JAS INVESTORS 120 PERCY ST, HALIFAX, NS

Dr. Balance

1 3 0 0 00

3 6 0 0 00 4 9 0 0 00 3 6 0 0 00

Credit

Dr. Balance

2 0 0 0 00 1 1 0 0 00

2 0 0 0 00 3 1 0 0 00 1 1 0 0 00 2 2 0 0 00 I 1 0 0 00

Credit

Dr. Balance

B3N 2S2 Post Ref.

Explanation

SJ1 SJ1

Debit 2 0 0 0 00 1 1 0 0 00

CRJ1 SJ1

1 1 0 0 00

CRJ1

PATON LEE 3211 HARVARD ST, HALIFAX, NS

B3P 1N1

Explanation

Post Ref.

Debit

SJ1

9 0 0 00 2 0 0 00 7 0 0 00

SJ1

YOUVILLE COMPANY 28 WINCHESTER AVE, HALIFAX, NS

B3A 8T2

Explanation

Post Ref.

Debit

SJ1

3 2 0 0 00

Date 2016 Mar 31

Credit

3 6 0 0 00 1 3 0 0 00

CRJ1

Date 2016 Mar 6 11 16

NAME ADDRESS

Post Ref.

Explanation

Date 2016 Mar 3 9 16 22 26 NAME ADDRESS

B3K 3X9

Credit

9 0 0 00 7 0 0 00 0

Dr. Balance 3 2 0 0 00

MARY’S CARD HOUSE SCHEDULE OF ACCOUNTS RECEIVABLE MARCH 31, 2016 Gayle Herbert Jas Investors Youville Company

3 6 0 0 00 1 1 0 0 00 3 2 0 0 00 7 9 0 0 00

7-41

7-42

Date 2016 Mar 1 9 12 15 23 24 30

Chq. No. 1201 1202 1203 1204 1205 1206 1207 Account Debited Harbour Realty Able Cleaning Service X-Card Company Salaries Kaelynn Imports AMR Supplies Halifax Auto

PROBLEM 7B-4., Cont.

8 0 0 00

6100

3 0 0 0 00 6 7 5 0 00 3 0 2 5 0 0 13 2 5 0 0 0 (X) (2100)

✔

3 5 0 0 00

Accounts Payable Dr.

✔

6150

1450

Post Ref.

Sundry Dr. 1 8 0 0 00 4 2 5 00

MARY’S CARD HOUSE CASH PAYMENTS JOURNAL

5 0 0 00 (5100)

5 0 0 00

Card Purchases Dr.

Cash Cr. 1 8 0 0 00 4 2 5 00 7 0 00 3 4 3 0 00 8 0 0 00 3 0 00 2 9 7 0 00 5 0 0 00 6 7 5 0 00 1 0 0 0 0 16 6 7 5 0 0 (5130) (1100)

Purchases Discounts Cr.

Page 1

PROBLEM 7B-4., Cont. MARY’S CARD HOUSE ACCOUNTS PAYABLE LEDGER NAME: ADDRESS:

BENSON AND MCINTYRE 455 BATTERY ST, HALIFAX, NS

Date 2016 Mar 26

NAME: ADDRESS:

Debit

PJ1

HALIFAX AUTO 60 LAKE ROAD, HALIFAX, NS

Post Ref.

Debit

PJ1 CPJ1

KAELYNN IMPORTS 626 HARBOUR ST, HALIFAX, NS

6 7 5 0 00

Debit

PJ1 GJ1 CPJ1

X-CARD COMPANY 75 ISLEVILLE ST, HALIFAX, NS

Date 2016 Mar 2 8 12 29

Explanation

Cr. Balance

5 0 0 0 00

Credit

Cr. Balance

13 5 0 0 0 0 13 5 0 0 0 0 6 7 5 0 00

B3A 2M4 Post Ref.

Explanation

Credit

B3T 6N1

Explanation

Date 2016 Mar 13 15 23 NAME: ADDRESS:

Post Ref.

Explanation

Date 2016 Mar 19 30

NAME: ADDRESS:

B3P 1N1

Credit

Cr. Balance

4 2 0 0 00

4 2 0 0 00 3 0 0 0 00 0

Credit

Cr. Balance

3 5 0 0 00 1 7 5 0 00

3 5 0 0 00 5 2 5 0 00 1 7 5 0 00 3 3 5 0 00

1 2 0 0 00 3 0 0 0 00

B3K 1Z4 Post Ref.

Debit

PJ1 PJ1 CPJ1

3 5 0 0 00 1 6 0 0 00

PJ1

MARY’S CARD HOUSE SCHEDULE OF ACCOUNTS PAYABLE MARCH 31, 2016 Benson and Mcintyre Halifax Auto X-Card Company

5 0 0 0 00 6 7 5 0 00 3 3 5 0 00 15 1 0 0 0 0

7-43

PROBLEM 7B-4., Cont. MARY’S CARD HOUSE - PARTIAL GENERAL LEDGER NAME: CASH Date 2016 Mar 31 31

ACCOUNT NO. Explanation

Post Ref.

Debit

CRJ1

37 7 3 8 0 0

Explanation

Post Ref.

Debit

GJ1 SJ1

Explanation

Post Ref.

Debit

CPJ1

1 8 0 0 00

7-44

Explanation

Cr Dr Dr

Credit

Post Ref.

Debit

PJ1

13 5 0 0 0 0

Credit

Debit

GJ1

1 2 0 0 00 13 2 5 0 0 0

2 0 0 00 13 0 0 0 0 0 7 9 0 0 00

Balance

1 8 0 0 00

1620

DR CR

Balance

13 5 0 0 0 0

2100

DR CR Dr

29 5 5 0 0 0

PJ1 CPJ1

Credit

Balance

DR CR

ACCOUNT NO. Post Ref.

37 7 3 8 0 0 21 0 6 3 0 0

1450

ACCOUNT NO.

NAME: ACCOUNTS PAYABLE Date 2016 Mar 15 31 31

2 0 0 00

ACCOUNT NO.

NAME: DELIVERY TRUCK Date 2016 Mar 19

DR CR

5 1 0 0 00

Balance

1200

Credit

13 2 0 0 0 0

CPJ1

Explanation

ACCOUNT NO.

NAME: PREPAID RENT Date 2016 Mar 1

DR CR Dr

16 6 7 5 0 0

CPJ1

NAME: ACCOUNTS RECEIVABLE Date 2016 Mar 11 31 31

Credit

1100

Cr Cr

Balance 1 2 0 0 00 28 3 5 0 0 0 15 1 0 0 0 0

PROBLEM 7B-4., Cont. MARY’S CARD HOUSE - PARTIAL GENERAL LEDGER NAME: BANK LOAN PAYABLE Date 2016 Mar 13

Explanation

ACCOUNT NO. Post Ref.

Debit

CRJ1

NAME: M. JAMES, CAPITAL Date 2016 Mar 1

Explanation

Post Ref.

Debit

CRJ1

Explanation

Post Ref.

Debit

15 0 0 0 0 0

3000

Credit

DR CR

Balance

12 0 0 0 0 0

Explanation

Post Ref.

Debit

GJ1

2 0 0 00

DR CR Cr Cr

Credit

Post Ref.

Debit

Credit

6 2 00

PJ1 CPJ1

Debit 16 0 5 0 0 0 5 0 0 00

13 2 0 0 0 0 18 9 0 0 0 0

DR CR

Balance

2 0 0 00

DR CR

4130 Balance 6 2 00

ACCOUNT NO. Post Ref.

Balance

4120

ACCOUNT NO.

CRJ1

Explanation

Credit

4100

ACCOUNT NO.

NAME: CARD PURCHASES Date 2016 Mar 31 31

Balance

13 2 0 0 0 0 5 7 0 0 00

SJ1 CRJ1

NAME: SALES DISCOUNTS Date 2016 Mar 31

DR CR

ACCOUNT NO.

NAME: SALES RETURNS AND ALLOWANCES Date 2016 Mar 11

Credit

ACCOUNT NO.

NAME: CARD SALES Date 2016 Mar 31 31

2200

Credit

DR CR Dr Dr

5100 Balance 16 0 5 0 0 0 16 5 5 0 0 0

7-45

PROBLEM 7B-4., Cont. MARY’S CARD HOUSE - PARTIAL GENERAL LEDGER NAME: PURCHASES RETURNS AND ALLOWANCES Date 2016 Mar 15

Explanation

Post Ref.

ACCOUNT NO. Debit

GJ1

NAME: PURCHASES DISCOUNTS Date 2016 Mar 31

Explanation

Post Ref.

Debit

CPJ1

Explanation

7-46

Explanation

DR CR

Balance

1 2 0 0 00

5130

Credit

DR CR

Balance

1 0 0 00

ACCOUNT NO. Post Ref.

Debit

CPJ1

8 0 0 00

NAME: CLEANING EXPENSE Date 2016 Mar 9

Credit

ACCOUNT NO.

NAME: SALARIES EXPENSE Date 2016 Mar 15

5120

Credit

DR CR

Balance

8 0 0 00

ACCOUNT NO. Post Ref.

Debit

CPJ1

4 2 5 00

Credit

6100

6150

DR CR

Balance

4 2 5 00

7-47

Date 2016 Mar 2 5 9 17

Account Credited Whalen Co. Mega Gifts Co. Kelsey Co. W/ialen Co.

PROBLEM 7C-1.

Date of Inv. Invoice No. Terms 03/02 6092 2/10,n30 03/04 672 03/08 3710 2/10,n/30 03/16 6136 ✔

✔

Post Ref.

Accounts Payable Cr. 1 8 3 2 00 2 3 5 5 00 1 2 8 9 00 1 6 4 5 00 7 1 2 1 00 (211)

AMY BURKE GIFTS PURCHASES JOURNAL

3 1 2 1 00 (500)

1 2 8 9 00

Purchases Dr. 1 8 3 2 00

Store Supplies

Store Equipment

Account

124

150

Post Ref.

Sundry Dr.

1 6 4 5 00 4 0 0 0 00 (X)

2 3 5 5 00

Amount

Page 1

PROBLEM 7C-1. Cont. AMY BURKE GIFTS ACCOUNTS PAYABLE LEDGER NAME ADDRESS Date 2016 Mar 9

NAME ADDRESS Date 2016 Mar 5

NAME ADDRESS Date 2016 Mar 2 17

7-48

KELSEYCO. 944 OWEN SOUND, SHELBURNE, ON

LON Post Ref.

Explanation

1S1 Debit

PJ1

MEGA GIFTS CO. 315 MAIN ST., SHELBURNE, ON

LON

Debit

PJ1

WHALEN CO. 968 MAIN ST., SHELBURNE, ON Explanation

LON

Cr. Balance

1 2 8 9 00

Credit

Cr. Balance

2 3 5 5 00

Credit

Cr. Balance

1 8 3 2 00 1 6 4 5 00

1 8 3 2 00 3 4 7 7 00

1S6 Post Ref.

Explanation

Credit

1S9 Post Ref. PJ1 PJ1

Debit

PROBLEM 7C-1, Cont. AMY BURKE GIFTS PARTIAL GENERAL LEDGER NAME: STORE SUPPLIES Date 2016 Mar 17

Explanation

ACCOUNT NO. Post Ref.

Debit

PJ1

1 6 4 5 00

NAME: STORE EQUIPMENT Date 2016 Mar 5

Explanation

Post Ref.

Debit

PJ1

2 3 5 5 00

Balance

1 6 4 5 00

Credit

150

DR CR

Balance

2 3 5 5 00

ACCOUNT NO. Post Ref.

Debit

PJ1

NAME: PURCHASES Date 2016 Mar 31

DR CR

ACCOUNT NO.

NAME: ACCOUNTS PAYABLE Date 2016 Mar 31

Credit

124

211

Credit

DR CR

Balance

7 1 2 1 00

ACCOUNT NO. Explanation

Post Ref.

Debit

PJ1

3 1 2 1 00

Credit

500

DR CR

Balance

3 1 2 1 00

7-49

7-50

Date 2017 Aug 5 9 12 19 25

Date 2017 Aug 16

Account Credited Banker Co. Holmes Co. Genesis Co. Well-Equip Co. Genesis Co.

PROBLEM 7C-2.

✔ ✔ ✔ ✔ ✔

Post Ref.

Debit memo No. 5 re invoice No. 2467.

Purchase Returns and Allowances

Accounts Payable (Bakker Co.)

3 4 2 1 75 (510)

Purchases Dr. 1 6 3 7 45 1 7 8 4 30

SUPER SWEETS GENERAL JOURNAL

Accounts Payable Cr. 1 6 3 7 45 1 7 8 4 30 1 4 7 8 25 1 7 5 4 50 7 4 3 30 7 3 9 7 80 (210)

Account Title and Description

Date of Inv. Inv. No. Terms 08/04 2467 2/10,n60 08/08 1438 2/10,n60 08/12 5031 08/18 42784 08/13 5182 2/10,n30

SUPER SWEETS PURCHASES JOURNAL

✔ 512

210/

Post Ref.

2 4 5 00

Cr.

Page 3

120

Post Ref.

Sundry

Display Equipment

Account Name

Dr. 2 4 5 00

7 4 3 30 2 2 2 1 55 (110)

1 4 7 8 25

Store Supplies Dr.

1 7 5 4 50 (X)

1 7 5 4 50

Amount Dr.

Page 15

PROBLEM 7C-2., Cont. SUPER SWEETS ACCOUNTS PAYABLE LEDGER NAME: ADDRESS: Date 2017 Aug 1 5 16

NAME: ADDRESS: Date 2017 Aug 1 12 25

NAME: ADDRESS: Date 2017 Aug 1 9

NAME: ADDRESS: Date 2017 Aug 1 19

BARKER CO. 18212 - 84 AVE NW, EDMONTON, AB

TSM 2T2

Explanation

Post Ref.

Debit

Cr. Balance

1 6 3 7 45

1 4 6 9 40 3 1 0 6 85 2 8 6 1 85

Credit

Cr. Balance

1 4 7 8 25 7 4 3 30

1 4 6 8 37 2 9 4 6 62 3 6 8 9 92

Credit

Cr. Balance

1 7 8 4 30

2 7 0 5 15 4 4 8 9 45

Credit

Cr. Balance

1 7 5 4 50

4 1 5 85 2 1 7 0 35

✔

Balance

PJ15 GJ3

GENESIS CO. 10112 - 33 AVE SW, EDMONTON, AB

T5T 2V8

Explanation

Post Ref.

2 4 5 00

Debit

✔

Balance

PJ15 PJ15

HOLMES CO. 3436 - FORT ROAD NW, EDMONTON, AB Explanation

T5A 1P2 Post Ref.

Debit

✔

Balance

PJ15

WELL-EQUIP CO 4021 - 75 ST NW, EDMONTON, AB Explanation Balance

Credit

T6L 0L7 Post Ref.

Debit

✔ PJ15

7-51

PROBLEM 7C-2., Cont. SUPER SWEETS PARTIAL GENERAL LEDGER NAME: STORE SUPPLIES Date 2017 Aug 1 31

ACCOUNT NO.

Explanation

Post Ref.

Debit

✔

Balance

PJ15

2 2 2 1 55

Explanation

Post Ref.

Debit

PJ15

DR CR

ACCOUNT NO.

Explanation

Post Ref.

Debit

Credit

2 4 5 00

GJ3

7 3 9 7 80

PJ15

ACCOUNT NO. Explanation

Post Ref.

Debit

Credit

✔

Balance

PJ15

Explanation

Post Ref.

Credit

✔

Balance

DR CR

ACCOUNT NO. Debit

GJ3

4 3 8 0 00 6 1 3 4 50

Balance 6 0 5 8 77 5 8 1 3 77 13 2 1 1 5 7

Balance 74 2 9 4 3 0 77 7 1 6 0 5 512

DR CR Cr

2 4 5 00

Balance

510

3 4 2 1 75

2 0 6 6 20 4 2 8 7 75

210

DR CR

✔

Balance

120

1 7 5 4 50

NAME: PURCHASES RETURNS AND ALLOWANCES Date 2017 Aug 1 15

Credit

✔

Balance

NAME: PURCHASES Date 2017 Aug 1 31

ACCOUNT NO.

NAME: ACCOUNTS PAYABLE Date 2017 Aug 1 16 31

DR CR Dr

NAME: DISPLAY EQUIPMENT Date 2017 Aug 1 19

Credit

110

Balance 6 8 3 28 9 2 8 28

SUPER SWEETS SCHEDULE OF ACCOUNTS PAYABLE AUGUST 31, 2017 Bakker Co. Genesis Co. Holmes Co. Well-Equip Co.

7-52

2 8 6 1 85 3 6 8 9 92 4 4 8 9 45 2 1 7 0 35 13 2 1 1 5 7

7-53

Date 2016 May 4 6 8 9 15 25 28 29 31

Chq. No. 843 844 845 846 847 848 849 850 851 Account Debited Wolfe Co. Northern Motors Co. Prime Filter Co. Mansard Co. Excel Plastics Co. Higgins Co. Industrial Realty Yellowknife Utilities o. Frances Co.

PROBLEM 7C-3.

1500

✔

6800

16 1 7 4 3 7 (X)

4 6 2 50 7 5 2 5 72 (2100)

2 7 4 5 75

✔ 6400

3 2 7 8 40

Accounts Payable Dr. 1 0 3 9 07

✔

2 4 0 0 00 1 7 4 37

13 6 0 0 0 0

Post Ref.

✔

Sundry Dr.

DEVLIN WATER BOTTLING CASH PAYMENTS JOURNAL

5 4 1 0 00 (5100)

1 9 4 5 00

3 4 6 5 00

Purchases Dr.

Cash Cr. 1 0 1 8 29 13 6 0 0 0 0 3 4 6 5 00 9 8 35 3 1 8 0 05 1 9 4 5 00 2 7 4 5 75 2 4 0 0 00 I 7 4 37 4 6 2 50 1 1 9 1 3 28 9 9 0 9 6 (5150) (1100)

Purchases Discounts Cr. 2 0 78

Page 14

PROBLEM 7C-3., Cont. DEVLIN WATER BOTTLING ACCOUNTS PAYABLE LEDGER NAME: ADDRESS: Date 2016 May 1 31

FRANCES CO. 150-525 OLD AIRPORT RD., YELLOWKNIFE, NWT

Date 2016 May 1 25

CPJ14

HIGGINS CO. 4812 - 49 ST., YELLOWKNIFE, NWT

Date 2016 May 1 4

Credit

Cr. Balance 9 2 5 00 4 6 2 50

4 6 2 50

XIA 1N9 Post Ref.

Explanation

Debit

Credit

Cr. Balance

✔

Balance

CPJ14

2 7 4 5 75 0

2 7 4 5 75

MANSARD CO. 282 RANGE LAKE RD., YELLOWKNIFE, NWT

XIA 3B2

Post Ref.

Debit

Explanation

Credit

Cr. Balance

✔

Balance

CPJ14

NAME: ADDRESS:

Debit

✔

Balance

NAME: ADDRESS: Date 2016 May 1 9

Post Ref.

Explanation

NAME: ADDRESS:

XIA 3X9

WOLFE CO. 2510 - 48 ST., YELLOWKNIFE, NWT

3 2 7 8 40 0

3 2 7 8 40

XIA 2B1 Post Ref.

Explanation

Debit

Credit

Cr. Balance

✔

Balance

CPJ14

2 0 7 8 13 1 0 3 9 06

1 0 3 9 07

PARTIAL GENERAL LEDGER NAME:

CASH

Date 2016 May 1 31

7-54

ACCOUNT NO. Explanation

Balance

Post Ref.

Debit

Credit

✔ CPJ5

1110

DR CR Dr

28 9 9 0 9 6

Balance 21 5 7 8 3 4 7 4 1 2 62

PROBLEM 7C-3., Cont. PARTIAL GENERAL LEDGER NAME: DELIVERY TRUCK Date 2016 May 6

ACCOUNT NO.

Explanation

Post Ref.

Debit

CPJ14

13 6 0 0 0 0

NAME: ACCOUNTS PAYABLE Date 2016 May 1 31

Explanation

Post Ref.

Debit

CPJ14

Credit

2100

DR CR

ACCOUNT NO. Explanation

Post Ref.

Debit

Credit

✔

Balance

CPJ14

Explanation

5 4 1 0 00

ACCOUNT NO. Post Ref.

Debit

Credit

Cr Cr

ACCOUNT NO.

Explanation

Post Ref.

Debit

Credit

✔

Balance

CPJ14

DR CR Dr

2 4 0 0 00

ACCOUNT NO.

Explanation

Post Ref.

Debit

✔ CPJ14

Credit

DR CR Dr

1 7 4 37

9 0 2 7 28 1 5 0 1 56

Balance 42 7 2 3 6 7 48 1 3 3 6 7 5150

DR CR

1 1 9 13

CPJ14

Balance

5100

DR CR

✔

Balance

13 6 0 0 0 0

7 5 2 5 72

NAME: UTILITIES EXPENSE Date 2016 May 28 29

NAME: RENT EXPENSE Date 2016 May 1 28

Balance

✔

Balance

NAME: PURCHASES DISCOUNTS Date 2016 May 1 31

DR CR

ACCOUNT NO.

NAME: PURCHASES Date 2016 May 1 31

Credit

1500

Balance 6 3 4 88 7 5 4 01 6400 Balance 8 0 0 00 3 2 0 0 00 6800 Balance 2 9 5 20 4 6 9 57

DEVLIN WATER BOTTLING SCHEDULE OF ACCOUNTS PAYABLE MAY 31, 2016 Frances Co. Wolfe Co.

4 6 2 50 1 0 3 9 06 1 5 0 1 56

7-55

PROBLEM 7C-4. FANCY WRITING SUPPLY CO. SALES JOURNAL

Date Invoice 2015 No. Customer’s Name May 3 801 Dr. M. LaPeierre 6 802 Hon. N. Maracliee 9 803 Fern Michaels, LLB 18 804 B. Kirk, CA 22 805 Dr. M. LaPeierre 23 806 B. Kirk, CA 31 807 Moncton Hospital

Page 1

Terms 2/10, n/30 2/10, n/30 2/10, n/30 2/10, n/30 2/10, n/30 2/10, n/30 2/10, n/30

Post Ref.

✔ ✔ ✔ ✔ ✔ ✔ ✔

Accounts Writing Receivable Supplies Sales Dr. Cr. 1 2 5 0 00 1 2 5 0 00 2 4 5 7 50 2 4 5 7 50 1 2 5 0 00 1 2 5 0 00 2 7 6 5 50 2 7 6 5 50 1 1 4 5 00 1 1 4 5 00 7 2 4 65 7 2 4 65 3 6 5 0 00 3 6 5 0 00 13 2 4 2 6 5 13 2 4 2 6 5 (1100) (4000)

FANCY WRITING SUPPL Y CO. GENERAL JOURNAL Date 2015 May 1

Account Title and Description Cash Printing Press E. Ames, Capital Sales Returns and Allowances Accounts Receivable (Dr. M. LaPeierre)

Page 1 Post Ref.

Dr.

Cr.

1000 25 0 0 0 0 0 1800 30 0 0 0 0 0 3000 55 0 0 0 0 0 4020 1100/✔

1 7 5 00

2150/✔

2 3 5 00

1 7 5 00

Credit memo No. 101 re invoice No. 801. 15

Accounts Payable (Markham Inks) Purchases Returns and Allowances Debit memo No. 25 re invoice No. 931.

7-56

5100

2 3 5 00

7-57

Date 2015 May 2 8 12 19 26 29

Account Credited Gant Paper Co. Gant Paper Co. Markham Inks Maritime Equip Sales Findlay and Fortune Gant Paper Co.

PROBLEM 7C-4., Cont.

Date of Inv. Invoice No. May I 24388 May 7 24451 May 12 931 May 19 30275 May 26 6289 May 26 24722 2/10,n30 2/10,n30

Terms 2/10,n30 2/10,n30 3/15,n60 ✔ ✔ ✔ ✔ ✔ ✔

Post Ref.

Accounts Sundiy Dr. Payable Purchases Cr. Dr. Account PR 5 2 4 7 25 5 2 4 7 25 1 5 0 0 00 1 5 0 0 00 9 8 5 25 9 8 5 25 21 5 0 0 0 0 Printing Press 1800 3 6 0 0 00 3 6 0 0 00 3 4 7 5 80 3 4 7 5 80 36 3 0 8 3 0 14 8 0 8 3 0 (2150) (5000)

FANCY WRITING SUPPLY CO. PURCHASES JOURNAL

21 5 0 0 0 0 (X)

21 5 0 0 0 0

Amount

Page 1

7-58

Date 2015 May 13 14 16 16 16 26 26

Cash Dr. 10 0 0 0 0 0 5 8 5 00 1 5 0 0 00 2 4 0 8 35 1 0 5 3 50 1 1 2 2 10 2 7 1 0 19 19 3 7 9 1 4 (1000)

PROBLEM 7C-4., Cont.

2 4 5 7 50 1 0 7 5 00 1 I 4 5 00 2 7 6 5 50 7 4 4 3 00 (1100)

Accounts Receivable Cr.

2 0 8 5 00 (4000)

5 8 5 00 1 5 0 0 00

Writing Supplies Sales Cr.

4 9 15 2 1 50 2 2 90 5 5 31 1 4 8 86 (4025)

Sales Discounts Dr.

Hon. N. Marachee Dr. M. LaPeierre Dr. M. LaPeierre B. Kirk, CA

Description of Receipt Royal Bank Bank Loan

FANCY WRITING SUPPLY CO. CASH RECEIPTS JOURNAL

✔ ✔ ✔ ✔

2400

Post Ref.

10 0 0 0 0 0 (X)

Sundry Cr. 10 0 0 0 0 0

Page 1

PROBLEM 7C-4., Cont. ACCOUNTS RECEIVABLE LEDGER NAME ADDRESS

B. KIRK, CA 302 NORWOOD AVE, MONCTON, NB

Date 2015 May 18 23 26

NAME ADDRESS

SJ1 SJ1

DR. M. LAPEIERRE 521 DRAYTON ST., MONCTON, NB

Credit

Dr. Balance

2 7 6 5 50

2 7 6 5 50 3 4 9 0 15 7 2 4 65

Credit

Dr. Balance

2 7 6 5 50 7 2 4 65

E1A 9T9

Explanation

Post Ref.

Debit

SJ1

1 2 5 0 00

CRJ1 SJ1

1 1 4 5 00

1 2 5 0 00 1 0 7 5 00 0 1 1 4 5 00 0

Credit

Dr. Balance

2 4 5 7 50

2 4 5 7 50 0

Credit

Dr. Balance

1 7 5 00 1 0 7 5 00

GJ1

1 1 4 5 00

CRJ1

HON. N. MARACHEE 105 CHAMPLAIN ST, MONCTON, NB E1A 3G4

Explanation

Post Ref.

Debit

SJ1

2 4 5 7 50

CRJ1

FERN MICHAELS, LLB 401 NORWOOD AVE, MONCTON, NB

Date 2015 May 9 NAME ADDRESS

Debit

CRJ1

Date 2015 May 6 16 NAME ADDRESS

Post Ref.

Explanation

Date 2015 May 3 12 16 22 26 NAME ADDRESS

E1C 5M2

Explanation

MONCTON HOSPITAL 105 MACBEATH AVE, MONCTON, NB

Date 2015 May 31

Explanation

E1C 6M4 Post Ref.

Debit

SJ1

1 2 5 0 00

E1C 6Z8 Post Ref.

Debit

SJ1

3 6 5 0 00

Credit

Dr. Balance 3 6 5 0 00

FANCY WRITING SUPPLY CO. SCHEDULE OF ACCOUNTS RECEIVABLE MAY 31, 2015 B. Kirk, CA Fern Michaels, LLB Moncton Hospital

7 2 4 65 1 2 5 0 00 3 6 5 0 00 5 6 2 4 65

7-59

7-60

Chq. No. 3001 3002 3003 3004 3005 3006 3007

Date 2015 May 1

Maritime Equipment Sales

MDS Supplies

Markham Inks

D. Lee - Casual Salary

Gant Paper Co.

Jenkins Cleaning Service

Account Debited Riverfront Realty

PROBLEM 7C-4., Cont.

✔

6500

✔

6800

✔

6140

1350

Post Ref.

3 8 7 50

7 2 7 74

9 7 0 00

5 I 4 2 30

2 8 7 50

Cash Cr. 2 1 0 0 00

1 2 7 4 6 20 3 6 5 0 4 (5125) (1000)

2 2 51

1 0 4 95

Purchases Discounts Cr.

3 7 4 5 0 0 16 7 4 7 5 0 (X) (2150)

Purchases Dr.

10 7 5 0 0 0

7 5 0 25

5 2 4 7 25

Accounts Payable Dr.

Page 1

10 7 5 0 0 0

3 8 7 50

9 7 0 00

2 8 7 50

Sundry Dr. 2 1 0 0 00

FANCY WRITING SUPPLY CO. CASH PAYMENTS JOURNAL

7-61

Date 2015 May 1 10 11 15 23 24 30

Chq. No. 3001 3002 3003 3004 3005 3006 3007 Account Debited Riverfront Realty Jenkins Cleaning Service Gant Paper Co. D. Lee - Casual Salary Markham Inks MDS Supplies Maritime Equipment Sales

PROBLEM 7C-4., Cont.

6800

6200

✔

7 5 0 25

5 2 4 7 25

Accounts Payable Dr.

10 7 5 0 0 0 3 7 4 5 0 0 16 7 4 7 5 0 (X) (2150)

3 8 7 50

9 7 0 00

1350 6140

Sundry Dr. 2 1 0 0 00 2 8 7 50

Post Ref.

FANCY WRITING SUPPL Y CO. CASH PAYMENTS JOURNAL

Purchases Dr.

Cash Cr. 2 1 0 0 00 2 8 7 50 1 0 4 95 5 1 4 2 30 9 7 0 00 2 2 51 7 2 7 74 3 8 7 50 10 7 5 0 0 0 1 2 7 4 6 20 3 6 5 0 4 (5125) (1000)

Purchases Discounts Cr.

Page 1

PROBLEM 7C-4., Cont. FANCY WRITING SUPPL Y CO. ACCOUNTS PAYABLE LEDGER NAME: ADDRESS:

FINDLAY AND FORTUNE 499 MCLAUGHLIN DRIVE, MONCTON, NB

Date 2015 May 26

NAME: ADDRESS:

GANT PAPER CO. 291 COMMUNICATION RD., MONCTON, NB

E1H 1D4

Post Ref.

Debit

Explanation

PJ1 PJ1 CPJ1

Credit

Cr. Balance

3 6 0 0 00

Credit

Cr. Balance

5 2 4 7 25 1 5 0 0 00 3 4 7 5 80

5 2 4 7 25 6 7 4 7 25 1 5 0 0 00 4 9 7 5 80

Credit

Cr. Balance

5 2 4 7 25

PJ1

MARITIME EQUIPMENT SALES 1204 MAIN ST., MONCTON, NB E1E 8H1

Date 2015 May 19 30

NAME: ADDRESS:

Debit

PJ1

Date 2015 May 2 8 11 29 NAME: ADDRESS:

Post Ref.

Explanation

E1A 4T9

Post Ref.

Explanation

Debit

PJ1 CPJ1

MARKHAM INKS 24 UPTON ST., MONCTON, NB

Date 2015 May 12 15 23

Explanation

10 7 5 0 0 0

21 5 0 0 0 0 21 5 0 0 0 0 10 7 5 0 0 0

E1E 4P2 Post Ref.

Debit

9 8 5 25

PJ1 GJ1 CPJ1

Credit

2 3 5 00 7 5 0 25

Cr. Balance 9 8 5 25 7 5 0 25 0

FANCY WRITING SUPPLY CO. SCHEDULE OF ACCOUNTS PAYABLE MAY 31, 2015 Findlay and Fortune Gant Paper Co. Maritime Equipment Sales

7-62

3 6 0 0 00 4 9 7 5 80 10 7 5 0 0 0 19 3 2 5 8 0

PROBLEM 7C-4., Cont. FANCY WRITING SUPPL Y CO. - PARTIAL GENERAL LEDGER NAME: CASH Date 2015 May 1 31 31

ACCOUNT NO. Explanation

Post Ref. GJ1 CRJ1

Debit 25 0 0 0 0 0 19 3 7 9 1 4

Explanation

Post Ref.

Debit

SJ1

Explanation

Debit

CPJ1

2 1 0 0 00

Credit

Post Ref.

PJ1

Debit

Credit

30 0 0 0 0 0 21 5 0 0 0 0

Debit

GJ1

2 3 5 00

2 1 0 0 00

1800

DR CR

CPJ1

16 7 4 7 5 0

Balance 30 0 0 0 0 0 51 5 0 0 0 0

2150

DR CR Dr

36 3 0 8 3 0

PJ1

1 7 5 00 13 0 6 7 6 5 5 6 2 4 65

Balance

Credit

Balance

DR CR

ACCOUNT NO. Post Ref.

25 0 0 0 0 0 44 3 7 9 1 4 24 0 1 4 1 0

1350

ACCOUNT NO.

GJ1

Explanation

DR CR

ACCOUNT NO. Post Ref.

Balance

1100

7 4 4 3 00

NAME: ACCOUNTS PAYABLE Date 2015 May 15 31 31

Credit

13 2 4 2 6 5

CRJ1

NAME: PRINTING PRESS Date 2015 May 1 19

1 7 5 00

GJ1

Explanation

ACCOUNT NO.

NAME: PREPAID RENT Date 2015 May 1

DR CR Dr

20 3 6 5 0 4

CPJ1

NAME: ACCOUNTS RECEIVABLE Date 2015 May 12 31 31

Credit

1000

Cr Cr

Balance 2 3 5 00 36 0 7 3 3 0 19 3 2 5 8 0

7-63

PROBLEM 7C-4., Cont. FANCY WRITING SUPPLY CO. - PARTIAL GENERAL LEDGER NAME: BANK LOAN PAYABLE Date 2015 May 13

Explanation

ACCOUNT NO. Post Ref.

Debit

CRJ1

NAME: E. AMES, CAPITAL Date 2015 May 1

Explanation

Debit

CRJ1

NAME: WRITING SUPPLIES SALES Date 2015 May 31 31

Explanation

Post Ref.

Debit

Explanation

Post Ref.

Debit

GJ1

1 7 5 00

7-64

10 0 0 0 0 0

Post Ref.

Debit

CRJ1

1 4 8 86

DR CR

Balance

55 0 0 0 0 0

Credit

DR CR Cr Cr

Credit

Post Ref. PJ1 CPJ1

Debit 14 8 0 8 3 0 5 0 0 00

Credit

4000 Balance 13 2 4 2 6 5 15 3 2 7 6 5

4020

DR CR

Balance

1 7 5 00

4025

DR CR

Balance

1 4 8 86

ACCOUNT NO. Explanation

3000

Credit

ACCOUNT NO.

NAME: PURCHASES Date 2015 May 31 31

10 0 0 0 0 0

ACCOUNT NO.

NAME: SALES DISCOUNTS Date 2015 May 31

Balance

13 2 4 2 6 5 2 0 8 5 00

SJ1 CRJ1

Explanation

DR CR

ACCOUNT NO.

NAME: SALES RETURNS AND ALLOWANCES Date 2015 May 12

Credit

ACCOUNT NO. Post Ref.

2400

DR CR Dr Dr

5000 Balance 14 8 0 8 3 0 15 3 0 8 3 0

PROBLEM 7C-4., Cont. FANCY WRITING SUPPLY CO. - PARTIAL GENERAL LEDGER NAME: PURCHASES RETURNS AND ALLOWANCES Date 2015 May 15

Explanation

Post Ref.

ACCOUNT NO. Debit

GJ1

NAME: PURCHASES DISCOUNTS Date 2015 May 31

Explanation

Debit

CPJ1

NAME: CLEANING EXPENSE Date 2015 May 10

Explanation

Post Ref.

Debit

CPJ1

2 8 7 50

Explanation

Post Ref.

Debit

CPJ1

3 8 7 50

Explanation

2 3 5 00

Post Ref.

Debit

DR CR

Balance

1 2 7 46

Credit

Debit

CPJ1

9 7 0 00

Credit

6140

DR CR

Balance

2 8 7 50

6200

DR CR

Balance

3 8 7 50

DR CR

ACCOUNT NO. Post Ref.

5125

Credit

ACCOUNT NO.

NAME: SALARIES EXPENSE Date 2015 May 15

Balance

ACCOUNT NO.

NAME: PRINTING SUPPLIES EXPENSE Date

DR CR

ACCOUNT NO.

NAME: DISPLAY SUPPLIES EXPENSE Date 2015 May 24

Credit

ACCOUNT NO. Post Ref.

5100

6500 Balance

6800

DR CR

Balance

9 7 0 00

7-65

SOLUTIONS TO ON-THE-JOB TRAINING, #T-1. PARTIAL GENERAL LEDGER Cash CRJ39,400

Sales

12,060 CPJ

16,800 SJ 9,600 CRJ

Accounts Receivable SJ 16,800

1,600 GJ 10,000 CRJ

Notes Payable 20,000 CRJ

Sales Discounts

18,000 PJ

140 CPJ

Purchase Returns and Allowances

CRJ 200

800 GJ

Sales Returns and Allowances GJ1,600

Accounts Payable GJ 800 CPJ 7,000

Purchases Discounts

Salaries Expense CPJ 2,600 CPJ 2,600

Purchases PJ 18,000

ACCOUNTS RECEIVABLE LEDGER Blue Co. SJ 4,800

4,800 CRJ

Jon Co. SJ 5,600

1,600 GJ 2,000 CRJ

Roff Co. SJ 6,400

3,200 CRJ

ACCOUNTS PAYABLE LEDGER Ralph Co. 4,000 PJ

Sos Co. CPJ 3,000

6,000 PJ

Jingle Co. GJ 800 CPJ 4,000

8,000 PJ

A computer system is programmed to post from the journal to both the general and subsidiary ledgers automatically and quickly. Errors are very rare in this process and much efficiency is found in this part of the bookkeeping cycle (if a computer system is used).

7-66

CONTINUING PROBLEM, Cont. PRECISION COMPUTER CENTRE PURCHASES JOURNAL

Date 2016 Sept.

5 6 10 13

Account Credited

Post Ref.

Multi Systems, 3/10, n/30 Staples, n/30 ComputerConnect, 1/3On/60 West Bell

Accounts Payable Cr.

Sundry Purchases Dr.

4 5 0 00 2 5 0 00 5 0 0 00 7 0 00 1 2 7 0 00 (2000)

S1 C3 W1

Page 1

Account Name

Post Ref.

Amount Dr.

Supplies

1030

2 5 0 00

Phone

5040

7 0 00 3 2 0 00 (X)

4 5 0 00 5 0 0 00 9 5 0 00 (5600)

PRECISION COMPUTER CENTRE CASH PAYMENTS JOURNAL

Date Chq. 2016 No. Account Debited Sept 5 242 Staples 13 243 Multi Systems 13 244 City Electric 16 245 Automated Payroll Services 17 246 Computer Connection 23 247 Alpha Office Co. 25 248 Supplies 27 249 Able Holdings Inc.

Post Ref. S1 M1 5030 2030

250 Automated Payroll Service 251 West Bell Canada

4 0 0 00 4 2 0 00

A1 1030 1025

5110

Accounts Payable Dr. 1 0 0 00 4 5 0 00

8 0 00 1 8 1 0 18

5020

30 30

Sundry Dr.

5 0 00 8 0 0 00 4 0 0 00 3 7 4 0 20

6 8 8 0 38 (X)

2 1 6 00 1 5 8 6 00 (2000)

Page 1 Purchases Discounts Cr.

Cash Cr. 1 0 0 00 1 3 50 4 3 6 50 8 0 00 1 8 1 0 18 4 00 3 9 6 00 4 2 0 00 5 0 00 1 2 0 0 00

3 7 4 0 20 2 1 6 00 1 7 50 8 4 4 8 88 (5620) (1000)

7-67

CONTINUING PROBLEM, Cont. PRECISION COMPUTER CENTRE ACCOUNTS PAYABLE SUBSIDIARY LEDGER NAME: ADDRESS: Date 2016 Sept. 1 23

NAME: ADDRESS: Date 2016 Sept. 1

NAME: ADDRESS: Date 2016 Sept. 1 10 17 17

NAME: ADDRESS: Date 2016 Sept. 1 5 13

7-68

ALPHA OFFICE CO. A1 121 WHITEMUD FREEWAY, EDMONTON, AB T6T 2Z1 Explanation

Post Ref.

Debit

Credit

✔

Balance

CITY NEWSPAPER 10098 EDMONTON WAY, EDMONTON, AB Explanation

4 2 0 00 0

4 2 0 00

CPJ1

C2 TSA 9S2

Post Ref.

Debit

Credit

✔

Balance

COMPUTER CONNECTION 2400, 4421 16 AVENUE, EDMONTON, AB Explanation

C3 T6R 1A1 Post Ref.

Debit

Credit

5 0 0 00

PJ1 GJ10 CPJ1

MULTI SYSTEMS, INC. 310 N. ESCONDIDO BLVD., EDMONTON, AB Explanation

Post Ref.

Balance

✔

Cr. Balance 3 7 5 00

✔

Balance

Cr. Balance

1 0 0 00 4 0 0 00

0 5 0 0 00 4 0 0 00 0

M1 T7G 1P1 Debit

Credit

4 5 0 00

PJ1 CPJ1

Cr. Balance

4 5 0 00

Cr. Balance 0 4 5 0 00 0

CONTINUING PROBLEM, Cont. PRECISION COMPUTER CENTRE ACCOUNTS PAYABLE SUBSIDIARY LEDGER NAME: ADDRESS Date 2016 Sept. 1 5 6

STAPLES 43 ESCONDIDO AVENUE, EDMONTON, AB Explanation

Post Ref.

Debit

CPJ1

1 0 0 00 2 5 0 00

PJ1

WEST BELL CANADA 10149 EDMONTON WAY, EDMONTON, AB Explanation Balance

Credit

✔

Balance

NAME ADDRESS Date 2016 Sept. 1 13 30

S1 T7G 9T9 Cr. Balance 1 0 0 00 0 2 5 0 00

W1 T5A 9T1

Post Ref.

Debit

Credit

✔ 7 0 00

PJ1 CPJ1

2 1 6 00

Cr. Balance 1 4 6 00 2 1 6 00 0

PRECISION COMPUTER CENTRE SCHEDULE OF ACCOUNTS PAYABLE SEPTEMBER 30, 2016 City Newspaper Staples

$ 3 7 5 00 2 5 0 00 $ 6 2 5 00

7-69

CONTINUING PROBLEM, Cont. PRECISION COMPUTER CENTRE PARTIAL GENERAL LEDGER NAME: CASH Date 2016 Sept. 1 30 30

ACCOUNT NO. Explanation

Post Ref.

Debit

✔

Balance

CRJ1

21 2 8 0 0 0

Post Ref.

Debit

4 0 0 00

GJ9 SJ1

9 3 0 0 00

7-70

Dr Dr

9 5 0 0 00

CRJ

ACCOUNT NO. Explanation

Post Ref.

Debit

Credit

✔

Balance

CPJ1

DR CR Dr

8 0 0 00

ACCOUNT NO. Explanation

Post Ref.

Debit

Credit

✔

Balance

PJ1 CPJ1

Explanation Balance

DR CR Dr

2 5 0 00 5 0 00

NAME: ACCOUNTS PAYABLE Date 2016 Sept. 1 17 30 30

DR CR Dr

NAME: SUPPLIES Date 2016 Sept. 1 6 25

Credit

✔

Balance

ACCOUNT NO.

NAME: PREPAID RENT Date 2016 Sept. 1 27

8 4 4 8 88

CPJ1

Explanation

DR CR Dr

NAME: ACCOUNTS RECEIVABLE Date 2016 Sept. 1 27 30 30

Credit

Dr Dr

ACCOUNT NO. Post Ref.

Debit

Credit

✔ GJ10

1 0 0 00

1 2 7 0 00

PJ1 CPJ1

DR CR

1 5 8 6 00

Cr Cr

1000 Balance 1 1 9 5 00 22 4 7 5 0 0 14 0 2 6 1 2

1020 Balance 8 7 4 0 00 8 3 4 0 00 17 6 4 0 0 0 8 1 4 0 00

1025 Balance 0 8 0 0 00

1030 Balance 4 5 0 00 7 0 0 00 7 5 0 00

2000 Balance 1 0 4 1 00 9 4 1 00 2 2 1 1 00 6 2 5 00

CONTINUING PROBLEM, Cont. PRECISION COMPUTER CENTRE PARTIAL GENERAL LEDGER NAME: OTHER AMOUNTS PAYABLE Date 2016 Sept. 1 16

Explanation

ACCOUNT NO. Post Ref.

Debit

✔

Balance

CPJ1

1 8 1 0 18

ACCOUNT NO. Explanation

Post Ref.

Debit

NAME: SALES RETURNS AND ALLOWANCES Explanation

Explanation

Post Ref.

Debit

GJ9

4 0 0 00

Post Ref.

Debit

CRJ1

2 2 0 00

Explanation

Credit

Post Ref.

Debit

Credit

✔

Balance

PJ1

Explanation Balance

Debit

✔ PJ1

9 3 0 0 00 21 3 0 0 0 0

4020

4030

DR CR

Balance

2 2 0 00

DR CR

DR CR Dr

8 0 00

Balance

4 0 0 00

Credit

4010

ACCOUNT NO. Post Ref.

1 8 1 0 18 0

Balance

4 0 0 00

Balance

DR CR

ACCOUNT NO.

NAME: UTILITIES EXPENSE Date 2016 Sept. 1 13

ACCOUNT NO.

NAME: RENT EXPENSE Date 2016 Sept. 1 27

DR CR

ACCOUNT NO.

NAME: SALES DISCOUNTS Date 2016 Sept. 30

Credit 9 3 0 0 00 12 0 0 0 0 0

SJ1 CRJ1

Date 2016 Sept. 27

DR CR Cr

NAME: SALES Date 2016 Sept. 30 30

Credit

2030

5020 Balance 4 0 0 00 8 0 0 00

5030 Balance 9 5 00 1 7 5 00

7-71

CONTINUING PROBLEM, Cont. PRECISION COMPUTER CENTRE PARTIAL GENERAL LEDGER NAME: PHONE EXPENSE Date 2016 Sept. 1 13

Explanation

ACCOUNT NO. Post Ref.

Debit

✔

Balance

PJ1

Explanation

7 0 00

Post Ref.

Debit

CPJ1

7-72

DR CR Dr

3 7 4 0 20

ACCOUNT NO. Explanation

Post Ref.

Debit

PJ1

9 5 0 00

Explanation

Post Ref.

Debit

GJ10

Explanation

Credit

CPJ1

Debit

1 4 6 00 2 1 6 00

5110 Balance 5 0 2 0 00 8 7 6 0 20

5600 Balance

9 5 0 00

5610

Credit

DR CR

Balance

1 0 0 00

ACCOUNT NO. Post Ref.

Balance

DR CR

ACCOUNT NO.

NAME: PURCHASES DISCOUNTS Date 2016 Sept. 30

Credit

✔

Balance

NAME: PURCHASES RETURNS AND ALLOWANCES Date 2016 Sept. 17

ACCOUNT NO.

NAME: PURCHASES Date 2016 Sept. 30

DR CR Dr

NAME: WAGES EXPENSE Date 2016 Sept. 1 30

Credit

5040

Credit 1 7 50

DR CR Cr

5620 Balance 1 7 50

8 Banking Procedures and Control of Cash ANSWERS TO DISCUSSION QUESTIONS 1. 2. 3. 4.

5. 6. 7. 8.

9. 10. 11. 12.

13. 14. 15. 16. 17. 18.

19.

Internal control helps develop control over a company’s assets and monitor its operations. Preprinted deposit slips take less time to fill out and lessen the chance of error or fraud. A cheque with a blank endorsement can be further endorsed by someone but a restrictive endorsement limits any further negotiation of the cheque. Payee: person or company to whom cheque is payable. Drawer: person or company who orders the bank to pay a sum of money. Drawee: Bank that the drawer has money in. So one doesn’t forget to reduce the chequebook balance. Cheque stubs aid in updating special journals. False. Usually once a month. After a bank reconciliation, the adjusted chequebook balance is equal to the adjusted bank balance. Outstanding cheques are subtracted from the bank balance because the bank has no idea they have been written, since they have not yet been processed. On the chequebook side, the written cheques have already reduced the chequebook balance. Disagree. A debit memorandum reduces the bank account by the amount of the NSF cheque. To cause the balance in the cash account in the ledger to equal the adjusted balance of cash in the chequebook. Electronic Funds Transfer (EFT) transfers funds among parties electronically without the use of paper cheques. Advantages: convenience, availability, transaction speed, efficiency, effective. Disadvantages: startup may take time, learning curve, bank website changes, trusting that it works, thieves accessing bank account. Cancelled cheques are not returned to the depositor—they are kept for a certain period of time by the bank and then microfilmed. Reject. Petty Cash is an asset. The auxiliary petty cash record is a supplementary record that gathers information about expenses which will be used to prepare a journal entry in the replenishment process. Debiting totals of individual expenses updates the ledger to record where cash was used. After replenishment, the cash is back to a certain level, and the old expenses have been updated in the ledger. The change fund, an asset, aids in making change to customers who pay cash. When the account Cash Short and Over has more shortages than overages, its balance is a miscellaneous expense shown on the income statement. Keep in mind Cash Short and Over would normally be recorded in the cash receipts journal. Next month the bank will most likely spot and correct the error. But Albert Ray should go back to his supervisor and remind him/her that being honest with the bank is important—it is illegal to keep money that does not belong to you and pointing out this mistake will show the integrity and honesty of the company.

8-1

SOLUTIONS TO CLASSROOM DEMONSTRATION EXERCISES 1.

a, c, d, e WOODY CO. BANK RECONCILIATION

MAY 31, 2016

8-2

Woody G/L Cash Balance Bank Service Charge NSF Cheque

$1,869.60 – 13.80 – 61.20

Reconciled Book Balance

$1,794.60

1, 2, 4

1, 2

3, 4

1, 2

1, 2, 4

Band-Aid Expense

Stamp Expense

Cash Short and Over

Cash

Petty Cash

Band-Aid Expense

Stamp Expense

Cash Short and Over

Cash

Bank Balance Deposits in Transit Cheques Outstanding Reconciled Bank Balance

$1,951.20 271.20 2,222.40 – 427.80 $1,794.60

SOLUTIONS TO EXERCISES—Set A EXERCISE 8-1A. FAITH CO. BANK RECONCILIATION AS OF JULY 31, 2016 G/L CASH ACCOUNT BALANCE Ending Cash Account Balance Deduct: Bank Service Charge NSF Cheque

BALANCE PER BANK STATEMENT $ 445 15 25

Reconciled Balance

2013 July 31

July

Ending Bank Statement Balance Add: Deposits in Transit

$ 300 200 $ 500

$ 405

Deduct: Outstanding Cheques

Reconciled Balance

$ 405

Service Charge Cash To record charge by bank

1 5 00

Accounts Receivable - Judith Wall Cash To record NSF Cheque from Judith Wall

2 5 00

1 5 00

2 5 00

EXERCISE 8-2A. 2015 July 3

Petty Cash Cash Establishment of Petty Cash fund Donations Expense Postage Expense Office Supplies Expense Miscellaneous Expense Cash To record Petty Cash expenses & replenishment

1 0 0 00 1 0 000 2 0 00 1 8 00 2 5 00 2 5 00 8 8 00

EXERCISE 8-3A. 2015 July

Donations Expense Postage Expense Office Supplies Expense Miscellaneous Expense Cash Short and Over Cash To record Petty Cash expenses & replenishment

2 0 00 1 8 00 2 5 00 2 5 00 1 00 8 9 00

8-3

SOLUTIONS TO EXERCISES—Set A, Cont. EXERCISE 8-4A. 2015 July

Donations Expense Postage Expense Office Supplies Expense Miscellaneous Expense Cash Short and Over Cash To record Petty Cash expenses & replenishment

2 0 00 1 8 00 2 5 00 2 5 00 1 00 8 7 00

EXERCISE 8-5A. Beg. Change Fund

+ Cash Register Total

1,200

= Cash should have on hand

1,230

- Counted Cash

–

1,156

= Cash Shortage

Cash

1 1 2 6 00

Cash Short and Over

7 4 00

Sales

1 2 0 0 00

To record day’s takings and shortage

SOLUTIONS TO EXERCISES—Set B EXERCISE 8-1B. FAITH CO. BANK RECONCILIATION AS OF JULY 31, 2016 G/L CASH ACCOUNT BALANCE Ending Cash Account Balance Deduct: Bank Service Charge NSF Cheque

BALANCE PER BANK STATEMENT $764 21 76

Reconciled Balance

8-4

Ending Bank Statement Balance Add: Deposits in Transit

$667

$489 326 $815

Deduct: Outstanding Cheques

148

Reconciled Balance

$667

EXERCISE 8-1B., Cont. 2016 July 31

July

Service Charge Cash To record charge by bank

2 1 00

Accounts Receivable - Judith Wall Cash To record NSF Cheque from Judith Wall

7 6 00

2 1 00

7 6 00

EXERCISE 8-2B. 2015 July

Petty Cash Cash Establishment of Petty Cash fund Delivery Expense Postage Expense Office Supplies Expense Miscellaneous Expense Cash To record Petty Cash expenses & replenishment

1 5 0 00 1 5 000 5 5 00 3 4 00 1 8 00 2 8 00 1 3 500

EXERCISE 8-3B. 2015 July

Delivery Expense Postage Expense Office Supplies Expense Miscellaneous Expense Cash Short and Over Cash To record Petty Cash expenses & replenishment

5 5 00 3 4 00 1 8 00 2 8 00 2 00 1 3 700

EXERCISE 8-4B. 2015 July

Delivery Expense Postage Expense Office Supplies Expense Miscellaneous Expense Cash Short and Over Cash To record Petty Cash expenses & replenishment

5 5 00 3 4 00 1 8 00 2 8 00 2 00 1 3 5 00

8-5

SOLUTIONS TO EXERCISES—Set B, Cont. EXERCISE 8-5B. Beg. Change Fund + Cash Register Total = Cash should have on hand – Counted Cash = Cash Short

$ + $

30 1,700 1,730 1,726 4

Cash

1 6 9 6 00

Cash Short and Over

4 00

Sales

1 7 0 0 00

To record day’s takings and shortage

PROBLEM 8A-1. ROSE COMPANY BANK RECONCILIATION AS OF JULY 31, 2017 2017 July

Chequebook Balance

2017 July

G/L Cash Account Balance Add: Proceeds of a Note Less Collection Charge by Bank Deduct: Bank Service Charge Automobile Expense Reconciled Balance

$5 7 0 0 0 0

8 0 3 00

$6 5 0 3 0 0 6 0 00 3 3 00 $6 4 1 0 0 0

Balance per Bank Statement

Ending Bank Statement Balance Add: Deposits in Transit

$7 1 0 0 0 0 1 1 1 0 00 $8 2 1 0 0 0

Deduct: Cheque No. 122 Cheque No. 130

8 0 0 00 1 0 0 0 00 1 8 0 0 00

Reconciled Balance

8-6

$6 4 1 0 0 0

PROBLEM 8A-1., Cont. ROSE COMPANY GENERAL JOURNAL Date 2017 July

Account Title and Description

Post

Cash

Dr.

Cr.

8 0 3 00

Collection Charge

7 00

Notes Receivable

8 1 0 00

Service Charge Expense

6 0 00

Cash

6 0 00

Automobile Expense

3 3 00

Cash

3 3 00

PROBLEM 8A-2. BANK OF SASKATCHEWAN MAIN BRANCH REGINA, SASKATCHEWAN This form is provided to help you balance your bank statement. If no errors are reported to the bank within 30 days, the account will be considered correct. Please notify us of any change in address. Cheques outstanding (not charged to account)

Cheque No.

Amount

111

$600

119

1,200

121

330

Total

$2,130

Sort the cheques numerically or by date issued. Check off the stubs of your chequebook with each cheque paid by bank. List the numbers and amounts of cheques still outstanding in the space provided at the left. Verify the deposits in your chequebook with deposits credited on this statement. Bank balance shown on this statement Plus: deposits not credited on this statement Subtotal Less: Cheques outstanding Balance If your chequebook does not agree, enter any necessary adjustment: Less: NSF $300 SC 30 Correct chequebook balance

5,400

2,000 7,400 2,130 5,270 $5,600

330 5,270

8-7

PROBLEM 8A-2., Cont. RICK’S DELI GENERAL JOURNAL Date 2018 Feb

Account Title and Description

Post Ref.

Accounts Receivable, Jim Rice

Dr.

Cr.

3 0 0 00

Cash

3 0 0 00

Service Charge

3 0 00

Cash

3 0 00

PROBLEM 8A-3. MERRY CO. GENERAL JOURNAL Date 2016 April

Account Title and Description 1

Petty Cash

Page 2 Post Ref.

Dr.

Cr.

1 0 0 00

Cash

1 0 0 00

To establish petty cash fund, Chq. 14 29

Office Equipment

7 0 0 00

Cash

7 0 0 00

Purchased office equipment from Roy Kloon, Chq. 15 30

Postage Expense

2 9 00

Office Supplies Expense

3 8 00

Miscellaneous Expense

9 00

Cash To replenish petty cash fund, Chq. 16

8-8

76 00

8-9

1 2 3 4 5

Apri 1 5 8 16 23 26

30 30

Voucher No.

Date 2016

Ending Balance Replenishment Balance (New)

Establishment Postage Office Supplies Office Supplies Postage Miscellaneous Totals Ending Balance

PROBLEM 8A-3., Cont.

Description

2 4 00 7 6 00 1 0 0 00

1 0 0 00

Receipts

1 5 00 2 0 00 1 8 00 1 4 00 9 00 7 6 00 2 4 00 1 0 0 00

Payments

AUXILIARY PETTY CASH RECORD

MERRY CO.

2 9 00

1 4 00

1 5 00

Postage Expense

3 8 00

2 0 00 1 8 00 Misc.

Office Supplies Expense Account

Category of Payment

9 00 9 00

Amount

Sundry

8-10

Oct

Balance Replenishment Balance (New)

Postage

30 30 30

Description

Computer Supplies

Fund Shortage

Establishment Postage Delivery Miscellaneous Postage Delivery

1 2 3 4 5

Voucher No.

1 5 9 12 15 16

Date 2015

PROBLEM 8A-4.

1 5 0 00 3 5 00 1 1 5 00 1 5 0 00

1 5 0 00

Receipts

3 00 1 1 5 00 3 5 00 1 5 0 00

1 4 00

2 5 00

2 4 00 1 2 00 1 0 00 9 00 1 8 00

Payments

AUXILIARY PETTY CASH RECORD

LOGAN CO.

4 7 00

1 4 00

9 00

2 4 00

Postage Expense

3 0 00

1 8 00

1 2 00

Delivery Expense

Cash Short and Over

Computer Supplies

Misc.

Account

Category of Payment

3 00 3 8 00

2 5 00

1 0 00

Amount

Sundry

PROBLEM 8A-4., Cont. LOGAN CO. GENERAL JOURNAL Date 2015 Oct 1

Page 33 Post Ref.

Account Title and Description

Dr.

Petty Cash Cash To establish petty cash fund, Chq. 444

1 5 0 00

Postage Expense Delivery Expense Computer Supplies Expense Miscellaneous Expense Cash Short and Over Cash To replenish petty cash fund, Chq. 618

4 7 00 3 0 00 2 5 00 1 0 00 3 00

Cr.

1 5 0 00

1 1 5 00

PROBLEM 8A-5. CASING SUPPLIERS LTD. BANK RECONCILIATION AS OF MARCH 31, 2018 G/L CASH ACCOUNT BALANCE

BALANCE PER BANK

Ending Cash Account Add: Interest Earned Subtotal Deduct: Bank Service Charge NSF Cheque NSF Service Charge Subtotal:

Ending Bank Statement Balance Add: Deposits in Transit Subtotal Deduct: Outstanding Cheques Chq #3496 Chq #3539 Chq #3547 Chq #3554 Chq #3556

Reconciled Balance

$3,861.31 86.20 $3,947.51 42.75 648.00 20.00 710.75

$3,236.76

Reconciled Balance

$7,912.30 2,866.38 $10,778.68

53.18 365.00 125.00 6,745.14 253.60 7,541.92 $3,236.76

8-11

PROBLEM 8B-1. ROSE COMPANY BANK RECONCILIATION AS OF JULY 31, 2014 2017 July 31

2017 July

G/L Cash Account Balance Cash Account Balance Add: Proceeds of a Note less Bank Collection Charge Error re Rent Deduct: Bank Service Charge NSF Cheque Reconciled Balance

$6 3 2 1 0 0 1 7 5 8 00 1 0 0 00 2 4 00 5 2 5 00

$8 1 7 9 0 0

5 4 9 00 $7 6 3 0 0 0

Balance per Bank Statement

Ending Bank Statement Balance Add: Deposits in Transit Error by Bank Deduct: Cheque No. 111 Cheque No. 1115

$5 8 2 0 0 0 2 8 7 5 00 5 6 0 00

$9 2 5 5 0 0

4 7 8 00 1 1 4 7 00 1 6 2 5 00

Reconciled Balance

$7 6 3 0 0 0

ROSE COMPANY GENERAL JOURNAL Date 2017 July 31

31 31 31

8-12

Account Title and Description Cash Collection Charge Notes Receivable Cash Accounts Payable (re Rent) Service Charge Expense Cash Accounts Receivable (re NSF Cheque) Cash

Post

Dr.

Cr.

1 7 5 8 00 1 2 00 1 7 7 0 00 1 0 0 00 1 0 0 00 2 4 00 2 4 00 5 2 5 00 5 2 5 00

PROBLEM 8B-2. BANK OF SASKATCHEWAN MAIN BRANCH REGINA, SASKATCHEWAN This form is provided to help you balance your bank statement. If no errors are reported to the bank within 30 days, the account will be considered correct. Please notify us of any change in address. Cheques outstanding (not charged to account)

Cheque No.

Amount

110 116 118

$ 80 160 52

Total

$292

Sort the cheques numerically or by date issued. Check off on the stubs of your chequebook each cheque paid by bank. List the numbers and amounts of cheques still outstanding in the space provided at the left. Verify the deposits in your chequebook with deposits credited on this statement. Bank balance shown on this statement Plus: deposits not credited on this statement Subtotal Less: Cheques outstanding Balance If your chequebook does not agree, enter any necessary adjustment: Less: NSF $40 SC 2 Correct chequebook balance

$ 632 416 1,048 292 $ 756

$ 798 42 $ 756

RICK’S DELI GENERAL JOURNAL Date 2018 Apr 30

Account Title and Description Accounts Receivable, Jim Rice Cash Service Charge Cash

Post Ref.

Dr.

Cr.

4 0 00 4 0 00 2 00 2 00

8-13

PROBLEM 8B-3. MERRY CO. GENERAL JOURNAL Page 2 Date 2016 April

Account Title and Description 1

8-14

Petty Cash Cash To establish petty cash fund, Chq. 4 Office Equipment Cash Purchased office equipment from Roy Kloon, Chq. 5 Postage Expense Office Supplies Expense Miscellaneous Expense Cash To replenish petty cash fund, Chq. 16

Post Ref.

Dr.

Cr.

8 0 00 8 0 00

8 0 0 00 8 0 0 00

1 5 00 2 1 00 1 2 00 4 8 00

8-15

April

30 30

1 5 8 16 23 26

Date 2016

1 2 3 4 5

Voucher No.

Ending Balance Replenishment Balance (New)

Establishment Postage Office Supplies Office Supplies Postage Miscellaneous Totals Ending Balance

PROBLEM 8B-3., Cont.

Description

3 2 00 4 8 00 8 0 00

8 0 00

Receipts

9 00 1 2 00 9 00 6 00 1 2 00 4 8 00 3 2 00 8 0 00

Payments

AUXILIARY PETTY CASH RECORD

MERRY CO.

1 5 00

6 00

9 00

Postage Expense

2 1 00

1 2 00 9 00

Office Supplies Expense

Misc

Account

Category of Payment

1 2 00 1 2 00

Amount

Sundry

8-16

Oct

Balance Replenishment Balance (New)

Postage

30 30 30

Description

Computer Supplies

Fund Shortage

Establishment Postage Delivery Miscellaneous Postage Delivery

1 2 3 4 5

Voucher No.

1 5 9 15 15 16

Date 2015

PROBLEM 8B-4.

1 0 0 00 2 7 00 7 3 00 1 0 0 00

1 0 0 00

Receipts

3 00 7 3 00 2 7 00 1 0 0 00

7 00 4 00

1 8 00 1 2 00 1 0 00 1 4 00 5 00

Payments

AUXILIARY PETTY CASH RECORD

LOGAN CO.

3 6 00

4 00

1 4 00

1 8 00

Postage Expense

1 7 00

5 00

1 2 00

Delivery Expense

Cash Short and Over

Computer Supplies

Misc.

Account

Category of Payment Sundry

3 00 2 0 00

7 00

1 0 00

Amount

PROBLEM 8B-4., Cont. LOGAN CO. GENERAL JOURNAL Page 33 Date 2015 Oct

Post Ref.

Account Title and Description 1

Petty Cash

Dr.

Cr.

1 0 0 00

Cash

1 0 0 00

To establish petty cash fund, Chq. 444 30

Postage Expense

3 6 00

Delivery Expense

1 7 00

Computer Supplies Expense

7 00

Miscellaneous Expense

1 0 00

Cash Short and Over

3 00

Cash

7 3 00

To replenish petty cash fund, Chq. 618

PROBLEM 8B-5. CASING SUPPLIERS LTD. BANK RECONCILIATION AS OF MARCH 31, 2018 CHEQUEBOOK BALANCE

BALANCE PER BANK

Ending Chequebook Add: Interest Earned Subtotal Deduct: Bank Service Charge NSF Cheque NSF Service Charge Subtotal:

Ending Bank Statement Balance Add: Deposits in Transit Subtotal Deduct: Outstanding Cheques Chq #2296 Chq #2339 Chq #2347 Chq #2354 Chq #2356

Reconciled Balance

$2,445.97 86.20 $2,532.17 34.76 952.00 20.00 1,006.76

$1,525.41

Reconciled Balance

$5,099.10 3,148.62 $8,247.72

87.26 376.00 150.00 5,840.60 268.45 6,722.31 $1,525.41

8-17

PROBLEM 8C-1. 2016 May

May

Chequebook Balance Add: Proceeds of a note collected by bank. Less: Collection Fee

$6 9 1 9 0 0 7 3 4 00 1 4 00

Deduct: NSF Cheque Bank Service Charge New Cheques Purchase

1 5 1 00 3 9 00 7 8 00

7 2 0 00 7 6 3 9 00

2 6 8 00

Reconciled Balance

$7 3 7 1 0 0

Balance per Bank Statement Add: Deposits in Transit

$7 4 8 3 0 0 1 3 8 1 00 8 8 6 4 00

Deduct: Cheque No. 354 356 347

2 9 7 00 5 1 2 00 6 8 4 00 1 4 9 3 00 $7 3 7 1 0 0

Reconciled Balance

GRAHAM COMPANY GENERAL JOURNAL Date 2016 May 31 31 31

8-18

Account Title and Description Accounts Receivable, Harry Pride Cash Service Charge Cash Cash Collection Charge Notes Receivable To reconcile bank Office Supplies Cash Purchase of cheques from bank

Post Ref.

Dr.

Cr.

1 5 1 00 1 5 1 00 3 9 00 3 9 00 7 2 0 00 1 4 00 7 3 4 00 7 8 00 7 8 00

PROBLEM 8C-2. BANK OF INDUSTRY AND COMMERCE MAIN BRANCH HALIFAX, NS This form is provided to help you balance your bank statement. If no errors are reported to the bank within 30 days, the account will be considered correct. Please notify us of any change in address. Cheques outstanding (not charged to account)

Cheque No.

Amount

231

$298

245

509

246

247

237

Total

$1,120

Sort the cheques numerically or by date issued. Check off on the stubs of your chequebook each cheque paid by bank. List the numbers and amounts of cheques still outstanding in the space provided at the left. Verify the deposits in your chequebook with deposits credited on this statement. Bank balance shown on this statement Plus: Deposits not credited on this statement Bank error Subtotal Less: Cheques outstanding Balance If your chequebook does not agree, enter any necessary adjustment: NSF Cheque, Jane Yates $225 Entry Error - Chq. #241 27 Service Charge 12 Correct chequebook balance

$ 3,238 2,122 607 5,967 1,120 $ 4,847 $ 5,111

264 $ 4,847

THE FRESH FLOWER SHOP GENERAL JOURNAL Date 2017 July 29

Account Title and Description Accounts Receivable, Jane Yates Cash NSF cheque Utilities Expense Cash Error in recording cheque 241 Bank Service Charge Cash Bank charges

Post Ref.

Dr.

Cr.

2 2 5 00 2 2 5 00 2 7 00 2 7 00 1 2 00 1 2 00

8-19

PROBLEM 8C-3. SAMUEL & CO. GENERAL JOURNAL Page 2 Date 2016 Mar 1

8-20

Account Title and Description Petty Cash Cash To establish petty cash fund, Chq. 314 Office Equipment Cash Purchased office equipment from Klondike Office Equipment, Chq. 315 Postage Expense Office Supplies Expense Miscellaneous Expense Cash To replenish petty cash fund, Chq. 316

Post Ref.

Dr.

Cr.

2 0 0 00 2 0 0 00

1 8 9 0 00 1 8 9 0 00

9 2 00 6 6 00 2 0 00 1 7 8 00

8-21

Mar

Date 2016

Postage Expense

Description

2 2 00 1 7 8 00 2 0 0 00

Replenishment

Balance (New)

2 0 0 00

Receipts

2 0 0 00

2 2 00

1 7 8 00

2 0 00

4 7 00

2 7 00

3 9 00

4 5 00

Payments

AUXILIARY PETTY CASH RECORD

SAMUEL & CO.

Ending Balance

Totals

Miscellaneous Expense

Postage Expense

Office Supplies Expense

Establishment

Voucher No.

PROBLEM 8C-3., Cont.

9 2 00

4 7 00

4 5 00

Postage Expense

6 6 00

2 7 00

3 9 00

Office Supplies Expense

Misc.

Account

Category of Payment

2 0 00

Amount

Sundry

PROBLEM 8C-4. CARON CO. GENERAL JOURNAL Page 22 Date 2015 Oct 1

8-22

Account Title and Description

Post Ref.

Dr.

Petty Cash Cash To establish petty cash fund, Chq. 772

2 5 0 00

Postage Expense Delivery Expense Miscellaneous Expense Computer Supplies Expense Cash Short and Over Cash To replenish petty cash fund, Chq. 813

1 3 0 00 2 9 00 3 0 00 1 9 00 4 00

Cr.

2 5 0 00

2 1 2 00

8-23

Oct

1 2 3 4 5

Voucher No.

1 5 9 12 15 16

Date 2015 Description

Balance Replenishment Balance (new)

Fund Shortage

Postage

Computer Supplies

Establishment Postage Delivery Miscellaneous Expense Postage Delivery

PROBLEM 8C-4., Cont.

2 5 0 00 3 8 00 2 1 2 00 2 5 0 00

2 5 0 00

Receipts

2 1 2 00 3 8 00 2 5 0 00

4 00

3 2 00

1 9 00

4 1 00 1 6 00 3 0 00 5 7 00 1 3 00

Payments

AUXILIARY PETTY CASH RECORD

CARON CO.

1 3 0 00

3 2 00

5 7 00

4 1 00

Postage Expense

2 9 00

1 3 00

1 6 00

Delivery Expense

Cash Short and Over

Computer Supplies

Misc.

Account

Category of Payment Sundry

5 3 00

4 00

1 9 00

3 0 00

Amount

PROBLEM 8C-5. NORTHERN ENERGY CONSULTING BANK RECONCILIATION APRIL 30, 2017 Balance per bank Statement Add: Deposit in transit Less: Outstanding Cheques # 219 $2,488.16 # 220 1,450.00 # 221 1,220.00

Reconciled Balance

8-24

$9,199.21 1,155.30 10,354.51

5,158.16

$5,196.35

Balance per G/L - Unadjusted Add: Interest Income

Less: NSF Cheque NSF Cheque Charge Bank Service Charges Error on Cheque #216 ($326 should be $362) Reconciled Balance

$5,648.15 58.40 5,706.55

$ 425.00 15.00 34.20 36.00

510.20 $5,196.35

SOLUTIONS TO ON-THE-JOB TRAINING, #T-1.

HOOP CO. GENERAL JOURNAL Date 2016 Nov

Page 13 Post Ref.

Account Title and Description

Dr.

Petty Cash

Cr.

5 0 00

Cash

5 0 00

To establish petty cash fund Dec

Delivery Expense

8 50

Office Supplies Expense

1 2 00

Postage Expense

1 5 00

Petty Cash

5 0 00

Cash

8 5 50

To replenish petty cash fund and increase to $100

The Petty Cash Account is too low only if it often doesn’t cover the normal level of cash expenses. This could have been a one-time problem. However, as $35 was paid out in a week, Karen was probably correct in increasing the fund.

SOLUTIONS TO ON-THE-JOB TRAINING, #T-2.

GINGER COMPANY BANK RECONCILIATION NOVEMBER 30, 2016 Balance per Bank Statement Add: Deposits in transit Less: Outstanding Cheques # 621 $ 152.50 # 942 71.50 # 947 206.50

$ 4,440.50 611.00 5,051.50

G/L Cash Account Balance Add: Collection on Notes Rec. $500.00 Less Collection Fee 6.00 Error in recording Chq #899

430.50 $ 4,621.00

Less: NSF Chq A. Ellen Service Charges

$130.00 6.50

$ 4,209.50

494.00 54.00 4,757.50

136.50 $ 4,621.00

Suggestion to Bill: Always wait until the usual bank reconciliation is completed before concluding that the bank has made an error.

8-25

SOLUTIONS TO ON-THE-JOB TRAINING, # T-3.

BERGEN CARPET CO. BANK RECONCILIATION FEBRUARY 28, 2016 Balance per Bank Statement Add: Outstanding Deposit Less: Outstanding Cheques # 417 # 443 # 447 # 448 # 449

$ 19,528.53 1,786.90 21,315.43 $

28.30 909.50 1,950.90 1,213.20 76.15

Reconciled Balance Balance per General Ledger Less: NSF Cheque Returned NSF Service Charge Service Charges Reconciled Balance

8-26

4,178.05 $ 17,137.38 $ 17,575.29

$ 404.46 15.00 18.45

437.91 $ 17,137.38

CONTINUING PROBLEM PRECISION COMPUTER CENTRE SALES JOURNAL Page 2 Date 2016 Oct. 22

Account Debited

Invoice No. 12685

Terms

Taylor Golf

2/10, n/30

Post. Ref.

Dr. Acc. Receivable Cr. Sales 4 2 0 0 00 4 2 0 0 00 (1020/410)

PRECISION COMPUTER CENTRE CASH RECEIPTS JOURNAL Page 2 Sundry Date 2016 Oct.

Cash Dr. 4 4

Sales Disc. Dr.

Acc. Rec. Cr.

3 6 0 0 00 1 6 0 0 00 5 2 0 0 00 (1000)

Sales Cr.

1 1

Account

6 0 0 00 6 0 0 00 (4010)

Cash customer Anthony Pitale, Invoice 12684

Post. Ref.

4000 X

Amount Cr. 3 6 0 0 00 3 6 0 0 00 (X)

PRECISION COMPUTER CENTRE CASH PAYMENTS JOURNAL Page 2 Date 2016 Oct.

Chq. No.

Account Debited

1 252

Cleaning

4 8 15 15 29

Petty Cash Fund T. Freedman West Bell Canada City Electric Postage Supplies Miscellaneous T. Freedman, Withdrawals

253 254 255 256 257

Post Ref.

Sundry Dr.

1023 5015 1010 3010 5040 5030 5070 1030 5100 3010

6 0 0 00 3 0 0 00 1 0 0 00 2 0 0 0 00 6 5 00 9 5 00 2 5 00 4 2 00 1 0 00 1 5 00 3 2 5 2 00 (X)

Accounts Payable Dr.

Purchases Discounts Cr.

Cash Cr. 9 0 0 00 1 0 0 00 2 0 0 0 00 6 5 00 9 5 00 9 2 00

3 2 5 2 00 (100)

8-27

8-28

Oct.

4 8 9 11 25 28

Date 2016

101 102 103 104 105

Voucher No.

Establishment Stamps Supplies Newspaper Supplies Lunch Total Balance Replenishment

CONTINUING PROBLEM, Cont.

Description

1 0 0 00 8 00 9 2 00 1 0 0 00

1 0 0 00

Receipts

2 5 00 2 2 00 1 0 00 2 0 00 1 5 00 9 2 00

Payments

PRECISION COMPUTER CENTRE AUXILIARY PETTY CASH RECORD

2 5 00

Postage Expense

4 2 00

2 0 00

2 2 00

Supplies Expense

W/D

Misc.

Account

Category of Payment

1 5 00 2 5 00

1 0 00

Amount

Sundry

CONTINUING PROBLEM, Cont. GENERAL LEDGER OF PRECISION COMPUTER CENTRE NAME: CASH Date 2016 Oct.

ACCOUNT NO. Explanation

1 31 31

Post Ref.

Debit

✔

Balance

3 2 5 2 00 5 2 0 0 00

NAME: PETTY CASH

Oct.

Post Ref.

Debit

CPJ2

1 0 0 00

NAME: ACCOUNTS RECEIVABLE

Oct.

Explanation

1 31

Post Ref.

SJ2

Explanation 1

Debit

Oct.

Balance

1 0 0 00

1020 DR CR Dr Dr

ACCOUNT NO. Post Ref.

Debit

CPJ2

6 0 0 00

Credit

Post Ref.

✔

Debit

Credit

14 0 2 6 12 10 7 7 4 12 15 9 7 4 12

DR CR

Balance 8 1 4 0 00 12 3 4 0 0 0

1023 DR CR

Balance

6 0 0 00

ACCOUNT NO. Explanation

Credit

4 2 0 0 00

NAME: PREPAID RENT Date 2016

Credit

Balance

1010

ACCOUNT NO.

NAME: PREPAID CLEANING

Oct.

✔

Balance

Date 2016

ACCOUNT NO. Explanation

Date 2016

DR CR Dr

CPJ2 CRJ2

Date 2016

Credit

1000

1025 DR CR

Balance

8 0 0 00

8-29

CONTINUING PROBLEM, Cont. GENERAL LEDGER OF PRECISION COMPUTER CENTRE NAME: SUPPLIES Date 2016 Oct. 1 29

ACCOUNT NO. Explanation

Post Ref.

Debit

✔

Balance

4 2 00

CPJ2

Explanation

ACCOUNT NO. Post Ref.

Debit

NAME: COMPUTER SHOP EQUIPMENT Date 2016 Oct. 1

Explanation

Post Ref.

Debit

Explanation

Post Ref.

Debit

Explanation

Debit

8-30

Credit

✔

Balance

Explanation

Post Ref.

Debit

✔

Balance

Explanation Balance

7 1 0 0 00

Balance

3 8 0 0 00

DR CR

✔

Credit

Balance 9 9 00

1090 Balance

1 0 5 0 00

DR CR Dr

Debit

1081

DR CR

ACCOUNT NO. Post Ref.

1080

DR CR

ACCOUNT NO. Credit

1040

ACCOUNT NO. Post Ref.

7 5 0 00 7 9 2 00

Balance

NAME: ACCOUNTS PAYABLE Date 2016 Oct. 1

Credit

Balance

DR CR

ACCOUNT NO.

✔

Balance

NAME: ACCUMULATED AMORTIZATION, OFFICE EQUIPMENT Date 2016 Oct. 1

Credit

✔

Balance

NAME: OFFICE EQUIPMENT Date 2016 Oct. 1

Credit

ACCOUNT NO.

NAME: ACCUMULATED AMORTIZATION, COMPUTER SHOP EQUIP. Date 2016 Oct. 1

✔

Balance

DR CR Dr

NAME: MERCHANDISE INVENTORY Date 2016 Oct. 1

Credit

1030

1091 Balance 2 0 00

2000

DR CR

Balance

6 2 5 00

CONTINUING PROBLEM, Cont. GENERAL LEDGER OF PRECISION COMPUTER CENTRE NAME: T. FREEDMAN, CAPITAL Date 2016 Oct. 1

Explanation

ACCOUNT NO. Post Ref.

Debit

Explanation

Post Ref.

CPJ2 CPJ2

Explanation

Debit

Explanation

Post Ref.

Debit

Dr Dr

Credit

DR CR

ACCOUNT NO. Post Ref.

Debit

Credit

DR CR Cr

3 6 0 0 00

CRJ2

ACCOUNT NO. Explanation

Post Ref.

Debit

Credit

✔

Balance

CRJ2

Explanation

DR CR

Cr Cr

ACCOUNT NO. Post Ref.

✔

Debit

Credit

Balance 2 0 1 5 00 4 0 1 5 00 4 0 3 0 00

3020 Balance

4000 Balance 20 1 4 9 8 2 23 7 4 9 8 2

4010

4 2 0 0 00 1 6 0 0 00

SJ2

Balance

DR CR

✔

Balance

3010

ACCOUNT NO.

NAME: SALES RETURNS AND ALLOWANCES Date 2016 Oct. 1

Credit

2 0 0 0 00 1 5 00

NAME: SALES Date 2016 Oct. 1 31 31

7 4 6 0 00

SERVICE REVENUE

Date 2016 Oct. 1 4

ACCOUNT NO.

NAME: INCOME SUMMARY

NAME:

Balance

✔

Balance

Date 2016

DR CR

✔

Balance

NAME: T. FREEDMAN, WITHDRAWALS Date 2016 Oct. 1 8 29

Credit

3000

Balance 21 3 0 0 0 0 25 5 0 0 0 0 27 1 0 0 0 0

4020

DR CR

Balance

4 0 0 00

8-31

CONTINUING PROBLEM, Cont. GENERAL LEDGER OF PRECISION COMPUTER CENTRE NAME: SALES DISCOUNTS Date 2016 Oct. 1

Explanation

ACCOUNT NO. Post Ref.

Debit

Explanation

Post Ref.

Debit

Explanation

Post Ref.

Debit

CPJ2

3 0 0 00

Explanation

Post Ref.

Debit

DR CR

Balance

4 8 0 00

Credit

5015

DR CR

Balance

3 0 0 00

Credit

Explanation

Balance

8 0 0 00

ACCOUNT NO. Post Ref.

Debit

Credit

CPJ2

Explanation Balance

5030

DR CR

✔

Balance

5020

DR CR

✔

Balance

9 5 00

NAME: PHONE EXPENSE

8-32

Credit

5010

ACCOUNT NO.

NAME: UTILITIES EXPENSE

Date 2016 Oct. 1 15

2 2 0 00

ACCOUNT NO.

NAME: RENT EXPENSE

Date 2016 Oct. 1 15

ACCOUNT NO.

NAME: CLEANING EXPENSE

Date 2016 Oct. 1

Balance

✔

Balance

Date 2016 Oct. 1

DR CR

✔

Balance

NAME: ADVERTISING EXPENSE Date 2016 Oct. 1

Credit

4030

ACCOUNT NO. Post Ref.

Debit

✔ CPJ2

Credit

1 7 5 00 2 7 0 00

5040

DR CR Dr

6 5 00

Balance

Balance 2 1 6 00 2 8 1 00

CONTINUING PROBLEM, Cont. GENERAL LEDGER OF PRECISION COMPUTER CENTRE NAME: POSTAGE EXPENSE Date 2016 Oct. 1 29

Explanation

ACCOUNT NO. Post Ref.

Debit

CPJ2

Explanation

2 5 00

Debit

CPJ2

Explanation

1 0 00

Post Ref.

Debit

Explanation

Balance

8 7 6 0 20

Credit

Explanation

5600

DR CR

Balance

9 5 0 00

Post Ref.

Debit

Credit

5610

DR CR

Balance

1 0 0 00

✔

Balance

DR CR

ACCOUNT NO.

NAME: PURCHASES DISCOUNTS Date 2016 Oct. 1

Credit

✔

Balance

ACCOUNT NO. Post Ref.

✔

1 0 00 2 0 00

5110

ACCOUNT NO. Explanation

Balance

ACCOUNT NO.

NAME: PURCHASES RETURNS AND ALLOWANCES Date 2016 Oct. 1

DR CR

✔

Balance

5100

NAME: PURCHASES Date 2016 Oct. 1

Credit

✔

Balance

2 5 00 5 0 00

ACCOUNT NO. Post Ref.

Balance

NAME: WAGES EXPENSE Date 2016 Oct. 1

DR CR

✔

Balance

NAME: MISCELLANEOUS EXPENSE Date 2016 Oct. 1 29

Credit

5070

Debit

Credit

5620

DR CR

Balance

1 7 50

8-33

CONTINUING PROBLEM, Cont. PRECISION COMPUTER CENTRE TRIAL BALANCE OCTOBER 31, 2016 Cash Petty Cash Accounts Receivable Prepaid Cleaning Prepaid Rent Supplies Merchandise Inventory Computer Shop Equipment Accumulated Amortization, Computer Shop Equipment Office Equipment Accumulated Amortization, Office Equipment Accounts Payable T. Freedman, Capital T. Freedman, Withdrawals Service Revenue Sales Sales Returns and Allowances Sales Discounts Advertising Expense Cleaning Expense Rent Expense Utilities Expense Phone Expense Postage Expense Miscellaneous Expense Wages Expense Purchases Purchases Returns and Allowances Purchases Discounts

8-34

15 9 7 4 12 1 0 0 00 12 3 4 0 00 6 0 0 00 8 0 0 00 7 9 2 00 7 1 0 0 00 3 8 0 0 00 9 9 00 1 0 5 0 00 2 0 00 6 2 5 00 7 4 0 6 00 4 0 3 0 00 23 7 4 9 82 27 1 0 0 00 4 0 0 00 2 2 0 00 4 8 0 00 3 0 0 00 8 0 0 00 2 7 0 00 2 8 1 00 5 0 00 2 0 00 8 7 6 0 20 9 5 0 00 1 0 0 00 1 7 50 59 1 1 7 32 59 1 1 7 32

CONTINUING PROBLEM, Cont. PRECISION COMPUTER CENTRE BANK RECONCILIATION AS OF JULY 31, 2016 G/L CASH ACCOUNT BALANCE Ending Cash Account

BALANCE PER BANK $1,645.00

Add Subtotal

$1,645.00

Deduct:

Deposit in Transit Subtotal

0.00

Deduct: Cheque #212 Cheque #213 Subtotal

$1,645.00

Reconciled Balance

0.00

Reconciled Balance

$2,905.00

Add 0.00

Subtotal

Ending Bank Statement Balance $140.00

140.00 $3,045.00

200.00 1,200.00 1,400.00 $1,645.00

8-35

9 Payroll Procedures: The Employees’ Perspective

ANSWERS TO DISCUSSION QUESTIONS 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

11.

12.

Overtime is the number of overtime hours worked over the maximum set out in the provincial minimum wage law and usually multiplied by one and a half. Overtime and commission income are both added to salary when calculating gross pay. Income tax, CPP and EI deductions are still calculated on gross pay no matter whether commission income or overtime is included. The T4 form summarizes an employee’s annual earnings and statutory deductions. It is used by employees in filing their annual income tax return. True. Claiming more allowances results in a higher net claim code which means less income tax is deducted. False; most payroll registers only provide the data for recording and posting the payroll information. CPP (or QPP) is a pension plan set up by the federal government to provide pension benefits for all contributing Canadians at retirement. Disagree. The employer matches the CPP contribution of the employee. Federal and provincial income tax withholdings are determined by the Payroll Deductions Online Calculator, or Tables of Payroll Deductions provided by Canada Revenue Agency. A calendar year is January 1 to December 31. The purpose of an income tax deduction is to approximate the amount of income tax an employee will have to pay in respect of that pay period. A final determination is made when the annual income tax return is filed by the end of April of the following year. The employee individual earnings record contains information about the total amount of wages paid, deductions for the calendar year, etc., that aids the employer in complying with governmental regulations and reports. It also provides information necessary for Record of Employment and T4 form preparation. CPP and EI deductions are computed differently with separate rates. EI has a maximum deduction per year; CPP has a basic exemption and a maximum per year.

13. WEEKLY PAYROLL

PAYROLL REGISTER

INDIVIDUAL EARNINGS RECORD UPDATED

14.

RECORD PAYROLL JOURNAL

PAYMENTS BY CASH DISBURSEMENTS JOURNAL

Disagree. CPP has a maximum deduction per year, which would be reached by both employees.

9-1

15.

Meg should mention these points to her boss: 1.

It is difficult to adjust amounts owed to CRA, because the amount owed is based on payroll details that are almost impossible to “fake”.

If deduction amounts are reduced, employees will certainly question the reasons for the lowered amounts. This might lead to them seeking advice from CRA and in effect notifying them that something is up.

There is no point in reducing any Income Tax deductions, since if these amounts are reduced, the employees’ net pay will just go up by an equal amount. Plus—the amounts would have to be paid sooner, because CRA does not get paid until the 15th of the month following.

The penalties for failing to pay the required deductions are huge - up to 10% of a penalty, so a lot of thought must go into taking any action that would attract such a costly amount.

Consider talking with the company’s bank and borrowing the necessary funds. This would certainly be cheaper than suffering a penalty for failing to submit employee deductions. Plus, it is common business practice.

This action is probably illegal, and should therefore be avoided—especially if there are other ways to raise the necessary funds. SOLUTIONS TO CLASSROOM DEMONSTRATION EXERCISES

a. b.

$370 $660

($10.00 x 37) ($12.00 x 40) + ($18.00 x 10)

CPP = NIL (maximum already reached); EI = NIL (maximum already reached)

$912.75

($1,200 - (247.25 + NIL + NIL + 40.00))

1. 2. 3. 4. 5. 6.

a b b b b c

1. 2. 3. 4. 5.

b, e c, d b, e b, e b, e

SOLUTIONS FOR EXERCISES—SET A EXERCISE 9-1A. Regular Hours

Overtime Hours

Total Pay

Jean Knott

36 X $ 13.20 = $ 475.20

$ 475.20

Abe Janzen

40 X $ 15.00 = $ 600.00

4 X $ 22.50 = $ 90.00

$ 690.00

Mike Toth

40 X $ 16.00 = $ 640.00

6 X $ 24.00 = $144.00

$ 784.00

EXERCISE 9-2A.

Ben Smith

Gross Pay Deductions: Income Tax

May Cheung

$ 610.00 $35.75 (Fed) + $20.40 (Prov) =

$ 820.00 $80.05 (Fed) +

$ 56.15

$40.15 (Prov) =

$ 120.20

CPP

26.81

37.13

11.46

15.40

94.42

172.73

$515.58

$ 647.27

Total Deductions Net Pay

9-2

EXERCISE 9-3A.

Account Category

Dr/Cr

Appears on which Financial Report?

CPP Payable

Liability

Cr.

Balance Sheet

Income Tax Payable

Liability

Cr.

Balance Sheet

Medical Insurance Payable

Liability

Cr.

Balance Sheet

Wages and Salaries Payable

Liability

Cr.

Balance Sheet

Office Salaries Expense

Expense

Dr.

Income Statement

Marketing Wages

Expense

Dr.

Income Statement

EXERCISE 9-4A. The two debits come from the last two columns of the Payroll Register showing the total of the distribution of expense accounts. The CPP Payable, EI Payable, Income Tax Payable and Union Dues Payable come from the total of each of these deductions. The Salaries and Wages Payable is from the total of the Net Pay Column.

EXERCISE 9-5A. MOORE CO. CASH DISBURSEMENTS JOURNAL

Jan

Post Ref.

Sundry Dr.

Accounts Payable Dr.

Page 10 Salaries amd Wages Payable Dr.

Chq. No.

Account Payment to

111

Nina Smith

2 0 5 0 00

112

Jean Logan

1 3 2 9 00

113

Fred Singer

2 1 4 3 00

Purchases Discounts Cr.

Cash Cr.

5 5 2 2 00

9-3

SOLUTIONS FOR EXERCISES—Set B EXERCISE 9-1B. Regular Hours

Overtime Hours

Total Pay

Jean Knott

38 X $ 14.50 = $ 551.00

$ 551.00

Abe Janzen

40 X $ 16.00 = $ 640.00

2 X $ 24.00 = $ 48.00

$ 688.00

Mike Toth

40 X $ 17.50 = $ 700.00

5 X $ 26.25 = $131.25

$ 831.25

EXERCISE 9-2B.

Ben Smith

Gross Pay

May Cheung

$ 685.00

Deductions:

$51.90 (Fed) +

Income Tax

$ 920.00 $98.95 (Fed) +

$25.70 (Prov) =

$ 77.60

$49.30 (Prov) =

$ 148.25

CPP

30.58

42.08

12.89

17.31

121.07

207.64

$ 563.93

$ 712.36

Total Deductions Net Pay

EXERCISE 9-3B.

Account Category

Dr/Cr

Appears on which Financial Report?

EI Payable

Liability

Cr.

Balance Sheet

Income Tax Payable

Liability

Cr.

Balance Sheet

Employee Donation Payable

Liability

Cr.

Balance Sheet

Wages and Salaries Payable

Liability

Cr.

Balance Sheet

Office Salaries Expense

Expense

Dr.

Income Statement

Sales Wages Expense

Expense

Dr.

Income Statement

EXERCISE 9-4B. The two debits come from the last two columns of the Payroll Register showing the total of the distribution of expense accounts. The CPP Payable, EI Payable, Income Tax Payable and Union Dues Payable come from the total of each of these deductions. The Salaries and Wages Payable is from the total of the Net Pay Column.

EXERCISE 9-5B. MOORE CO. CASH DISBURSEMENTS JOURNAL

Jan

9-4

Post Ref.

Sundry Dr.

Accounts Payable Dr.

Page 10 Salaries amd Wages Payable Dr.

Chq. No.

Account Payment to

1604

Nina Smith

2 1 9 0 00

1605

Jean Logan

1 5 4 0 00

1606

Fred Singer

2 2 9 7 00

Purchases Discounts Cr.

Cash Cr.

6 0 2 7 00

SOLUTIONS TO GROUP A PROBLEMS PROBLEM 9A-1. HOURLY RATE

REG. HOURS

OT HOURS

GROSS EARNINGS

a. Stephen Post

$12.00

$570.00

b. Jean Nicola

13.50

$513.00

c. Maria Cardinal

14.00

$623.00

d. Tony Lee

18.00

$990.00

EMPLOYEE

40 X $12.00 = $480.00 5 X $18.00 =

38 X $13.50 = $513.00

40 X $18.00 = $720.00

90.00 $570.00

40 X $14.00 = $560.00 3 X $21.00 =

63.00

10 X $27.00 = 270.00

$623.00

$990.00

PROBLEM 9A-2. NICKELS COMPANY - PAYROLL REGISTER Employee

Net Claim Code

Weekly Salary

Jenny Quan

9 5 0 00

Frank Sloan

6 2 0 00

Alberta Nobel

9 8 0 00

Jeremy Gold

6 5 0 00

Nancy James

8 2 0 00 4 0 2 0 00

9-5

PROBLEM 9A-2., Cont. NICKELS COMPANY - PAYROLL REGISTER Deductions CPP EI

IT*

Net Pay

Union Dues

Chq. No.

Expense Accounts Office Sales

1 4 8 70

4 3 57

1 7 90

1 2 00

7 2 7 83

9 5 0 00

7 7 75

2 7 31

1 1 65

1 2 00

4 9 1 29

6 2 0 00

1 6 9 70

4 5 05

1 8 46

1 2 00

7 3 4 79

9 8 0 00

6 3 50

2 8 79

1 2 21

1 2 00

5 3 3 50

6 5 0 00

1 2 0 20

3 7 13

1 5 40

1 2 00

6 3 5 27

8 2 0 00

5 7 9 85

1 8 1 85

7 5 62

6 0 00 3 1 2 2 68

1 6 3 0 00 2 3 9 0 00

Income Tax:

Federal Income Tax +

Provincial Income Tax =

*Total Income Tax

Jenny Quan

96.65

52.05

148.70

Frank Sloan

52.10

25.65

77.75

Alberta Nobel

112.55

57.15

169.70

Jeremy Gold

41.35

22.15

63.50

Nancy James

80.05

40.15

120.20

Total Income Tax

579.85

PROBLEM 9A-3. PINTO CO. - PAYROLL REGISTER Employee

NetClaim M

Daily Time T

W Th F 8 12 7

Mary Cardinal

Bill Smith

9 11 9

Joe Kingle Anita Tsui

Total Hrs. Rate of S Reg. O/T Pay

Earnings Regular

Overtime

Gross Earnings

23.00

7 5 9 00

1 3 8 00

8 9 7 00

15.00

5 2 5 00

1 1 2 50

6 3 7 50

8 10 7 12 10

24.00

9 3 6 00

2 8 8 00

1 2 2 4 00

12.00

4 5 6 00

2 6 7 6 00

9-6

4 5 6 00 5 3 8 50

3 2 1 4 50

PROBLEM 9A-3., Cont. PINTO CO. GENERAL JOURNAL Date Nov.

Post Ref.

Account Title and Description 5

Page 13 Dr.

Cr.

Office Salaries Expense

1 0 9 3 50

Sales Salaries Expense

2 1 2 1 00

Income Tax Payable

4 7 8 40

CPP Payable

1 2 8 57

EI Payable

2 0 55

Health Insurance Payable

8 0 00

Wages and Salaries Payable

2 5 0 6 98

To record payroll expense for the week of Nov. 5

PINTO CO. - PAYROLL REGISTER Deductions IT*

CPP

1 4 2 80

4 1 09

6 9 00

2 8 20

2 4 2 65

4 0 06 *

2 3 95

1 9 22

8 56

4 7 8 40

1 2 8 57

2 0 55

1 1 99

Health

Net Pay

Chq . No .

2 0 00

6 9 3 11

2 0 00

5 0 8 31

2 0 00

9 2 1 29

2 0 00

3 8 4 27

8 0 00 2 5 0 6 98

Expense Accounts Office

Sales 8 9 7 00

6 3 7 50 1 2 2 4 00 4 5 6 00 1 0 9 3 50 2 1 2 1 00

Income Tax:

Federal Income Tax +

Provincial Income Tax =

*Total Income Tax

Mary Cardinal

95.60

47.20

142.80

Bill Smith Joe Kingle Anita Tsui Total Income Tax

45.20 163.60 13.70

23.80 79.05 10.25

69.00 242.65 23.95 478.40

9-7

PROBLEM 9A-4. BYSCANE CO. - PAYROLL REGISTER Net Claim Code

Employee

Weekly Salary

Cumulative CPP

IT*

Jim Ryan

9 4 0 00

1 0 5 9 80

1 2 9 35

Emma LaPierre

9 7 5 00

2 1 0 8 42

1 6 8 00

Jean Arnold

1 1 4 0 00

1 7 2 2 80

2 2 0 55

Bob Sylvan

1 4 1 0 00

2 3 0 4 72

2 8 5 45

4 4 6 5 00

8 0 3 35

BYSCANE CO. GENERAL JOURNAL Date Sept

Page 9 Post Ref.

Account Title and Description

Dr.

Cr.

23 Factory Salaries Expense

610

2 0 8 0 00

Office Salaries Expense

612

2 3 8 5 00

Income Tax Payable

210

8 0 3 35

CPP Payable

212

1 9 2 33

EI Payable

214

5 7 49

Union Dues Payable

216

6 0 00

Health Insurance Payable

218

7 2 00

Salaries Payable

220

3 2 7 9 83

To record payroll for September 23

Income Tax:

Federal Income Tax +

Provincial Income Tax =

*Total Income Tax

Jim Ryan Emma LaPierre Jean Arnold Bob Sylvan Total Income Tax

82.75 110.85 148.20 191.05

46.60 57.15 72.35 94.40

129.35 168.00 220.55 285.45 803.35

9-8

PROBLEM 9A-4., Cont. BYSCANE CO. - PAYROLL REGISTER Deductions

Factory 9 4 0 00

4 3 07

1 7 65

1 5 00

2 4 00

7 1 0 93

4 4 81

1 8 37

1 5 00

2 4 00

7 0 4 82

5 2 97

2 1 47

1 5 00

2 4 00

8 0 6 01

1 5 00

1 0 5 8 07

6 0 00

7 2 00 3 2 7 9 83

1 9 2 33

5 7 49

Health

Chq . No .

CPP

5 1 48 *

Union Dues

Expense Accounts

Net Pay

Office

9 7 5 00 1 1 4 0 00 1 4 1 0 00 2 0 8 0 00 2 3 8 5 00

* To CPP maximum of $2,356.20 for the year.

9-9

9-10

Sept

Date

Jim Ryan

Emma LaPierre

Jean Arnold

Bob Sylvan

Account Payment to

Chq. No.

PROBLEM 9A-4., Cont.

Post Ref.

Sundry Dr.

Accounts Payable Dr.

BYSCANE CO. CASH PAYMENTS JOURNAL

3 2 5 3 33

3 2 7 9 83

8 0 6 01

7 0 4 82

7 1 0 93

Cash Cr.

1 0 3 1 57

Purchases Discounts Cr.

1 0 5 8 07

8 0 6 01

7 0 4 82

7 1 0 93

Salaries Payable Dr.

Page 20

PROBLEM 9A-4., Cont. INCOME TAX PAYABLE Date Sept

ACCOUNT NO. 210

Post Ref.

Explanation 23

Debit

GJ9

Credit

DR CR

8 0 3 35

CPP PAYABLE Date Sept

Debit

GJ9

Credit

DR CR

1 9 2 33

EI PAYABLE Date Sept

Explanation 23

Post Ref.

Debit

Credit 5 7 49

GJ9

Sept

Explanation 23

Post Ref.

Debit

Credit 6 0 00

GJ9

Sept

Explanation 23

Post Ref.

Debit

Credit 7 2 00

GJ9

Sept

Explanation

GJ9

CD20

Debit

Sept

Explanation 23

Sept

Explanation 23

DR CR Cr

Balance 6 0 00

DR CR Cr

Balance 7 2 00

DR CR

Balance

2 7 9 83

3 2 7 9 83

3 2 7 9 83 ACCOUNT NO. 610

Post Ref.

Debit

GJ9

2 0 8 0 00

Credit

OFFICE SALARIES EXPENSE Date

5 7 49

Credit

FACTORY SALARIES EXPENSE Date

Balance

ACCOUNT NO. 220

Post Ref.

DR CR

ACCOUNT NO. 218

SALARIES PAYABLE Date

1 9 2 33

ACCOUNT NO. 216

HEALTH INSURANCE PAYABLE Date

Balance

ACCOUNT NO. 214

UNION DUES PAYABLE Date

8 0 3 35

ACCOUNT NO. 212 Post Ref.

Explanation

Balance

DR CR

Balance

2 0 8 0 00

ACCOUNT NO. 612

Post Ref.

Debit

GJ9

2 3 8 5 00

Credit

DR CR

Balance

2 3 8 5 00

9-11

SOLUTIONS TO GROUP B PROBLEMS PROBLEM 9B-1. HOURLY RATE

REG. HOURS

OT HOURS

GROSS EARNINGS

a. Stephen Post

$13.00

$637.00

b. Jean Nicola c. Maria Cardinal

14.50 16.00

40 36

0 0

580.00 576.00

d. Tony Lee

19.00

988.00

EMPLOYEE

40 X $13.00 = $520.00

40 X $14.50 = $580.00

40 X $19.00 = $760.00

6 X $19.50 = 117.00 $637.00 c)

36 X $16.00 = $576.00

8 X $28.50 = 228.00 $988.00

PROBLEM 9B-2. NICKELS COMPANY - PAYROLL REGISTER Employee

Net Claim Code

Jenny Quan

Frank Sloan Alberta Nobel Jeremy Gold Nancy James

2 1 1 4

9-12

Weekly Salary 9 2 0 00 5 8 0 1 1 3 0 6 9 0 5 6 0 3 8 8 0

00 00 00 00

PROBLEM 9B-3. PINTO CO. - PAYROLL REGISTER Daily Time

Net Claim M

Employee

W Th F

Total Hrs. Rate of S Reg. O/T Pay

Earnings Regular

Gross Earnings

Overtime

Mary Cardinal

22.00

8 3 6 00

9 9 00

9 3 5 00

Bill Smith

14.00

5 4 6 00

1 2 6 00

6 7 2 00

Joe Kingle

10 12

25.00

1 0 0 0 00

2 6 2 50

1 2 6 2 50

Anita Tsui

12.00

4 6 8 00

5 4 00

5 2 2 00

2 8 5 0 00

5 4 1 50

3 3 9 1 50

PINTO CO. GENERAL JOURNAL Date Nov.

Account Title and Description 5

Page 13 Post Ref.

Dr.

Office Salaries Expense

1 1 9 4 00

Sales Salaries Expense

2 1 9 7 50

Cr.

Income Tax Payable

5 2 4 20

CPP Payable

1 1 9 23

EI Payable

2 2 42

Health Insurance Payable

4 8 00

Wages and Salaries Payable

2 6 7 7 65

To record payroll expense for the week of Nov. 5

9-13

PROBLEM 9B-2., Cont. NICKELS COMPANY - PAYROLL REGISTER Deductions IT*

Net Pay

Union Dues

Chq. No.

Expense Accounts

CPP

Office

Sales

1 4 8 25

4 2 08

1 7 31

1 4 00

6 9 8 36

6 6 35

2 5 33

1 0 89

1 4 00

4 6 3 43

2 1 6 80

5 2 48

2 1 28

1 4 00

8 2 5 44

1 1 3 0 00

9 1 20

3 0 77

1 2 96

1 4 00

5 4 1 07

6 9 0 00

4 6 15

2 4 34

1 0 52

1 4 00

4 6 4 99

5 6 0 00

5 6 8 75

1 7 5 00

7 2 96

7 0 00 2 9 9 3 29

2 7 4 0 00 1 1 4 0 00

9 2 0 00 5 8 0 00

PROBLEM 9B-3., Cont. PINTO CO. - PAYROLL REGISTER Deductions IT**

CPP

Health

1 5 1 90

4 2 83

6 6 90

2 9 88

2 4 5 75

2 4 06 *

5 9 65

2 2 46

9 80

5 2 4 20

1 4 6 65

2 2 42

1 2 62

Net Pay

Chq. No.

1 2 00

7 2 8 27

1 2 00

5 5 0 60

1 2 00

9 8 0 69

1 2 00

4 1 8 09

4 8 00 2 6 7 7 65

Expense Accounts Office

Sales 9 3 5 00

6 7 2 00 1 2 6 2 50 5 2 2 00 1 1 9 4 00 2 1 9 7 50

* To the maximum of $2,356.20

PROBLEM 9B-2. Income Tax:

Federal Income Tax +

Provincial Income Tax =

*Total Income Tax

Jenny Quan

98.95

49.30

148.25

Frank Sloan Alberta Nobel Jeremy Gold Nancy James Total Income Tax

43.45 145.55 62.15 28.20

22.90 71.25 29.05 17.95

66.35 216.80 91.20 46.15 568.75

Federal Income Tax +

Provincial Income Tax =

**Total Income Tax

PROBLEM 9B-3. Income Tax: Mary Cardinal

99.30

52.60

151.90

Bill Smith Joe Kingle Anita Tsui Total Income Tax

43.60 165.45 38.40

23.30 80.30 21.25

66.90 245.75 59.65 524.20

9-14

PROBLEM 9B-4. BYSCANE CO. - PAYROLL REGISTER Net Claim Code

Employee

Weekly Salary

Cumulative CPP

IT*

Jim Ryan

8 7 0 00

1 6 9 2 40

1 1 3 70

Emma LaPierre

9 6 0 00

1 8 7 1 42

1 6 3 20

Jean Arnold

9 8 0 00

1 8 7 9 66

1 6 9 70

Bob Sylvan

1 2 4 0 00

2 3 3 8 18

2 4 6 40

4 0 5 0 00

6 9 3 00

BYSCANE CO. GENERAL JOURNAL Date Sept

Account Title and Description

Page 9 Post Ref.

Dr.

Cr.

23 Factory Salaries Expense

610

2 1 1 0 00

Office Salaries Expense

612

1 9 4 0 00

Income Tax Payable

210

6 9 3 00

CPP Payable

212

1 4 6 74

EI Payable

214

5 2 91

Union Dues Payable

216

5 6 00

Health Insurance Payable

218

8 4 00

Salaries Payable

220

3 0 1 7 35

To record payroll for September 23

Income Tax: Jim Ryan Emma LaPierre Jean Arnold Bob Sylvan Total Income Tax

Federal Income Tax +

Provincial Income Tax =

*Total Income Tax

73.65 107.45 112.55 166.25

40.05 55.75 57.15 80.15

113.70 163.20 169.70 246.40 693.00

9-15

PROBLEM 9B-4., Cont. BYSCANE CO. - PAYROLL REGISTER Deductions

Factory 8 7 0 00

3 9 61

1 6 36

1 4 00

2 8 00

6 5 8 33

4 4 06

1 8 09

1 4 00

2 8 00

6 9 2 65

9 6 0 00

4 5 05

1 8 46

1 4 00

2 8 00

7 0 4 79

9 8 0 00

1 4 00

9 6 1 58

5 6 00

8 4 00 3 0 1 7 35

1 4 6 74

5 2 91

* To CPP maximum of $2,356.20 for the year.

9-16

Health

Chq. No.

CPP

1 8 02 *

Union Dues

Expense Accounts

Net Pay

Office

1 2 4 0 00 2 1 1 0 00 1 9 4 0 00

9-17

Sept

Date

Bob Sylvan

Jean Arnold

3 0 7 1 35

3 0 1 7 35

7 0 4 79

6 9 2 65

6 5 8 33

Cash Cr.

9 6 1 58

Purchases Discounts Cr.

Page 20

9 6 1 58

7 0 4 79

6 9 2 65

Salaries Payable Dr.

Emma LaPierre

Accounts Payable Dr.

Sundry Dr.

6 5 8 33

Post Ref.

Jim Ryan

Account Payment to

BYSCANE CO. CASH PAYMENTS JOURNAL

Chq. No.

PROBLEM 9B-4., Cont.

PROBLEM 9B-4., Cont. INCOME TAX PAYABLE Date Sept

Explanation 23

ACCOUNT NO. 210

Post Ref.

Debit

GJ9

Credit

DR CR

Balance

6 9 3 00

CPP PAYABLE Date Sept

Explanation 23

ACCOUNT NO. 212 Post Ref.

Debit

GJ9

Credit

DR CR

Balance

1 4 6 74

EI PAYABLE Date Sept

Explanation 23

ACCOUNT NO. 214 Post Ref.

Debit

Credit 5 2 91

GJ9

UNION DUES PAYABLE Date Sept

Explanation 23

Post Ref.

Debit

Credit 5 6 00

GJ9

Sept

Explanation 23

Post Ref.

Debit

Credit 8 4 00

GJ9

Explanation

Post Ref.

GJ9

Sept

GJ10

Debit

Sept

9-18

5 6 00

DR CR Cr

Balance 8 4 00

DR CR

Balance

3 0 1 7 35

ACCOUNT NO. 610

Post Ref.

Debit

GJ9

2 1 1 0 00

Credit

OFFICE SALARIES EXPENSE Date

Balance

Credit

FACTORY SALARIES EXPENSE Explanation

DR CR

ACCOUNT NO. 220

Sept

Date

5 2 91

ACCOUNT NO. 218

SALARIES PAYABLE Date

Balance

ACCOUNT NO. 216

HEALTH INSURANCE PAYABLE Date

DR CR

Balance

2 1 1 0 00

ACCOUNT NO. 612

Post Ref.

Debit

GJ9

1 9 4 0 00

Credit

DR CR

Balance

1 9 4 0 00

SOLUTIONS TO C PROBLEMS PROBLEM 9C-1. HOURLY RATE

REG. HOURS

OT HOURS

GROSS EARNINGS

A. Al Topping

$ 23.00

$1,058.00

B. Barb Frank C. Amos Ng

21.00

871.50

14.00

D. Carl Holdman

18.50

609.00 934.25

E. Erika Hance

15.50

875.75

EMPLOYEE

(40 x $23.00) + (4 x $34.50) = $1,058.00

(40 x $21.00) + (1 x $31.50) = $871.50

(39 x $14.00) + (3 x $21.00) = $609.00

(40 x $18.50) + (7 x $27.75) = $934.25

(40 x $15.50) + (11 x $23.25) = $875.75

PROBLEM 9C-2. WAYLON COMPANY - PAYROLL REGISTER Week Ended: February 14 Net Claim Code

Weekly Wages

Al Topping

1 0 5 8 00

Barb Frank

8 7 1 50

Amos Ng

6 0 9 00

Carl Holdman

9 3 4 25

Erika Hance

8 7 5 75

Employee

4 3 4 8 50

9-19

PROBLEM 9C-3. WAYLON COMPANY - PAYROLL REGISTER Week Ended: February 21 Net Claim Code

Employee

Weekly Wages

Al Topping

9 7 8 00

Barb Frank

8 0 0 00

Amos Ng

6 8 0 00

Carl Holdman

7 9 2 00

Erika Hance

5 5 8 00 3 8 0 8 00

PROBLEM 9C-2., Cont. WAYLON COMPANY - PAYROLL REGISTER Week Ended: February 14 Deductions IT*

Chq. #

CPP

1 9 0 30

4 9 01

1 9 87

3 2 00

1 6 00

7 5 0 8 2 1424

1 3 3 90

3 9 86

1 6 36

4 8 00

1 6 00

6 1 7 3 8 1425

6 4 05

2 6 81

1 1 46

3 2 00

1 6 00

4 5 8 6 8 1426

1 3 5 75

4 2 83

1 7 54

3 2 00

1 6 00

6 9 0 1 3 1427

1 3 5 60

4 0 10

1 6 47

4 8 00

1 6 00

6 1 9 5 8 1428

6 5 9 60

1 9 8 61

8 1 70

1 9 2 00

Feb 14 Income Tax: Employee Name

Medical Plan Union Dues

Net Pay

8 0 00 3 1 3 6 59

Federal Income Tax +

Provincial Income Tax =

*Total Income Tax

Al Topping

126.65

63.65

190.30

Barb Frank

88.85

45.05

133.90

Amos Ng

41.85

22.20

64.05

Carl Holdman

87.15

48.60

135.75

Erika Hance

90.55

45.05

135.60

Total Income Tax

9-20

659.60

PROBLEM 9C-3, Cont. WAYLON COMPANY - PAYROLL REGISTER Week Ended: February 21 IT**

Deductions EI

CPP

Medical Plan Union Dues

Net Pay

Chq. #

1 6 5 65

4 5 05

1 8 37

3 2 00

1 6 00

7 0 0 9 3 1443

1 1 5 45

3 6 22

1 5 06

4 8 00

1 6 00

5 6 9 2 7 1444

7 6 50

3 0 28

1 2 77

3 2 00

1 6 00

5 1 2 4 5 1445

9 3 35

3 5 82

1 4 89

3 2 00

1 6 00

5 9 9 9 4 1446

6 6 35

2 4 24

1 0 48

4 8 00

1 6 00

3 9 2 9 3 1447

5 1 7 30

1 7 1 61

7 1 57

1 9 2 00

8 0 00 2 7 7 5 52

Feb 21 Income Tax: Employee Name

Federal Income Tax +

Provincial Income Tax =

*Total Income Tax

Al Topping

109.50

56.15

165.65

Barb Frank

76.70

38.75

115.45

Amos Ng

50.80

25.70

76.50

Carl Holdman

60.35

33.00

93.35

Erika Hance

43.40

22.95

66.35

Total Income Tax

517.30

9-21

PROBLEM 9C-4. WAYLON COMPANY GENERAL JOURNAL Date

Feb

Account Title and Description

14 Wages Expense

Post Ref.

Dr.

Cr.

4 3 4 8 50

Income Taxes Payable

6 5 9 60

CPP Payable

1 9 8 61

EI Payable

8 1 70

Medical Plan Payable

1 9 2 00

Union Dues Payable

8 0 00

Wages Payable

3 1 3 6 59

To record wages per Payroll Summary this date

PROBLE M 9C-5.

Feb

21 Wages Expense Income Taxes Payable

5 1 7 30

CPP Payable

1 7 1 61

EI Payable

7 1 57

Medical Plan Payable

1 9 2 00

Union Dues Payable

8 0 00

Wages Payable To record wages per Payroll Summary this date

9-22

3 8 0 8 00

2 7 7 5 52

PROBLEM 9C-6. MARLIN COMPANY - PAYROLL REGISTER Hours

Net Claim Code

Rate

Regular

Overtime

Total

Fred Mora

24.00

1 1 0 4 00

Pat Samuels

20.00

8 5 0 00

Emilia Leung

14.50

7 5 4 00

Keith Jones

18.00

7 2 0 00

Dave Jarvic

N/A

1 4 0 0 00

Employee

N/A

Weekly Earnings

4 8 2 8 00

1 (37 x $24.00) + (6 x $36.00) = $1,104.00

(Sales)

2 (38 x $20.00) + (3 x $30.00) = $ 850.00

(Sales)

3 (40 x $14.50) + (8 x $21.75) = $ 754.00

(Admin)

4 (40 x $18.00)

(Admin)

= $ 720.00

(Manager)

9-23

PROBLEM 9C-6., Cont. MARLIN COMPANY - PAYROLL REGISTER Deductions Union Dues

Expense Accounts

Chq. No.

IT*

CPP

2 0 5 25

5 1 24

2 0 72

9 00

2 6 00

7 9 1 79

1 1 0 4 00

1 2 8 45

3 8 62

1 5 96

9 00

4 8 00

6 0 9 97

8 5 0 00

9 3 90

3 3 94

1 4 16

9 00

2 6 00

5 7 7 00

7 5 4 00

6 9 45

3 2 26

1 3 53

9 00

4 8 00

5 4 7 76

7 2 0 00

3 0 190 7 9 8 95

1 5 6 06

6 4 37

3 6 00

Medical

Net Pay

Sales

Admin.

Manager

4 8 00 1 0 5 0 10

1 4 0 000

1 9 6 00 3 5 7 6 62

1 9 5 4 00 1 4 7 4 00 1 4 0 000

Income Tax: Employee Name

Federal Income Tax +

Provincial Income Tax =

*Total Income Tax

Fred Mora

137.20

68.05

205.25

Pat Samuels

85.50

42.95

128.45

Emilia Leung

61.95

31.95

93.90

Keith Jones

44.20

25.25

69.45

Dave Jarvic

203.60

98.30

301.90

Total Income Tax

798.95 MARLIN CO. GENERAL JOURNAL

Date Oct

Account Title and Description

Post Ref.

Dr.

20 Sales Wages

1 9 5 4 00

Admin Wages

1 4 7 4 00

Managerial Salaries

1 4 0 0 00

Cr.

Income Tax Payable

7 9 8 95

CPP Payable

1 5 6 06

EI Payable

6 4 37

Union Dues Payable

3 6 00

Medical Plan Payable

1 9 6 00

Salaries and Wages Payable

To record payroll this date

9-24

Page 1

3 5 7 6 62

PROBLEM 9C-7. COMET ENGINEERING - PAYROLL REGISTER Net Claim Code

Employee

Gross Earnings

Cumulative CPP

IT*

Donna Alvarez

1 6 4 0 00

2 2 8 7 46

3 7 1 20

Joan Kemp

1 4 9 0 00

2 3 4 0 92

3 1 2 65

John Harper

1 2 9 0 00

1 6 3 0 72

2 6 5 35

Tim Culver

1 3 4 0 00

9 8 4 37

2 7 6 25

May Silver

9 3 6 00 1

6 4 5 23

1 5 5 95

Joe Polemko

6 9 0 00 2

1 0 2 0 84

7 1 00

Yourself

8 7 5 00

8 2 3 65

1 3 1 55

8 2 6 1 00

1 5 8 3 95

1 (40 x $18.00) + (8 x $27.00) = $936.00 2 (37 x $15.00) + (6 x $22.50) = $690.00 3 To maximum of $2,356.20 4 Maximum $47,400 earned for the year.

Income Tax: Employee Name

Federal Income Tax +

Provincial Income Tax =

*Total Income Tax

Donna Alvarez

247.30

123.90

371.20

Joan Kemp

209.55

103.10

312.65

John Harper

179.85

85.50

265.35

Tim Culver

187.35

88.90

276.25

May Silver

102.35

53.60

155.95

Joe Polemko

46.95

24.05

71.00

Yourself

87.50

44.05

131.55

Total Income Tax

1,583.95

9-25

PROBLEM 9C-7., Cont. COMET ENGINEERING INC. - PAYROLL REGISTER Deductions CPP

6 8 74

Life Ins.

Disability

Medical

Charitable

Net Pay

Chq. No.

1 9 00

3 2 00

3 6 00

2 5 00 1 0 8 8 06

574

1 5 2 8 3

1 2 00

2 8 00

3 6 00

2 5 00 1 0 6 1 07

575

6 0 40

2 4 24

1 0 00

2 4 00

1 8 00

8 7 0 01

576

6 2 87

2 5 18

8 00

2 5 00

3 6 00

1 8 00

8 8 8 70

577

4 3 07

1 7 60

1 8 00

7 0 1 38

578

3 0 77

1 2 96

3 6 00

5 00

5 3 4 27

579

3 9 86

1 6 47

6 00

1 8 00

5 00

6 4 0 12

580

3 2 0 99

9 6 45

5 5 00

1 2 7 00

1 9 8 00

9 6 00 5 7 8 3 61

COMET ENGINEERING GENERAL JOURNAL Date Aug

Account Title and Description

Post Ref.

Dr.

20 Professional Salaries Expense

5 7 6 0 00

Casual Wages Expense

1 6 2 6 00

Office Wages Expense

8 7 5 00

Income Tax Payable

Cr.

1 5 8 3 95

CPP Payable

3 2 0 99

EI Payable

9 6 45

Life Insurance Liability

5 5 00

Disability Insurance Liability

1 2 7 00

Medical Plan Liability

1 9 8 00

Charitable Deductions Liability Salaries and Wages Payable To record payroll for week ending August 20

9-26

Page 21

9 6 00 5 7 8 3 69

PROBLEM 9C-7., Cont. COMET ENGINEERING CASH PAYMENTS JOURNAL

Date

Chq. Post No. Account Payment to Ref.

Sundry Account Dr .

Accounts Payable Dr.

Page 8 Wages & Salaries Payable Dr.

Cash Cr.

Aug 20

574

Donna Alvarez

1 0 8 8 06

575

Joan Kemp

1 0 6 1 07

576

John Harper

8 7 0 01

577

Tim Culver

8 8 8 70

578

May Silver

7 0 1 38

579

Joe Polemko

5 3 4 27

580

Yourself

6 4 0 12

5 7 8 3 61

SOLUTION TO ON-THE-JOB TRAINING, #T-1. Gross Pay for Jim Roy: 40 hours @ $14.00 = 8 hours @ $28.00 = Total:

$560.00 224.00 $784.00

Gross Pay for Janice Alter: 40 hours @ $14.00 =

$560.00

8 hours @ $21.00 = 8 hours @ $28.00 = Total:

168.00 224.00 $952.00

Advice to Bert is that as the owner of Small Co., he cannot take a salary as such - he will be taxed on the profits of the proprietorship. He may take a monthly withdrawal if he chooses.

SOLUTION TO ON-THE-JOB TRAINING, #T-2. Marcy must pay the CPP and EI at her new place of employment. She will get a refund of the extra premiums when she files her income tax return in the following calendar year, but in the meantime, she is out the cash. The same refund is not available to her new employer. Employers must remit their share of CPP and EI, but will not be able to claim a refund.

9-27

CONTINUING PROBLEM PRECISION COMPUTER CENTRE SALES JOURNAL Date 2016

Account Debited

Nov. 1 4

Page 3

Invoice No.

Terms

Post Ref.

Dr. Acc. Receivable Cr. Sales

Vita Needle

12686

6 8 0 0

Accu Pac Inc.

12687

3 9 0 0

10 7 0 0

(1020/4000)

PRECISION COMPUTER CENTRE CASH RECEIPTS JOURNAL Date 2016

Cash Dr.

Sales Disc. Dr.

Nov. 12

5 0 0 00

8 0 0 00

25 3 4 0 0 0 0 4 7 0 0 00

3 4 0 0 00 4 7 0 0 00 (1020))

(1000)

Acc. Rec. Cr.

Sales Cr.

Page 3 Sundry Account

Post Ref.

Taylor Golf, Inv. 12685 Taylor Golf, Inv. 12685 Vita Needle, Inv. 12686

PRECISION COMPUTER CENTRE CASH PAYMENTS JOURNAL Date 2016

9-28

Accounts Payable Dr.

Page 3 Purchases Discounts Cr.

Post Ref.

Sundry Dr.

258 Wages Payable - L. Klumm 259 Wages Payable - A. Hall

2010 2010

6 0 5 04 6 7 3 85

15 260 Wages Payable - L. Klumm

2010

5 4 8 35

6 0 5 04 6 7 3 85 5 4 8 35

261 Wages Payable - A. Hall 22 262 Wages Payable - L. Klumm 263 Wages Payable - A. Hall

2010

5 7 6 41 5 1 8 58 5 6 2 63

29 264 Wages Payable - L. Klumm

2010

6 0 5 04

265 Wages Payable - A. Hall

2010

7 1 2 36

4 8 0 2 26

(X)

(1000)

Nov. 8

Chq. No.

Amount Cr.

Account Debited

2010

Cash Cr.

CONTINUING PROBLEM, Cont. PRECISION COMPUTER CENTRE - PURCHASES JOURNAL Date 2016

Account Credited

Accounts Payable Cr.

Inv. PO Post No. Number Ref.

Nov. 5 System Design Furn 8771

4013

19 Multi Systems

1794

Sundry Purchases Dr.

1 4 0 0 00

11 West Bell 4014

Page 2

Account Name

Post Ref.

Amount Dr.

Computer Equip 1080 1 4 0 0 0 0

1 5 0 00

Phone Expense

5040

1 5 0 00

4 5 0 00

Office - Fax

1090

4 5 0 00

2 0 0 0 00

(2 00 0)

(X)

PRECISION COMPUTER CENTRE – GENERAL JOURNAL

Page 4

Date Account Title and Description 2016 Nov. 8 Wages Expense Income Tax Payable CPP Payable EI Payable Wages Payable

Post Ref. 5110

Dr.

Cr.

1 6 2 0 00 2 3 7 7 3 3 0 1 2 7 8

2020 2030 2040 2010

30 35 46 89

To record wages for first week of Nov. 15 Wages Expense

5110

1 4 0 0 00

Income Tax Payable CPP Payable EI Payable

2020

2040

1 8 6 40 6 2 54 2 6 30

Wages Payable To record wages for second week of Nov.

2010

1 1 2 4 76

22 Wages Expense

2030

5110

1 3 4 0 00

Income Tax Payable

2020

1 7 4 05

CPP Payable

2030

5 9 57

EI Payable

2040

2 5 17

Wages Payable

2010

1 0 8 1 21

To record wages for third week of Nov. 29 Wages Expense

5110

1 6 8 0 00

Income Tax Payable CPP Payable

2020

2 5 4 70

2030

7 6 32

EI Payable

2040

3 1 58

Wages Payable

2010

1 3 1 7 40

To record wages for fourth week of Nov. 29 Rent Expense Prepaid Rent

5020 1025

8 0 0 00 8 0 0 00

9-29

CONTINUING PROBLEM, Cont. PRECISION COMPUTER CENTRE ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER NAME

ACCU PAC, INC.

ADDRESS

11151 - 118 STREET, EDMONTON, AB T5S 2S2

Date 2016 Nov.

Explanation 1

AC101

Post Ref.

Debit

Credit

✔

Balance

SJ3

0 3 9 0 0 00

NAME

CARSON ENGINEERING CORP.

ADDRESS

9939 EDMONTON WAY, EDMONTON, AB T5A 9A2

Date 2016 Nov.

Explanation 1

NAME ADDRESS

9-30

CA101

Debit

Credit

Dr. Balance 6 2 4 0 00

ANTHONY J. PITALE PI101 229 DIAMOND RICH AVENUE, EDMONTON, AB T4K 2L7 Explanation

3 9 0 0 00

✔

Balance

Date 2016 Nov.

Post Ref.

Dr. Balance

Balance

Post Ref.

✔

Debit

Credit

Dr. Balance 1 6 0 0 00

CONTINUING PROBLEM, Cont. PRECISION COMPUTER CENTRE ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER NAME

TAYLOR GOLF

ADDRESS

232 TAYLOR HEIGHTS, EDMONTON, AB T6E 6R2

Date 2016

Explanation

Nov.

TA101

Post. Ref.

Debit

Credit

✔

Balance

4 5 0 0 00

CRJ3

5 0 0 00

4 0 0 0 00

CRJ3

8 0 0 00

3 2 0 0 00

Credit

Dr. Balance

NAME

VITA NEEDLE COMPANY

ADDRESS

SUITE 204, 10091 89 STREET, EDMONTON, AB T6F 1S1

Date 2016 Nov.

Dr. Balance

Explanation 1

Balance

VI101

Post Ref.

Debit

✔

SJ3

CRJ3

0 6 8 0 0 00

6 8 0 0 00 3 4 0 0 00

3 4 0 0 00

PRECISION COMPUTER CENTRE SCHEDULE OF ACCOUNTS RECEIVABLE NOVEMBER 30, 2016 Accu Pac, Inc.

3 9 0 0 00

Carson Engineering Corp.

6 2 4 0 00

Anthony Pitale

1 6 0 0 00

Taylor Golf

3 2 0 0 00

Vita Needle

3 4 0 0 00 18 3 4 0 00

9-31

CONTINUING PROBLEM, Cont. PRECISION COMPUTER CENTRE ACCOUNTS PAYABLE SUBSIDIARY LEDGER NAME ADDRESS

ALPHA OFFICE CO. A1 121 WHITEMUD FREEWAY, EDMONTON, AB T6T 2Z1

Date 2016

Explanation

Nov.

Post Ref .

Debit

Credit

✔

Balance

NAME

CITY NEWSPAPER

ADDRESS

10098 EDMONTON WAY, EDMONTON, AB T5A 9S2

Date 2016

Explanation

Nov.

Post Ref .

Debit

Credit

✔

Balance

COMPUTER CONNECTION

ADDRESS

2400, 4421 16 AVENUE, EDMONTON, AB T6R 1A1 Explanation

Nov.

Post Ref .

Debit

Credit

✔

Balance

MULTI SYSTEMS, INC.

ADDRESS

310 N. ESCONDIDO BLVD., EDMONTON, AB T7G 1P1

Nov.

Explanation 1

Balance

9-32

Cr. Balance 0

NAME

Date 2016

Cr. Balance 3 7 5 00

NAME

Date 2016

Cr. Balance

Post Ref .

Debit

Credit

✔ PJ2

Cr. Balance 0

4 5 0 00

CONTINUING PROBLEM, Cont. PRECISION COMPUTER CENTRE ACCOUNTS PAYABLE SUBSIDIARY LEDGER NAME ADDRESS

STAPLES S1 43 ESCONDIDO AVENUE, EDMONTON, AB T7G

Date 2016

Post Ref .

Explanation

Nov.

Debit

Credit

✔

Balance

2 5 0 00

NAME

SYSTEM DESIGN FURNITURE

ADDRESS

43 ESCONDIDO AVENUE, EDMONTON, AB T7G

Date 2016

Post Ref .

Explanation

Nov.

Debit

PJ2

NAME

WEST BELL CANADA

ADDRESS

10149 EDMONTON WAY, EDMONTON, AB T5A 9T1

Date 2016 Nov.

Explanation 1

Cr. Balance

Balance

Credit

Cr. Balance

1 4 0 0 00

Credit

Cr. Balance

Post Ref .

Debit

✔

0 1 5 0 00

PJ2

1 5 0 00

PRECISION COMPUTER CENTRE SCHEDULE OF ACCOUNTS PAYABLE NOVEMBER 30, 2016 City Newspaper

3 7 5 00

Multi Systems, Inc.

4 5 0 00

Staples

2 5 0 00

System Design Furniture

West Bell Canada

4 0 0 00 1 5 0 00

6 2 5 00

9-33

CONTINUING PROBLEM, Cont. GENERAL LEDGER OF PRECISION COMPUTER CENTRE NAME: CASH Date 2016 Nov.

ACCOUNT NO. Explanation

Post Ref.

Debit

Credit

✔

Balance

CRJ3

CPJ3

4 7 0 0 00 4

8 0 2 26

NAME: PETTY CASH Date 2016 Nov.

Explanation 1

Debit

NAME: ACCOUNT RECEIVABLE Date 2016 Nov.

Explanation 1

Post Ref.

SJ3

CRJ3

Debit

Nov.

9-34

Explanation 1

Balance

15 9 7 4 12

20 6 7 4 12

15 8 7 1 86

1 0 0 00

ACCOUNT NO.

1020

10 7 0 0 0 0 4

7 0 0 00

DR CR

Balance

12 3 4 0 00

23 0 4 0 00

18 3 4 0 00

ACCOUNT NO. Post Ref.

✔

Debit

Credit

1010

Credit

NAME: PREPAID CLEANING Date 2016

Balance

✔

Balance

DR CR

Credit

✔

Balance

DR CR

ACCOUNT NO. Post Ref.

1000

1023

DR CR

Balance

6 0 0 00

CONTINUING PROBLEM, Cont. GENERAL LEDGER OF PRECISION COMPUTER CENTRE NAME: PREPAID CLEANING Date 2016 Nov.

Explanation 1

ACCOUNT NO. Post Ref.

Debit

Credit

✔

Balance

29 NAME: SUPPLIES Date 2016 Nov.

Post Ref.

Debit

Credit

✔

Balance

NAME: MERCHANDISE INVENTORY Date 2016 Nov.

Explanation 1

Post Ref.

Debit

Credit

✔

Balance

NAME: COMPUTER SHOP EQUIPMENT Date 2016 Nov.

Explanation 1

Post Ref.

Debit

Credit

✔

Balance

PJ2

1 4 0 0 00

NAME: ACCUMULATED AMORTIZATION, COMPUTER SHOP Date 2016 Nov.

Explanation 1

Post Ref.

Debit

Credit

✔

Balance

Explanation

Post Ref.

Debit

Credit

✔

Balance

PJ2

4 5 0 00

NAME: ACCUMULATED AMORTIZATION, OFFICE EQUIPMENT Date 2016 Nov.

Explanation 1

Balance

8 0 0 00 0

Post Ref.

✔

Debit

1030

DR CR

Balance

7 9 2 00

ACCOUNT NO.

1040

DR CR

Balance

7 1 0 00

ACCOUNT NO.

1080

DR CR

Balance

3 8 0 0 00

5 2 0 0 00

ACCOUNT NO.

NAME: OFFICE EQUIPMENT Date 2016 Nov. 1

Balance

ACCOUNT NO. Explanation

DR CR

8 0 0 00

GJ4

1025

DR CR

1081 Balance

9 9 00

ACCOUNT NO.

1090

DR CR

Balance

1 0 5 0 00

1 5 0 0 00

ACCOUNT NO. Credit

DR CR Cr

1091 Balance 2 0 00

9-35

CONTINUING PROBLEM, Cont. GENERAL LEDGER OF PRECISION COMPUTER CENTRE NAME: ACCOUNT PAYABLE Date 2016 Nov.

Explanation 1

ACCOUNT NO. Post Ref.

Debit

Credit

✔

Balance

2 0 0 0 00

PJ2

NAME: WAGES PAYABLE Date 2016 Nov.

Explanation 8

Balance

Post Ref.

Debit

GJ4 CPJ3

6 0 5 04

CPJ3

6 7 3 85

GJ4

CPJ3

5 4 8 35

CPJ3

5 7 6 41

GJ4

CPJ3

5 1 8 58

CPJ3

5 6 2 63

GJ4

CPJ3

6 0 5 04

CPJ3

7 1 2 36

Nov.

6 2 5 00

2 6 2 5 00

Balance

1 2 7 8 89

6 7 3 85 0

1 1 2 4 76

5 7 6 41 0

1 0 8 1 21

5 6 2 63 0

1 3 1 7 40

7 1 2 36 0

ACCOUNT NO. Post Ref.

Debit

2010

2020

Credit

DR CR

Balance

GJ4

2 3 7 30

GJ4

1 8 6 40

4 2 3 70

GJ4

1 7 4 05

5 9 7 75

GJ4

2 5 4 70

8 5 2 45

ACCOUNT NO.

2030

Date 2016

9-36

DR CR

NAME: CPP PAYABLE

Nov.

Balance

Credit

NAME: INCOME TAXES PAYABLE Explanation

DR CR

ACCOUNT NO.

Date 2016

2000

Explanation

Post Ref.

Debit

Credit

DR CR

Balance

GJ4

7 3 35

GJ4

6 2 54

1 3 5 89

GJ4

5 9 57

1 9 5 46

GJ4

7 6 32

2 7 1 78

CONTINUING PROBLEM, Cont. GENERAL LEDGER OF PRECISION COMPUTER CENTRE NAME: EI PAYABLE Date 2016 Nov.

Explanation

ACCOUNT NO. Post Ref.

Debit

Balance

GJ4

3 0 46

GJ4

2 6 30

5 6 76

GJ4

2 5 17

8 1 93

GJ4

3 1 58

1 1 3 51

ACCOUNT NO.

3000

NAME: T. FREEDMAN, CAPITAL Date 2016 Nov.

Explanation 1

Post Ref.

Debit

Credit

✔

Balance

NAME: T. FREEDMAN, WITHDRAWALS Date 2016 Nov.

Explanation 1

Post Ref.

Debit

Credit

✔

Balance

Date 2016 Nov.

Post Ref.

Debit

Credit

✔

Balance

NAME: SALES Date 2016 Nov.

Post Ref.

Debit

Credit

✔

Balance

10 7 0 0 00

SJ3

NAME: SALES RETURNS AND ALLOWANCES Date 2016

Explanation 1

Balance

7 4 0 6 00

3010

DR CR

Balance

4 0 3 0 00

4000

DR CR

Balance

23 7 4 9 82

ACCOUNT NO. Explanation

Balance

ACCOUNT NO.

Explanation 1

DR CR

ACCOUNT NO.

NAME: SERVICE REVENUE

Nov.

DR CR

Credit

2040

Post Ref.

✔

4010

DR CR

Balance

27 1 0 0 00

37 8 0 0 00

ACCOUNT NO. Debit

Credit

4020

DR CR

Balance

4 0 0 00

9-37

CONTINUING PROBLEM, Cont. GENERAL LEDGER OF PRECISION COMPUTER CENTRE NAME: SALES DISCOUNTS Date 2016 Nov.

Explanation 1

ACCOUNT NO. Post Ref.

Debit

Credit

✔

Balance

NAME: ADVERTISING EXPENSE Date 2016

Explanation

Nov.

Post Ref.

Debit

Credit

✔

Balance

NAME: CLEANING EXPENSE Date 2016

Explanation

Nov.

Post Ref.

Debit

Credit

✔

Balance

NAME: RENT EXPENSE Date 2016 Nov.

Explanation 1

Post Ref.

Debit

Credit

✔

Balance

GJ4

8 0 0 00

NAME: UTILITIES EXPENSE Date 2016 Nov.

Explanation 1

Debit

Credit

✔

Balance

DR CR

Balance

2 2 0 00

ACCOUNT NO.

5010

DR CR

Balance

4 8 0 00

ACCOUNT NO.

5015

DR CR

Balance

3 0 0 00

ACCOUNT NO.

5020

DR CR

Balance

8 0 0 00

1 6 0 0 00

ACCOUNT NO. Post Ref.

4030

5030

DR CR

Balance

2 7 0 00

NAME: PHONE EXPENSE Date 2016 Nov.

Explanation 1

ACCOUNT NO. Post Ref.

Debit

Credit

✔

Balance

PJ2

1 5 0 00

NAME: POSTAGE EXPENSE Date 2016 Nov.

9-38

Explanation 1

Balance

Post Ref.

✔

Debit

Credit

5040

DR CR

Balance

2 8 1 00

4 3 1 00

ACCOUNT NO.

5070

DR CR Dr

Balance 5 0 00

CONTINUING PROBLEM, Cont. GENERAL LEDGER OF PRECISION COMPUTER CENTRE NAME: MISCELLANEOUS EXPENSE Date 2016 Nov.

Explanation 1

ACCOUNT NO. Post Ref.

Debit

Credit

✔

Balance

NAME: WAGES EXPENSE Date 2016 Nov.

Explanation 1

Post Ref.

Debit

Credit

✔

Balance

2 0 00

ACCOUNT NO.

5110

DR CR

Balance

8 7 6 0 20

GJ4

1 6 2 0 00

10 3 8 0 20

GJ4

1 4 0 0 00

11 7 8 0 20

GJ4

1 3 4 0 00

13 1 2 0 20

GJ4

1 6 8 0 00

14 8 0 0 20

NAME: PURCHASES Date 2016 Nov.

Explanation 1

ACCOUNT NO. Post Ref.

Debit

Credit

✔

Balance

NAME: PURCHASES RETURNS AND ALLOWANCES Date 2016 Nov.

Explanation 1

Post Ref.

Debit

Credit

✔

Balance

NAME: PURCHASES DISCOUNTS Date 2016 Nov.

DR CR

5100

Explanation 1

Balance

Post Ref.

✔

Debit

Credit

5600

DR CR

Balance

9 5 0 00

ACCOUNT NO.

5610

DR CR

Balance

1 0 0 00

ACCOUNT NO.

5620

DR CR Cr

Balance 1 7 50

9-39

CONTINUING PROBLEM, Cont. PRECISION COMPUTER CENTRE TRIAL BALANCE NOVEMBER 30, 2016 Cash

15 8 7 1 86

Petty Cash Accounts Receivable Prepaid Cleaning

1 0 0 00 18 3 4 0 00 6 0 0 00

Prepaid Rent Supplies

7 9 2 00

Merchandise Inventory

7 1 0 0 00

Computer Shop Equipment

5 2 0 0 00

Accumulated Amortization, Computer Shop Equipment Office Equipment

9 9 00 1 5 0 0 00

Accumulated Amortization, Office Equipment

2 0 00

Accounts Payable

2 6 2 5 00

Income Tax Payable

8 5 2 45

CPP Payable

2 7 1 78

EI Payable

1 1 3 51

T. Freedman, Capital T. Freedman, Withdrawals

7 4 0 6 00 4 0 3 0 00

Service Revenue

23 7 4 9 82

Sales

37 8 0 0 00

Sales Returns and Allowances

4 0 0 00

Sales Discounts

2 2 0 00

Advertising Expense

4 8 0 00

Cleaning Expense

3 0 0 00

Rent Expense

1 6 0 0 00

Utilities Expense

2 7 0 00

Phone Expense

4 3 1 00

Postage Expense

5 0 00

Miscellaneous Expense

2 0 00

Wages Expense Purchases

14 8 0 0 20 9 5 0 00

Purchases Returns and Allowances

1 0 0 00

Purchases Discounts

1 7 50 73 0 5 5 06

9-40

73 0 5 5 06

9-41

1 1

Nov 15 Lance Klumm 222

15 Aurelle Hall

Income Tax:

8 0 0 00

71.10 98.95

20.00

7 6 0 00

7 0 0 00

6 4 0 00

Nov. 29 Lance Klumm Nov. 29 Aurelle Hall

20.00

Federal Income Tax + 54.30 63.25

Regular

1 8 6 40

1 4 0 0 00

2 5 4 70 8 5 2 45

1 6 8 0 00 6 0 4 0 00

35.35 49.30

2 7 1 78

7 6 32

4 2 08

3 4 24

5 9 57

3 1 27

CPP 2 8 30

Deductions

88.60 97.80

106.45 148.25

*Total Income Tax 81.10 92.95

1 4 8 25

9 2 0 00

1 0 6 45

1 7 4 05

1 3 4 0 00

7 6 0 00

9 2 95

IT** 8 1 10 7 0 0 00

6 4 0 00

Provincial Income Tax = 26.80 29.70

1 2 0 00

Overtime

Gross Earnings

28.70 32.30

6 2 54

3 2 26

3 0 28

7 3 35

3 9 11

3 4 24

CPP

Deductions

*Total Income Tax 106.45 130.85

9 7 80

7 2 0 00

8 8 60

2 3 7 30

1 6 2 0 00

6 8 0 00

1 3 0 85

1 0 6 45

IT*

8 6 0 00

7 6 0 00

Gross Earnings

Provincial Income Tax = 35.35 43.65

6 0 00

Overtime

Earnings

Employee Name Nov 22 Lance Klumm Nov. 22 Aurelle Hall

Nov 29 Lance Klumm 226

227

225

22 Aurelle Hall

Employee

Net Total Hrs. Chq Claim Rate of # Code Reg. O/T Pay 1

29 w

7 2 0 00

6 8 0 00

8 0 0 00

59.90 65.50

20.00

7 6 0 00

Nov. 15 Lance Klumm Nov. 15 Aurelle Hall

20.00

Federal Income Tax + 71.10 87.20

Regular

Earnings

Employee Name Nov 8 Lance Klumm Nov. 8 Aurelle Hall

Nov 22 Lance Klumm 224

Date 2016

Income Tax:

221

8 Aurelle Hall

223

Employee

Net Total Hrs. Chq Claim Rate of # Code Reg. O/T Pay

Nov 8 Lance Klumm 220

Date 2016

PRECISION COMPUTER CENTRE - PAYROLL REGISTER

6 7 3 85

6 0 5 04

Net Pay

5 7 6 41

5 4 8 35

5 6 2 63

5 1 8 58

7 1 2 36

6 0 5 04

1 1 3 51 4 8 0 2 26

3 1 58 1 3 1 7 40

1 7 31

1 4 27

2 5 17 1 0 8 1 21

1 3 15

EI 1 2 02

Net Pay

2 6 30 1 1 2 4 76

1 3 53

1 2 77

3 0 46 1 2 7 8 89

1 6 19

1 4 27

10 The Employer’s Tax Responsibilities: Principles and Procedures

ANSWERS TO DISCUSSION QUESTIONS AND CRITICAL THINKING/ETHICAL CASE 1.

3. 4. 5. 6. 7. 8. 9. 10. 11.

Employee benefits expense is made up of the employer’s share of Canada Pension Plan and Employment Insurance contributions plus all or part of the cost of other employee benefits such as health care, long term disability or other insurance. True, with the exception of certain large companies with more than $15,000 of withholdings which must be remitted more often; very small employers who may remit quarterly; or deductions for other employee benefits such as health care, insurance, etc., which are remitted as required. In addition to CPP and EI, a company is also required to pay WCB which is a related cost required by law. An employer may also pay part or all of other costs such as health care, insurance, etc. RC 1 is the form used by an employer to request a remittance number for payroll withholdings. It is submitted only at the beginning of a new business or a change of ownership. Failure to remit on time is costly because it frequently results in a non-deductible penalty of 10% of the amount due over $500. False. The employer does not contribute to the employees’ income tax. (b) False. A PD7A is sent to the federal government once or twice monthly depending on the amount of remittance.* Many employers find the task of keeping accurate payroll records time consuming and difficult, especially the Record of Employment and T4-T4A preparation. Computerized payroll software offers relief in this area. False. The T4-T4A Summary forms must be filed each year by February 28, two months after the end of the calendar year. The question in this case is whether Abby should be allowed to use the photocopy machine. If she uses the machine during an emergency or once in a while, I do not view her behavior as being unethical. However, if she frequently uses the machine for nonbusiness related matters, I would consider this behavior to be less defensible.

* In the case of employers remitting $50,000 or more monthly, the PD7A must be submitted by the third working day following the payroll date. (Do not count Saturdays, Sundays or holidays as working days.)

10-1

SOLUTIONS TO CLASSROOM DEMONSTRATION EXERCISES 1.

FISHER COMPANY - GENERAL JOURNAL Date July

Account Title and Description 24 Employee Benefits Expense CPP Payable EI Payable To record employee benefits expense this date

Income Tax - 5 x $341.00 CPP - 2 X (5 x $87.00) EI - 2.4 X (5 x $34.00)

Beth Hudson: John Wong: Ida Hastings:

Post Ref.

Bi-Weekly: Semi Monthly:

Dr.

Cr.

1 3 4 60 8 7 00 4 7 60

$1,705.00 870.00 408.00 $ 2,983.00

CPP = $51.12; EI = $20.68 CPP = $44.93; EI = $18.33 CPP = $38.74; EI = $15.98 $54,000/26 = $2,076.92 CPP = $96.14 (to a maximum of $2,356.20 in period 25); EI = $2,076.92 x .0188 = $39.05 (Maximum of $891.12 reached in period 23) $54,000/24 = $2,250.00 CPP = $104.16 (to a maximum of $2,356.20 in period 23); EI = $2,250.00 x .0188 = $42.30 (Maximum of $891.12 reached in period 22)

No advantage.

SOLUTIONS TO EXERCISES—SET A EXERCISE 10-1A. Date July

10-2

Account Title and Description 9

Employee Benefits Expense CPP Payable EI Payable To record employee benefits expense this date

Post Ref.

Dr.

Cr.

1 6 3 20 1 0 3 00 6 0 20

EXERCISE 10-2A. Date April

Account Title and Description

Post Ref.

30 Employee Benefits Expense CPP Payable EI Payable To record employee benefits expense for July

Dr.

Cr.

5 7 1 40 3 5 3 00 2 1 8 40

EXERCISE 10-3A. Income Tax - As deducted CPP - 2 X $ 353.00 EI - 2.4 X $ 156.00

$ 1,091.00 706.00 374.40 $ 2,171.40

EXERCISES 10-4A. & 10-5A. Date Mar

Mar

Account Title and Description

Post Ref.

14 Employee Benefits Expense CPP Payable EI Payable 28 Employee Benefits Expense CPP Payable EI Payable

Dr.

Cr.

2 5 1 80 1 5 8 00 9 3 80 2 6 6 40 1 6 7 00 9 9 40

EXERCISE 10-6A. Income tax - as deducted ($535 + $560) CPP - ($158 + $167) X 2 EI - ($67 + $71) X 2.4 Total to be remitted

$1,095.00 650.00 331.20 $ 2,076.20

EXERCISE 10-7A. Part a

Part b

254,000 x 1.75 / 100 = 347,000 x 2.55 / 100 = 418,000 x 1.20 / 100 = Cheque to be sent

$ 4,445.00 8,848.50 5,016.00 $18,309.50

Actual premium for year

$ 4,371.50 9,042.30 4,992.00 $18,405.80

249,800 x 1.75 / 100 = 354,600 x 2.55 / 100 = 416,000 x 1.20 / 100 =

Difference to be sent January 2018

$ 96.30

10-3

SOLUTIONS TO EXERCISES—SET B EXERCISE 10-1B. Date July

Account Title and Description 9

Post Ref.

Employee Benefits Expense CPP Payable EI Payable To record employee benefits expense this date

Dr.

Cr.

1 8 0 80 1 1 5 00 6 5 80

EXERCISE 10-2B. Date April

Account Title and Description

Post Ref.

30 Employee Benefits Expense CPP Payable EI Payable To record employee benefits expense for April

Dr.

Cr.

6 1 0 40 3 7 8 00 2 3 2 40

EXERCISE 10-3B. Income Tax - As deducted CPP - 2 X $ 378.00 EI - 2.4 X $ 166.00

$ 1,226.00 756.00 398.40 $ 2,380.40

EXERCISES 10-4B. & 10-5B. Date Mar

Mar

Account Title and Description 14 Employee Benefits Expense CPP Payable EI Payable 28 Employee Benefits Expense CPP Payable EI Payable

Post Ref.

Dr.

Cr.

2 7 6 20 1 7 4 00 1 0 2 20 2 9 1 80 1 8 4 00 1 0 7 80

EXERCISE 10-6B. Income tax - as deducted ($602 + $654) CPP - ($174 + $184) X 2 EI - ($73 + $77) X 2.4 Total to be remitted

10-4

$1,256.00 716.00 360.00 $ 2,332.00

EXERCISE 10-7B. Part a

Part b

286,000 x 1.85 / 100 = 375,000 x 2.45 / 100 = 460,000 x 1.25 / 100 = Cheque to be sent

$ 5,291.00 9,187.50 5,750.00 $20,228.50

Actual premium for year

$ 5,402.00 9,163.00 5,850.00 $20,415.00

292,000 x 1.85 / 100 = 374,000 x 2.45 / 100 = 468,000 x 1.25 / 100 =

Difference to be sent January 2018

$ 186.50

PROBLEM 10A-1.

Bob Roberts Robin Case Bailey Tropp Ishma Blumen

Tax

CPP

Medical

Union

$ 432.00 457.00 226.00 339.00 $1,454.00

$ 139.00 122.00 104.00 117.00 $ 482.00

$ 58.00 52.00 45.00 50.00 $205.00

$ 28.00 56.00 56.00 56.00 $196.00

$ 21.00 21.00 21.00 21.00 $ 84.00

a. Apr.

RICE COMPANY GENERAL JOURNAL

Page 12

30 Employee Benefits Expense CPP Payable EI Payable Medical Plan Payable

9 6 5 00 4 8 2 00 2 8 7 00 1 9 6 00

b. Cheque Date

Cheque No.

May 10 May 15 May 20

495 502 531

Cheque to Receiver General: Income Tax CPP (x 2) EI (x 2.24)

Cheque Issued To

Cheque Amount

Union Treasurer Receiver General Provincial Health Care Insurance

$ 84.00 $ 2,910.00 $ 392.00

Cheque to Provincial Health Care: $ 1,454.00 964.00 492.00 $ 2,910.00

Employee’s Share Employer’s Share

$ 196.00 196.00 $ 392.00

10-5

PROBLEM 10A-1., Cont. c. May

May

RICE COMPANY GENERAL JOURNAL

Page 13

10 Union Dues Payable Cash To remit union dues collected

8 4 00 8 4 00

15 Income Tax Payable CPP Payable EI Payable Cash April deductions remitted

1 4 5 4 00 9 6 4 00 4 9 2 00

20 Medical Plan Payable Cash April payroll remittance

3 9 2 00

2 9 1 0 00

3 9 2 00

PROBLEM 10A-2. Fred Jones May George Bren Morley Joyce Fisher Pat Sailer

Tax

CPP

$ 458.00 394.00 316.00 282.00 227.00 $1,677.00

$ 144.00 114.00 119.00 104.00 99.00 $ 580.00

a. Mar.

EI $

60.00 49.00 51.00 45.00 43.00 $ 248.00

LTD $

26.00 50.00 50.00 26.00 26.00 $ 178.00

Medical $

38.00 65.00 38.00 — 38.00 $ 179.00

GIBRALTOR CO. GENERAL JOURNAL 31 Employee Benefits Expense CPP Payable EI Payable Medical Plan Payable To record employer’s portion of deductions

April 15 April 20 April 30 April 30

Cheque Issued To Receiver General Medical Plan Union Treasurer Long Term Disability Plan

Cheque to Receiver General Income Tax ( 1,677.00 ) x 1 = CPP (580.00) x 2 = EI (248.00) x 2.4 =

10-6

$1,677.00 1,160.00 595.20 $3,432.20

24.00 24.00 24.00 24.00 24.00 $ 120.00

Page 5 1 1 0 6 20 5 8 0 00 3 4 7 20 1 7 9 00

b. Cheque Date

Union

Cheque Amount $ 3,432.20 358.00 120.00 178.00

PROBLEM 10A-3. First half of June payroll:

Ann Wyatt Jim Elliott Bren Stairs Becky Holmes

Tax

CPP

Union

Charitable

$ 194.00 201.00 138.00 163.00 $ 696.00

$ 72.00 68.00 54.00 57.00 $ 251.00

$ 30.00 29.00 23.00 25.00 $ 107.00

$ 14.00 14.00 14.00 14.00 $ 56.00

$ 18.00 18.00 18.00 18.00 $ 72.00

Tax

CPP

Union

Charitable

$ 197.00 201.00 138.00 204.00 $ 740.00

$ 74.00 68.00 54.00 67.00 $ 263.00

$ 31.00 29.00 23.00 28.00 $ 111.00

$ 14.00 14.00 14.00 14.00 $ 56.00

$ 18.00 18.00 18.00 18.00 $ 72.00

Second half of June payroll:

Ann Wyatt Jim Elliott Bren Stairs Becky Holmes

THE CANDY CO. GENERAL JOURNAL

a. June

June

Page 7

15 Employee Benefits Expense CPP Payable EI Payable Charitable Donations Payable To record employer’s share

5 4 4 80

30 Employee Benefits Expense CPP Payable EI Payable Charitable Donations Payable To record employer’s share

5 6 2 40

2 5 1 00 1 4 9 80 1 4 4 00

2 6 3 00 1 5 5 40 1 4 4 00

b. Cheque Date July 5 July 15 July 15

Cheque Issued To Save the Children Canada Union Treasurer Receiver General

Cheque to Receiver General: Income Tax for June 15 Payroll Income Tax for June 30 Payroll CPP for June 15 Payroll (x 2) CPP for June 30 Payroll (x 2) EI for June 15 Payroll (x 2.4) EI for June 30 Payroll (x 2.4)

Cheque Amount $ 2,592.00 112.00 2,987.20

Cheque to Save the Children Canada: $ 696.00 740.00 502.00 526.00 256.80 266.40 $2,987.20

Employees’ Portion to May 31 ($144*5) Employer’s Portion to May 31 ($288*5) June 15 Payroll Employees’ Portion June 15 Payroll Employer’s Portion June 30 Payroll Employees’ Portion June 30 Payroll Employer’s Portion

$ 720.00 1,440.00 72.00 144.00 72.00 144.00 $2,592.00

10-7

PROBLEM 10A-4. a.

RIPCORD PARACHUTE CLUB GENERAL JOURNAL 2015

Feb.

7 Employee Benefits Expense CPP Payable EI Payable Pension Plan Liability Medical Plan Payable To record employer’s share 14 Employee Benefits Expense CPP Payable EI Payable Pension Plan Liability Medical Plan Payable To record employer’s share 21 Employee Benefits Expense CPP Payable EI Payable Pension Plan Liability Medical Plan Payable To record employer’s share 28 Employee Benefits Expense CPP Payable EI Payable Pension Plan Liability Medical Plan Payable To record employer’s share

4 0 6 60 1 1 8 6 8 1 5 6 6 4

00 60 00 00

1 2 3 7 1 1 6 2 6 4

00 40 00 00

1 2 3 7 1 1 6 2 6 4

00 40 00 00

1 3 6 7 8 1 7 7 6 4

00 40 00 00

4 2 0 40

4 5 5 40

b. Income Tax Payable 423.00 450.00 450.00 537.00 1,860.00

10-8

CPP Payable 118.00 118.00 123.00 123.00 123.00 123.00 136.00 136.00 1,000.00

EI Payable 49.00 68.60 51.00 71.40 51.00 71.40 56.00 78.40 496.80

PROBLEM 10A-4., Cont. LTD Payable

Pension Plan Liability

46.00 48.00 48.00 52.00 194.00

Medical Plan Payable 64.00 64.00 64.00 64.00 64.00 64.00 64.00 64.00 512.00

134.00 156.00 141.00 162.00 141.00 162.00 152.00 177.00 1,225.00

Employee Benefits Expense 406.60 420.40 420.40 455.40 1,702.80

Wage Expense 2,600.00 2,700.00 2,700.00 2,950.00 10,950.00

c. Cheque Date

Cheque Payable To

Mar. 15 Mar. 15 Mar. 15 Mar. 15

Cheque Amount

Receiver General Pension Plan Medical Plan Long Term Disability Plan

$3,356.80 $1,225.00 $512.00 $194.00

Cheque to Receiver General: TAX CPP EI

$1,860.00 1,000.00 496.80 $3,356.80

10-9

PROBLEM 10B-1.

Bob Roberts Robin Case Bailey Tropp Ishma Blumen

Tax

CPP

Medical

Union

454.00 433.00 336.00 392.00 $ 1,615.00

$ 146.00 124.00 107.00 124.00 $ 501.00

$ 61.00 53.00 46.00 53.00 $ 213.00

$ 28.00 56.00 56.00 56.00 $ 196.00

$ 21.00 21.00 21.00 21.00 $ 84.00

RICE COMPANY GENERAL JOURNAL

a. Apr.

Page 12

30 Employee Benefits Expense CPP Payable EI Payable Medical Plan Payable To record employer’s portion of deductions

9 9 5 20 5 0 1 00 2 9 8 20 1 9 6 00

b. Cheque Date

Cheque No.

May 10 May 15 May 20

681 698 713

Cheque to Receiver General: Income Tax CPP (x 2) EI (x 2.4)

$ 1,615.00 1,002.00 511.20 $ 3,128.20

Cheque Issued To

Cheque Amount

Union Treasurer Receiver General Provincial Health Care Insurance

84.00 3,128.20 392.00

Cheque to Provincial Health Care: Employee’s Share Employer’s Share

$ 196.00 196.00 $ 392.00

PROBLEM 10B-1., Cont. c.

May

RICE COMPANY GENERAL JOURNAL 10 Union Dues Payable Cash Union dues collected for April

15 Income Tax Payable CPP Payable EI Payable Cash April deductions remitted

20 Medical Plan Payable Cash April remittance

Page 13 8 4 00 8 4 00

1 6 1 5 00 1 0 0 2 00 5 1 1 20 3 1 2 8 20

3 9 2 00 3 9 2 00

10-11

PROBLEM 10B-2.

Fred Jones May George Bren Morley Joyce Fisher Pat Sailer

Tax

CPP

$ 492.00 430.00 352.00 274.00 256.00 $1,804.00

$ 151.00 124.00 129.00 109.00 109.00 $ 622.00

a. Mar.

EI $

63.00 53.00 55.00 47.00 47.00 $ 265.00

LTD $

26.00 50.00 50.00 26.00 26.00 $ 178.00

Medical $

38.00 65.00 38.00 — 38.00 $ 179.00

GIBRALTOR CO. GENERAL JOURNAL 31 Employee Benefits Expense CPP Payable EI Payable Medical Plan Payable To record employer’s portion of deductions

April 15 April 20 April 30 April 30

Cheque Issued To Receiver General Medical Plan Union Treasurer Long Term Disability Plan

Cheque to Receiver General: Income Tax (x 1) CPP (x 2) EI (x 2.4)

$1,804.00 1,244.00 636.00 $3,684.00

24.00 24.00 24.00 24.00 24.00 $ 120.00

Page 5 1 1 7 2 00 6 2 2 00 3 7 1 00 1 7 9 00

b. Cheque Date

Union

Cheque Amount $ 3,684.00 358.00 120.00 178.00

PROBLEM 10B-3. First half of June payroll:

Ann Wyatt Jim Elliott Bren Stairs Becky Holmes

Tax

CPP

Union

Charitable

$ 202.00 210.00 150.00 194.00 $ 756.00

$ 74.00 70.00 57.00 67.00 $ 268.00

$ 31.00 29.00 24.00 28.00 $ 112.00

$ 14.00 14.00 14.00 14.00 $ 56.00

$ 18.00 18.00 18.00 18.00 $ 72.00

Tax

CPP

Union

Charitable

$ 202.00 214.00 150.00 202.00 $ 768.00

$ 74.00 72.00 57.00 72.00 $ 275.00

$ 31.00 30.00 24.00 30.00 $ 115.00

$ 14.00 14.00 14.00 14.00 $ 56.00

$ 18.00 18.00 18.00 18.00 $ 72.00

Second half of June payroll:

Ann Wyatt Jim Elliott Bren Stairs Becky Holmes

THE CANDY CO. GENERAL JOURNAL

a. June

June

Page 7

15 Employee Benefits Expense CPP Payable EI Payable Charitable Donations Payable To record employer’s portion of deductions

5 6 8 80

30 Employee Benefits Expense CPP Payable EI Payable Charitable Donations Payable To record employer’s portion of deductions

5 8 0 00

2 6 8 00 1 5 6 80 1 4 4 00

2 7 5 00 1 6 1 00 1 4 4 00

b. Cheque Date July 5 July 15 July 15

Cheque Issued To Save the Children Canada Union Treasurer Receiver General

Cheque to Receiver General: Income Tax for June 15 Payroll Income Tax for June 30 Payroll CPP for June 15 Payroll (x2) CPP for June 30 Payroll (x2) EI for June 15 Payroll (x2.4) EI for June 30 Payroll (x2.4)

Cheque Amount $ 2,172.00 112.00 3,154.80

Cheque to Save the Children Canada: $ 756.00 768.00 536.00 550.00 268.80 276.00 $ 3,154.80

Employees’ Portion to May 31 Employer’s Portion to May 31 June 15 Payroll Employees’ Portion June 15 Payroll Employer’s Portion June 30 Payroll Employees’ Portion June 30 Payroll Employer’s Portion

$ 580.00 1,160.00 72.00 144.00 72.00 144.00 $ 2,172.00

10-13

PROBLEM 10B-4. RIPCORD PARACHUTE CLUB GENERAL JOURNAL

Feb.

7 Employee Benefits Expense CPP Payable EI Payable Pension Plan Liability Medical Plan Payable To record employer’s portion of deductions 14 Employee Benefits Expense CPP Payable EI Payable Pension Plan Liability Medical Plan Payable To record employer’s portion of deductions 21 Employee Benefits Expense CPP Payable EI Payable Pension Plan Liability Medical Plan Payable To record employer’s portion of deductions 28 Employee Benefits Expense CPP Payable EI Payable Pension Plan Liability Medical Plan Payable To record employer’s portion of deductions

4 5 4 40 1 3 8 7 8 1 8 0 5 8

00 40 00 00

1 4 1 7 9 1 8 3 5 8

00 80 00 00

1 4 4 8 1 1 8 6 5 8

00 20 60 00

1 4 5 8 2 1 8 8 5 8

00 60 10 00

4 6 1 80

4 6 9 80

4 7 3 70

b. Income Tax Payable 527.00 531.00 543.00 546.00 2,147.00

CPP Payable 138.00 138.00 141.00 141.00 144.00 144.00 145.00 145.00 1,136.00

EI Payable 56.00 78.40 57.00 79.80 68.00 81.20 59.00 82.60 552.00

PROBLEM 10B-4., Cont. LTD Payable

Pension Plan Liability

56.00 57.00 58.00 58.00 229.00

Medical Plan Payable 58.00 58.00 58.00 58.00 58.00 58.00 58.00 58.00 464.00

154.00 180.00 156.00 183.00 158.00 186.60 160.00 188.10 1,365.70

Employee Benefits Expense 454.40 461.80 469.80 473.70 1,859.70

Wage Expense 3,000.00 3,050.00 3,110.00 3,135.00 12,295.00

c. Cheque Date

Cheque Payable To

Cheque Amount

March 15 March 15 March 15 March 15

Receiver General Pension Plan Pension Plan Long Term Disability Plan

$ 3,835.00 $ 1,365.70 $ 464.00 $ 229.00

Cheque to Receiver General: IT CPP EI

$ 2,147.00 1,136.00 552.00 $ 3,835.00

10-15

PROBLEM 10C-1. BAWLF HARDWARE CO. GENERAL JOURNAL

a. Date May

Account Title and Description

Page 8

Post Ref.

31 Employee Benefits Expense CPP Payable EI Payable LTD Payable To record employer’s portion of deductions

Dr.

Cr.

1 0 6 7 60 5 3 2 00 3 2 0 60 2 1 5 00

b. Cheque No. 543

Employees’ deductions

$ 215.00

Employer’s share

215.00 Total

Cheque No. 551

$ 430.00

Income Tax: $ 1,415 X 1.0

$ 1,415.00

CPP: $ 532 X 2.0

1,064.00

EI: $ 229 X 2.4

549.60 Total

Cheque No. 567

$ 3,028.60

Deductions $ 125 X 1.0

$ 125.00

No Employer Contribution Total

$ 125.00

BAWLF HARDWARE CO. GENERAL JOURNAL

c. Date June

June

Account Title and Description 10 LTD Payable Cash Remittance from May payroll 15 Income Tax Payable CPP Payable EI Payable Cash May deductions remitted 15 Union Dues Payable Cash Union dues collected for May

Post Ref.

Page 9 Dr.

Cr.

4 3 0 00 4 3 0 00 1 4 1 5 00 1 0 6 4 00 5 4 9 60 3 0 2 8 60 1 2 5 00 1 2 5 00

PROBLEM 10C-2. COUNTERPOINT COUNSELLING CO. GENERAL JOURNAL 2017 July

Post Ref.

Account Title and Description

Employee Benefits Expense CPP Payable EI Payable Charitable Donations Payable To record employer’s portion of deductions for July 2017

Cheque Date

Page 7 Dr.

Cr.

2 6 4 3 80 1 5 1 7 00 8 2 1 80 3 0 5 00

Cheque to be issued to

Cheque

August 15

Receiver General (1)

$ 12,730.80

August 15

Provincial Health Care Organization (2)

$ 596.00

August 20

Provincial Counsellors Society (3)

$ 252.00

August 20

ABCD Insurance Co. (4)

$ 242.00

August 25

Canadian Centre for Counselling Research (5)

$ 610.00

Space below for calculations: 1. Income tax : $ 8,288 X 1.0

$ 8,288.00

CPP: $ 1,517 x 2.0

3,034.00

EI: $ 587 x 2.4

1,480.80

$ 12,730.80

2. Amount Deducted

$ 596.00

3. Amount Deducted

$ 252.00

4. Amount Deducted

$ 242.00

5. Amount Deducted $ 305 X 2

$ 610.00

10-17

PROBLEM 10C-3. WAYLON COMPANY GENERAL JOURNAL Date Feb

Account Title and Description

Page 8 Post Ref.

14 Employee Benefits Expense CPP Payable EI Payable To record employee benefits expenses for week 2, February

Dr.

Cr.

3 1 2 99 1 9 8 61 1 1 4 38

PROBLEM 10C-4. WAYLON COMPANY GENERAL JOURNAL Date Feb

Account Title and Description 21 Employee Benefits Expense CPP Payable EI Payable To record employee benefits expenses for week 3, February

Page 9 Post Ref.

Dr.

Cr.

2 7 1 81 1 7 1 61 1 0 0 20

PROBLEM 10C-5. MUNCHKIN BAKERY CO. GENERAL JOURNAL Date

Page 14 Post Ref.

Account Title and Description

Dr.

Mar 15 Employee Benefits Expense CPP Payable EI Payable Health Care Payable To record employee benefits expenses for Mar. 15 payroll

6 7 9 80

Mar 29 Employee Benefits Expense CPP Payable EI Payable Health Care Payable To record employee benefits expenses for Mar. 29 payroll

6 8 8 20

Cheque Date

Cr.

3 3 9 00 1 9 8 80 1 4 2 00

3 4 6 00 2 0 0 20 1 4 2 00

Cheque to be issued to:

Cheque

April 10

Provincial Health Care Organization (1)

April 15

Receiver General (2)

$ 4,029.00

April 28

Union Treasurer (3)

568.00 79.00

Space below for calculations: 1. Amount deducted X 2 ($142 + $142) X 2 = 2. Income tax ($975 + $1,000) X 1.0

$ 568.00 $ 1,975.00

CPP ($339 + $346) X 2.0

1,370.00

EI ($142 + $143) X 2.4

684.00

3. Amount deducted: ($ 40 + $ 39)

$ 4,029.00 $ 79.00

10-19

PROBLEM 10C-6. GRIERSON AUTO REPAIR COMPANY - GENERAL JOURNAL Page 13 Date Account Title and Description 2017 May 2 Employee Benefits Expense CPP Payable EI Payable To record employee benefits exp. for the May 2 payroll May

Post Ref.

Dr. 3 0 2 94

1 9 1 99 1 1 0 95

9 Employee Benefits Expense CPP Payable EI Payable To record employee benefits exp. for the May 9 payroll

2 9 7 32

May 16 Employee Benefits Expense CPP Payable EI Payable To record employee benefits exp. for the May 16 payroll

3 0 3 32

May 23 Employee Benefits Expense CPP Payable EI Payable To record employee benefits exp. for the May 23 payroll

2 9 6 32

May 30 Employee Benefits Expense CPP Payable EI Payable To record employee benefits exp. for the May 30 payroll

2 9 9 60

Cr.

1 8 8 33 1 0 8 99

1 9 2 24 1 1 1 08

1 8 7 68 1 0 8 64

1 8 9 81 1 0 9 79

PROBLEM 10C-6., Cont.

Cheque Date

Cheque to be issued to

Cheque Amount

June 15

Receiver General (1)

$ 6,188.44

June 20

Union Treasurer (2)

160.00

June 20

Health Plan Organization (3)

351.60

June 20

Dental Insurance Co. (4)

210.00

Space below for calculations: 1. Income tax: ($ 679.10 + 664.05 + 674.90 + 652.85 + 675.54)

$ 3,346.44

CPP: ($ 191.99 + 188.33 + 192.24 + 187.68 + 189.81) X 2

1,900.10

EI: ($ 79.25 + 77.85 + 79.34 + 77.60 + 78.42) X 2.4

941.90

$ 6,188.44

2. Amounts deducted: (($ 31.60) X 3) + (($ 32.60) X 2)

160.00

3. Amounts Deducted: ($ 70.32) X 5

351.60

4. Amounts Deducted: ($ 42.00) X 5

210.00

SOLUTION TO ON-THE-JOB TRAINING, #T-1. Approximate payroll tax cost to hire 50 workers directly: 4% CPP + (1.88% x 1.4 for EI) + vacation pay 4% = Approx. 11% cost. $10 x 1.11 = $11.10 which is less than $12.00. Adding the cost of Worker’s Compensation and other benefits (if any) will probably still be less than $12.00. Non-financial considerations must also be considered. These would include the extra effort to supervise employees rather than contract workers; the cost of administering the payroll records for employees; and the possibility of obligation to employees for ongoing work. Additionally, unsuitable workers are more easily replaced and often training costs are borne by the agency.

10-21

CONTINUING PROBLEM PRECISION COMPUTER CENTRE SALES JOURNAL Date

Account Debited

Terms

Page 4

InvoiceNo.

Dec. 20 Carson Engineering Corp.

12688

Post Dr. Acc. Receivable Ref. Cr. Sales 8 7 5 0 00 8 7 5 0 00 (1020/4010)

PRECISION COMPUTER CENTRE CASH RECEIPTS JOURNAL Date 2016

Cash Dr.

Dec. 9 13 30

3 4 0 0 00 3 9 0 0 00 5 4 9 5 00 12 7 9 5 00 (1000)

Sales Disc. Dr.

Acc. Rec. Cr. 3 4 0 0 00 3 9 0 0 00 7 3 0 0 00 (1020)

Sales Cr.

Sundry Post Account Ref. Vita Needle, 12686 X Accu Pac, 12687 X Augustana, 12689 4000

Page 4

Amount Cr.

5 4 9 5 00 5 4 9 5 00 (X)

CONTINUING PROBLEM, Cont. PRECISION COMPUTER CENTRE - PURCHASES JOURNAL

Date 2016 Dec. 10 11 17

Account Credited City Newspaper West Bell Alpha Office Co.

Inv. PO Post No. Number Ref.

8161

4015

Accounts Payable Cr. 4 8 0 00 1 6 5 00 3 1 8 00 9 6 3 00

Purchases Dr.

Sundry Account Post Name Ref. Advertising 5010 Telephone 5040 Supplies 1030

(2000)

Dec.

Chq. No.

6 266 6 267 13 268 269 13 270 13 271 13 272

16 17 20 20 23 24 24

273 274 275 276 277 278 279

Account Debited

Post Ref.

Sundry Dr.

Wages - L. Klumm Wages - A. Hall Wages - L. Klumm Wages - A. Hall West Bell Canada Purchased goods for resale Income Tax Payable re Nov CPP Payable re Nov EI Payable re Nov System Design Furniture Multi Systems Wages - L. Klumm Wages - A. Hall City Electric Wages - L. Klumm Wages - A. Hall

2010 2010 2010 2010 X 5600 2020 2030 2040 X X 2010 2010 5030 2010 2010

6 9 2 30 5 4 8 35 6 3 3 27 6 7 3 85

Amount Dr. 4 8 0 00 1 6 5 00 3 1 8 00 9 6 3 00 (X)

PRECISION COMPUTER CENTRE CASH PAYMENTS JOURNAL Date 2016

Page 3

Accounts Payable Dr.

1 5 0 00 7 0 0 0 00 8 5 2 45 5 4 3 56 2 7 2 42 1 4 0 0 00 4 5 0 00

Page 4 Purchases Discounts Cr.

Cash Cr. 6 9 2 30 5 4 8 35 6 3 3 27 6 7 3 85 1 5 0 00 7 0 0 0 00 1 6 6 8 43

5 4 8 35 5 7 6 41 4 8 6 00 5 1 8 58 6 0 5 04 13 9 5 0 58

2 0 0 0 00

1 4 0 0 00 4 5 0 00 5 4 8 35 5 7 6 41 4 8 6 00 5 1 8 58 6 0 5 04 15 9 5 0 58

(X)

(2000)

(1000)

10-23

CONTINUING PROBLEM, Cont. PRECISION COMPUTER CENTRE - GENERAL JOURNAL Date Account Title and Description 2016 Nov 30 Employee Benefits Expense CPP Payable EI Payable To record employee benefits for November

Post Ref. 5120 2030 2040

Dec

6 Wages Expense Income Tax Payable CPP Payable EI Payable Wages Payable To record wages expense week of Dec. 6

5110 2020 2030 2040 2010

1 5 7 0 00

13 Wages Expense Income Tax Payable CPP Payable EI Payable Wages Payable To record wages expense week of Dec. 13

5110 2020 2030 2040 2010

1 6 6 0 00

20 Wages Expense Income Tax Payable CPP Payable EI Payable Wages Payable To record wages expense week of Dec. 20

5110 2020 2030 2040 2010

1 4 0 0 00

24 Wages Expense Income Tax Payable CPP Payable EI Payable Wages Payable To record wages expense week of Dec. 24

5110 2020 2030 2040 2010

1 4 0 0 00

31 Employee Benefits Expense CPP Payable EI Payable To record employee benefits expense for Dec.

5120 2030 2040

4 2 9 99

Dr.

Page 5 Cr.

4 3 0 69 2 7 1 78 1 5 8 91

2 2 8 7 0 2 9 1 2 4 0

95 88 52 65

2 4 6 7 5 3 1 1 3 0 7

30 33 25 12

1 8 6 6 2 2 6 1 1 2 4

40 54 30 76

1 8 7 6 2 2 6 1 1 2 3

55 54 29 62

2 7 1 29 1 5 8 70

CONTINUING PROBLEM, Cont. PRECISION COMPUTER CENTRE ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER NAME

ACCU PAC, INC.

ADDRESS

11151 - 118 STREET, EDMONTON, AB T5S 2S2

Date 2016 Dec. 1 Balance 13

Explanation

AC101

Post Ref.

Debit

✓ CRJ4

NAME

CARSON ENGINEERING CORP.

ADDRESS

9939 EDMONTON WAY, EDMONTON, AB T5A 9A2

Date 2016 Dec. 1 Balance 2

Explanation

Post Ref. ✓ SJ4

Debit

3 9 0 0 00

3 9 0 0 00 0

Credit

Dr. Balance 6 2 4 0 00 14 9 9 0 00

8 7 5 0 00

ANTHONY J. PITALE

ADDRESS

229 DIAMOND RICH AVENUE, EDMONTON, AB T4K 2L7 Explanation

Dr. Balance

CA101

NAME

Date 2016 Dec. 1 Balance

Credit

PI101

Post Ref. ✓

Debit

Credit

Dr. Balance 1 6 0 0 00

10-25

CONTINUING PROBLEM, Cont. PRECISION COMPUTER CENTRE ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER NAME

TAYLOR GOLF

ADDRESS

232 TAYLOR HEIGHTS, EDMONTON, AB T6E 6R2

Date 2016 Dec. 1 Balance

Explanation

TA101

Post Ref.

Debit

Credit

✓

3 2 0 0 00

NAME

VITA NEEDLE COMPANY

ADDRESS

SUITE 204, 10091 89 STREET, EDMONTON, AB T6F 1S1

Date 2016 Dec. 1 Balance 9

Explanation

Dr. Balance

VI101

Post Ref.

Debit

✓ CRJ4

Credit

Dr. Balance

3 4 0 0 00

3 4 0 0 00 0

PRECISION COMPUTER CENTRE SCHEDULE OF ACCOUNTS RECEIVABLE DECEMBER 31, 2016 Carson Engineering Corp. Anthony J. Pitale Taylor Golf

14 9 9 0 00 1 6 0 0 00 3 2 0 0 00 19 7 9 0 00

CONTINUING PROBLEM, Cont. PRECISION COMPUTER CENTRE ACCOUNTS PAYABLE SUBSIDIARY LEDGER NAME

ALPHA OFFICE CO.

ADDRESS

121 WHITEMUD FREEWAY, EDMONTON, AB T6T 2Z1

Date 2016 Dec. 1 Balance 17

Explanation

Post Ref.

Debit

Credit

✓ PJ3

3 1 8 00

NAME

CITY NEWSPAPER

ADDRESS

10098 EDMONTON WAY, EDMONTON, AB T5A 9S2

Date 2016 Dec. 1 Balance 10

Explanation

Post Ref.

Debit

Credit

✓ PJ3

4 8 0 00

COMPUTER CONNECTION

ADDRESS

2400, 4421 16 AVENUE, EDMONTON, AB T6R 1A1 Explanation

Post Ref.

Debit

Credit

✓

3 7 5 00 8 5 5 00

Cr. Balance 0

MULTI SYSTEMS, INC.

ADDRESS

310 N. ESCONDIDO BLVD., EDMONTON, AB T7G 1P1 Explanation

Cr. Balance

NAME

Date 2016 Dec. 1 Balance 16

0 3 1 8 00

NAME

Date 2016 Dec. 1 Balance

Cr. Balance

Post Ref. ✓ CPJ4

Debit

4 5 0 00

Credit

Cr. Balance 4 5 0 00 0

10-27

CONTINUING PROBLEM, Cont. PRECISION COMPUTER CENTRE ACCOUNTS PAYABLE SUBSIDIARY LEDGER NAME

STAPLES

ADDRESS

43 ESCONDIDO AVENUE, EDMONTON, AB T7G 9T9

Date 2016 Dec. 1 Balance

Post Ref.

Explanation

Debit

Credit

✓

2 5 0 00

NAME

SYSTEM DESIGN FURNITURE

ADDRESS

43 ESCONDIDO AVENUE, EDMONTON, AB T7G 9T9

Date 2016 Dec. 1 Balance 16

Explanation

Post Ref. ✓ CPJ4

Debit

Credit

1 4 0 0 00

WEST BELL CANADA

ADDRESS

10149 EDMONTON WAY, EDMONTON, AB T5A 9T1 Explanation

Cr. Balance 1 4 0 0 00

NAME

Date 2016 Dec. 1 Balance 11 13

Cr. Balance

Post Ref. ✓ PJ3 CPJ4

Debit

Credit

1 6 5 00 1 5 0 00

Cr. Balance 1 5 0 00 3 1 5 00 1 6 5 00

PRECISION COMPUTER CENTRE SCHEDULE OF ACCOUNTS PAYABLE DECEMBER 31, 2016 Alpha Office Co. City Newspaper Staples West Bell Canada

3 1 8 00 8 5 5 00 2 5 0 00 1 6 5 00 1 5 8 8 00

CONTINUING PROBLEM, Cont. GENERAL LEDGER OF PRECISION COMPUTER CENTRE NAME:

CASH

Date Explanation 2016 Dec. 1 Balance 31 31

NAME:

✓ CRJ4 1 2 7 9 5 0 0 CPJ4

Post Ref.

Debit

15 9 5 0 58

Credit

✓

DR CR Dr Dr Dr

DR CR Dr

ACCOUNT NO. Post Ref. ✓ SJ4 CRJ4

Debit

Credit

8 7 5 0 00 7 3 0 0 00

DR CR Dr Dr Dr

ACCOUNT NO. Post Ref.

Debit

Credit

✓

PREPAID RENT

Date Explanation 2016 Dec. 1 Balance

Credit

ACCOUNT NO.

PREPAID CLEANING

Date Explanation 2016 Dec. 1 Balance

NAME:

Debit

ACCOUNTS RECEIVABLE

Date Explanation 2016 Dec. 1 Balance 31 31 NAME:

Post Ref.

PETTY CASH

Date Explanation 2016 Dec. 1 Balance

NAME:

ACCOUNT NO.

DR CR Dr

ACCOUNT NO. Post Ref. ✓

Debit

Credit

DR CR Dr

1000 Balance 15 8 7 1 86 28 6 6 6 86 12 7 1 6 28

1010 Balance 1 0 0 00

1020 Balance 18 3 4 0 00 27 0 9 0 00 19 7 9 0 00 1023 Balance 6 0 0 00

1025 Balance 0

10-29

CONTINUING PROBLEM, Cont. GENERAL LEDGER OF PRECISION COMPUTER CENTRE NAME:

SUPPLIES

Date Explanation 2016 Dec. 1 Balance 17

NAME:

Post Ref.

Debit

Credit

✓

DR CR Dr

ACCOUNT NO. Post Ref.

Debit

Credit

✓

Post Ref.

Debit

DR CR Dr

ACCOUNT NO.

Credit

✓

DR CR Cr

ACCOUNT NO. Post Ref.

Debit

Credit

✓

Post Ref.

Debit

DR CR Dr

ACCOUNT NO. Credit

✓

ACCOUNTS PAYABLE

Date Explanation 2016 Dec. 1 Balance 31 31

DR CR Dr Dr

ACCOUNT NO.

ACCUMULATED AMORTIZATION, OFFICE EQUIPMENT

Date Explanation 2016 Dec. 1 Balance

NAME:

3 1 8 00

OFFICE EQUIPMENT

Date Explanation 2016 Dec. 1 Balance

NAME:

Credit

ACCUMULATED AMORTIZATION, COMPUTER SHOP EQUIPMENT

Date Explanation 2016 Dec. 1 Balance

NAME:

✓ PJ3

Debit

COMPUTER SHOP EQUIPMENT

Date Explanation 2016 Dec. 1 Balance

NAME:

Post Ref.

MERCHANDISE INVENTORY

Date Explanation 2016 Dec. 1 Balance

NAME:

ACCOUNT NO.

DR CR Cr

ACCOUNT NO. Post Ref.

Debit

✓ CPJ4 PJ3

2 0 0 0 00

Credit

9 6 3 00

DR CR Cr Cr Cr

1030 Balance 7 9 2 00 1 1 1 0 00

1040 Balance 7 1 0 0 00

1080 Balance 5 2 0 0 00

1081 Balance 9 9 00

1090 Balance 1 5 0 0 00

1091 Balance 2 0 00

2000 Balance 2 6 2 5 00 6 2 5 00 1 5 8 8 00

CONTINUING PROBLEM, Cont. GENERAL LEDGER OF PRECISION COMPUTER CENTRE NAME:

WAGES PAYABLE

Date 2016 Dec. 6 6 6 13 13 13 20 20 20 24 24 24

NAME:

Explanation

Post Ref. GJ5 CPJ4 CPJ4 GJ5 CPJ4 CPJ4 GJ5 CPJ4 CPJ4 GJ5 CPJ4 CPJ4

Debit

1 3 0 7 12

Cr Cr

1 3 0 7 12 6 7 3 85

1 1 2 4 76

Cr Cr

1 1 2 4 76 5 7 6 41

1 1 2 3 62

Cr Cr

1 1 2 3 62 6 0 5 04

6 9 2 30 5 4 8 35 6 3 3 27 6 7 3 85 5 4 8 35 5 7 6 41 5 1 8 58 6 0 5 04

✓ GJ5 GJ5 CPJ4 GJ5 GJ5

Debit

Credit

2 2 8 95 2 4 6 30 8 5 2 45 1 8 6 40 1 8 7 55

DR CR Cr Cr Cr Cr Cr Cr

ACCOUNT NO. Post Ref. ✓ GJ5 GJ5 GJ5 CPJ4 GJ5 GJ5 GJ5

Balance

CPP PAYABLE

Date Explanation 2016 Dec. 1 Balance 2 6 13 13 20 24 24

1 2 4 0 65 5 4 8 35

1 2 4 0 65

ACCOUNT NO. Post Ref.

2010

DR CR Cr Cr

Credit

INCOME TAX PAYABLE

Date Explanation 2016 Dec. 1 Balance 6 13 13 20 24

NAME:

ACCOUNT NO.

Debit

Credit

2 7 1 78 7 0 88 7 5 33 5 4 3 56 6 2 54 6 2 54 2 7 1 29

DR CR Cr Cr Cr Cr Cr Cr Cr Cr

2020 Balance 8 5 2 45 1 0 8 1 40 1 3 2 7 70 4 7 5 25 6 6 1 65 8 4 9 20

2030 Balance 2 7 1 5 4 3 6 1 4 6 8 9 1 4 6 2 0 8 2 7 1 5 4 2

78 56 44 77 21 75 29 58

10-31

CONTINUING PROBLEM, Cont. GENERAL LEDGER OF PRECISION COMPUTER CENTRE NAME:

EI PAYABLE

Date Explanation 2016 Dec. 1 Balance 2 6 13 13 20 24 24

NAME:

Credit

1 5 8 91 2 9 52 3 1 25 2 7 2 42 2 6 30 2 6 29 1 5 8 70

Post Ref.

Debit

Credit

✓

DR CR Cr

ACCOUNT NO. Post Ref.

Debit

Credit

✓

DR CR Dr

ACCOUNT NO. Post Ref.

Debit

✓ CRJ4

Credit

SALES

Date Explanation 2016 Dec. 1 Balance 31

DR CR Cr Cr Cr Cr Cr Cr Cr Cr

ACCOUNT NO.

SERVICE REVENUE

Date Explanation 2016 Dec. 1 Balance 30

NAME:

✓ GJ5 GJ5 GJ5 CPJ4 GJ5 GJ5 GJ5

Debit

T. FREEDMAN, WITHDRAWALS

Date Explanation 2016 Dec. 1 Balance

NAME:

Post Ref.

T. FREEDMAN, CAPITAL

Date Explanation 2016 Dec. 1 Balance

NAME:

ACCOUNT NO.

4 9 5 00

DR CR Cr Cr

ACCOUNT NO. Post Ref. ✓ PJ4

Debit

Credit

8 7 5 0 00

DR CR Cr Cr

2040 Balance 1 1 3 51 2 7 2 42 3 0 1 94 3 3 3 19 6 0 77 8 7 07 1 1 3 36 2 7 2 06 3000 Balance 7 4 0 6 00

3010 Balance 4 0 3 0 00

4000 Balance 23 7 4 9 82 29 2 4 4 82

4010 Balance 37 8 0 0 00 46 5 5 0 00

CONTINUING PROBLEM, Cont. GENERAL LEDGER OF PRECISION COMPUTER CENTRE NAME:

SALES RETURNS AND ALLOWANCES

Date Explanation 2016 Dec. 1 Balance

NAME:

Debit

DR CR Dr

ACCOUNT NO. Post Ref. ✓ PJ3

Debit

Credit

4 8 0 00

DR CR Dr Dr

ACCOUNT NO. Post Ref.

Debit

Credit

✓

DR CR Dr

ACCOUNT NO. Post Ref.

Debit

Credit

✓

DR CR Dr

ACCOUNT NO. Post Ref. ✓ CPJ4

Debit

Credit

4 8 6 00

PHONE EXPENSE

Date Explanation 2016 Dec. 1 Balance 11

Credit

✓

UTILITIES EXPENSE

Date Explanation 2016 Dec. 1 Balance 23 NAME:

Post Ref.

RENT EXPENSE

Date Explanation 2016 Dec. 1 Balance

DR CR Dr

ACCOUNT NO.

CLEANING EXPENSE

Date Explanation 2016 Dec. 1 Balance

Credit

✓

ADVERTISING EXPENSE

Date Explanation 2016 Dec. 1 Balance 10

NAME:

Debit

SALES DISCOUNTS

Date Explanation 2016 Dec. 1 Balance

NAME:

Post Ref.

ACCOUNT NO.

DR CR Dr Dr

ACCOUNT NO. Post Ref. ✓ PJ3

Debit

1 6 5 00

Credit

DR CR Dr Dr

4020 Balance 4 0 0 00

4030 Balance 2 2 0 00

5010 Balance 4 8 0 00 9 6 0 00

5015 Balance 3 0 0 00

5020 Balance 1 6 0 0 00

5030 Balance 2 7 0 00 7 5 6 00 5040 Balance 4 3 1 00 5 9 6 00

10-33

CONTINUING PROBLEM, Cont. GENERAL LEDGER OF PRECISION COMPUTER CENTRE NAME:

POSTAGE EXPENSE

Date Explanation 2016 Dec. 1 Balance

NAME:

Post Ref.

Debit

Credit

✓

Balance 5 0 00

5100

DR CR Dr

Balance 2 0 00

5110

ACCOUNT NO. Post Ref. ✓ GJ5 GJ5 GJ5 GJ5

Debit

1 1 1 1

5 7 0 6 6 0 4 0 0 4 0 0

Credit

00 00 00 00

DR CR Dr Dr Dr Dr Dr

ACCOUNT NO. Post Ref. GJ5 GJ5

Debit

Credit

4 3 0 69 4 2 9 99

DR CR Dr Dr

ACCOUNT NO. Post Ref. ✓ CPJ4

Debit

Post Ref.

Credit

7 0 0 0 00

DR CR Dr Dr

ACCOUNT NO. Debit

Credit

✓

PURCHASES DISCOUNTS

Date Explanation 2016 Dec. 1 Balance

DR CR Dr

ACCOUNT NO.

PURCHASES RETURNS AND ALLOWANCES

Date Explanation 2016 Dec. 1 Balance

NAME:

✓

PURCHASES

Date Explanation 2016 Dec. 1 Balance 13 NAME:

Credit

PAYROLL BENEFITS EXPENSE

Date Explanation 2016 Dec. 2 Balance 31 NAME:

Debit

WAGES EXPENSE

Date Explanation 2016 Dec. 1 Balance 6 13 20 24 NAME:

Post Ref.

MISCELLANEOUS EXPENSE

Date Explanation 2016 Dec. 1 Balance

5070

ACCOUNT NO.

DR CR Cr

ACCOUNT NO. Post Ref. ✓

Debit

Credit

DR CR Cr

Balance 14 16 18 19 20

8 0 0 3 7 0 0 3 0 4 3 0 8 3 0

20 20 20 20 20

5120 Balance 4 3 0 69 8 6 0 68 5600 Balance 9 5 0 00 7 9 5 0 00 5610 Balance 1 0 0 00

5620 Balance 1 7 50

10-35

40 40

8 0 0 00 8 0 0 00

1 38

Dec. 24 Lance Klumm Dec. 24 Aurelle Hall

Income Tax: Employee Name Dec. 20 Lance Klumm Dec. 20 Aurelle Hall

24 Aurelle Hall

Employee

7 6 0 00

54.30 71.10

Federal Income Tax + 59.90 65.50

20.00

8 0 0 00 8 6 0 00 1 6 6 0 00

8 9 0 00 6 8 0 00 1 5 7 0 00

Gross Earnings

1 8 7 55 8 4 9 20

1 4 0 0 00 6 0 3 0 00

26.80 35.35

2 7 1 29

6 2 54

3 4 24

2 8 30

6 2 54

CPP 3 0 28 3 2 26

Deductions

81.10 106.45

**Total Income Tax 88.60 97.80

1 0 6 45

7 6 0 00

8 1 10

1 4 0 0 00 6 4 0 00

1 8 6 40

6 8 0 00 7 2 0 00

115.45 130.85

3 6 22 3 9 11 7 5 33

CPP 4 0 60 3 0 28 7 0 88

Deductions

*Total Income Tax 140.35 88.60

1 1 5 45 1 3 0 85 2 4 6 30

I T* 1 4 0 35 8 8 60 2 2 8 95

I T* 8 8 60 9 7 80

Gross Earnings

Provincial Income Tax = 28.70 32.30

Overtime

38.75 43.65

Provincial Income Tax = 46.45 28.70

6 0 00

Overtime 9 0 00

Earnings

6 4 0 00

Date 2016

Dec. 24 Lance Klumm

76.70 87.20

Federal Income Tax + 93.90 59.90

20.00 20.00

Regular 6 8 0 00 7 2 0 00

Net Total Hrs. Rate of Claim Reg. O/T Pay Dec. 20 Lance Klumm 1 34 20.00 20 Aurelle Hall 1 36 20.00

Dec. 13 Lance Klumm Dec. 13 Aurelle Hall

Income Tax: Employee Name Dec. 6 Lance Klumm Dec. 6 Aurelle Hall

1 1

Regular 8 0 0 00 6 8 0 00

Earnings

PRECISION COMPUTER CENTRE - PAYROLL REGISTER

Net Total Hrs. Rate of Claim Reg. O/T Pay Lance Klumm 1 40 3 20.00 Aurelle Hall 1 34 20.00

Employee

Dec. 13 Lance Klumm 13 Aurelle Hall

Dec. 6 6

Date 2016

CONTINUING PROBLEM, Cont.

5 4 8 35 5 7 6 41

NetPay

6 0 5 04

5 1 8 58

1 1 3 36 4 7 9 6 15

2 6 29 1 1 2 3 62

1 4 27

1 2 02

2 6 30 1 1 2 4 76

EI 1 2 77 1 3 53

1 5 06 6 3 3 27 1 6 19 6 7 3 85 3 1 25 1 3 0 7 12

NetPay EI 1 6 75 6 9 2 30 1 2 77 5 4 8 35 2 9 52 1 2 4 0 65

Net Rate of Hours Claim Pay Worked Code 1 20/h 38 34 32 38 43 40 34 32 7 6 0 00 6 8 0 00 6 4 0 00 7 6 0 00 8 0 0 00 8 0 0 00 6 8 0 00 6 4 0 00 5 7 6 0 00

Regular

1 2 3 4 5 6 7 8

Week

Net Rate of Hours Claim Pay Worked Code 1 20/h 42 36 35 44 34 42 36 38 8 0 0 00 7 2 0 00 7 0 0 00 8 0 0 00 6 8 0 00 8 0 0 00 7 2 0 00 7 6 0 00 5 9 8 0 00

Regular

Name of Employee Aurelle Hall Social Insurance Number 893 421 777 Date of Birth 01/27/78

1 2 3 4 5 6 7 8

Week

Name of Employee Lance Klumm Social Insurance Number 123 456 999 Date of Birth 09/29/74

Gross Pay

8 6 0 00 7 2 0 00 7 0 0 00 1 2 0 00 9 2 0 00 6 8 0 00 6 0 00 8 6 0 00 7 2 0 00 7 6 0 00 2 4 0 00 6 2 2 0 00

6 0 00

Overtime

Earnings

1 0 6 45 8 8 60 8 1 10 1 0 6 45 1 4 0 35 1 1 5 45 8 8 60 8 1 10 8 0 8 10

IT 3 4 24 3 0 28 2 8 30 3 4 24 4 0 60 3 6 22 3 0 28 2 8 30 2 6 2 46

CPP

1 3 0 85 9 7 80 9 2 95 1 4 8 25 8 8 60 1 3 0 85 9 7 80 1 0 6 45 8 9 3 55

3 9 11 3 2 26 3 1 27 4 2 08 3 0 28 3 9 11 3 2 26 3 4 24 2 8 0 61

CPP

Precision Computer Centre Employee Earnings Record For the Calendar Year 2016

7 6 0 00 6 8 0 00 6 4 0 00 7 6 0 00 9 0 00 8 9 0 00 8 0 0 00 6 8 0 00 6 4 0 00 9 0 00 5 8 5 0 00

Overtime

Earnings

Precision Computer Centre Employee Earnings Record For the Calendar Year 2016

1 6 19 1 3 53 1 3 15 1 7 31 1 2 77 1 6 19 1 3 53 1 4 27 1 1 6 94

Deductions

1 4 27 1 2 77 1 2 02 1 4 27 1 6 75 1 5 06 1 2 77 1 2 02 1 0 9 93

Deductions

Medical

6 0 5 04 5 4 8 35 5 1 8 58 6 0 5 04 6 9 2 30 6 3 3 27 5 4 8 35 5 1 8 58 4 6 6 9 51

Net Pay

Charitable

6 7 3 85 5 7 6 41 5 6 2 63 7 1 2 36 5 4 8 35 6 7 3 85 5 7 6 41 6 0 5 04 4 9 2 8 90

Net Pay

221 223 225 227 229 231 238 241

Chq. No.

220 222 224 226 228 230 237 240

Chq. No.

Employee Address: 22 Fairway Lane Edmonton, Alberta T6A 1A1

Charitable

Employee Address: 11224 23B Street Edmonton, Alberta T6V 2V2

Canada Revenue Agency

Agence du revenu du Canada

Year Année

Precision Computer Centre 385 North Escondido Blvd. Edmonton, Alberta T6G 1X9 Payroll Account Number (15 characters) Numéro de compte de retenues (15 caractères)

2016

Social insurance number Numéro d'assurance sociale

1 2 3 4 5 6 9 9 9

Employment code Code d'emploi

KLUMM

808 10 EI insurable earnings Gains assurables d'AE

262 46 Employee's QPP contributions – line 308 Cotisations de l'employé au RRQ – ligne 308

First name – Prénom

Initials – Initiales

LANCE

Union dues – line 212 Cotisations syndicales – ligne 212

109 93 RPP contributions – line 207 Cotisations à un RPA – ligne 207

Charitable donations – Schedule 1 Dons de bienfaisance – Annexe 1

11224-23B Street Edmonton, Alberta T6V 2V2

46 Pension adjustment – line 206 Facteur d'équivalence – ligne 206

RPP or DPSP registration number N° d'agrément d'un RPA ou d'un RPDB

50 PPIP insurable earnings Gains assurables du RPAP

Employee's PPIP premiums – see over Cotisations de l'employé au RPAP – voir au verso

Other information (see the back) Autres renseignements (voir au verso)

Box/Case

Amount/Montant

5,850 00

CPP/QPP pensionable earnings Gains donnant droit à pension – RPC/RRQ

Employee's EI premiums – line 312 Cotisations de l'employé à l'AE – ligne 312

Employee's name and address – Nom et adresse de l'employé Last name (in capital letters) – Nom de famille (en lettres majuscules)

Employee's CPP contributions – line 308 Cotisations de l'employé au RPC – ligne 308

Exempt – Exemption EI CPP - QPP

RPC - RRQ

Income tax deducted – line 437 Impôt sur le revenu retenu – ligne 437

5,850 00

Province of employment Province d'emploi

123456789RP0001

T4 STATEMENT OF REMUNERATION PAID ÉTAT DE LA RÉMUNÉRATION PAYÉE

Employment income – line 101 Revenus d'emploi – ligne 101

VOID ANNULÉ

Return with T4 Summary Á retourner avec le T4 Sommaire

Employer's name – Nom de l'employeur

Box/Case

Amount – Montant

Box/Case

Amount/Montant

Box/Case

Amount/Montant

T4 (09)

Canada Revenue Agency

Agence du revenu du Canada

Year Année

Precision Computer Centre 385 North Escondido Blvd. Edmonton, Alberta T6G 1X9 Payroll Account Number (15 characters) Numéro de compte de retenues (15 caractères)

2016

Social insurance number Numéro d'assurance sociale

8 9 3 4 2 1 7 7 7

6,220 00

Exempt – Exemption EI CPP - QPP

Employment code Code d'emploi

Initials – Initiales

RPC - RRQ

HALL

893 55 EI insurable earnings Gains assurables d'AE

280 61

26 Employee's EI premiums – line 312 Cotisations de l'employé à l'AE – ligne 312

First name – Prénom

AURELLE

116 94

Union dues – line 212 Cotisations syndicales – ligne 212

RPP contributions – line 207 Cotisations à un RPA – ligne 207

Charitable donations – Schedule 1 Dons de bienfaisance – Annexe 1

46 Pension adjustment – line 206 Facteur d'équivalence – ligne 206

22 Fairway Lane Edmonton, Alberta T6A 1A1

RPP or DPSP registration number N° d'agrément d'un RPA ou d'un RPDB

Employee's PPIP premiums – see over Cotisations de l'employé au RPAP – voir au verso

Other information (see the back) Autres renseignements (voir au verso)

Box/Case

Amount/Montant

Box/Case

Amount/Montant

6,220 00

Employee's QPP contributions – line 308 CPP/QPP pensionable earnings Cotisations de l'employé au RRQ – ligne 308 Gains donnant droit à pension – RPC/RRQ

Employee's name and address – Nom et adresse de l'employé Last name (in capital letters) – Nom de famille (en lettres majuscules)

Income tax deducted – line 437 Impôt sur le revenu retenu – ligne 437

Employee's CPP contributions – line 308 Cotisations de l'employé au RPC – ligne 308

Province of employment Province d'emploi

123456789RP0001

T4 STATEMENT OF REMUNERATION PAID ÉTAT DE LA RÉMUNÉRATION PAYÉE

Employment income – line 101 Revenus d'emploi – ligne 101

VOID ANNULÉ

Return with T4 Summary Á retourner avec le T4 Sommaire

Employer's name – Nom de l'employeur

PPIP insurable earnings Gains assurables du RPAP

Amount/Montant

Box/Case

Amount/Montant

Box/Case

Amount/Montant

T4 (09)

10-37

Canada Revenue Agency

Agence du revenu du Canada

Web Access Code - Code d'accès au Web

For the year ending December 31,

0505

20 16

Summary Sommaire

SUMMARY OF REMUNERATION PAID SOMMAIRE DE LA RÉMUNÉRATION PAYÉE Businesss Number - Numèro d'enterprise

You have to file your T4 information return on or before the last day of February. See the information on the back of this form.

123456789RP0001 Name and address of employer – Nom et adresse de l'employeur

Precision Computer Centre 385 North Escondido Blvd. Edmonton, Alberta T6G 1X9

Vous devez produire votre déclaration de renseignements T4 au plus tard le dernier jour de février. Lisez les renseignements au verso de ce formulaire.

Total number of T4 slips filed – Nombre total de feuillets T4 produits

Employees' CPP contributions – Cotisations de l'employé au RPC

543 07

12,070 00

543 07

Registered pension plan (RPP) contributions Cotisations à un régime de pension agréé (RPA)

Employees' EI premiums – Cotisations de l'employé à l'AE

Pension adjustment – Facteur d'équivalence

Employer's EI premiums – Cotisations de l'employeur à l'AE

317 62

2 D– J

PD15-1

NLFP APPT

POF PSF

3,332 28

Memo – Note

Minus: remittances – Moins : versements 52

1,701 65

1 Y–A

Total deductions reports (16 + 27 + 18 + 19 + 22) Total des retenues déclarées (16 + 27 + 18 + 19 + 22)

Indiquez le nombre de feuillets T4 émis pour des employés dont I'adresse est aux États-Unis.

Income tax deducted – Impôt sur le revenu retenu

Indicate how many T4 slips are for employees whole addresses are in the U.S.A.

1 Pro Forma

226 87

Other Autre

Last to current Précédente à courante

Employer's CPP contributions – Cotisations de l'employeur au RPC

Employment income – Revenus d'emploi 14

Do not use this area N'inscrivez rien ici

1,668 43

We do not charge or refund a difference of less than $2.

Nous n'exigeons ni ne remboursons une différence inférieure à 2 $.

Prepared by – Établi par

Date

Difference – Différence

1,663 85

Overpayment – Paiement en trop 84

Balance due – Solde dû 86

Amount enclosed – Somme jointe

1,663 85

SIN of the proprietor(s) or principal owner(s) – NAS du ou des propriétaires Canadian-controlled private corporations or unincorporated employers Sociétés privées sous contrôle canadien ou employeurs non constitués

75 Area code Indicatif régional

Person to contact about this return – Personne avec qui communiquer au sujet de cette déclaration 76

Tony Freedman

780

Telephone number Numéro de téléphone

444

Extension Poste

4441

Certification – Attestation I certify that the information given in this T4 return (T4 Summary and related T4 slips) is, to the best of my knowledge, correct and complete. J'atteste que les renseignements fournis dans cette déclaration T4 (le formulaire T4 Sommaire et les feuillets T4 connexes) sont, à ma connaissance, exacts et complets.

January 15, 2017

Tony Freedman

Owner

Date

Signature of authorized person – Signature d'une personne autorisée

Position or office – Titre ou poste

Privacy Act, personal information bank number RCT/P-PU-005 Loi sur la protection des renseignments personnels, ficher de renseignements personnels numéro RCT/P-PU-005

T4 Summary – Sommaire (09)

MINI PRACTICE SET PETE’S MARKET PAYROLL REGISTER 2018

Employee

Sep 7 Fred Flynn 7 Mary Jones 7 Lilly Vron

2018

Employee

Sep 14 Fred Flynn 14 Mary Jones 14 Lilly Vron

2018

Employee

Sep 21 Fred Flynn 21 Mary Jones 21 Lilly Vron

2018

Employee

Sep 28 Fred Flynn 28 Mary Jones 28 Lilly Vron

Net Claim Weekly Salary Code 5 1 1 9 0 00 1 1 2 6 5 00 1 9 4 0 00 3 3 9 5 00

Net Claim Weekly Salary Code 5 1 2 6 5 00 1 1 2 6 5 00 1 9 4 0 00 3 4 7 0 00

Net Claim Weekly Salary Code 5 1 2 6 5 00 1 1 2 6 5 00 3 9 4 0 00 3 4 7 0 00

IT*

CPP

2 0 7 15 2 5 7 90 1 5 7 65 6 2 2 70

5 5 45 5 9 16 4 3 07 1 5 7 68

2 2 36 0 00 1 7 65 4 0 01

IT**

CPP

2 0 7 15 2 5 7 90 1 5 7 65 6 2 2 70

5 5 45 5 9 16 4 3 07 1 5 7 68

2 2 36 0 00 1 7 65 4 0 01

IT***

CPP

2 2 9 60 2 5 7 90 1 5 7 65 6 4 5 15

5 9 16 3 4 67 4 3 07 1 3 6 90

2 3 87 0 00 1 7 65 4 1 52

IT****

CPP

2 2 9 60 2 5 7 90 1 4 5 55 6 3 3 05

5 9 16 0 00 4 3 07 1 0 2 23

2 3 87 0 00 1 7 65 4 1 52

Net Pay 9 0 5 04 9 4 7 94 7 2 1 63 2 5 7 4 61

Net Pay 9 5 2 37 9 7 2 43 7 2 1 63 2 6 4 6 43

Net Pay 9 5 2 37 1 0 0 7 10 7 3 3 73 2 6 9 3 20

Re: Income Tax column: See Page 9-40 for details of Federal and Provincial Income Tax.

10-39

MINI PRACTICE SET, Cont. Information for Pete’s Market Payroll Register - Income Tax

Date Sep 7

Date Sep 14

Date Sep 21

Date Sep 28

Income Tax: Employee Name Fred Flynn Mary Jones Lilly Vron Total Income Tax

Federal Income Tax + 137.45 174.60 104.05 416.10

Provincial Income Tax = 69.70 83.30 53.60 206.60

*Total Income Tax 207.15 257.90 157.65 622.70

Income Tax: Employee Name Fred Flynn Mary Jones Lilly Vron Total Income Tax

Federal Income Tax + 137.45 174.60 104.05 416.10

Provincial Income Tax = 69.70 83.30 53.60 206.60

**Total Income Tax 207.15 257.90 157.65 622.70

Income Tax: Employee Name Fred Flynn Mary Jones Lilly Vron Total Income Tax

Federal Income Tax 153.30 174.60 104.05 431.95

Provincial Income Tax = 76.30 83.30 53.60 213.20

***Total Income Tax 229.60 257.90 157.65 645.15

Income Tax: Employee Name Fred Flynn Mary Jones Lilly Vron Total Income Tax

Federal Income Tax + 153.30 174.60 94.95 422.85

Provincial Income Tax = 76.30 83.30 50.60 210.20

****Total Income Tax 229.60 257.90 145.55 633.05

MINI PRACTICE SET, Cont. PETE’S MARKET GENERAL JOURNAL 2018 Sep

Page 3 Post Ref.

Account Title and Description 7 Salaries Expense Income Taxes Payable CPP Payable EI Payable Salaries Payable To record payroll for September 7, 2018 7 Employee Benefits Expense CPP Payable EI Payable To record employee benefits expense for Sep 7 payroll 7 Payroll Bank Account* Operating Bank Account To record transfer of funds to pay net payroll this date

Dr.

Cr.

3 3 9 5 00 6 2 2 1 5 7 4 0 2 5 7 4

70 68 01 61

2 1 3 69 1 5 7 68 5 6 01 2 5 7 4 61 2 5 7 4 61

* Students should note that individual cheques will be issued from the payroll bank account to each of the three employees for their net pay, thus also reducing the Salaries Payable account to zero at the same time.

14 Salaries Expense Income Taxes Payable CPP Payable EI Payable Salaries Payable To record payroll for September 14, 2018 14 Employee Benefits Expense CPP Payable EI Payable To record employee benefits expense for Sep 14, 2018 14 Payroll Bank Account Operating Bank Account To record transfer of funds to cover net pay for Sep 14 14 Income Taxes Payable CPP Payable EI Payable Operating Bank Account To record cheque to CRA for August payroll deductions plus employer portion

3 3 9 5 00 6 2 2 1 5 7 4 0 2 5 7 4

70 68 01 61

2 1 3 69 1 5 7 68 5 6 01 2 5 7 4 61 2 5 7 4 61 3 2 6 8 75 1 5 7 6 80 5 9 2 08 5 4 3 7 63

10-41

MINI PRACTICE SET, Cont. PETE’S MARKET GENERAL JOURNAL 2018 Sep

Account Title and Description 21 Salaries Expense Income Taxes Payable CPP Payable EI Payable Salaries Payable To record payroll for September 21, 2018 21 Employee Benefits Expense CPP Payable EI Payable To record employee benefits expense for Sep 21 payroll 21 Payroll Bank Account Operating Bank Account To record transfer of funds to cover net pay for Sep 21 28 Salaries Expense Income Taxes Payable CPP Payable EI Payable Salaries Payable To record payroll for September 28, 2018 28 Employee Benefits Expense CPP Payable EI Payable To record employee benefits expense for Sep 28 28 Payroll Bank Account Operating Bank Account To record transfer of funds to cover net pay for Sep 28

Page 4 Post Ref.

Dr.

Cr.

3 4 7 0 00 6 4 5 1 3 6 4 1 2 6 4 6

15 90 52 43

1 9 5 03 1 3 6 90 5 8 13 2 6 4 6 43 2 6 4 6 43 3 4 7 0 00 6 3 3 1 0 2 4 1 2 6 9 3

05 23 52 20

1 6 0 36 1 0 2 23 5 8 13 2 6 9 3 20 2 6 9 3 20

END OF CHAPTER PAYROLL PROJECT VERDUNN COMPANY

First 2 Weeks of February HOURLY RATE

REG. HOURS

O/T HOURS

GROSS EARNINGS

a . Jeffery Chan

$14.00

$16.00

Week 1 - 38 Week 2 - 40 Week 1 - 40 Week 2 - 35

Week 1 - 0 Week 2 - 3 Week 1 - 2 Week 2 - 0

$532 $623 $688 $560

HOURLY RATE

REG. HOURS

O/T HOURS

GROSS EARNINGS

a . Jeffery Chan

$14.00

b . Katherine Lovejoy

$16.00

Week 3 - 40 Week 4 - 40 Week 3 - 40 Week 4 - 40

Week 3 - 2 Week 4 - 5 Week 3 - 0 Week 4 - 6

$602 $665 $640 $784

EMPLOYEE

Katherine Lovejoy

Last 2 Weeks of February EMPLOYEE

Week 1 - $14 x 38 = $532.00 Week 2 - $14 x 40 = $560.00 Week 2 OT - $21 x 3 = $63.00 Total Pay First 2 Wks of Feb = $1,155

Week 1 - $16 x 40 = $640.00 Week 1 OT - $24.00 x 2 = $48.00 Week 2 - $16 x 35 = $560.00 Total Pay First 2 Wks of Feb = $1,248.00

Week 3 - $14 x 40 = $560.00 Week 3 OT - $21 x 2 = $42.00 Week 4 - $14 x 40 = $560.00 Week 4 OT - $21 x 5 = $105.00 Total Pay Second 2 Wks of Feb = $1,267

Week 3 - $16 x 40 = $640.00 Week 4 - $16.00 x 40 = $640.00 Week 4 OT - $24.00 x 6 = $144.00 Total Pay Second 2 Wks of Feb = $1,424.00

Total Pay for February for Jeffery Chan = $2,422

Total Pay for February for Katherine Lovejoy = $2,672.00

10-43

END OF CHAPTER PAYROLL PROJECT, Cont. FIRST TWO WEEKS OF FEBRUARY - VERDUNN COMPANY Net Claim Code 1 3 2 4 1 2

Employee Adams, Taylor Evans, Chelsea Johnson, Quinn Winston, Jameel Chan, Jeffery Lovejoy, Katherine

Gross Earnings 1 2 4 5 00 1 4 7 5 00 1 5 5 0 00 9 8 0 00 1 1 5 5 00 1 2 4 8 00 7 6 5 3 00

IT* 1 5 6 1 8 0 2 1 2 6 6 1 3 9 1 4 9 9 0 5

73 85 28 69 91 21 67

IT* 1 5 6 1 9 0 2 1 2 7 9 1 6 0 1 8 4 9 8 4

73 54 28 87 83 50 75

LAST TWO WEEKS OF FEBRUARY - VERDUNN COMPANY Net Claim Code 1 3 2 4 1 2

Employee Adams, Taylor Evans, Chelsea Johnson, Quinn Winston, Jameel Chan, Jeffery Lovejoy, Katherine

Gross Earnings 1 2 4 5 00 1 5 2 5 00 1 5 5 0 00 1 0 5 0 00 1 2 6 7 00 1 4 2 4 00 8 0 6 1 00

First 2 Weeks of February (see next page for Second 2 Weeks) Income Tax: Employee Name

Federal Income Tax +

Provincial Income Tax =

*Total Income Tax

Adams, Taylor Evans, Chelsea Johnson, Quinn Winston, Jameel Chan, Jeffery Lovejoy, Katherine

104.87 118.76 141.41 37.32 92.29 99.21

51.86 62.09 70.87 29.37 47.62 50.00

156.73 180.85 212.28 66.69 139.91 149.21

Total Income Tax

Note: The tax calculations were derived from CRA Payroll Deductions Online Calculator for January 1, 2013 for Ontario.

905.67

END OF CHAPTER PAYROLL PROJECT, Cont. FIRST TWO WEEKS OF FEBRUARY - VERDUNN COMPANY, Cont. Deductions CPP

5 4 96 6 6 35 7 0 06 4 1 85 5 0 51 5 5 11 3 3 8 84

2 3 41 2 7 73 2 9 14 1 8 42 2 1 71 2 3 46 1 4 3 87

Net Pay

Health Ins.

Group Ins.

1 6 00 1 6 00 1 6 00 1 6 00

1 1 00 1 1 00 1 1 00 1 1 00

1 6 00 8 0 00

1 1 00 5 5 00

5 00 9 7 7 90 5 00 1 1 6 8 07 5 00 1 2 0 6 52 5 00 8 2 1 04 5 00 9 3 7 87 5 00 9 8 8 22 3 0 00 6 0 9 9 62

Deductions CPP

5 4 96 6 8 82 7 0 06 4 5 31 5 6 05 6 3 82 3 5 9 02

2 3 41 2 8 67 2 9 14 1 9 74 2 3 82 2 6 77 1 5 1 55

Chq. No.

Charitable

Net Pay

Health Ins.

Group Ins.

1 6 00 1 6 00 1 6 00 1 6 00

1 1 00 1 1 00 1 1 00 1 1 00

1 6 00 8 0 00

1 1 00 5 5 00

425 426 427 428 429 430

Chq. No.

Charitable 5 00 9 7 7 90 5 00 1 2 0 4 97 5 00 1 2 0 6 52 5 00 8 7 3 08 5 00 1 0 2 1 30 5 00 1 1 1 6 91 3 0 00 6 4 0 0 68

689 690 691 692 693 694

Second 2 Weeks of February (see previous page for First 2 Weeks) Income Tax: Employee Name

Federal Income Tax +

Provincial Income Tax =

*Total Income Tax

Adams, Taylor Evans, Chelsea Johnson, Quinn Winston, Jameel Chan, Jeffery Lovejoy, Katherine

104.87 125.75 141.41 47.20 107.94 123.86

51.86 64.79 70.87 32.67 52.89 60.64

156.73 190.54 212.28 79.87 160.83 184.50

Total Income Tax

984.75

10-45

END OF CHAPTER PAYROLL PROJECT, Cont. VERDUNN COMPANY GENERAL JOURNAL

Page 13

Date Account Title and Description 2016 Feb 14 Salaries and Wages Expense CPP Payable EI Payable IT Payable Health Insurance Payable Group Insurance Payable Charitable Payable Salaries and Wages Payable

Post Ref. 515 225 227 230 235 236 237 222

Feb

14 Employee Benefits Expense CPP Payable EI Payable Health Insurance Payable Charitable Payable

520 225 227 235 237

6 5 0 26

28 Salaries and Wages Expense CPP Payable EI Payable IT Payable Health Insurance Payable Group Insurance Payable Charitable Payable Salaries and Wages Payable

515 225 227 230 235 236 237 222

8 0 6 1 00

28 Employee Benefits Expense CPP Payable EI Payable Health Insurance Payable Charitable Payable

520 225 227 235 237

6 8 1 19

225 227 230 233

1 3 9 5 72 7 0 9 01 1 8 9 0 42

Feb

Mar 15 CPP Payable EI Payable IT Payable CRA Payable

Dr.

Cr.

7 6 5 3 00 3 3 8 1 4 3 9 0 5 8 0 5 5 3 0 6 0 9 9

84 87 67 00 00 00 62

3 3 8 2 0 1 8 0 3 0

84 42 00 00

3 5 9 1 5 1 9 8 4 8 0 5 5 3 0 6 4 0 0

02 55 75 00 00 00 68

3 5 9 2 1 2 8 0 3 0

02 17 00 00

3 9 9 5 15

END OF CHAPTER PAYROLL PROJECT, Cont. VERDUNN COMPANY CASH PAYMENTS JOURNAL

Page 6

Feb 14 425

Taylor Adams

✓

Salaries and Wages Payable Dr. 9 7 7 90

426

Chelsea Evans

✓

1 1 6 8 07 1 1 6 8 07

427

Quinn Johnson

✓

1 2 0 6 52 1 2 0 6 52

428

Jameel Winston

✓

8 2 1 04

429

Jeffery Chan

✓

9 3 7 87

Date 2016

Chq. No.

Account Payment to

Post Ref .

Sundry Dr.

Accounts Payable Dr .

Cash Cr . 9 7 7 90

Katherine Lovejoy

✓

9 8 8 22

28 689

Taylor Adams

✓

9 7 7 90

690

Chelsea Evans

✓

1 2 0 4 97 1 2 0 4 97

691

Quinn Johnson

✓

1 2 0 6 52 1 2 0 6 52

692

Jameel Winston

✓

693

Jeffery Chan

✓

1 0 2 1 30 1 0 2 1 30

694

Katherine Lovejoy

✓

1 1 1 6 91 1 1 1 6 91

725 726 727 728

Receiver General Ontario Supplementary Medical Mayfair Financial African Educational Fund

233 235 236 237

430

Mar 15 15 15 15

8 7 3 08

3 9 9 5 15 3 2 0 00 1 1 0 00 1 2 0 00 4 5 4 5 15 (X)

8 7 3 08

3 9 9 5 15 3 2 0 00 1 1 0 00 1 2 0 00 12 5 0 0 3 0 17 0 4 5 4 5 (222)

(100)

10-47

END OF CHAPTER PAYROLL PROBLEMS, Cont. PARTIAL GENERAL LEDGER OF VERDUNN COMPANY NAME:

CASH

Date 2016 Feb Mar

NAME:

Explanation

28 15

Debit

CPJ6 CPJ6

Explanation

DR CR Dr Cr Cr

ACCOUNT NO. Post Debit Ref. GJ13 GJ13 CPJ6 1 2 5 0 0 3 0

Credit 6 0 9 9 62 6 4 0 0 68

DR CR Cr Cr

ACCOUNT NO. Post Ref. GJ13 GJ13 GJ13 GJ13 GJ13

Debit

Credit 3 3 8 84 3 3 8 84 3 5 9 02 3 5 9 02

DR CR Cr Cr Cr Cr

1 3 9 5 72

EI PAYABLE

Date 2016 Feb 14 14 28 28 Mar 15

Credit

12 5 0 0 30 4 5 4 5 15

CPP PAYABLE

Date 2016 Feb 14 14 28 28 Mar 15

NAME:

Post Ref.

SALARIES AND WAGES PAYABLE

Date 2016 Feb 14 14 28

NAME:

ACCOUNT NO.

Post Ref. GJ13 GJ13 GJ13 GJ13 GJ13

Debit

Credit 1 4 3 87 2 0 1 42 1 5 1 55 2 1 2 17

7 0 9 01

Balance

12 5 0 0 30 17 0 4 5 45

222 Balance 6 0 9 9 62 12 5 0 0 30

225 Balance 3 3 8 6 7 7 1 0 3 6 1 3 9 5

84 68 70 72

ACCOUNT NO. Explanation

100

DR CR Cr Cr Cr Cr

227 Balance 1 4 3 3 4 5 4 9 6 7 0 9 0

87 29 84 01

END OF CHAPTER PAYROLL PROBLEMS, Cont. GENERAL LEDGER OF VERDUNN COMPANY NAME:

INCOME TAX PAYABLE

Date 2016 Feb 14 28 Mar 15 NAME:

Explanation

DR CR Cr Cr

1 8 9 0 42 ACCOUNT NO.

Post Ref. GJ13 CPJ6

Debit

Post Ref. GJ13 GJ13 GJ13 GJ13 CPJ6

Credit 3 9 9 5 15

DR CR Cr

3 9 9 5 15

ACCOUNT NO. Debit

Credit 8 0 00 8 0 00 8 0 00 8 0 00

DR CR Cr Cr Cr Cr

3 2 0 00

Post Ref. GJ13 GJ13 CPJ6

Debit

Credit 5 5 00 5 5 00

DR CR Cr Cr

1 1 0 00 ACCOUNT NO.

Post Ref. GJ13 GJ13 GJ13 GJ13 CPJ6

Debit

Credit 3 0 00 3 0 00 3 0 00 3 0 00

1 2 0 00

230 Balance 9 0 5 67 1 8 9 0 42 0 233 Balance 3 9 9 5 15 0

235 Balance 8 0 1 6 0 2 4 0 3 2 0

00 00 00 00

ACCOUNT NO.

CHARITABLE PAYABLE

Date 2016 Feb 14 14 28 28 Mar 15

Credit 9 0 5 67 9 8 4 75

GROUP INSURANCE PAYABLE

Date 2016 Feb 14 28 Mar 15 NAME:

Debit

PROVINCIAL HEALTH INSURANCE PAYABLE

Date 2016 Feb 14 14 28 28 Mar 15

NAME:

Post Ref. GJ13 GJ13 GJ13

CRA PAYABLE

Date 2016 Mar 15 15

NAME:

Explanation

ACCOUNT NO.

DR CR Cr Cr Cr Cr

236 Balance 5 5 00 5 5 00 0 237 Balance 3 0 6 0 9 0 1 2 0

00 00 00 00

10-49

END OF CHAPTER PAYROLL PROBLEMS, Cont. GENERAL LEDGER OF VERDUNN COMPANY NAME:

SALARIES AND WAGES EXPENSE

Date 2016 Feb 14 28

NAME:

Explanation

ACCOUNT NO. Post Ref. GJ13 GJ13

Debit 7 6 5 3 00 8 0 6 1 00

EMPLOYEE BENEFITS EXPENSE

Date 2016 Feb 14 28

Explanation

Credit

DR CR Dr Dr

ACCOUNT NO. Post Ref. GJ13 GJ13

Debit

Credit

6 5 0 26 6 8 1 19

DR CR Dr Dr

515 Balance 7 6 5 3 00 15 7 1 4 00

520 Balance 6 5 0 26 1 3 3 1 45

VERDUNN COMPANY CHEQUES TO BE ISSUED Cheque to be issued to:

Cheque Amount

Cheque Date

Cheque No.

February 14 14 14 14 14 14

425 426 427 428 429 430

Taylor Adams Chelsea Evans Quinn Johnson Jameel Winston Jeffery Chan Katherine Lovejoy

$ 977.90 1,168.07 1,206.52 821.04 937.87 988.22

28 28 28 28 28 28

689 690 691 692 693 694

Taylor Adams Chelsea Evans Quinn Johnson Jameel Winston Jeffery Chan Katherine Lovejoy

977.90 1,204.97 1,206.52 873.08 1,021.30 1,116.91

March 15 15 15 15

725 726 727 728

Receiver General Ontario Supplementary Medical Mayfair Financial African Educational Fund

3,995.15 320.00 110.00 120.00

11 Special Journals: Purchases and Cash Payments

ANSWERS TO DISCUSSION QUESTIONS AND CRITICAL THINKING/ETHICAL CASE 1.

2. 3. 4. 5. 6. 7.

8. 9. 10.

11. 12.

13. 14. 15.

The PST differs from the GST/HST in that not all provinces/territories charge PST. It is sent to the province rather than the federal government. PST paid on purchases cannot be deducted from PST charged like the GST/HST. PST Payable simply accumulates the provincial sales tax to pay the provincial government. Debit. Value-added tax means that it is added to the total of each invoice prepared for a customer and based on the total value of the goods sold. The purchase requisition doesn’t usually mention the GST/PST because it is an internal form asking permission to buy specific goods. Because PST does not have input tax credits, there is no need to record PST separately in a Purchases Journal. A credit memorandum would decrease the amount of PST Payable. A Cash Receipts Journal records the receipt of cash from any source. A column for GST Payable is included for cash sales only. A Cash Payments Journal records all payments by cheque. A column for GST Prepaid is included for all cash payments. When a seller issues a credit memorandum with both PST and GST included, Sales Returns and Allowances, GST Payable and PST Payable are debited, and Accounts Receivable is credited. Sales discounts should not be taken on GST or PST amounts. The federal government does not accept discounts on GST Payable. In a given reporting period, it is likely that a successful business will owe some GST or HST. If the business has just purchased a huge inventory or piece of equipment, their input tax credits might exceed the GST Payable. Then the business will receive a refund. To show that the purchaser does not owe as much because the item is being returned. Yes, PST would be included on the debit memorandum. The purchases journal records buying merchandise or other items on account, while the cash payments journal records payment transactions including the payment of items purchased on account. A column for Prepaid GST with regard to the purchase would be included on the purchases journal. The Prepaid GST column on the cash payments journal only applies to cash purchases. The GST/HST paid is deductible from the amount payable on behalf of the federal government. The amount of GST/HST paid on purchases is being reduced, thereby increasing the amount due to the federal government. The question in this case is whether Mel and Joanne should backdate the cheque in order to make the discount period. Although a business should try to pay bills during the discount period, they should avoid backdating a cheque. It is a questionable business practice to backdate a cheque, knowing full well that they missed the discount date. Instead of backdating their cheque, Joanne and Mel should make certain that future bills are paid within the discount period. In Canada, it is sometimes acceptable to allow up to 3 or 4 “days of grace” when dealing with discounts, so it is too strong a comment to conclude that a discount should never be taken in these circumstances.

11-1

SOLUTIONS TO CLASSROOM DEMONSTRATION EXERCISES 1.

Sales Sales Returns and Allowances Sales Discount PST Payable HST Payable

Revenue Revenue (Contra)

Cr. Dr.

Temporary Temporary

Revenue (Contra) Liability Liability

Dr. Cr. Cr.

Temporary Permanent Permanent

Gross Sales - SRA - SD = Net Sales

$100.00 - 12.00 - 1.76 $86.24

Dr. Dr. Cr.

$300 15 315

PST and GST on Sales has no effect on Net Sales.

SRA GST Payable Accts. Rec., North Corp.

Net purchases: $100 - 12 - 2 = $86

a. 1,3,4 b. 2,3,4 c. 2,4 d. 6,3,5

11-2

Revenue (Contra) Liability Asset

BLUE CO. SCHEDULE OF ACCOUNTS RECEIVABLE MAY 31, 2015 Bon Co. Green Co. Peke Co. Total Accts. Rec.

$105 84 42 $231

SOLUTIONS TO EXERCISES—SET A 11-1A. Kevin Stone Co. 4/19 SJ1 630

Accounts Receivable 4/30 SJ1 1,575

Bill Valley Co. 4/20 SJ1 945

GST Payable

112

212 75 SJ1 4/30

Sales

412 1500 SJ1 4/30

11-2A. SALES JOURNAL 2016

May

17 18

Terms

Invoice No.

Post Ref.

Acc. Receivable Dr.

2/10,n/30

147 148

✔ ✔

1 2 6 0 00 1 9 9 5 00 3 2 5 5 00 (112)

Account Debited

Ronald Co. Bass Co.

Page 1

2/10,n/30

GST Payable Cr.

6 0 00 9 5 00 1 5 5 00 (225)

GENERAL JOURNAL May

Sales Returns and Allowances GST Payable Accounts Receivable, Bass Co. Issued Credit Memo #12

Sales Cr.

1 2 0 0 00 1 9 0 0 00 3 1 0 0 00 (411)

Page 1 412 225 112 /✔

7 0 0 00 3 5 00 7 3 5 00

Bass Co. 5/18 SJ1 1,995 735 GJ1 5/21

Accounts Receivable 112 5/31 SJ1 3,255 735 GJ1 5/21

GST Payable 5/21 GJ1 35

Ronald Co. 5/17 SJ1 1,260

Sales

Sales Returns & Allowances 412 5/21 GJ1 700

411 3,100 SJ1 5/31

225 155 SJ1 5/21

11-3

11-4

3 3 17

June

2 6 10 16

2017

June

2017

11.4A

May

2016

11-3A. Sales Discounts Dr. 2 4 00

(1 1 1)

5 0 0 0 00 2 2 6 00 5 5 5 00 4 5 2 00 6 2 3 3 00

Cash Dr.

Boston Co. Gary Co. Boston Co.

(1 1 3)

5 6 5 00

1 0 00

Accounts Receivable Cr.

5 6 5 00

(4 1 3)

218 219 220

Invoice No.

Sales Cr.

✔ ✔ ✔

(2 1 2)

5 2 00 7 8 00

2 6 00

HST Payable Cr.

(411)

7 0 0 00 1 1 0 0 00 6 0 0 00 2 4 0 0 00

Sales Cr.

Page 1

(4 1 1)

Edna Cares, Capital 2 0 0 0 0 Cash Sale Boston Co. 4 0 0 0 0 Cash Sale 6 0 0 00

Sundry Account Names

(212)

(113)

Sales Cr.

9 1 00 1 4 3 00 7 8 00 3 1 2 00

HST Payable Cr.

Ronald Co.

Sundry Account Names

7 9 1 00 1 2 4 3 00 6 7 8 00 2 7 1 2 00

Post Acc. Receivable Ref. Dr.

CASH RECEIPTS JOURNAL

2/10,n/30

Terms

SALES JOURNAL

Accounts GST Payable Receivable Cr. Cr. 1 2 6 0 00

1 0 00

Sales Discounts Dr.

Account Debited

1 2 3 6 00

Cash Dr.

CASH RECEIPTS JOURNAL

SOLUTIONS TO EXERCISES—SET A, Cont.

311 X ✔ X

Post Ref.

✔

Post Ref.

(X)

5 0 0 0 00

Amount Cr.

Page 1

Amount Cr.

Page 1

EXERCISE 11-4A., Cont. GENERAL JOURNAL Date 2017 June 9

Post Ref.

Account Titles and Description Sales Returns and Allowances HST Collected Accounts Receivable/Boston Co. Issued Credit Memo #24

ACCOUNTS RECEIVABLE LEDGER

Page 1

412 212 113/✔

Dr.

Cr.

2 0 0 00 2 6 00 2 2 6 00

PARTIAL GENERAL LEDGER

Boston Co. 6/03 SJ1 791 226 GJ1 6/09 6/17 SJ1 678 565 CRJ1 6/10

Cash 6/30 CRJ1 6,233

Gary Co. 6/03 SJ1 1,243

Accounts Receivable 113 6/30 SJ1 2,712 226 GJ1 6/09 565 CRJ1 6/30 HST Payable 6/09 GJ1 26

111

212 312 SJ1 6/30 78 CRJ1 6/30

Edna Cares, Capital 311 5,000 CRJ1 6/02 Sales

411 2,400 SJ1 6/30 600 CRJ1 6/30

Sales Returns & Allowances 6/9 GJ1 200

412

Sales Discounts 6/30 CRJ1 10

413

EDNA CO. SCHEDULE OF ACCOUNTS RECEIVABLE JUNE 30, 2017 Boston Co. $ 678 Gary Co. 1,243 Total Accounts Receivable $ 1,921

11-5

SOLUTIONS TO EXERCISES—SET A, Cont. Barr Co. 6/9 PJ1

Equipment 600

120

420 PJ1 6/3

125

840 PJ1 6/6

GST Prepaid 6/30 PJ1 90

Jess Co.

Rey Co. 630 PJ1 6/9

Accounts Payable 210 1,890 PJ1 6/30 Purchases 6/30 PJ1 1,200

510

EXERCISE 11-6A. GENERAL JOURNAL Date 2017 July 8

Page 1 Post Ref.

Account Title and Description

Dr.

211 / ✔

Accounts Payable, Reel Co. Purchases Returns and Allowances Prepaid GST Debit Memo #1

Cr.

4 2 0 00 4 0 0 00 2 0 00

513 125

Reel Co. 7/8 GJ1 420

Prepaid GST

125 20

11-6

7/8 GJ1

Accounts Payable 7/8 GJ1 420

211

Purchases Returns & Allowances 400 7/8 GJ1

513

EXERCISE 11-7A. CASH PAYMENTS JOURNAL Date 2016 April

2 9 16 30

Chq. No.

Account Debited

Post Ref.

20 21

A. James Company Advertising Expense

✔ 610 125 ✔

B. Foss

Sundry Accounts Dr.

Page 2

Accounts Payable Dr. 1 0 5 0 00

Purchases Discounts Cr. 2 0 00

1 0 3 0 00

2 0 00

1 0 5 00 4 2 0 00 1 5 5 5 00

1 0 0 00 5 00 1 0 5 00

4 2 0 00 1 4 7 0 00

(X)

(210)

ACCOUNTS PAYABLE

(511)

Cash Cr.

(110)

PARTIAL GENERAL LEDGER

B. Foss 4/16 CPJ2 420 420

Cash

A. James 4/02 CPJ2 1,050 1,050

Prepaid GST 4/09 CPJ2 5

125

J. Ranch 945

Accounts Payable 4/30 CPJ2 1,470 2,625

210

B. Swanson 210

Purchases Discounts

511 20 CPJ2 4/30

Advertising Expense 4/09 CPJ2 100

610

3,000

110 1,555 CPJ2 4/30

EXERCISE 11-8A. MORGAN’S CLOTHING SCHEDULE OF ACCOUNTS PAYABLE APRIL 30, 2016 J. Ranch B. Swanson Total Accounts Payable

Accounts Payable 1,470

$ 945 210 $ 1,155

210 2,625 1,155 Balance SUDBURY OUTDOOR WEAR Quick Method of Accounting for HST Sales $325,000

Quick Rate × 4.4%

To CRA $14,300.00

11-7

SOLUTIONS TO EXERCISES—SET B 11-1B. Kevin Stone Co. 4/19 SJ1 735

Accounts Receivable 4/30 SJ1 1,575

Bill Valley Co. 4/20 SJ1 840

GST Payable

112

212 75 SJ1 4/30

Sales

412 1500 SJ1 4/30

11-2B. SALES JOURNAL 2016 May

15 19

Account Debited

Terms

Ronald Co. Bass Co.

2/10,n/30 2/10,n/30

Invoice No. 246 247

Post Ref.

✔ ✔

Page 1 Acc. Receivable

Dr. 1 5 7 5 00 2 3 1 0 00 3 8 8 5 00 (112)

GST Payable Cr. 7 5 00 1 1 0 00 1 8 5 00 (225)

GENERAL JOURNAL May

Sales Returns and Allowances GST Payable Accounts Receivable, Bass Co. Issued Credit Memo #12

Sales Cr. 1 5 0 0 00 2 2 0 0 00 3 7 0 0 00 (411)

Page 1 412 225 112 /✔

4 0 0 00 2 0 00 4 2 0 00

Bass Co. 5/19 SJI 2,310 420 GJI 5/23

Accounts Receivable 112 5/31 SJI 3,885 420 GJI 5/21

GST Payable 5/23 GJI 20

Ronald Co. 5/15 SJI 1,575

Sales

Sales Returns & Allowances 412 5/31 GJI 400

11-8

411 3,700 SJI 5/31

225 185 SJI 5/31

11-9

3 3 17

June

2 6 10 16

2017

June

2017

11-4B.

May

2016

11-3B. Sales Discounts Dr. 3 0 00

(1 1 1)

8 0 0 0 00 3 3 9 00 8 3 2 50 3 9 5 50 9 5 6 7 00

Cash Dr.

Boston Co. Gary Co. Boston Co.

Invoice No. 218 219 220

(1 1 3)

8 4 7 50

1 5 00

Accounts Receivable Cr.

8 4 7 50

(4 1 3)

✔ ✔ ✔

Post Ref.

4 5 50 8 4 50

(411)

Sales Cr. 9 0 0 00 1 2 0 0 00 1 1 0 0 00 3 2 0 0 00

Page 1

Sundry Account Names

(212)

HST Payable Cr. 1 1 7 00 1 5 6 00 1 4 3 00 4 1 6 00

Ronald Co.

Sundry Account Names

(4 1 1)

Edna Cares, Capital 3 0 0 0 0 Cash Sale Boston Co. 3 5 0 0 0 Cash Sale 6 5 0 00

Sales Cr.

(113)

Dr. 1 0 1 7 00 1 3 5 6 00 1 2 4 3 00 3 6 1 6 00

3 9 00

HST Payable Cr.

(2 1 2)

Sales Cr.

Acc. Receivable

CASH RECEIPTS JOURNAL

2/10,n/30

Terms

SALES JOURNAL

Accounts GST Payable Receivable Cr. Cr. 1 5 7 5 00

1 5 00

Sales Discounts Dr.

Account Debited

1 5 4 5 00

Cash Dr.

CASH RECEIPTS JOURNAL

311 X ✔ X

Post Ref.

✔

Post Ref.

(X)

8 0 0 0 00

Amount Cr.

Page 1

Amount Cr.

Page 1

SOLUTIONS TO EXERCISES—SET B EXERCISE 11-4B., Cont. GENERAL JOURNAL Date 2017 June 9

Page 1 Post Ref.

Account Titles and Description Sales Returns and Allowances HST Collected Accounts Receivable/Boston Co. Issued Credit Memo #24

412 212 113/✔

ACCOUNTS RECEIVABLE LEDGER

Dr. 1 5 0 00 1 9 50

1 6 9 50

PARTIAL GENERAL LEDGER

Boston Co. 6/03 SJ1 1,017.00 169.50 GJ1 6/09 6/17 SJ1 1,243.00 847.50 CRJ1 6/10

Cash 6/30 CRJ1 9,567.00

111

Gary Co. 6/03 SJ1 1,356.00

Accounts Receivable 6/30 SJ1 3,616.00

169.50 GJ1 847.50 CRJ1

113 6/09 6/30

416.00 SJ1 84.50 CRJ1

212 6/30 6/30

HST Payable 6/09 GJ1 19.50 Edna Cares, Capital

311 8,000.00 CRJ1 6/02

Sales 3,200.00 SJ1 650.00 CRJ1

EDNA CO. SCHEDULE OF ACCOUNTS RECEIVABLE JUNE 30, 2017 Boston Co. Gary Co. Total Accounts Receivable

11-10

Cr.

$ 1,243.00 1,356.00 $ 2,599.00

411 6/30 6/30

Sales Returns & Allowances 6/9 GJ1 150.00

412

Sales Discounts 6/30 CRJ1 15.00

413

EXERCISE 11-5B. Barr Co. 6/9 PJ1

Equipment 400

120

525 PJ1 6/3

125

945 PJ1 6/6

GST Prepaid 6/30 PJ1 90

Jess Co.

Rey Co. 420 PJ1 6/9

Accounts Payable 210 1,890 PJ1 6/30 Purchases 6/30 PJ1 1,400

510

EXERCISE 11-6B. GENERAL JOURNAL Date 2017 July 7

Page 1 Post Ref.

Account Title and Description

211 / ✔

Accounts Payable, Reel Co. Purchases Returns and Allowances Prepaid GST Debit Memo #1

Reel Co. 7/8 GJ1 262.60

Dr.

Cr.

2 6 2 50 2 5 0 00 1 2 50

513 125

Prepaid GST 12.50 Accounts Payable 7/7 GJ1 262.50

125 7/8 GJ1 211

Purchases Returns & Allowances 513 250.00 7/7 GJ1

11-11

EXERCISE 11-7B. CASH PAYMENTS JOURNAL Date 2017 April

3 8

Chq. No.

Account Debited

200 A. James Company 201 Advertising Expense

15 202 30

B. Foss

Post Ref.

Sundry Accounts Dr.

✔ 610 125 ✔

1 0 0 00 5 00

Page 2

Accounts Payable Dr. 1 1 5 5 00

1 0 5 00

6 3 0 00 1 7 8 5 00

(X)

(210)

ACCOUNTS PAYABLE

Cash Cr. 1 1 3 3 00

2 2 00

1 0 5 00 6 3 0 00 1 8 6 8 00

(511)

(110)

PARTIAL GENERAL LEDGER

B. Foss 4/15 CPJ2 630 630

Cash

A. James 4/03 CPJ2 1,155 1,155

Prepaid GST 4/08 CPJ2 5.00

2,000.00

J. Ranch 840

110 1,868.00 CPJ24/30

Accounts Payable 4/30 CPJ2 1,785.00 2,940.00

B. Swanson 315

125

210

Purchases Discounts 511 22.00 CPJ2 4/30 Advertising Expense 4/09 CPJ2 100.00

EXERCISE 11-8B. MORGAN’S CLOTHING SCHEDULE OF ACCOUNTS PAYABLE APRIL 30, 2017 J. Ranch B. Swanson Total Accounts Payable Accounts Payable 1,785.00

$ 840.00 315.00 $ 1,155.00

210 2,940.00 1,155 Balance SUDBURY OUTDOOR WEAR Quick Method of Accounting for HST Sales $280,000

11-12

Purchases Discounts Cr. 2 2 00

Quick Rate × 4.4%

To CRA $12,320.00

610

11-13

April

8 9 22 23 29

Date 2016 Customer Alice Koy Co. Marika Sanchez Co. Jeff Tong Co. Rusty Neal Co. Marika Sanchez Co.

PROBLEM 11A-1.

1001 1002 1003 1004 1005

✔ ✔ ✔ ✔ ✔

Sales Post Invoice Ref.

(12)

Accounts Receivable Dr. 3 3 9 00 1 1 3 0 00 5 6 5 00 9 0 4 00 4 5 2 00 3 3 9 0 00

(20)

PST Payable Cr. 2 4 00 8 0 00 4 0 00 6 4 00 3 2 00 2 4 0 00

BILL’S COSMETIC MARKET SALES JOURNAL

(22)

GST Payable Cr. 1 5 00 5 0 00 2 5 00 4 0 00 2 0 00 1 5 0 00

SOLUTIONS TO END OF CHAPTER PROBLEMS

(40)

4 0 0 00 1 2 0 0 00

5 0 0 00

Lipstick Sales Cr. 3 0 0 00

(44)

1 8 0 0 00

8 0 0 00

1 0 0 0 00

Eyeshadow Sales Cr.

Page 1

11-14

Date 2016 April 2 5 5 19 26 26 30

(12)

(10)

5 6 5 00

4 5 2 00 1 0 1 7 00

Accounts Receivable Dr.

Cash Dr. 6 0 0 0 00 5 6 5 0 00 2 2 6 0 00 5 6 5 00 1 1 3 0 00 3 3 9 0 00 4 5 2 00 19 4 4 7 00

PROBLEM 11A-1, Cont.

(20)

8 8 0 00

8 0 00 2 4 0 00

4 0 0 00 1 6 0 00

PST Payable Cr.

(22)

5 5 0 00

5 0 00 1 5 0 00

2 5 0 00 1 0 0 00

GST Payable Cr.

(40)

6 0 0 0 00

1 0 0 0 00

5 0 0 0 00

Lipstick Sales Cr.

BILL’S COSMETIC MARKET CASH RECEIPTS JOURNAL

(44)

Description of Receipt Bill Murray, Capital Cash Sales 2 0 0 0 0 0 Cash Sales Marika Sanchez Co. Cash Sales 3 0 0 0 0 0 Cash Sales Marika Sanchez Co. 5 0 0 0 00

Eyeshadow Sales Cr.

✔

Post Ref.

(X)

6 0 0 0 00

Sundry Cr. 6 0 0 0 00

Page 1

PROBLEM 11A-1., Cont. BILL’S COSMETIC MARKET GENERAL JOURNAL Date 2016 April 12

Page 1 Post Ref.

Account Title and Description Sales Returns and Allowances, Lipstick PST Payable GST Payable Accounts Receivable, Alice Koy Issued Credit Memo #10

42 20 22

Dr. 1 5 0 00 1 2 00 7 50

12 / ✔

Sales Returns and Allowances, Lipstick PST Payable GST Payable Accounts Receivable, Jeff Tong Issued Credit Memo #11

42 20 22

Cr.

1 6 9 50

2 0 0 00 1 6 00 1 0 00

12 / ✔

2 2 6 00

BILL’S COSMETIC MARKET ACCOUNTS RECEIVABLE LEDGER NAME ADDRESS Date 2016 April 8 12

NAME ADDRESS Date 2016 April 23

ALICE KOY CO. 2 RYAN ROAD, BRANDON, MB R7C 4E6 Explanation

Post Ref.

Debit

SJ1

3 3 9 00

Credit 1 6 9 50

GJ1

Dr. Balance 3 3 9 00 1 6 9 50

RUSTY NEAL CO. 4 REEL ROAD, BRANDON, MB R3C 2L6 Explanation

Post Ref.

Debit

SJ1

9 0 4 00

Credit

Dr. Balance 9 0 4 00

11-15

PROBLEM 11A-1., Cont.

NAME ADDRESS Date 2016 April 9 19 29 30

BILL’S COSMETIC MARKET ACCOUNTS RECEIVABLE LEDGER MARIKA SANCHEZ CO. 14 BONE DRIVE, WINNIPEG, MB R2X 0L5 Explanation

Post Ref.

Debit

SJ1

1 1 3 0 00

Credit

Dr. Balance

4 5 2 00

SJ1 CRJ1

Date 2016 April 22 23

4 5 2 00

1 1 3 0 00 5 6 5 00 1 0 1 4 00 5 6 5 00

5 6 5 00

CRJ1

NAME ADDRESS

Dr. Balance

JEFF TONG CO. 2 MARION RD., PORTAGE LA PRAIRIE, MB R1N 2A4 Explanation

Post Ref.

Debit

SJ1

5 6 5 00

GJ1

2 2 6 00

5 6 5 00 3 3 9 00

ACCOUNT NO.

BILL’S COSMETIC MARKET PARTIAL GENERAL LEDGER NAME: CASH Date 2016 April 30

Explanation

Post Ref.

Debit

CRJ

19 4 4 7 00

NAME: ACCOUNTS RECEIVABLE Date 2016 April 12 23 30 30

11-16

Explanation

DR CR

Balance

19 4 4 7 00

ACCOUNT NO. Post Ref.

Debit

GJ1 SJ1 CRJ

Credit 1 6 9 50 2 2 6 00

GJ1

Credit

3 3 9 0 00

DR CR Cr Cr Dr

1 0 1 7 00

12 Balance 1 6 9 50 3 9 5 50 2 9 9 4 50 1 9 7 7 50

PROBLEM 11A-1., Cont. BILL’S COSMETIC MARKET PARTIAL GENERAL LEDGER NAME: PST PAYABLE Date 2016 April 12 23 30 30

ACCOUNT NO. Explanation

Post Ref. GJ1 GJ1

Debit

DR CR

1 2 00 1 6 00

Dr Dr

2 4 0 00 8 8 0 00

SJ1 CRJ1

NAME: GST PAYABLE Date 2016

Credit

Cr Cr

Balance 1 2 00 2 8 00 2 1 2 00 1 0 9 2 00

ACCOUNT NO. Explanation

Post Ref.

Debit

Credit

DR CR

Balance

April 12

GJ1

7 50

GJ1

1 0 00

1 7 50

SJ1

1 5 0 00

1 3 2 50

CRJ1

5 5 0 00

6 8 2 50

NAME: BILL MURRAY, CAPITAL Date 2016 April 2

Explanation

ACCOUNT NO. Post Ref.

Debit

CRJ1

NAME: LIPSTICK SALES Date 2016

Credit

DR CR

Balance

6 0 0 0 00

ACCOUNT NO. Explanation

Post Ref.

Debit

Credit

DR CR

Balance

April 30

SJ1

1 2 0 0 00

CRJ1

6 0 0 0 00

7 2 0 0 00

NAME: SALES RETURNS AND ALLOWANCES, LIPSTICK Date 2016

ACCOUNT NO.

Post Ref.

Debit

April 12

GJ1

Explanation

DR CR

Balance

1 5 0 00

2 0 0 00

3 5 0 00

Credit

11-17

PROBLEM 11A-1., Cont. BILL’S COSMETIC MARKET PARTIAL GENERAL LEDGER NAME: EYESHADOW SALES Date 2016

ACCOUNT NO. Post Ref.

Explanation

Debit

Credit

DR CR

Balance

April 30

SJ1

1 8 0 0 00

CRJ1

5 0 0 0 00

6 8 0 0 00

BILL’S COSMETIC MARKET SCHEDULE OF ACCOUNTS RECEIVABLE APRIL 30, 2016 Alice Koy Co. Rusty Neal Co. Marika Sanchez Co. Jeff Tong Co. Total Accounts Receivable

$ 1 6 9 50 9 0 4 00 5 6 5 00 3 3 9 00 $1 9 7 7 5 0

PROBLEM 11A-2. PARKER’S SCUBA SHOP SALES JOURNAL Date 2017 Apr

11-18

3 7 8 14 28

Invoice No. 614 615 616 617 618

Customer’s Name J. Simpson R. Langley J. Fellowes Phyllis Leung Roland Doncaster

Post Ref.

✔ ✔ ✔ ✔ ✔

Accounts Receivable Dr. 5 6 5 00 1 3 5 6 00 3 3 9 00 2 2 6 0 00 5 6 5 0 00 10 1 7 0 00 (1 2 0)

Page 11 HST Merchandise Payable Sales Cr. Cr. 6 5 00 5 0 0 00 1 5 6 00 1 2 0 0 00 3 9 00 3 0 0 00 2 6 0 00 2 0 0 0 00 6 5 0 00 5 0 0 0 00 1 1 7 0 00 9 0 0 0 00 (2 2 1) (4 0 0)

11-19

April

Date 2017

(110)

1 15 0 0 0 0 0 11 5 5 5 00 15 1 3 3 2 0 0 18 1 8 0 8 0 0 21 9 0 4 00 22 1 6 6 5 0 0 25 4 5 2 0 0 0 25 7 8 4 0 0

Cash Dr.

PROBLEM 11A-2., Cont.

(120)

4 5 2 0 00

9 0 4 00 1 6 9 5 00

5 6 5 00 1 3 5 6 00

Accounts Receivable Cr.

(221)

5 2 0 00 7 2 8 00

2 0 8 00

HST Payable Cr.

(400)

4 0 0 0 00 5 6 0 0 00

1 6 0 0 00

Merchandise Sales Cr.

PARKER’S SCUBA SHOP CASH RECEIPTS JOURNAL Description of Receipt

(404)

M. Parker, Capital 1 0 0 0 J. Simpson 2 4 0 0 R. Langley Cash Sales R. Doncaster 3 0 0 0 Phyllis Leung Cash Sales 6 4 00

Sales Discounts Dr.

✔ ✔

300

Post Ref.

(X)

15 0 0 0 0 0

Sundry Cr.

Page 12

PROBLEM 11A-2., Cont. PARKER’S SCUBA SHOP GENERAL JOURNAL Date 2017 April 18

Page 13 Post Ref.

Account Title and Description Sales Returns and Allowances HST Payable Accounts Receivable, Phyllis Leung Issued Credit Memo #101

402 221

Dr. 5 0 0 00 6 5 00

120 / ✔

Sales Returns and Allowances HST Payable Accounts Receivable, Roland Doncaster Issued Credit Memo #102

402 221

Cr.

5 6 5 00

8 0 0 00 1 0 4 00

120 / ✔

9 0 4 00

PARKER’S SCUBA SHOP ACCOUNTS RECEIVABLE LEDGER NAME ADDRESS Date 2017 April 1 21 28 29

Explanation

11-20

Post Ref.

Debit

Credit

✔

Balance

SJ11

Dr. Balance 9 0 4 00

CRJ12

9 0 4 00

5 6 5 0 00 4 7 4 6 00

Credit

Dr. Balance

5 6 5 0 00

GJ13

NAME ADDRESS Date 2017 April 1 8

ROLAND DONCASTER 585 BURKE STREET, BATHURST, NB E2A 2J4

J. FELLOWES 112 CRAFT AVE., CHARLOTTETOWN, PE C1E 3D6 Explanation Balance

Post Ref.

✔ SJ11

Debit 3 3 9 00

1 4 1 2 50 1 7 5 1 50

PROBLEM 11A-2., Cont. PARKER’S SCUBA SHOP ACCOUNTS RECEIVABLE LEDGER NAME ADDRESS Date 2017 April 1 7 15

R. LANGLEY 67 MAIN STREET, BATHURST, NB E2A 5F5 Explanation

Credit

Dr. Balance

SJ11

1 3 5 6 00

SRJ12

1 3 5 6 00 1 3 5 6 00

Credit

Dr. Balance

PHYLLIS LEUNG 245 CASEMENT CLOSE, EDMUNDSTON, NB E3V 2E4 Explanation

Post Ref.

Debit

✔

Balance

SJ11

2 2 6 0 00 5 6 5 00 1 6 9 5 00

GJ13 CRJ1

NAME ADDRESS Date 2017 April 1 3 11

Debit

✔

Balance

NAME ADDRESS Date 2017 April 1 14 18 22

Post Ref.

2 2 6 0 00 1 6 9 5 00

J. SIMPSON 65 TALLISMAN CRESC., FREDERICTON, NB E3A 3M1 Explanation

Post Ref.

Debit

Credit

Dr. Balance

5 6 5 00

5 9 3 25 1 1 5 8 25 5 9 3 25

✔

Balance

SJ11

5 6 5 00

CRJ1

PARKER’S SCUBA SHOP PARTIAL GENERAL LEDGER NAME: CASH Date 2017 April 1 30

ACCOUNT NO. Explanation

Post Ref.

Debit

✔

Balance

CRJ12

Explanation Balance

DR CR Dr

25 7 8 4 00

NAME: ACCOUNTS RECEIVABLE Date 2017 April 1 18 29 30 30

Credit

ACCOUNT NO. Post Ref.

Debit

Credit

✔

5 6 5 00 9 0 4 00

GJ13 GJ13 SJ11 CRJ12

DR CR

10 1 7 0 00

Dr Dr Dr

4 5 2 0 00

110 Balance 1 9 5 3 56 27 7 3 7 56

120 Balance 2 9 0 9 75 2 3 4 4 75 1 4 4 0 75 11 6 1 0 75 7 0 9 0 75

11-21

PROBLEM 11A-2., Cont. PARKER’S SCUBA SHOP PARTIAL GENERAL LEDGER NAME: HST PAYABLE Date 2017 April 18 29 30 30

ACCOUNT NO. Explanation

Post Ref. GJ13 GJ13

Debit 6 5 00 1 0 4 00

Explanation

Post Ref.

Debit

15 0 0 0 00

Post Ref.

Debit

CRJ12

Explanation

11-22

DR CR

Cr Cr

ACCOUNT NO. Post Ref.

Debit

Credit

GJ13 GJ13

5 0 0 00 8 0 0 00

Explanation

CRJ12

Dr Dr

ACCOUNT NO. Post Ref.

Debit 6 4 00

Credit

Balance 28 0 0 0 00 43 0 0 0 00

Balance 74 5 2 3 48 83 5 2 3 48 89 1 2 3 48

402

DR CR

✔

Balance

6 5 00 1 6 9 00 1 0 0 1 00 1 7 2 9 00

400

9 0 0 0 00 5 6 0 0 00

SJ11

NAME: SALES DISCOUNTS Date 2017 April 30

Credit

Balance

300

ACCOUNT NO.

NAME: SALES RETURNS AND ALLOWANCES Date 2017 April 1 18 29

Credit

✔

Balance

CRJ12

Explanation

ACCOUNT NO.

NAME: MERCHANDISE SALES Date 2017 April 1 30 30

✔

Balance

DR CR Dr

1 1 7 0 00 7 2 8 00

SJ11 CRJ12

NAME: MARY PARKER, CAPITAL Date 2017 April 1 1

Credit

221

DR CR Dr

Balance 7 5 2 50 1 2 5 2 50 2 0 5 2 50

404 Balance 6 4 00

PROBLEM 11A-2., Cont. PARKER’S SCUBA SHOP SCHEDULE OF ACCOUNTS RECEIVABLE APRIL 30, 2017 Roland Doncaster J. Fellowes J. Simpson Total Accounts Receivable

$4 7 4 6 00 1 7 5 1 50 5 9 3 25 $7 0 9 0 7 5

11-23

11-24

May

8 11 14 18 25 31

Date 2015

Aton Co. Broward Co. Midden Co. Relar Co. Midden Co.

Account Credited

PROBLEM 11A-3.

5/7 5/11 5/11 5/18 5/22

Terms

400 2/10,n/60 120 2/10,n/60 510 810 516 2/10,n/30

Date of Inv. Invoice No. ✔ ✔ ✔ ✔ ✔

Post Ref.

(210)

(510)

(112)

(110)

Accounts Store Sundry Dr. Purchases Prepaid GST Payable Supplies Dr. Dr. Cr. Dr. Account PR 6 3 0 00 6 0 0 00 3 0 00 1 2 6 0 00 1 2 0 0 00 6 0 00 7 3 5 00 3 5 00 7 0 0 00 5 8 8 00 2 8 00 Office Equipment 120 6 8 2 50 3 2 50 6 5 0 00 3 8 9 5 50 1 8 0 0 00 1 8 5 50 1 3 5 0 00

MABEL’S NATURAL FOOD STORE PURCHASES JOURNAL

(X)

5 6 0 00

Amount

Page 10

PROBLEM 11A-3., Cont. MABEL’S NATURAL FOOD STORE GENERAL JOURNAL Date 2012 May 15

Post Ref.

Account Title and Description

210 / ✔

Accounts Payable, Aton Co. Prepaid GST Purchase Returns and Allowances Issued Debit Memo #8

Page 2 Dr.

Cr.

4 2 0 00 2 0 00 4 0 0 00

112 512

MABEL’S NATURAL FOOD STORE ACCOUNTS PAYABLE LEDGER NAME: ADDRESS: Date 2015 May 1 8 15

NAME: ADDRESS: Date 2015 May 1 11

NAME: ADDRESS: Date 2015 May 1 14 25

NAME: ADDRESS: Date 2015 May 1 18

ATON CO. 1014 - 12 ST., COLD LAKE, AB T9M 1E1 Explanation

Post Ref.

Debit

Credit

Cr. Balance

6 3 0 00

4 2 0 00 1 0 5 0 00 6 3 0 00

Credit

Cr. Balance

1 2 6 0 00

6 3 0 00 1 8 9 0 00

Credit

Cr. Balance

7 3 5 00 6 8 2 50

1 2 6 0 00 1 9 9 5 00 2 6 7 7 50

Credit

Cr. Balance

5 8 8 00

5 2 5 00 1 1 1 3 00

✔

Balance

PJ10 GJ2

4 2 0 00

BROWARD CO. 415 BASE ST., COLD LAKE, AB T9M 1B2 Explanation

Post Ref.

Debit

✔

Balance

PJ10

MIDDEN CO. 5518 VIMY PARK RD., COLD LAKE, AB T9M 1B5 Explanation

Post Ref.

Debit

✔

Balance

PJ10 PJ10

RELAR CO. 2415 LAKEVIEW AVE, COLD LAKE, AB T9M 1C1 Explanation Balance

Post Ref.

Debit

✔ PJ10

11-25

PROBLEM 11A-3., Cont. MABEL’S NATURAL FOOD STORE PARTIAL GENERAL LEDGER NAME: STORE SUPPLIES Date 2015 May 31

ACCOUNT NO.

Explanation

Post Ref.

Debit

PJ10

1 3 5 0 00

Credit

NAME: PREPAID GST Date 2015 May 1 15 31

Post Ref.

Debit

Credit

✔

Balance

2 0 00 1 8 5 50

Explanation

Post Ref.

Debit

PJ10

5 6 0 00

Credit

DR CR

Post Ref.

Explanation

Debit

Credit

✔

Balance

GJ2

Post Ref.

Debit

Credit

✔

Balance

PJ10

DR CR

NAME: PURCHASES RETURNS AND ALLOWANCES Post Ref.

Explanation

DR CR Dr

1 8 0 0 00

ACCOUNT NO. Debit

GJ2

120

5 6 0 00

ACCOUNT NO. Explanation

4 7 1 00 4 5 1 00 6 3 6 50

3 8 9 5 50

PJ10

Balance

4 2 0 00

112

DR CR

ACCOUNT NO.

NAME: PURCHASES

Date 2015 May 15

1 3 5 0 00

ACCOUNT NO.

NAME: ACCOUNTS PAYABLE

Date 2015 May 1 31

NAME: OFFICE EQUIPMENT

Date 2015 May 1 15 31

Balance

GJ2 PJ10

Date 2015 May 18

DR CR

ACCOUNT NO.

Explanation

110

210 Balance 2 8 3 5 00 2 4 1 5 00 6 3 1 0 50 510 Balance 16 0 0 0 00 17 8 0 0 00 512

Credit

DR CR

Balance

4 0 0 00

MABEL’S NATURAL FOOD STORE SCHEDULE OF ACCOUNTS PAYABLE MAY 31, 2015 Aton Co. Broward Co. Midden Co. Relar Co. Total Accounts Payable

11-26

$ 6 3 0 1 8 9 0 2 6 7 7 1 1 1 3

00 00 50 00

$6 3 1 0 5 0

11-27

May

3 3 7 17 24 27 28 31 31

Date 2016 21 22 23 24 25 26 27 28

Chq. No. Account Debited Henry Co. Delivery Truck Cash Purchase Cash Purchase Xon Co. Rent Expense Utilities Expense Soy Co.

PROBLEM 11A-4.

✔

620

610

✔

150

✔

Post Ref.

(210)

10 3 0 0 00 (X)

1 4 7 0 00

Accounts Payable Dr. 3 1 5 00

4 2 0 00 2 2 0 5 00

2 0 0 0 00 3 0 0 00

8 0 0 0 00

Sundry Dr.

JONES’ COMPUTER CENTRE CASH PAYMENTS JOURNAL

(132)

7 5 0 00

1 0 0 00 1 5 00

4 0 0 00 1 9 5 00 4 0 00

Prepaid GST Dr.

(510)

4 7 0 0 00

3 9 0 0 00 8 0 0 00

Computer Purchases Dr.

Cash Cr.

(511)

(110)

3 0 9 00 8 4 0 0 00 4 0 9 5 00 8 4 0 00 2 8 00 1 4 4 2 00 2 1 0 0 00 3 1 5 00 4 2 0 00 3 4 00 17 9 2 1 00

Computer Purchases Discount Cr. 6 00

Page 5

PROBLEM 11A-4., Cont. ACCOUNTS PAYABLE LEDGER ALVIN CO. 204 GOLDSTREAM AVE., WHITEHORSE, YT Y1A 4H1

NAME: ADDRESS: Date 2016 May 1

Post Ref.

Explanation

Date 2016 May 1 3

Post Ref.

1 2 6 0 00

CPJ5

NAME: ADDRESS:

Debit

Credit

Cr. Balance

✔

Balance

6 3 0 00 3 1 5 00

3 1 5 00

SOY CO. 952 SECOND AVENUE, WHITEHORSE, YT Y1A 5H1 Post Ref.

Explanation

Debit

Credit

Cr. Balance

✔

Balance

CPJ5

NAME: ADDRESS: Date 2016 May 1 24

Cr. Balance

HENRY CO. 401 FIRST ST., WHITEHORSE, YT Y1A 5H2 Explanation

Date 2016 May 1 31

Credit

✔

Balance

NAME: ADDRESS:

Debit

8 4 0 00 4 2 0 00

4 2 0 00

XON CO. 241 MOUNTAIN RD, RR1, WHITEHORSE, YT Y1A 4H9 Post Ref.

Explanation

Debit

Credit

Cr. Balance

✔

Balance

CPJ5

1 4 7 0 00

PARTIAL GENERAL LEDGER NAME: CASH Date 2016 May 1 31

ACCOUNT NO. Explanation

Post Ref.

Debit

✔

Balance

17 9 2 1 00

CPJ5

11-28

Explanation Balance

DR CR Dr

NAME: PREPAID GST Date 2016 May 1 31

Credit

ACCOUNT NO. Post Ref.

Debit

✔ CPJ5

Credit

DR CR Dr

7 5 0 00

110 Balance 17 0 0 0 00 9 2 1 00

132 Balance 9 2 0 00 1 6 7 0 00

PROBLEM 11A-4., Cont.

PARTIAL GENERAL LEDGER

NAME: DELIVERY TRUCK Date 2016 May 3

ACCOUNT NO. Post Ref.

Debit

CPJ5

8 0 0 0 00

Explanation

Credit

NAME: ACCOUNTS PAYABLE Date 2016 May 1 31

Post Ref.

Debit

Credit

✔

Balance

CPJ5

2 2 0 5 00

Post Ref.

Debit

CPJ5

4 7 0 0 00

Explanation

Post Ref.

Debit

Credit 3 4 00

Post Ref.

Debit

CPJ5

2 0 0 0 00

Credit

Explanation

Debit

CPJ5

3 0 0 00

Credit

Balance 4 2 0 0 00 1 9 9 5 00

510 Balance

4 7 0 0 00

DR CR

511 Balance 3 4 00

610

DR CR

Balance

2 0 0 0 00

ACCOUNT NO. Post Ref.

210

DR CR

ACCOUNT NO.

NAME: UTILITIES EXPENSE Date 2016 May 28

DR CR

ACCOUNT NO.

CPJ5

Explanation

8 0 0 0 00

Credit

NAME: RENT EXPENSE Date 2016 May 27

ACCOUNT NO.

NAME: COMPUTER PURCHASES DISCOUNTS Date 2016 May 31

Balance

NAME: COMPUTER PURCHASES Date 2016 May 31

DR CR

ACCOUNT NO.

Explanation

150

620

DR CR

Balance

3 0 0 00

JONES’ COMPUTER CENTRE SCHEDULE OF ACCOUNTS PAYABLE MAY 31, 2016 Alvin Co. Henry Co. Soy Co. Total Accounts Payable

$1 2 6 0 3 1 5 4 2 0 $1 9 9 5

00 00 00 00

11-29

11-30

May

Date 2016

1 8 12 19 26 28 31

Earl Miller Co. Earl Miller Co. Minnie Katz Sam Katz Garage Woody Smith Earl Miller Co.

Account Credited

PROBLEM 11A-5.

3/1 3/8 3/12 3/19 3/26 3/26

Date of Invoice

436

211

111

311

415

410

Inv. No.

2/10,n/30 2/10,n/30

2/10,n/30 2/10,n/30 1/15,n/60

Terms ✔ ✔ ✔ ✔ ✔ ✔

Post Ref.

(210)

(510)

Accounts Toy Payable Purchases Cr. Dr. 4 5 2 0 00 4 0 0 0 00 1 3 5 6 00 1 2 0 0 00 4 5 2 0 00 4 0 0 0 00 3 3 9 0 00 5 4 2 4 00 4 8 0 0 00 1 5 8 2 00 1 4 0 0 00 20 7 9 2 00 15 4 0 0 00

ABBY’S TOY HOUSE PURCHASES JOURNAL

(116)

(X)

Prepaid Sundry Dr. HST Dr. Account PR Amount 5 2 0 00 1 5 6 00 5 2 0 00 121 3 9 0 0 0 Delivery Truck 3 0 0 0 00 6 2 4 00 1 8 2 00 2 3 9 2 00 3 0 0 0 00

Page 10

THIS SOLUTION ASSUMES HST (13%)

11-31

May

1 11 11 15 22 25 29 31

Date 2016 1 2 3 4 5 6 7

Chq. No. Prepaid Rent Cleaning Expense Earl Miller Co. Salaries Expense Minnie Katz Cash Purchase Earl Miller Co.

Account Debited

PROBLEM 11A-5., Cont.

1 5 8 2 00 9 4 9 2 00 (210)

3 9 0 0 00 (X)

✔

4 5 2 0 00

Accounts Payable Dr.

3 3 9 0 00

6 0 0 00

3 0 0 0 00 3 0 0 00

Sundry Dr.

✔

610

✔

612

114

Post Ref.

ABBY’S TOY HOUSE CASE PAYMENTS JOURNAL

(116)

5 0 7 0 00

7 8 00

Prepaid HST Dr. 3 9 0 00 3 9 00

(510)

6 0 0 00

Toy Purchases Dr.

(514)

2 8 00 1 3 8 0 00

3 0 00

8 0 00

Purchases Discount Cr.

(110)

3 3 9 0 00 3 3 9 00 4 4 4 0 00 6 0 0 00 3 3 6 0 00 6 7 8 00 1 5 5 4 00 14 3 6 1 00

Cash Cr.

Page 8

THIS SOLUTION ASSUMES HST (13%)

11-32

Mar

Cash Dr.

(110)

1 10 0 0 0 0 0 13 1 4 6 9 0 0 15 4 5 2 0 0 0 15 4 4 4 00 18 1 1 3 0 00 26 9 9 9 00 26 1 2 2 1 00 28 5 0 0 0 00 31 24 7 8 3 0 0

Date 2016

PROBLEM 11A-5., Cont.

(112)

3 8 4 2 00

4 5 2 00 1 1 3 0 00 1 0 1 7 00 1 2 4 3 00

Accounts Receivable Cr.

(410)

5 3 0 0 00

1 3 0 0 00 4 0 0 0 00

Toy Sales Cr.

(218)

6 8 9 00

1 6 9 00 5 2 0 00

HST Payable Cr.

ABBY’S TOY HOUSE CASH RECEIPTS JOURNAL Description of Receipt

(414)

A. Ellen, Capital Cash Sale Cash Sale 8 0 0 Jim Rex Bill Burton 1 8 0 0 Bill Burton 2 2 0 0 Amy Rose A. Ellen, Capital 4 8 00

Sales Discounts Dr.

310

✔ ✔ ✔ ✔

310

Post Ref.

(X)

5 0 0 0 00 15 0 0 0 0 0

10 0 0 0 0 0

Sundry Cr.

Page 14

THIS SOLUTION ASSUMES HST (13%)

PROBLEM 11A-5., Cont.

THIS SOLUTION ASSUMES HST (13%) ABBY’S TOY HOUSE SALES JOURNAL

Date 2016 Mar

4 6 8 18 22 22 29 31

Invoice. No. 1 2 3 4 5 6 7

Customer’s Name

Post Ref.

✔ ✔ ✔ ✔ ✔ ✔ ✔

Bill Burton Jim Rex Bill Burton Amy Rose Bill Burton Amy Rose Bonnie Flow Company

Page 4 Sundry Accounts Dr. 1 1 3 0 00 7 9 1 00 6 7 8 00 4 5 2 0 00 1 0 1 7 00 1 2 4 3 00 3 3 9 0 00 12 7 6 9 00 (112)

HST Toy Payable Sales Cr. Cr. 1 3 0 00 1 0 0 0 00 9 1 00 7 0 0 00 7 8 00 6 0 0 00 5 2 0 00 4 0 0 0 00 1 1 7 00 9 0 0 00 1 4 3 00 1 1 0 0 00 3 9 0 00 3 0 0 0 00 14 6 9 00 11 3 0 0 00 (218)

ABBY’S TOY HOUSE GENERAL JOURNAL Date Account Title and Description 2016 Mar 12 Sales Returns and Allowances HST Payable Accounts Receivable, Jim Rex Issued Credit Memo #1 15 Accounts Payable, Minnie Katz Purchase Returns and Allowances Prepaid HST Issued Debit Memo #1

(410)

Page 3 Post Ref. 412 218

Dr. 3 0 0 00 3 9 00

3 3 9 00

112 /✔

210 /✔ 512 116

Cr.

1 1 3 0 00 1 0 0 0 00 1 3 0 00

11-33

PROBLEM 11A-5., Cont.

THIS SOLUTION ASSUMES HST (13%) ACCOUNTS RECEIVABLE LEDGER

NAME ADDRESS Date 2016 Mar 4 8 18 22 26 NAME ADDRESS Date 2016 Mar 29

BILL BURTON 24 NORTH WEST ARM ROAD, HALIFAX, NS B3V 6K0 Explanation

Post Ref. SJ4 SJ4

SJ4

NAME ADDRESS Date 2016 Mar 18 22 26

1 1 3 0 00 1 0 1 7 00 1 0 1 7 00

CRJ14

Dr. Balance 1 1 3 0 00 1 8 0 8 00 6 7 8 00 1 6 9 5 00 6 7 8 00

BONNIE FLOW COMPANY 2 SMITH AVENUE, HALIFAX, NS B3V 1A1 Post Ref. SJ4

Date 2016 Mar 6 12 15

Credit

1 1 3 0 00 6 7 8 00

CRJ14

Explanation

NAME ADDRESS

Debit

Credit

3 3 9 0 00

Dr. Balance 3 3 9 0 00

JIM REX 1 SCHOOL STREET, HALIFAX, NS B3P 2R5 Explanation

Post Ref.

Debit

SJ4

7 9 1 00

Credit 3 3 9 00 4 5 2 00

GJ3 CRJ14

Dr. Balance 7 9 1 00 4 5 2 00

AMY ROSE 18 VEEK STREET, DARTMOUTH, NS B2X 1X1 Explanation

Post Ref. SJ4 SJ4

Debit

Credit

4 5 2 0 00 1 2 4 3 00

CRJ14

1 2 4 3 00

Dr. Balance 4 5 2 0 00 5 7 6 3 00 4 5 2 0 00

ABBY’S TOY HOUSE SCHEDULE OF ACCOUNTS RECEIVABLE MARCH 31, 2016 Bill Burton Bonnie Flow Company Amy Rose Total Accounts Receivable

11-34

$ 6 7 8 3 3 9 0 4 5 2 0 $8 5 8 8

00 00 00

PROBLEM 11A-5., Cont.

THIS SOLUTION ASSUMES HST (13%) ACCOUNTS PAYABLE LEDGER

NAME ADDRESS Date 2016 Mar 12 15 22

NAME ADDRESS Date 2016 Mar 19

NAME ADDRESS Date 2016 Mar 1 8 11 28 29 NAME ADDRESS Date 2016 Mar 26

MINNIE KATZ 87 GARFIELD AVENUE, HALIFAX, NS B3V 1B4 Post Ref.

Explanation

Debit

4 5 2 0 00

PJ10 GJ3 CPJ8

Credit

1 1 3 0 00 3 3 9 0 00

Cr. Balance 4 5 2 0 00 3 3 9 0 00

SAM KATZ GARAGE 22 REGIS STREET, HALIFAX, NS B3V 1B9 Post Ref.

Explanation

Debit

PJ10

Credit

Cr. Balance

3 3 9 0 00

Credit

Cr. Balance

EARL MILLER CO. 22 RETTER STREET, TORONTO, ON M6S 3L8 Post Ref.

Explanation

Debit

4 5 2 0 00 1 3 5 6 00

PJ10 PJ10 CPJ8

4 5 2 0 00 1 5 8 2 00

PJ10 CPJ8

1 5 8 2 00

4 5 2 0 5 8 7 6 1 3 5 6 2 9 3 8 1 3 5 6

00 00 00 00 00

WOODY SMITH 2 SPRING STREET, HALIFAX, NS B3D 2D8 Explanation

Post Ref.

Debit

Credit 5 4 2 4 00

PJ10

Cr. Balance 5 4 2 4 00

ABBY’S TOY HOUSE SCHEDULE OF ACCOUNTS PAYABLE MARCH 31, 2016 Sam Katz Garage Earl Miller Co. Woody Smith Total Accounts Receivable

$3 3 9 0 1 3 5 6 5 4 2 4 $10 1 7 0

00 00 00

11-35

PROBLEM 11A-5., Cont.

THIS SOLUTION ASSUMES HST (13%) ABBY’S TOY HOUSE - PARTIAL GENERAL LEDGER

NAME: CASH Date 2016 Mar 31 31

ACCOUNT NO. Explanation

Post Ref.

Debit

CRJ14

24 7 8 3 00

Explanation

Post Ref.

Debit

GJ3 SJ4

Explanation

Post Ref.

Debit

CPJ8

3 0 0 0 00

Post Ref.

Debit

PJ10 CPJ8

Explanation

Post Ref.

Debit

PJ10

3 0 0 0 00

11-36

Post Ref.

Debit

GJ3

1 1 3 0 00

CPJ8

Credit

Cr Dr Dr

GJ3 SJ4 CRJ14

Debit 3 9 00

Balance 1 3 0 00 2 2 6 2 00 2 7 6 9 00 121

3 0 0 0 00

DR CR

DR CR Dr

1 4 6 9 00 6 8 9 00

116

Credit

114

Balance

ACCOUNT NO. Post Ref.

3 3 9 00 12 4 3 0 00 8 5 8 8 00

DR CR

9 4 9 2 00

Balance

3 0 0 0 00

1 3 0 00

20 7 9 2 00

112

DR CR

Credit

24 7 8 3 00 10 4 2 2 00

Balance

Credit

Balance

DR CR

ACCOUNT NO.

PJ10

Explanation

ACCOUNT NO.

NAME: HST PAYABLE Date 2016 Mar 12 31 31

2 3 9 2 00 5 0 7 00

NAME: ACCOUNTS PAYABLE Date 2016 Mar 15 31 31

ACCOUNT NO.

GJ3

Explanation

3 3 9 00

ACCOUNT NO.

NAME: DELIVERY TRUCK Date 2016 Mar 19

DR CR

3 8 4 2 00

NAME: PREPAID HST Date 2016 Mar 15 31 31

Credit

12 7 6 9 00

CRJ14

Explanation

ACCOUNT NO.

NAME: PREPAID RENT Date 2016 Mar 1

DR CR Dr

14 3 6 1 00

CPJ8

NAME: ACCOUNTS RECEIVABLE Date 2016 Mar 12 31 31

Credit

110

Cr Cr

210 Balance 1 1 3 0 00 19 6 6 2 00 10 1 7 0 00 218 Balance 3 9 00 1 4 3 0 00 2 1 1 9 00

PROBLEM 11A-5., Cont.

THIS SOLUTION ASSUMES HST (13%) ABBY’S TOY HOUSE - PARTIAL GENERAL LEDGER

NAME: A. ELLEN, CAPITAL Date 2016 Mar 1 28

ACCOUNT NO. Post Ref.

Explanation

Debit

Credit 10 0 0 0 00 5 0 0 0 00

CRJ14 CRJ14

NAME: TOY SALES Date 2016 Mar 31 31

Post Ref.

Explanation

Debit

Credit 11 3 0 0 00 5 3 0 0 00

SJ4 CRJ14

Explanation

Post Ref.

Debit

GJ3

3 0 0 00

Credit

Explanation

Post Ref. CRJ14

Explanation

Debit

Credit

4 8 00

Post Ref. CPJ8 PJ10

Explanation

Debit

Post Ref.

Debit

CPJ8

Debit

410 Balance 11 3 0 0 00 16 6 0 0 00

412 Balance

3 0 0 00

DR CR

Credit

DR CR Dr Dr

414 Balance 4 8 00

510 Balance 6 0 0 00 16 0 0 0 00

512

Credit

DR CR

Balance

1 0 0 0 00

ACCOUNT NO. Post Ref.

10 0 0 0 00 15 0 0 0 00

DR CR

ACCOUNT NO.

GJ3

Explanation

Balance

6 0 0 00 15 4 0 0 00

NAME: PURCHASES DISCOUNTS Date 2016 Mar 31

ACCOUNT NO.

NAME: PURCHASES RETURNS AND ALLOWANCES Date 2016 Mar 15

DR CR

ACCOUNT NO.

NAME: TOY PURCHASES Date 2016 Mar 31 31

ACCOUNT NO.

NAME: SALES DISCOUNTS Date 2016 Mar 31

ACCOUNT NO.

NAME: SALES RETURNS AND ALLOWANCES Date 2016 Mar 12

DR CR

310

514

Credit

DR CR

Balance

1 3 8 00

11-37

PROBLEM 11A-5., Cont.

THIS SOLUTION ASSUMES HST (13%) ABBY’S TOY HOUSE - PARTIAL GENERAL LEDGER

NAME: SALARIES EXPENSE Date 2016 Mar 15

Explanation

ACCOUNT NO. Post Ref.

Debit

CPJ8

6 0 0 00

NAME: CLEANING EXPENSE Date 2016 Mar 11

11-38

Explanation

Credit

DR CR

Balance

6 0 0 00

ACCOUNT NO. Post Ref.

Debit

CPJ8

3 0 0 00

Credit

610

612

DR CR

Balance

3 0 0 00

11-39

Mar

Date 2016

1 8 12 19 26 28 31

Earl Miller Co. Earl Miller Co. Minnie Katz Sam Katz Garage Woody Smith Earl Miller Co.

Account Credited

PROBLEM 11A-5.

311 111 211 436

3/19 3/26 3/26

2/10,n/30

1/15,n/60

2/10,n/30

415

3/8 3/12

Terms 2/10,n/30

Inv. No. 410

3/1

Date of Invoice

✔ ✔ ✔ ✔ ✔ ✔

Post Ref.

(210)

(510)

Accounts Toy Payable Purchases Cr. Dr. 4 2 0 0 00 4 0 0 0 00 1 2 6 0 00 1 2 0 0 00 4 2 0 0 00 4 0 0 0 00 3 1 5 0 00 5 0 4 0 00 4 8 0 0 00 1 4 7 0 00 1 4 0 0 00 19 3 2 0 00 15 4 0 0 00

ABBY’S TOY HOUSE PURCHASES JOURNAL

(116)

(X)

Prepaid Sundry Dr. GST PR Dr. Account Amount 2 0 0 00 6 00 2 0 0 00 121 1 5 0 0 0 Delivery Truck 3 0 0 0 00 2 4 0 00 7 00 9 2 0 00 3 0 0 0 00

Page 10

THIS SOLUTION ASSUMES GST (5%)

11-40

Mar

3 11 11 15 22 25 29 31

Date 2016 1 2 3 4 5 6 7

Chq. No. Prepaid Rent Cleaning Expense Earl Miller Co. Salaries Expense Minnie Katz Cash Purchase Earl Miller Co.

Account Debited

PROBLEM 11A-5., Cont.

1 4 7 0 00 8 8 2 0 00 (210)

3 9 0 0 00 (X)

✔

4 2 0 0 00

Accounts Payable Dr.

3 1 5 0 00

6 0 0 00

Sundry Dr. 3 0 0 0 00 3 0 0 00

✔

610

✔

612

114

Post Ref.

ABBY’S TOY HOUSE CASH PAYMENTS JOURNAL

(116)

1 9 5 00

3 0 00

Prepaid GST Dr. 1 5 0 00 1 5 00

(510)

6 0 0 00

Toy Purchases Dr.

(514)

2 8 00 1 3 8 0 00

3 0 00

8 0 00

Purchases Discount Cr.

(110)

Cash Cr. 3 1 5 0 00 3 1 5 00 4 1 2 0 00 6 0 0 00 3 1 2 0 00 6 3 0 00 1 4 4 2 00 13 3 7 7 00

Page 8

THIS SOLUTION ASSUMES GST (5%)

11-41

Mar

1 13 15 15 18 26 26 28 31

Date 2016

3 5 7 0 00 (112)

(110)

4 2 0 00 1 0 5 0 00 9 4 5 00 1 1 5 5 00

Accounts Receivable Cr.

10 0 0 0 0 0 1 3 6 5 00 4 2 0 0 00 4 1 2 00 1 0 5 0 00 9 2 7 00 1 1 3 3 00 5 0 0 0 00 24 0 8 7 0 0

Cash Dr.

PROBLEM 11A-5., Cont.

(410)

5 3 0 0 00

1 3 0 0 00 4 0 0 0 00

Toy Sales Cr.

(218)

2 6 5 00

6 5 00 2 0 0 00

GST Payable Cr.

ABBY’S TOY HOUSE CASH RECEIPTS JOURNAL Description of Receipt

(414)

A. Ellen, Capital Cash Sale Cash Sale 8 0 0 Jim Rex Bill Burton 1 8 0 0 Bill Burton 2 2 0 0 Amy Rose A. Ellen, Capital 4 8 00

Sales Discounts Dr.

310

✔ ✔ ✔ ✔

310

Post Ref.

(X)

5 0 0 0 00 15 0 0 0 0 0

10 0 0 0 0 0

Sundry Cr.

Page 14

THIS SOLUTION ASSUMES GST (5%)

PROBLEM 11A-5., Cont.

THIS SOLUTION ASSUMES GST (5%) ABBY’S TOY HOUSE SALES JOURNAL

Date 2016 Mar

4 6 8 18 22 22 31 31

Invoice. No. 1 2 3 4 5 6 7

Customer’s Name

Post Ref.

✔ ✔ ✔ ✔ ✔ ✔ ✔

Bill Burton Jim Rex Bill Burton Amy Rose Bill Burton Amy Rose Bonnie Flow Company

Page 4 Accounts Receivable Dr. 1 0 5 0 00 7 3 5 00 6 3 0 00 4 2 0 0 00 9 4 5 00 1 1 5 5 00 3 1 5 0 00 11 8 6 5 00 (112)

GST Toy Payable Sales Cr. Cr. 5 0 00 1 0 0 0 00 3 5 00 7 0 0 00 3 0 00 6 0 0 00 2 0 0 00 4 0 0 0 00 4 5 00 9 0 0 00 5 5 00 1 1 0 0 00 1 5 0 00 3 0 0 0 00 5 6 5 00 11 3 0 0 00 (218)

ABBY’S TOY HOUSE GENERAL JOURNAL Date Account Title and Description 2016 Mar 12 Sales Returns and Allowances GST Payable Accounts Receivable, Jim Rex Issued Credit Memo #1 15 Accounts Payable, Minnie Katz Purchase Returns and Allowances Prepaid GST Issued Debit Memo #1

11-42

(410)

Page 3 Post Ref. 412 218

Dr. 3 0 0 00 1 5 00

112 /

210 / 512 116

Cr.

3 1 5 00

1 0 5 0 00 1 0 0 0 00 5 0 00

PROBLEM 11A-5., Cont.

THIS SOLUTION ASSUMES GST (5%) ACCOUNTS RECEIVABLE LEDGER

NAME ADDRESS Date 2016 Mar 4 8 18 22 26 NAME ADDRESS Date 2016 Mar 31

NAME ADDRESS Date 2016 Mar 6 12 15

NAME ADDRESS Date 2016 Mar 18 22 26

BILL BURTON 24 NORTH WEST ARM ROAD Explanation

Post Ref. SJ4 SJ4

Debit

Dr. Balance

1 0 5 0 00 6 3 0 00

9 4 5 00

1 0 5 0 00 1 6 8 0 00 6 3 0 00 1 5 7 5 00 6 3 0 00

Credit

Dr. Balance

1 0 5 0 00

CRJ14 SJ4

Credit

9 4 5 00

CRJ14

BONNIE FLOW COMPANY 2 SMITH AVENUE Explanation

Post Ref. SJ4

Debit 3 1 5 0 00

3 1 5 0 00

JIM REX 1 SCHOOL STREET Explanation

Post Ref.

Debit

SJ4

7 3 5 00

Credit

Dr. Balance 7 3 5 00 4 2 0 00

3 1 5 00 4 2 0 00

GJ3 CRJ14

AMY ROSE 18 VEEK STREET Explanation

Post Ref. SJ4 SJ4

Debit

Credit

Dr. Balance

4 2 0 0 00 1 1 5 5 00

4 2 0 0 00 5 3 5 5 00 4 2 0 0 00

1 1 5 5 00

CRJ14

ABBY’S TOY HOUSE SCHEDULE OF ACCOUNTS RECEIVABLE MARCH 31, 2016 Bill Burton Bonnie Flow Company Amy Rose Total Accounts Receivable

6 3 0 3 1 5 0 4 2 0 0 $7 9 8 0

00 00 00

11-43

PROBLEM 11A-5., Cont.

THIS SOLUTION ASSUMES GST (5%) ACCOUNTS PAYABLE LEDGER

NAME ADDRESS Date 2016 Mar 12 15 22

MINNIE KATZ 87 GARFIELD AVENUE Post Ref.

Explanation

Debit

4 2 0 0 00

PJ10 GJ3 CPJ8

NAME ADDRESS Date 2016 Mar 19

1 0 5 0 00 3 1 5 0 00

Post Ref.

Debit

PJ10

Date 2016 Mar 1 8 11 28 29 NAME ADDRESS Date 2016 Mar 26

Cr. Balance 4 2 0 0 00 3 1 5 0 00

SAM KATZ GARAGE 22 REGIS STREET Explanation

NAME ADDRESS

Credit

Cr. Balance

3 1 5 0 00

Credit

Cr. Balance

EARL MILLER CO. 22 RETTER STREET Post Ref.

Explanation

Debit

4 2 0 0 00 1 2 6 0 00

PJ10 PJ10 CPJ8

4 2 0 0 00 1 4 7 0 00

PJ10 CPJ8

1 4 7 0 00

4 2 0 0 5 4 6 0 1 2 6 0 2 7 3 0 1 2 6 0

00 00 00 00 00

WOODY SMITH 2 SPRING STREET Explanation

Post Ref.

Debit

PJ10

Credit 5 0 4 0 00

Cr. Balance 5 0 4 0 00

ABBY’S TOY HOUSE SCHEDULE OF ACCOUNTS PAYABLE MARCH 31, 2016 Sam Katz Garage Earl Miller Co. Woody Smith Total Accounts Receivable

11-44

$3 1 5 0 1 2 6 0 5 0 4 0 $9 4 5 0

00 00 00

PROBLEM 11A-5., Cont.

THIS SOLUTION ASSUMES GST (5%) ABBY’S TOY HOUSE - PARTIAL GENERAL LEDGER

NAME: CASH Date 2016 Mar 31 31

ACCOUNT NO. Explanation

Post Ref.

Debit

CRJ14

24 0 8 7 00

Credit

NAME: ACCOUNTS RECEIVABLE Date 2016 Mar 12 31 31

Explanation

Post Ref.

Debit

GJ3 SJ4

Explanation

Post Ref.

Debit

CPJ8

3 0 0 0 00

Post Ref.

PJ10 CPJ8

Explanation

Debit

Credit 5 0 00

9 2 0 00 1 9 5 00

Post Ref.

Debit

PJ10

3 0 0 0 00

Debit

GJ3

1 0 5 0 00

CPJ8

8 8 2 0 00

DR CR Cr

GJ3 SJ4 CRJ14

Debit 1 5 00

116 Balance 5 0 00 8 7 0 00 1 0 6 5 00 121

3 0 0 0 00

DR CR

DR CR Dr

5 6 5 00 2 6 5 00

114

Balance

Credit

3 1 5 00 11 5 5 0 00 7 9 8 0 00

DR CR

ACCOUNT NO. Post Ref.

Balance

3 0 0 0 00

19 3 2 0 00

112

Credit

24 0 8 7 00 10 7 1 0 00

Balance

ACCOUNT NO. Post Ref.

Balance

DR CR

Credit

PJ10

Explanation

ACCOUNT NO.

NAME: GST PAYABLE Date 2016 Mar 12 31 31

ACCOUNT NO.

NAME: ACCOUNTS PAYABLE Date 2016 Mar 15 31 31

Credit

GJ3

Explanation

3 1 5 00

ACCOUNT NO.

NAME: DELIVERY TRUCK Date 2016 Mar 19

DR CR

3 5 7 0 00

NAME: PREPAID GST Date 2016 Mar 15 31 31

Credit

11 8 6 5 00

CRJ14

Explanation

ACCOUNT NO.

NAME: PREPAID RENT Date 2016 Mar 1

13 3 7 7 00

CPJ8

DR CR

110

Cr Cr

210 Balance 1 0 5 0 00 18 2 7 0 00 9 4 5 0 00 218 Balance 1 5 00 5 5 0 00 8 1 5 00

11-45

PROBLEM 11A-5., Cont.

THIS SOLUTION ASSUMES GST (5%) ABBY’S TOY HOUSE - PARTIAL GENERAL LEDGER

NAME: A. ELLEN, CAPITAL Date 2016 Mar 1 28

ACCOUNT NO. Post Ref.

Explanation

Debit

10 0 0 0 00 5 0 0 0 00

CRJ14 CRJ14

NAME: TOY SALES Date 2016 Mar 31 31

Post Ref.

Explanation

Debit

CRJ14

Explanation

Post Ref.

Debit

GJ3

3 0 0 00

Post Ref. CRJ14

Debit

Explanation

Post Ref.

PJ10

Debit

11-46

Credit

Cr Cr

Post Ref.

Credit

CPJ8

Debit

410 Balance 11 3 0 0 00 16 6 0 0 00

412

3 0 0 00

DR CR

DR CR Dr Dr

414 Balance 4 8 00

510 Balance 6 0 0 00 16 0 0 0 00

512

Credit

DR CR

Balance

1 0 0 0 00

ACCOUNT NO. Post Ref.

10 0 0 0 00 15 0 0 0 00

Balance

ACCOUNT NO. Debit

Balance

DR CR

6 0 0 00 15 4 0 0 00

GJ3

Explanation

DR CR

ACCOUNT NO.

CPJ8

Explanation

Credit

4 8 00

NAME: PURCHASES DISCOUNTS Date 2016 Mar 31

ACCOUNT NO.

NAME: PURCHASES RETURNS AND ALLOWANCES Date 2016 Mar 15

ACCOUNT NO.

NAME: TOY PURCHASES Date 2016 Mar 31 31

Credit 11 3 0 0 00 5 3 0 0 00

SJ4

NAME: SALES DISCOUNTS Date 2016 Mar 31

DR CR

ACCOUNT NO.

NAME: SALES RETURNS AND ALLOWANCES Date 2016 Mar 12

Credit

310

514

Credit

DR CR

Balance

1 3 8 00

PROBLEM 11A-5., Cont.

THIS SOLUTION ASSUMES GST (5%) ABBY’S TOY HOUSE - PARTIAL GENERAL LEDGER

NAME: SALARIES EXPENSE Date 2016 Mar 15

Explanation

ACCOUNT NO. Post Ref.

Debit

CPJ8

6 0 0 00

Credit

NAME: CLEANING EXPENSE Date 2016 Mar 11

Explanation

DR CR

Balance

6 0 0 00

ACCOUNT NO. Post Ref.

Debit

CPJ8

3 0 0 00

Credit

610

612

DR CR

Balance

3 0 0 00

11-47

11-48

Date 2016 April 5 9 19 22 26 Customer Alice Koy Co. Marika Sanchez Co. Jeff Tong Co. Rusty Neal Co. Marika Sanchez Co.

PROBLEM 11B-1.

Sales Post Invoice Ref. 1001 ✔ 1002 ✔ 1003 ✔ 1004 ✔ 1005 ✔

(12)

Accounts Receivable Dr. 4 5 2 00 1 0 1 7 00 6 7 8 00 1 1 3 0 00 1 0 1 7 00 4 2 9 4 00

(20)

PST Payable Cr. 3 2 00 7 2 00 4 8 00 8 0 00 7 2 00 3 0 4 00

BILL’S COSMETIC MARKET SALES JOURNAL

(22)

GST Payable Cr. 2 0 00 4 5 00 3 0 00 5 0 00 4 5 00 1 9 0 00

(40)

9 0 0 00 1 9 0 0 00

6 0 0 00

Lipstick Sales Cr. 4 0 0 00

(44)

1 9 0 0 00

1 0 0 0 00

9 0 0 00

Eyeshadow Sales Cr.

Page 1

11-49

Date 2016 April 2 3 4 18 29 29 30

(12)

(10)

5 0 8 50

1 0 1 7 00 1 5 2 5 50

Accounts Receivable Dr.

Cash Dr. 10 0 0 0 00 5 6 5 0 00 3 3 9 0 00 5 0 8 50 4 5 2 0 00 2 2 6 0 00 1 0 1 7 00 27 3 4 5 50

PROBLEM 11B-1., Cont.

(20)

1 1 2 0 00

3 2 0 00 1 6 0 00

4 0 0 00 2 4 0 00

PST Payable Cr.

(22)

7 0 0 00

2 0 0 00 1 0 0 00

2 5 0 00 1 5 0 00

GST Payable Cr.

(40)

9 0 0 0 00

4 0 0 0 00

5 0 0 0 00

Lipstick Sales Cr.

BILL’S COSMETIC MARKET CASH RECEIPTS JOURNAL

(44)

Description of Receipt Bill Murray, Capital Cash Sales 3 0 0 0 0 0 Cash Sales Marika Sanchez Co. Cash Sales 2 0 0 0 0 0 Cash Sales Marika Sanchez Co. 5 0 0 0 00

Eyeshadow Sales Cr.

✔

Post Ref.

(X)

10 0 0 0 00

Sundry Cr. 10 0 0 0 00

Page 1

PROBLEM 11B-1., Cont. BILL’S COSMETIC MARKET GENERAL JOURNAL Date 2016 April 16

Page 1 Post Ref.

Account Title and Description Sales Returns and Allowances, Lipstick PST Payable GST Payable Accounts Receivable, Alice Koy Issued Credit Memo #30

42 20 22

Dr. 2 0 0 00 1 6 00 1 0 00

12 / ✔

Sales Returns and Allowances, Lipstick PST Payable GST Payable Accounts Receivable, Jeff Tong Issued Credit Memo #31

42 20 22

Cr.

2 2 6 00

3 0 0 00 2 4 00 1 5 00

12 / ✔

3 3 9 00

BILL’S COSMETIC MARKET ACCOUNTS RECEIVABLE LEDGER NAME ADDRESS Date 2016 April 5 16

Explanation

11-50

Post Ref.

Debit

SJ1

4 5 2 00

Credit 2 2 6 00

GJ1

NAME ADDRESS Date 2016 April 22

ALICE KOY CO. 2 RYAN ROAD, OTTAWA, ON K1B 2A5 Dr. Balance 4 5 2 00 2 2 6 00

RUSTY NEAL CO. 4 REEL ROAD, TORONTO, ON M4G 2Y8 Explanation

Post Ref .

Debit

SJ1

1 1 3 0 00

Credit

Dr. Balance 1 1 3 0 00

PROBLEM 11B-1., Cont. BILL’S COSMETIC MARKET ACCOUNTS RECEIVABLE LEDGER NAME ADDRESS Date 2016 April 9 18 26 30

NAME ADDRESS Date 2016 April 19 23

MARIKA SANCHEZ CO. 14 BONE DRIVE, LONDON, ON N6J 3J6 Explanation

Post Ref.

Debit

SJ1

1 0 1 7 00

Credit

1 0 1 7 00

1 0 1 7 00 5 0 8 50 1 5 2 5 50 5 0 8 50

Credit

Dr. Balance

5 0 8 50

CRJ1 SJ1

Dr. Balance

1 0 1 7 00

CRJ1

JEFF TONG CO. 2 MARION RD., SARNIA, ON N7S 8A3 Explanation

Post Ref.

Debit

SJ1

6 7 8 00

GJ1

3 3 9 00

6 7 8 00 3 3 9 00

ACCOUNT NO.

BILL’S COSMETIC MARKET PARTIAL GENERAL LEDGER NAME: CASH Date 2016 April 30

Explanation

Post Ref.

Debit

CRJ1

27 3 4 5 50

NAME: ACCOUNTS RECEIVABLE Date 2016 April 16 23 30 30

Explanation

Credit

DR CR

Balance

27 3 4 5 50

ACCOUNT NO. Post Ref.

Debit

2 2 6 00 3 3 9 00

GJ1 GJ1 SJ1 CRJ

Credit

4 2 9 4 00

DR CR Cr Cr Dr

1 5 2 5 50

12 Balance 2 2 6 00 5 6 5 00 3 7 2 9 00 2 2 0 3 50

11-51

PROBLEM 11B-1., Cont. BILL’S COSMETIC MARKET PARTIAL GENERAL LEDGER NAME: PST PAYABLE Date 2016 April 16 23 30 30

ACCOUNT NO. Explanation

Post Ref. GJ1 GJ1

Debit

Dr Dr

3 0 4 00 1 1 2 0 00

CRJ1

NAME: GST PAYABLE Date 2016

DR CR

Credit

1 6 00 2 4 00

SJ1

Cr Cr

ACCOUNT NO. Explanation

Post Ref.

Debit

Credit

Balance 1 6 00 4 0 00 2 6 4 00 1 3 8 4 00

DR CR

Balance

April 16

GJ1

1 0 00

GJ1

1 5 00

2 5 00

SJ1

1 9 0 00

1 6 5 00

CRJ1

7 0 0 00

8 6 5 00

NAME: BILL MURRAY, CAPITAL Date 2016 April 2

Explanation

ACCOUNT NO. Post Ref.

Debit

CRJ

NAME: LIPSTICK SALES Date 2016

Credit

DR CR

Balance

10 0 0 0 00

ACCOUNT NO. Explanation

Post Ref.

Debit

Credit

DR CR

Balance

April 30

SJ1

1 9 0 0 00

CRJ

9 0 0 0 00

10 9 0 0 00

NAME: SALES RETURNS AND ALLOWANCES, LIPSTICK Date 2016

ACCOUNT NO.

Post Ref.

Debit

April 16

GJ1

11-52

Explanation

DR CR

Balance

2 0 0 00

3 0 0 00

5 0 0 00

Credit

PROBLEM 11B-1., Cont. BILL’S COSMETIC MARKET PARTIAL GENERAL LEDGER NAME: EYESHADOW SALES Date 2016

ACCOUNT NO. Post Ref.

Explanation

Debit

Credit

DR CR

Balance

April 30

SJ1

1 9 0 0 00

CRJ

5 0 0 0 00

6 9 0 0 00

BILL’S COSMETIC MARKET SCHEDULE OF ACCOUNTS RECEIVABLE APRIL 30, 2016 Alice Koy Co. Rusty Neal Co. Marika Sanchez Co. Jeff Tong Co. Total Accounts Receivable

$ 2 2 6 00 1 1 3 0 00 5 0 8 50 3 3 9 00 $2 2 0 3 5 0

PROBLEM 11B-2. PARKER’S SCUBA SHOP SALES JOURNAL Date 2017 Apr

Invoice No. 4 4 8 14 25

614 615 616 617 618

Customer’s Name J. Simpson R. Langley J. Fellowes Phyllis Leung Roland Doncaster

Post Ref.

✔ ✔ ✔ ✔ ✔

Accounts Receivable Dr. 9 0 4 00 1 8 0 8 00 6 7 8 00 3 3 9 0 00 6 7 8 0 00 13 5 6 0 00 (1 2 0)

Page 11 HST Merchandise Payable Sales Cr. Cr. 1 0 4 00 8 0 0 00 2 0 8 00 1 6 0 0 00 7 8 00 6 0 0 00 3 9 0 00 3 0 0 0 00 7 8 0 00 6 0 0 0 00 1 5 6 0 00 12 0 0 0 00 (2 2 1) (4 0 0)

11-53

11-54

April

Date 2017

(110)

1 14 0 0 0 0 0 11 8 8 8 00 18 1 8 0 8 0 0 18 2 8 2 5 0 0 21 9 0 4 00 21 2 3 3 1 0 0 22 3 6 1 6 0 0 26 3 7 2 0 0

Cash Dr.

(120)

5 9 8 9 00

9 0 4 00 2 3 7 3 00

9 0 4 00 1 8 0 8 00

Accounts Receivable Cr.

(221)

4 1 6 00 7 4 1 00

3 2 5 00

(400)

3 2 0 0 00 5 7 0 0 00

2 5 0 0 00

Merchandise Sales Cr.

Description of Receipt

(404)

M. Parker, Capital 1 6 0 0 J. Simpson R. Langley Cash Sales R. Doncaster 4 2 0 0 Phyllis Leung Cash Sales 5 8 00

Sales Discounts Dr.

PARKER’S SCUBA SHOP CASH RECEIPTS JOURNAL HST Payable Cr.

SOLUTION TO PROBLEM 11B-2., Cont.

✔ ✔

300

Post Ref.

(X)

14 0 0 0 0 0

Sundry Cr.

Page 12

PROBLEM 11B-2., Cont. PARKER’S SCUBA SHOP GENERAL JOURNAL Date 2017 April 21

Page 13 Post Ref.

Account Title and Description Sales Returns and Allowances HST Payable Accounts Receivable, Phyllis Leung Issued Credit Memo #101

402 221

Dr. 9 0 0 00 1 1 7 00

120 / ✔

Sales Returns and Allowances HST Payable Accounts Receivable, Roland Doncaster Issued Credit Memo #102

402 221

Cr.

1 0 1 7 00

1 0 0 0 00 1 3 0 00

120 / ✔

1 1 3 0 00

PARKER’S SCUBA SHOP ACCOUNTS RECEIVABLE LEDGER NAME ADDRESS

ROLAND DONCASTER 585 BURKE STREET, BATHURST, NB E2A 2J4

Date 2017 April 1 Balance 21 25 29

NAME ADDRESS

Explanation

Post Ref.

Debit

Credit

✔

9 0 4 00

CRJ1 SJ11

Dr. Balance

9 0 4 00

1 1 3 0 00

6 7 8 0 00 5 6 5 0 00

Credit

Dr. Balance

6 7 8 0 00

GJ13

J. FELLOWES 112 CRAFT AVE., CHARLOTTETOWN, PE C1E 3D6

Date 2017 April 1 Balance 8

Explanation

Post Ref.

Debit

✔ SJ11

6 7 8 00

1 4 1 2 50 2 0 9 0 50

11-55

PROBLEM 11B-2., Cont. PARKER’S SCUBA SHOP ACCOUNTS RECEIVABLE LEDGER NAME ADDRESS

R. LANGLEY 67 MAIN STREET, BATHURST, NB E2A 5F5

Date 2017 April 1 Balance 4 18

NAME ADDRESS

Debit

Credit

Dr. Balance

✔

SJ11

1 8 0 8 00

CRJ12

1 8 0 8 00 1 8 0 8 00

Credit

Dr. Balance

PHYLLIS LEUNG 245 CASEMENT CLOSE, EDMUNDSTON, NB E3V 2E4

Date 2017 April 1 Balance 14 21 21 NAME ADDRESS

Post Ref.

Explanation

Post Ref.

Explanation

Debit

✔

SJ11

3 3 9 0 00 1 0 1 7 00 2 3 7 3 00

GJ13 CRJ1

3 3 9 0 00 2 3 7 3 00

J. SIMPSON 65 TALLISMAN CRESC., FREDERICTON, NB E3A 3M1

Date 2017 April 1 Balance 4 11

Post Ref.

Explanation

Debit

Credit

Dr. Balance

9 0 4 00

5 9 3 25 1 4 9 7 25 5 9 3 25

✔ SJ11

9 0 4 00

CRJ1

PARKER’S SCUBA SHOP PARTIAL GENERAL LEDGER NAME: CASH Date 2017 April 1 Balance 30

ACCOUNT NO. Explanation

Post Ref.

Debit

✔ CRJ12

11-56

Explanation

DR CR Dr

26 3 7 2 00

NAME: ACCOUNTS RECEIVABLE Date 2017 April 1 Balance 21 29 30 30

Credit

ACCOUNT NO. Post Ref.

Debit

Credit

✔

1 0 1 7 00 1 1 3 0 00

GJ13 GJ13 SJ11 CRJ12

DR CR

13 5 6 0 00

Dr Dr Dr

5 9 8 9 00

110 Balance 1 9 5 3 56 28 3 2 5 56

120 Balance 2 9 0 9 75 1 8 9 2 75 7 6 2 75 14 3 2 2 75 8 3 3 3 75

PROBLEM 11B-2., Cont. PARKER’S SCUBA SHOP PARTIAL GENERAL LEDGER NAME: HST PAYABLE Date 2017 April 21 29 30 30

ACCOUNT NO. Explanation

Post Ref. GJ13 GJ13

Debit 1 1 7 00 1 3 0 00

Explanation

Post Ref.

Debit

14 0 0 0 00

CRJ12

Explanation

Post Ref.

Debit

Credit

✔

DR CR

12 0 0 0 00 5 7 0 0 00

DR CR

Cr Cr

ACCOUNT NO. Post Ref.

Debit

Credit

GJ13

9 0 0 00 1 0 0 0 00

Explanation

Dr Dr

ACCOUNT NO. Post Ref. CRJ12

Debit 5 8 00

Credit

Balance 28 0 0 0 00 42 0 0 0 00

Balance 74 5 2 3 48 86 5 2 3 48 92 2 2 3 48

402

DR CR

✔ GJ13

1 1 7 00 2 4 7 00 1 3 1 3 00 2 0 5 4 00

400

CRJ12

Balance

300

ACCOUNT NO.

SJ11

Explanation

NAME: SALES DISCOUNTS Date 2017 April 29

Credit

✔

NAME: SALES RETURNS AND ALLOWANCES Date 2017 April 1 Balance 21 29

ACCOUNT NO.

NAME: MERCHANDISE SALES Date 2017 April 1 Balance 30 30

DR CR Dr

1 5 6 0 00 7 4 1 00

SJ11 CRJ12

NAME: MARY PARKER, CAPITAL Date 2017 April 1 Balance 1

Credit

221

DR CR

Balance 7 5 2 50 1 6 5 2 50 2 6 5 2 50

404 Balance

5 8 00

11-57

PROBLEM 11B-2., Cont. PARKER’S SCUBA SHOP SCHEDULE OF ACCOUNTS RECEIVABLE APRIL 30, 2017 Roland Doncaster J. Fellowes J. Simpson Total Accounts Receivable

11-58

$5 6 5 0 00 2 0 9 0 50 5 9 3 25 $8 3 3 3 7 5

11-59

May

Date 2015

8 11 14 18 25 31

Broward Co. Aton Co. Midden Co. Relar Co. Midden Co.

Account Credited

PROBLEM 11B-3.

420 400 510 810 516

5/11 5/11 5/18 5/22

Inv. No.

5/7

Date of Invoice

2/10,n/60

Terms

✔ ✔ ✔ ✔ ✔

Post Ref.

(210)

(510)

Accounts Purchases Payable Dr. Cr. 5 2 5 00 5 0 0 00 9 4 5 00 9 0 0 00 8 4 0 00 7 8 7 50 8 9 2 50 3 9 9 0 00 1 4 0 0 00 (112)

(110)

Prepaid Store Sundry Dr. GST Supplies PR Dr. Dr. Account 2 5 00 4 5 00 4 0 00 8 0 0 00 3 7 50 Office Equipment 120 4 2 50 8 5 0 00 1 9 0 00 1 6 5 0 00

MABEL’S NATURAL FOOD STORE PURCHASES JOURNAL

(X)

7 5 0 00

Amount

Page 10

PROBLEM 11B-3., Cont. MABEL’S NATURAL FOOD STORE GENERAL JOURNAL Date Account Title and Description 2015 May 15 Accounts Payable, Aton Co. Prepaid GST Purchase Returns and Allowances Issued Debit Memo #7

Post Ref. 210 / ✔

Page 2 Dr.

Cr.

4 2 0 00 2 0 00 4 0 0 00

112 512

MABEL’S NATURAL FOOD STORE ACCOUNTS PAYABLE LEDGER NAME: ADDRESS:

ATON CO. 1014 - 12 ST., COLD LAKE, AB T9M 1E1

Date 2015 May 1 Balance 11 15

NAME: ADDRESS:

Date 2015 May 1 18

11-60

Debit

Credit

Cr. Balance

9 4 5 00

4 2 0 00 1 3 6 5 00 9 4 5 00

Credit

Cr. Balance

5 2 5 00

6 3 0 00 1 1 5 5 00

Credit

Cr. Balance

8 4 0 00 8 9 2 50

1 2 6 0 00 2 1 0 0 00 2 9 9 2 50

Credit

Cr. Balance

7 8 7 50

5 2 5 00 1 3 1 2 50

✔ PJ10 GJ2

4 2 0 00

Explanation

Post Ref.

Debit

✔ PJ10

MIDDEN CO. 5518 VIMY PARK RD., COLD LAKE, AB T9M 1B5

Date 2015 May 1 Balance 14 25

NAME: ADDRESS:

Post Ref.

BROWARD CO. 415 BASE ST., COLD LAKE, AB T9M 1B2

Date 2015 May 1 Balance 8

NAME: ADDRESS:

Explanation

Post Ref.

Debit

✔ PJ10 PJ10

RELAR CO. 2415 LAKEVIEW AVE, COLD LAKE, AB T9M 1C1 Explanation Balance

Post Ref.

Debit

✔ PJ10

PROBLEM 11B-3., Cont. MABEL’S NATURAL FOOD STORE PARTIAL GENERAL LEDGER NAME: STORE SUPPLIES Date 2015 May 31

Explanation

ACCOUNT NO. Post Ref.

Debit

PJ10

1 6 5 0 00

Credit

NAME: PREPAID GST Date 2015 May 1 Balance 15 31

Explanation

Debit

Credit

✔ PJ10

Explanation

1 9 0 00

Explanation

Post Ref.

Debit

PJ10

7 5 0 00

Credit

DR CR

Post Ref.

Debit

Credit

✔ GJ2

4 2 0 00

Post Ref.

Debit

Credit

✔ PJ10

DR CR

Explanation

Post Ref.

DR CR Dr

1 4 0 0 00

ACCOUNT NO. Debit

GJ2

120

7 5 0 00

ACCOUNT NO. Explanation

4 7 1 00 4 5 1 00 6 4 1 00

3 9 9 0 00

Balance

PJ10

112

DR CR

ACCOUNT NO.

NAME: PURCHASES RETURNS AND ALLOWANCES Date 2015 May 15

1 6 5 0 00

ACCOUNT NO.

NAME: PURCHASES Date 2015 May 1 Balance 31

NAME: ACCOUNTS PAYABLE Date 2015 May 1 Balance 15 31

Balance

2 0 00

GJ2

NAME: OFFICE EQUIPMENT Date 2015 May 18

DR CR

ACCOUNT NO. Post Ref.

110

210 Balance 2 8 3 5 00 2 4 1 5 00 6 4 0 5 00 510 Balance 16 0 0 0 00 17 4 0 0 00 512

Credit

DR CR

Balance

4 0 0 00

MABEL’S NATURAL FOOD STORE SCHEDULE OF ACCOUNTS PAYABLE MAY 31, 2015 Aton Co. Broward Co. Midden Co. Relar Co. Total Accounts Payable

00 00 50 50 00

11-61

11-62

May

3 3 7 17 24 27 28 31 31

Date 2016 21 22 23 24 25 26 27 28

Chq. No. Account Debited Delivery Truck Henry Co. Cash Purchase Cash Purchase Xon Co. Rent Expense Soy Co. Utilities Expense

PROBLEM 11B-4.

620

✔

610

✔

150

Post Ref.

2 2 0 5 00 (210)

(X)

4 2 0 00

1 4 7 0 00

3 1 5 00

Accounts Payable Dr.

4 2 5 00 11 4 2 5 00

3 0 0 0 00

Sundry Dr. 8 0 0 0 00

JONES’ COMPUTER CENTRE CASH PAYMENTS JOURNAL

(132)

2 1 25 6 6 6 25

1 5 0 00

4 5 00 5 0 00

Prepaid GST Dr. 4 0 0 00

(510)

1 9 0 0 00

9 0 0 00 1 0 0 0 00

Computer Purchases Dr.

(511)

(110)

Cash Cr. 8 4 0 0 00 1 5 00 3 0 0 00 9 4 5 00 1 0 5 0 00 7 0 00 1 4 0 0 00 3 1 5 0 00 4 2 0 00 4 4 6 25 8 5 00 16 1 1 1 25

Computer Purchases Discount Cr.

Page 5

PROBLEM 11B-4., Cont. NAME: ADDRESS:

ACCOUNTS PAYABLE LEDGER ALVIN CO. 204 GOLDSTREAM AVE., WHITEHORSE, YT Y1A 4H1

Date 2016 May 1 Balance

NAME: ADDRESS:

Credit

Cr. Balance 1 2 6 0 00

HENRY CO. 401 FIRST ST., WHITEHORSE, YT Y1A 5H2 Post Ref.

Explanation

Debit

Credit

Cr. Balance

✔ CPJ5

6 3 0 00 3 1 5 00

3 1 5 00

SOY CO. 952 SECOND AVENUE, WHITEHORSE, YT Y1A 5H1

Date 2016 May 1 Balance 28

NAME: ADDRESS:

Debit

✔

Date 2016 May 1 Balance 3

NAME: ADDRESS:

Post Ref.

Explanation

Post Ref.

Explanation

Debit

Credit

Cr. Balance

✔ CPJ5

8 4 0 00 4 2 0 00

4 2 0 00

XON CO. 241 MOUNTAIN RD, RR1, WHITEHORSE, YT Y1A 4H9

Date 2016 May 1 Balance 24

Post Ref.

Explanation

Debit

Credit

Cr. Balance

✔ CPJ5

1 4 7 0 00

PARTIAL GENERAL LEDGER NAME:

CASH

Date 2016 May 1 Balance 31

NAME:

ACCOUNT NO. Explanation

Post Ref.

Debit

Credit

✔

16 1 1 1 25

CPJ5

PREPAID GST

Date 2016 May 1 Balance 31

Explanation

DR CR

ACCOUNT NO. Post Ref.

Debit

Credit

✔ CPJ5

DR CR Dr

6 6 6 25

110 Balance 17 0 0 0 00 8 8 8 75

132 Balance 9 2 0 00 1 5 8 6 25

11-63

PROBLEM 11B-4., Cont.

PARTIAL GENERAL LEDGER

NAME: DELIVERY TRUCK Date 2016 May 3

ACCOUNT NO. Post Ref.

Debit

CPJ5

8 0 0 0 00

Explanation

NAME: ACCOUNTS PAYABLE Date 2016 May 1 31

Post Ref.

Explanation

Debit

CPJ5

2 2 0 5 00

8 0 0 0 00

DR CR

ACCOUNT NO. Post Ref.

Debit

CPJ5

1 9 0 0 00

Explanation

Post Ref.

Explanation

Credit

Debit

Credit 8 5 00

CPJ5

Post Ref.

Debit

CPJ5

3 0 0 0 00

Credit

Post Ref.

Debit

CPJ5

4 2 5 00

Credit

4 2 0 0 00 1 9 9 5 00

510

1 9 0 0 00

DR CR Cr

511 Balance 8 5 00

610

DR CR

Balance

3 0 0 0 00

ACCOUNT NO.

Explanation

Balance

ACCOUNT NO.

Explanation

210

DR CR

ACCOUNT NO.

NAME: UTILITIES EXPENSE Date 2016 May 31

Balance

NAME: RENT EXPENSE Date 2016 May 27

Credit

✔

Balance

NAME: COMPUTER PURCHASES DISCOUNTS Date 2016 May 31

DR CR

ACCOUNT NO.

NAME: COMPUTER PURCHASES Date 2016 May 31

Credit

150

620

DR CR

Balance

4 2 5 00

JONES’ COMPUTER CENTRE SCHEDULE OF ACCOUNTS PAYABLE MAY 31, 2016 Alvin Co. Henry Co. Soy Co. Total Accounts Payable

11-64

$1 2 6 0 3 1 5 4 2 0 $1 9 9 5

00 00 00 00

11-65

Mar

Date 2016

1 7 10 19 26 28 31

Earl Miller Co. Earl Miller Co. Minnie Katz Sam Katz Garage Woody Smith Earl Miller Co.

Account Credited

PROBLEM 11B-5.

410 415 311 111 211 436

3/1 3/7 3/9 3/19 3/26 3/26

Date of Inv. Invoice No.

2/10,n/30

1/15,n/60

2/10,n/30

Terms ✔ ✔ ✔ ✔ ✔ ✔

Post Ref.

(210)

(510)

Accounts Toy Payable Purchases Cr. Dr. 6 7 8 0 00 6 0 0 0 00 9 0 4 00 8 0 0 00 7 9 1 0 00 7 0 0 0 00 2 8 2 5 00 6 6 6 7 00 5 9 0 0 00 4 7 4 6 00 4 2 0 0 00 29 8 3 2 00 23 9 0 0 00

ABBY’S TOY HOUSE PURCHASES JOURNAL

(116)

(X)

Prepaid Sundry Dr. HST PR Dr. Account Amount 7 8 0 00 1 0 4 00 9 1 0 00 121 3 2 5 0 0 Delivery Truck 2 5 0 0 00 7 6 7 00 5 4 6 00 3 4 3 2 00 2 5 0 0 00

Page 10

THIS SOLUTION ASSUMES HST (13%)

11-66

Mar

1 9 11 15 22 26 29 31

Date 2016 1 2 3 4 5 6 7

Chq. No. Prepaid Rent Cleaning Expense Earl Miller Co. Salaries Expense Minnie Katz Cash Purchase Earl Miller Co.

Account Debited

PROBLEM 11B-5., Cont.

(X)

(210)

4 7 4 6 00 2 1 0 0 00 18 8 7 1 00

✔

6 7 8 0 00

Accounts Payable Dr.

7 3 4 5 00

7 0 0 00

Sundry Dr. 1 0 0 0 00 4 0 0 00

✔

610

✔

612

114

Post Ref.

ABBY’S TOY HOUSE CASH PAYMENTS JOURNAL

(116)

2 8 6 0 00

1 0 4 00

Prepaid HST Dr. 1 3 0 00 5 2 00

(510)

8 0 0 00

Toy Purchases Dr.

(514)

8 4 00 2 6 9 00

6 5 00

1 2 0 00

Purchases Discount Cr.

(110)

Cash Cr. 1 1 3 0 00 4 5 2 00 6 6 6 0 00 7 0 0 00 7 2 8 0 00 9 0 4 00 4 6 6 2 00 21 7 8 8 00

Page 8

THIS SOLUTION ASSUMES HST (13%)

11-67

Mar

1 13 15 15 18 26 26 27 31

Date 2016

7 0 0 6 00 (112)

(110)

6 7 8 00 1 8 0 8 00 2 2 6 0 00 2 2 6 0 00

Accounts Receivable Cr.

8 0 0 0 00 1 6 9 5 00 5 4 2 4 00 6 6 6 00 1 8 0 8 00 2 2 2 0 00 2 2 2 0 00 3 0 0 0 00 25 0 3 3 0 0

Cash Dr.

PROBLEM 11B-5., Cont.

(410)

6 3 0 0 00

1 5 0 0 00 4 8 0 0 00

Toy Sales Cr.

(218)

8 1 9 00

1 9 5 00 6 2 4 00

HST Payable Cr.

ABBY’S TOY HOUSE CASH RECEIPTS JOURNAL Description of Receipt

(414)

A. Ellen, Capital Cash Sale Cash Sale 1 2 0 0 Jim Rex Bill Burton 4 0 0 0 Bill Burton 4 0 0 0 Amy Rose A. Ellen, Capital 9 2 00

Sales Discounts Dr.

310

✔ ✔ ✔ ✔

310

Post Ref.

(X)

3 0 0 0 00 11 0 0 0 0 0

8 0 0 0 00

Sundry Cr.

Page 14

THIS SOLUTION ASSUMES HST (13%)

PROBLEM 11B-5., Cont.

THIS SOLUTION ASSUMES HST (13%) ABBY’S TOY HOUSE SALES JOURNAL

Date 2016 Mar

4 6 9 18 21 22 29 31

Invoice. No. 1 2 3 4 5 6 7

Customer’s Name

Post Ref.

✔ ✔ ✔ ✔ ✔ ✔ ✔

Bill Burton Jim Rex Bill Burton Amy Rose Bill Burton Amy Rose Bonnie Flow Company

Page 4 Accounts Receivable Dr. 1 8 0 8 00 9 0 4 00 7 9 1 00 6 7 8 0 00 2 2 6 0 00 2 2 6 0 00 3 6 1 6 00 18 4 1 9 00 (112)

HST Toy Payable Sales Cr. Cr. 2 0 8 00 1 6 0 0 00 1 0 4 00 8 0 0 00 9 1 00 7 0 0 00 7 8 0 00 6 0 0 0 00 2 6 0 00 2 0 0 0 00 2 6 0 00 2 0 0 0 00 4 1 6 00 3 2 0 0 00 2 1 1 9 00 16 3 0 0 00 (218)

ABBY’S TOY HOUSE GENERAL JOURNAL Date Account Title and Description 2016 Mar 10 Sales Returns and Allowances HST Payable Accounts Receivable, Jim Rex Issued Credit Memo #1 15 Accounts Payable, Minnie Katz Purchase Returns and Allowances Prepaid HST Issued Debit Memo #1

11-68

(410)

Page 3 Post Ref. 412 218

Dr. 2 0 0 00 2 6 00

2 2 6 00

112 /✔

210 /✔ 512 116

Cr.

5 6 5 00 5 0 0 00 6 5 00

PROBLEM 11B-5., Cont.

THIS SOLUTION ASSUMES HST (13%) ACCOUNTS RECEIVABLE LEDGER

NAME ADDRESS Date 2016 Mar 4 9 18 21 26 NAME ADDRESS Date 2016 Mar 29

NAME ADDRESS Date 2016 Mar 6 10 15

NAME ADDRESS Date 2016 Mar 18 22 26

BILL BURTON 24 NORTH WEST ARM ROAD, HALIFAX, NS B3V 6K0 Explanation

Post Ref. SJ4 SJ4

Debit

Dr. Balance

1 8 0 8 00 7 9 1 00

1 8 0 8 00 2 5 9 9 00 7 9 1 00 3 0 5 1 00 7 9 1 00

1 8 0 8 00

CRJ14 SJ4

Credit

2 2 6 0 00 2 2 6 0 00

CRJ14

BONNIE FLOW COMPANY 2 SMITH AVENUE, HALIFAX, NS B3V 1A1 Explanation

Post Ref. SJ4

Debit

Credit

Dr. Balance

3 6 1 6 00

JIM REX 1 SCHOOL STREET, HALIFAX, NS B3P 2R5 Explanation

Post Ref.

Debit

SJ4

9 0 4 00

Credit

Dr. Balance 9 0 4 00 6 7 8 00

2 2 6 00 6 7 8 00

GJ3 CRJ14

AMY ROSE 18 VEEK STREET, DARTMOUTH, NS B2X 1X1 Explanation

Post Ref. SJ4 SJ4

Debit

Credit

Dr. Balance

6 7 8 0 00 2 2 6 0 00

6 7 8 0 00 9 0 4 0 00 6 7 8 0 00

2 2 6 0 00

CRJ14

ABBY’S TOY HOUSE SCHEDULE OF ACCOUNTS RECEIVABLE MARCH 31, 2016 Bill Burton Bonnie Flow Company Amy Rose Total Accounts Receivable

7 9 1 3 6 1 6 6 7 8 0 $11 1 8 7

00 00 00

11-69

PROBLEM 11B-5., Cont.

THIS SOLUTION ASSUMES HST (13%) ACCOUNTS PAYABLE LEDGER

NAME ADDRESS Date 2016 Mar 10 15 22

MINNIE KATZ 87 GARFIELD AVENUE, HALIFAX, NS B3V 1B4 Post Ref.

Explanation

Debit

7 9 1 0 00

PJ10 GJ3 CPJ8

NAME ADDRESS Date 2016 Mar 19

5 6 5 00 7 3 4 5 00

Post Ref.

Debit

PJ10

Date 2016 Mar 1 7 11 28 29 NAME ADDRESS Date 2016 Mar 26

Cr. Balance 7 9 1 0 00 7 3 4 5 00

SAM KATZ GARAGE 22 REGIS STREET, HALIFAX, NS B3V 1B9 Explanation

NAME ADDRESS

Credit

Cr. Balance

2 8 2 5 00

Credit

Cr. Balance

EARL MILLER CO. 22 RETTER STREET, TORONTO, ON M6S 3L8 Post Ref.

Explanation

Debit

6 7 8 0 00 9 0 4 00

PJ10 PJ10 CPJ8

6 7 8 0 00 4 7 4 6 00

PJ10 CPJ8

4 7 4 6 00

6 7 8 0 7 6 8 4 9 0 4 5 6 5 0 9 0 4

00 00 00 00 00

WOODY SMITH 2 SPRING STREET, HALIFAX, NS B3D 2D8 Explanation

Post Ref.

Debit

PJ10

Credit 6 6 6 7 00

Cr. Balance 6 6 6 7 00

ABBY’S TOY HOUSE SCHEDULE OF ACCOUNTS PAYABLE MARCH 31, 2016 Sam Katz Garage Earl Miller Co. Woody Smith Total Accounts Payable

11-70

$2 8 2 5 9 0 4 6 6 6 7 $10 3 9 6

00 00 00

PROBLEM 11B-5., Cont.

THIS SOLUTION ASSUMES HST (13%) ABBY’S TOY HOUSE - PARTIAL GENERAL LEDGER

NAME: CASH Date 2016 Mar 31 31

ACCOUNT NO. Explanation

Post Ref.

Debit

CRJ14

25 0 3 3 00

Credit

NAME: ACCOUNTS RECEIVABLE Date 2016 Mar 10 31 31

Explanation

Post Ref.

Debit

GJ3 SJ4

Explanation

Post Ref.

Debit

CPJ8

1 0 0 0 00

Post Ref.

PJ10 CPJ8

Explanation

Debit

Credit 6 5 00

3 4 3 2 00 2 8 6 00

Post Ref.

Debit

PJ10

2 5 0 0 00

Debit

GJ3

5 6 5 00

CPJ8

18 8 7 1 00

DR CR Cr

GJ3 SJ4 CRJ14

Debit 2 6 00

116 Balance 6 5 00 3 3 6 7 00 3 6 5 3 00 121

2 5 0 0 00

DR CR

DR CR Dr

2 1 1 9 00 8 1 9 00

114

Balance

Credit

2 2 6 00 18 1 9 3 00 11 1 8 7 00

DR CR

ACCOUNT NO. Post Ref.

Balance

1 0 0 0 00

29 8 3 2 00

112

Credit

25 0 3 3 00 3 2 4 5 00

Balance

ACCOUNT NO. Post Ref.

Balance

DR CR

Credit

PJ10

Explanation

ACCOUNT NO.

NAME: HST PAYABLE Date 2016 Mar 10 31 31

ACCOUNT NO.

NAME: ACCOUNTS PAYABLE Date 2016 Mar 15 31 31

Credit

GJ3

Explanation

2 2 6 00

ACCOUNT NO.

NAME: DELIVERY TRUCK Date 2016 Mar 19

DR CR

7 0 0 6 00

NAME: PREPAID HST Date 2016 Mar 15 31 31

Credit

18 4 1 9 00

CRJ14

Explanation

ACCOUNT NO.

NAME: PREPAID RENT Date 2016 Mar 1

21 7 8 8 00

CPJ8

DR CR

110

Cr Cr

210 Balance 5 6 5 00 29 2 6 7 00 10 3 9 6 00 218 Balance 2 6 00 2 0 9 3 00 2 9 1 2 00

11-71

PROBLEM 11B-5., Cont.

THIS SOLUTION ASSUMES HST (13%) ABBY’S TOY HOUSE - PARTIAL GENERAL LEDGER

NAME: A. ELLEN, CAPITAL Date 2016 Mar 1 27

ACCOUNT NO. Post Ref.

Explanation

Debit

8 0 0 0 00 3 0 0 0 00

CRJ14 CRJ14

NAME: TOY SALES Date 2016 Mar 31 31

Post Ref.

Explanation

Debit

CRJ14

Explanation

Post Ref.

Debit

GJ3

2 0 0 00

Post Ref. CRJ14

Debit

Explanation

Post Ref.

PJ10

Debit

11-72

Credit

Cr Cr

Post Ref.

Credit

CPJ8

Debit

410 Balance 16 3 0 0 00 22 6 0 0 00

412

2 0 0 00

DR CR

DR CR Dr Dr

414 Balance 9 2 00

510 Balance 8 0 0 00 24 7 0 0 00

512

Credit

DR CR

Balance

5 0 0 00

ACCOUNT NO. Post Ref.

8 0 0 0 00 11 0 0 0 00

Balance

ACCOUNT NO. Debit

Balance

DR CR

8 0 0 00 23 9 0 0 00

GJ3

Explanation

DR CR

ACCOUNT NO.

CPJ8

Explanation

Credit

9 2 00

NAME: PURCHASES DISCOUNTS Date 2016 Mar 31

ACCOUNT NO.

NAME: PURCHASES RETURNS AND ALLOWANCES Date 2016 Mar 15

ACCOUNT NO.

NAME: TOY PURCHASES Date 2016 Mar 31 31

Credit 16 3 0 0 00 6 3 0 0 00

SJ4

NAME: SALES DISCOUNTS Date 2016 Mar 31

DR CR

ACCOUNT NO.

NAME: SALES RETURNS AND ALLOWANCES Date 2016 Mar 10

Credit

310

514

Credit

DR CR

Balance

2 6 9 00

PROBLEM 11B-5., Cont.

THIS SOLUTION ASSUMES HST (13%) ABBY’S TOY HOUSE - PARTIAL GENERAL LEDGER

NAME: SALARIES EXPENSE Date 2016 Mar 15

Explanation

ACCOUNT NO. Post Ref.

Debit

CPJ8

7 0 0 00

Credit

NAME: CLEANING EXPENSE Date 2016 Mar 9

Explanation

DR CR

Balance

7 0 0 00

ACCOUNT NO. Post Ref.

Debit

CPJ8

4 0 0 00

Credit

610

612

DR CR

Balance

4 0 0 00

11-73

11-74

Mar

Date 2016

1 7 10 19 26 28 31

Earl Miller Co. Earl Miller Co. Minnie Katz Sam Katz Garage Woody Smith Earl Miller Co.

Account Credited

PROBLEM 11B-5.

3/1 3/7 3/9 3/19 3/26 3/26

Terms

410 2/10,n/30 415 2/10,n/30 311 1/15,n/60 111 211 2/10,n/30 436 2/10,n/30

Date of Inv. Invoice No. ✔ ✔ ✔ ✔ ✔ ✔

Post Ref.

(210)

(510)

Accounts Toy Payable Purchases Cr. Dr. 6 3 0 0 00 6 0 0 0 00 8 4 0 00 8 0 0 00 7 3 5 0 00 7 0 0 0 00 2 6 2 5 00 6 1 9 5 00 5 9 0 0 00 4 4 1 0 00 4 2 0 0 00 27 7 2 0 00 23 9 0 0 00

ABBY’S TOY HOUSE PURCHASES JOURNAL

(116)

(X)

Sundry Dr. Prepaid GST PR Dr. Account Amount 3 0 0 00 4 0 00 3 5 0 00 121 2 5 0 0 00 1 2 5 0 0 Delivery Truck 2 9 5 00 2 1 0 00 1 3 2 0 00 2 5 0 0 00

Page 10

THIS SOLUTION ASSUMES GST (5%)

11-75

Mar

1 9 11 15 22 26 29 31

Date 2016 1 2 3 4 5 6 7

Chq. No. Prepaid Rent Cleaning Expense Earl Miller Co. Salaries Expense Minnie Katz Cash Purchase Earl Miller Co.

Account Debited

PROBLEM 11B-5., Cont.

(X)

(210)

4 4 1 0 00 2 1 0 0 00 17 5 3 5 00

✔

6 3 0 0 00

Accounts Payable Dr.

6 8 2 5 00

7 0 0 00

Sundry Dr. 1 0 0 0 00 4 0 0 00

✔

610

✔

612

114

Post Ref.

ABBY’S TOY HOUSE CASH PAYMENTS JOURNAL

(116)

1 1 0 00

4 0 00

Prepaid GST Dr. 5 0 00 2 0 00

(510)

8 0 0 00

Toy Purchases Dr.

(514)

8 4 00 2 6 9 00

6 5 00

1 2 0 00

Purchases Discount Cr.

(110)

Cash Cr. 1 0 5 0 00 4 2 0 00 6 1 8 0 00 7 0 0 00 6 7 6 0 00 8 4 0 00 4 3 2 6 00 20 2 7 6 00

Page 8

THIS SOLUTION ASSUMES GST (5%)

11-76

Mar

1 13 15 15 18 26 26 27 31

Date 2016

6 5 1 0 00 (112)

(110)

6 3 0 00 1 6 8 0 00 2 1 0 0 00 2 1 0 0 00

Accounts Receivable Cr.

8 0 0 0 00 1 5 7 5 00 5 0 4 0 00 6 1 8 00 1 6 8 0 00 2 0 6 0 00 2 0 6 0 00 3 0 0 0 00 24 0 3 3 0 0

Cash Dr.

PROBLEM 11B-5., Cont.

(410)

6 3 0 0 00

1 5 0 0 00 4 8 0 0 00

Toy Sales Cr.

(218)

3 1 5 00

7 5 00 2 4 0 00

GST Payable Cr.

ABBY’S TOY HOUSE CASH RECEIPTS JOURNAL Description of Receipt

(414)

A. Ellen, Capital Cash Sale Cash Sale 1 2 0 0 Jim Rex Bill Burton 4 0 0 0 Bill Burton 4 0 0 0 Amy Rose A. Ellen, Capital 9 2 00

Sales Discounts Dr.

310

✔ ✔ ✔ ✔

310

Post Ref.

(X)

3 0 0 0 00 11 0 0 0 0 0

8 0 0 0 00

Sundry Cr.

Page 14

THIS SOLUTION ASSUMES GST (5%)

PROBLEM 11B-5., Cont.

THIS SOLUTION ASSUMES GST (5%) ABBY’S TOY HOUSE SALES JOURNAL

Date 2016 Mar

4 6 9 18 21 22 29 31

Invoice. No. 1 2 3 4 5 6 7

Customer’s Name

Post Ref.

✔ ✔ ✔ ✔ ✔ ✔ ✔

Bill Burton Jim Rex Bill Burton Amy Rose Bill Burton Amy Rose Bonnie Flow Company

Page 4 Accounts Receivable Dr. 1 6 8 0 00 8 4 0 00 7 3 5 00 6 3 0 0 00 2 1 0 0 00 2 1 0 0 00 3 3 6 0 00 17 1 1 5 00 (112)

GST Toy Payable Sales Cr. Cr. 8 0 00 1 6 0 0 00 3 0 00 8 0 0 00 3 5 00 7 0 0 00 3 0 0 00 6 0 0 0 00 1 0 0 00 2 0 0 0 00 1 0 0 00 2 0 0 0 00 1 6 0 00 3 2 0 0 00 8 1 5 00 16 3 0 0 00 (218)

ABBY’S TOY HOUSE GENERAL JOURNAL Date Account Title and Description 2016 Mar 10 Sales Returns and Allowances GST Payable Accounts Receivable, Jim Rex Issued Credit Memo #1 15 Accounts Payable, Minnie Katz Purchase Returns and Allowances Prepaid GST Issued Debit Memo #1

(410)

Page 3 Post Ref. 412 218

Dr. 2 0 0 00 1 0 00

112 /

210 / ✔ 512 116

Cr.

2 1 0 00

5 2 5 0 00 5 0 0 00 2 5 00

11-77

PROBLEM 11B-5., Cont.

THIS SOLUTION ASSUMES GST (5%) ACCOUNTS RECEIVABLE LEDGER

NAME ADDRESS Date 2016 Mar 4 9 18 21 26 NAME ADDRESS Date 2016 Mar 29

BILL BURTON 24 NORTH WEST ARM ROAD Explanation

Post Ref. SJ4 SJ4

SJ4

NAME ADDRESS Date 2016 Mar 18 22 26

Dr. Balance 1 6 8 0 00 2 4 1 5 00 7 3 5 00 2 8 3 5 00 7 3 5 00

1 6 8 0 00 2 1 0 0 00 2 1 0 0 00

CRJ14

BONNIE FLOW COMPANY 2 SMITH AVENUE Post Ref. SJ4

Date 2016 Mar 6 10 15

Credit

1 6 8 0 00 7 3 5 00

CRJ14

Explanation

NAME ADDRESS

Debit

Credit

3 3 6 0 00

Dr. Balance 3 3 6 0 00

JIM REX 1 SCHOOL STREET Explanation

Post Ref.

Debit

SJ4

8 4 0 00

Credit

Dr. Balance 8 4 0 00 6 3 0 00

2 1 0 00 6 3 0 00

GJ3 CRJ14

AMY ROSE 18 VEEK STREET Explanation

Post Ref. SJ4 SJ4

Debit

Credit

Dr. Balance

6 3 0 0 00 2 1 0 0 00

CRJ14

6 3 0 0 00 8 4 0 0 00 6 3 0 0 00

2 1 0 0 00

ABBY’S TOY HOUSE SCHEDULE OF ACCOUNTS RECEIVABLE MARCH 31, 2016 Bill Burton Bonnie Flow Company Amy Rose Total Accounts Receivable

11-78

7 3 5 3 3 6 0 6 3 0 0 $10 3 9 5

00 00 00

PROBLEM 11B-5., Cont.

THIS SOLUTION ASSUMES GST (5%) ACCOUNTS PAYABLE LEDGER

NAME ADDRESS Date 2016 Mar 10 15 22

NAME ADDRESS Date 2016 Mar 19

NAME ADDRESS Date 2016 Mar 1 7 11 28 29 NAME ADDRESS Date 2016 Mar 26

MINNIE KATZ 87 GARFIELD AVENUE Post Ref.

Explanation

Debit

7 3 5 0 00

PJ10 GJ3 CPJ8

Credit

5 2 5 00 6 8 2 5 00

Cr. Balance 7 3 5 0 00 6 8 2 5 00

SAM KATZ GARAGE 22 REGIS STREET Post Ref.

Explanation

Debit

PJ10

Credit

Cr. Balance

2 6 2 5 00

Credit

Cr. Balance

EARL MILLER CO. 22 RETTER STREET Post Ref.

Explanation

Debit

6 3 0 0 00 8 4 0 00

PJ10 PJ10 CPJ8

6 3 0 0 00 4 4 1 0 00

PJ10 CPJ8

4 4 1 0 00

6 3 0 0 7 1 4 0 8 4 0 5 2 5 0 8 4 0

00 00 00 00 00

WOODY SMITH 2 SPRING STREET Explanation

Post Ref.

Debit

Credit 6 1 9 5 00

PJ10

Cr. Balance 6 1 9 5 00

ABBY’S TOY HOUSE SCHEDULE OF ACCOUNTS PAYABLE MARCH 31, 2016 Sam Katz Garage Earl Miller Co. Woody Smith Total Accounts Payable

$2 6 2 5 8 4 0 6 1 9 5 $9 6 6 0

00 00 00

11-79

PROBLEM 11B-5., Cont.

THIS SOLUTION ASSUMES GST (5%) ABBY’S TOY HOUSE - PARTIAL GENERAL LEDGER

NAME: CASH Date 2016 Mar 31 31

ACCOUNT NO. Explanation

Post Ref.

Debit

CRJ14

24 0 3 3 00

Explanation

Post Ref.

Debit

GJ3 SJ4

Explanation

Post Ref.

Debit

CPJ8

1 0 0 0 00

Post Ref.

Debit

PJ10 CPJ8

Explanation

11-80

Post Ref.

Debit

PJ10

2 5 0 0 00

Credit

Post Ref.

Debit

GJ3

5 2 5 00 17 5 3 5 00

DR CR Cr

GJ3 SJ4 CRJ14

Debit 1 0 00

116 Balance 2 5 00 1 2 9 5 00 1 4 0 5 00 121

2 5 0 0 00

DR CR

DR CR Dr

8 1 5 00 3 1 5 00

114

Balance

Credit

2 1 0 00 16 9 0 5 00 10 3 9 5 00

DR CR

ACCOUNT NO. Post Ref.

Balance

1 0 0 0 00

27 7 2 0 00

112

Credit

24 0 3 3 00 3 7 5 7 00

Balance

Credit

Balance

DR CR

ACCOUNT NO.

CPJ8

ACCOUNT NO.

PJ10

Explanation

Credit

1 3 2 0 00 1 1 0 00

NAME: GST PAYABLE Date 2016 Mar 10 31 31

2 5 00

NAME: ACCOUNTS PAYABLE Date 2016 Mar 15 31 31

ACCOUNT NO.

GJ3

Explanation

2 1 0 00

ACCOUNT NO.

NAME: DELIVERY TRUCK Date 2016 Mar 19

DR CR

6 5 1 0 00

NAME: PREPAID GST Date 2016 Mar 15 31 31

Credit

17 1 1 5 00

CRJ14

Explanation

ACCOUNT NO.

NAME: PREPAID RENT Date 2016 Mar 1

DR CR Dr

20 2 7 6 00

CPJ8

NAME: ACCOUNTS RECEIVABLE Date 2016 Mar 10 31 31

Credit

110

Cr Cr

210 Balance 5 2 5 00 27 1 9 5 00 9 6 6 0 00 218 Balance 1 0 00 8 0 5 00 1 1 2 0 00

PROBLEM 11B-5., Cont.

THIS SOLUTION ASSUMES GST (5%) ABBY’S TOY HOUSE - PARTIAL GENERAL LEDGER

NAME: A. ELLEN, CAPITAL Date 2016 Mar 1 27

ACCOUNT NO. Post Ref.

Explanation

Debit

Credit 8 0 0 0 00 3 0 0 0 00

CRJ14 CRJ14

NAME: TOY SALES Date 2016 Mar 31 31

Post Ref.

Explanation

Debit

Credit 16 3 0 0 00 6 3 0 0 00

SJ4 CRJ14

Explanation

Post Ref.

Debit

GJ3

2 0 0 00

Credit

Explanation

Post Ref. CRJ14

Explanation

Debit

Credit

9 2 00

Post Ref. CPJ8 PJ10

Explanation

Debit

Post Ref.

Debit

CPJ8

Debit

410 Balance 16 3 0 0 00 22 6 0 0 00

412 Balance

2 0 0 00

DR CR

Credit

DR CR Dr Dr

414 Balance 9 2 00

510 Balance 8 0 0 00 24 7 0 0 00

512

Credit

DR CR

Balance

5 0 0 00

ACCOUNT NO. Post Ref.

8 0 0 0 00 11 0 0 0 00

DR CR

ACCOUNT NO.

GJ3

Explanation

Balance

8 0 0 00 23 9 0 0 00

NAME: PURCHASES DISCOUNTS Date 2016 Mar 31

ACCOUNT NO.

NAME: PURCHASES RETURNS AND ALLOWANCES Date 2016 Mar 15

DR CR

ACCOUNT NO.

NAME: TOY PURCHASES Date 2016 Mar 31 31

ACCOUNT NO.

NAME: SALES DISCOUNTS Date 2016 Mar 31

ACCOUNT NO.

NAME: SALES RETURNS AND ALLOWANCES Date 2016 Mar 10

DR CR

310

514

Credit

DR CR

Balance

2 6 9 00

11-81

PROBLEM 11B-5., Cont.

THIS SOLUTION ASSUMES GST (5%) ABBY’S TOY HOUSE - PARTIAL GENERAL LEDGER

NAME: SALARIES EXPENSE Date 2016 Mar 15

Explanation

ACCOUNT NO. Post Ref.

Debit

CPJ8

7 0 0 00

NAME: CLEANING EXPENSE Date 2016 Mar 9

11-82

Explanation

Credit

DR CR

Balance

7 0 0 00

ACCOUNT NO. Post Ref.

Debit

CPJ8

4 0 0 00

Credit

610

612

DR CR

Balance

4 0 0 00

PROBLEM 11C-1. FORREST EQUIPMENT SUPPLY SALES JOURNAL Date 2017 Sept

2 5 8 12 30

Invoice. No. 703 704 705 706

Customer’s Name

Post Ref.

✔ ✔ ✔ ✔

Ray Fortuna Wilma Jorge Cassie Ho Wilma Jorge

Page 5

Accounts Receivable Dr. 9 9 7 5 00 3 1 5 0 00 16 5 9 0 00 4 8 8 2 50 34 5 9 7 50 (111)

Sales Tax Equipment Payable Sales Cr. Cr. 4 7 5 00 9 5 0 0 00 1 5 0 00 3 0 0 0 00 7 9 0 00 15 8 0 0 00 2 3 2 50 4 6 5 0 00 1 6 4 7 50 32 9 5 0 00 (212)

FORREST EQUIPMENT SUPPLY GENERAL JOURNAL Date 2017 Sept 9

Account Title and Description Sales Returns and Allowances Sales Tax Payable Accounts Receivable, Ray Fortuna Issued Credit Memo #14

(400)

Page 3 Post Ref. 402 212 111 / ✔

Dr.

Cr.

1 2 0 0 00 6 0 00 1 2 6 0 00

11-83

PROBLEM 11C-1., Cont. FORREST EQUIPMENT SUPPLY ACCOUNTS RECEIVABLE LEDGER NAME ADDRESS

RAY FORTUNA 82 FIR STREET, REGINA, SK S4W 3A6

Date 2017 Sept 1 Balance 2 9

NAME ADDRESS

Debit

Credit

Dr. Balance

1 2 6 0 00

2 1 0 0 00 12 0 7 5 00 10 8 1 5 00

Credit

Dr. Balance

✔ SJ5

9 9 7 5 00

GJ3

Explanation

Post Ref.

Debit

✔ SJ5

7 3 5 00 17 3 2 5 00

16 5 9 0 00

WILMA JORGE 124 PARTRIDGE WAY, PRINCE ALBERT, SK S6V 4H2

Date 2017 Sept 1 Balance 5 12

11-84

Post Ref.

CASSIE HO 34 SUSSEX RD., SASKATOON, SK S7H 8J2

Date 2017 Sept 1 Balance 8

NAME ADDRESS

Explanation

Post Ref.

Debit

✔ SJ5 SJ5

3 1 5 0 00 4 8 8 2 50

Credit

Dr. Balance 1 2 6 0 00 4 4 1 0 00 9 2 9 2 50

PROBLEM 11C-1., Cont. FORREST EQUIPMENT SUPPLY PARTIAL GENERAL LEDGER NAME: ACCOUNTS RECEIVABLE Date 2017 Sept 1 9 30

ACCOUNT NO. Post Ref.

Explanation

Debit

Credit

✔

Balance

GJ3 SJ5

2 6 0 00

34 5 9 7 50

ACCOUNT NO. Post Ref.

Explanation

Debit

Credit

✔

Balance

GJ3

6 0 00

1 6 4 7 50

SJ5

Sept

Post Ref.

Explanation

Debit

GJ3

1 2 0 0 00

4 0 9 5 00 2 8 3 5 00 37 4 3 2 50

212 Balance 1 7 4 2 50 1 6 8 2 50 3 3 3 0 00

400

DR CR

Balance

32 9 5 0 00

ACCOUNT NO. Post Ref.

Balance

Credit

Debit

SJ5

ACCOUNT NO.

NAME: SALES RETURNS AND ALLOWANCES Date 2017

DR CR Cr

NAME: EQUIPMENT SALES Date 2017 Sept 30

Dr Dr

NAME: SALES TAX PAYABLE Date 2017 Sept 1 9 30

DR CR

111

Credit

402

DR CR

Balance

1 2 0 0 00

FORREST EQUIPMENT SUPPLY SCHEDULE OF ACCOUNTS RECEIVABLE SEPTEMBER 30, 2017 Ray Fortuna Cassie Ho Wilma Jorge Total Accounts Receivable

11-85

11-86

Aug

7 9 20 22 30

Date 2016 Customer Kelly's Real Estate Co. Well's Hotshot Service Co. Mountain Explorations Co. Walkin's Safety Supply Co. Well's Hotshot Service Co.

PROBLEM 11C-2.

1201 1202 1203 1204 1205

Sales Invoice ✔ ✔ ✔ ✔ ✔

Post Ref.

(126)

Accounts Receivable Dr. 4 8 1 3 80 3 5 0 3 00 6 5 2 0 10 6 5 7 6 60 5 8 1 9 50 27 2 3 3 00

(210)

PST Payable Cr. 3 4 0 80 2 4 8 00 4 6 1 60 4 6 5 60 4 1 2 00 1 9 2 8 00

ROYCE'S COMMUNICATION SALES CO. SALES JOURNAL

(220)

GST Payable Cr. 2 1 3 00 1 5 5 00 2 8 8 50 2 9 1 00 2 5 7 50 1 2 0 5 00

5 7 7 0 00

Cellular Sales Cr. 4 2 6 0 00

(400)

(404)

5 1 5 0 00 8 9 2 0 00 15 1 8 0 00

5 8 2 0 00

3 1 0 0 00

Radio Sales Cr.

Page 1

11-87

Aug

Cash Dr.

1 32 0 0 0 00 2 6 1 0 2 00 6 9 2 0 9 50 16 1 7 5 1 50 20 5 0 0 0 0 0 0 26 3 9 0 9 80 27 1 8 0 8 0 0 0 31 1 7 5 1 50 122 8 0 4 3 0 (105)

Date 2016

Accounts Receivable Dr.

1 7 5 1 50 7 4 1 2 80 (126)

3 9 0 9 80

1 7 5 1 50

PROBLEM 11C-2., Cont.

2 3 6 4 00 (210)

1 2 8 0 00

4 3 2 00 6 5 2 00

PST Payable Cr.

Radio Sales Cr.

Cellular Sales Cr.

Description of Receipt

R. Lamoureux, Cap. 5 4 0 0 0 0 Cash Sales 8 1 5 0 00 Cash Sales Well's Hotshot Serv Loan Payable Kelly's Real Estate 8 0 0 0 0 7 6 0 0 0 0 8 4 0 0 0 0 Cash Sales. Well's Hotshot 1 4 7 7 50 15 7 5 0 00 13 8 0 0 00 (220) (400) (404) 2 7 0 00 4 0 7 50

GST Payable Cr.

ROYCE'S COMMUNICATION SALES CO. CASH RECEIPTS JOURNAL

✔

250

✔

300

Post Ref.

82 0 0 0 00 (X)

50 0 0 0 00

32 0 0 0 00

Sundry Cr.

Page 1

PROBLEM 11C-2., Cont. ROYCE'S COMMUNICATION SALES CO. GENERAL JOURNAL Date 2016 Aug 13

Post Ref.

Account Title and Description Sales Returns and Allowances PST Payable GST Payable Accounts Receivable, Kelly's Real Estate Co. Issued Credit Memo #1

Page 1

406 210 220

Dr. 8 0 0 00 6 4 00 4 0 00

126 / ✔

Sales Returns and Allowances PST Payable GST Payable Accounts Receivable, Mountain Explorations Co. Issued Credit Memo #2

406 210 220

Cr.

9 0 4 00

1 4 2 0 00 1 1 3 60 7 1 00

126 / ✔

1 6 0 4 60

ROYCE'S COMMUNICATION SALES CO. ACCOUNTS RECEIVABLE LEDGER NAME ADDRESS Date 2016 Aug 7 13 26

NAME ADDRESS Date 2016 Aug 20 23

11-88

KELLY'S REAL ESTATE CO. 245 CHATTERFORTH RD., WINNIPEG, MB R2T 4R5 Explanation

Post Ref.

Debit

SJ1

4 8 1 3 80

Credit 9 0 4 00 3 9 0 9 80

GJ1 CRJ1

Dr. Balance 4 8 1 3 80 3 9 0 9 80

MOUNTAIN EXPLORATIONS CO. 66 ROYAL ROAD, STONY MOUNTAIN, MB R0C 3C0 Explanation

Post Ref.

Debit

SJ1

6 5 2 0 10

GJ1

Credit

Dr. Balance

1 6 0 4 60

6 5 2 0 10 4 9 1 5 50

PROBLEM 11C-2., Cont. ROYCE'S COMMUNICATION SALES CO. ACCOUNTS RECEIVABLE LEDGER NAME ADDRESS Date 2016 Aug 22

NAME ADDRESS Date 2016 Aug 9 16 30 31

WALKINS SAFETY SUPPLY CO. 11203 FRASER WAY, WINNIPEG, MB R3C 9G2 Explanation

Post Ref.

Debit

SJ1

6 5 7 6 60

Credit

Dr. Balance 6 5 7 6 60

WELL'S HOTSHOT SERVICE CO. 23 PITTS AVE., PORTAGE LA PRAIRIE, MB R1N 7B2 Explanation

Post Ref.

Debit

SJ1

3 5 0 3 00

Credit 1 7 5 1 50

CRJ1 SJ1

Dr. Balance

5 8 1 9 50 1 7 5 1 50

CRJ1

3 5 0 3 00 1 7 5 1 50 7 5 7 1 00 5 8 1 9 50

ROYCE'S COMMUNICATION SALES CO. PARTIAL GENERAL LEDGER NAME: CASH Date 2016 Aug 31

ACCOUNT NO. Explanation

Post Ref.

Debit

CRJ

122 8 0 4 3 0

NAME: ACCOUNTS RECEIVABLE Date 2016 Aug 13 23 31 31

Explanation

Credit

105 DR CR

Balance

122 8 0 4 3 0

ACCOUNT NO. Post Ref.

Debit

9 0 4 00 1 6 0 4 60

GJ1 GJ1 SJ1 CRJ

Credit

27 2 3 3 0 0

126

DR CR Cr Cr Dr

7 4 1 2 80

Balance 9 0 4 00 2 5 0 8 60 24 7 2 4 4 0 17 3 1 1 6 0

11-89

PROBLEM 11C-2., Cont. ROYCE’S COMMUNICATION SALES CO. PARTIAL GENERAL LEDGER NAME: PST PAYABLE Date 2016 Aug 13 23 31 31

Explanation

ACCOUNT NO. Post Ref. GJ1 GJ1

Debit 6 4 00 1 1 3 60

CRJ

Explanation

Post Ref. GJ1 GJ1

Debit

CRJ

11-90

Post Ref.

DR CR

Dr Cr Cr

Debit

Post Ref.

Debit

Balance 6 4 00 1 7 7 60 1 7 5 0 40 4 1 1 4 40

220 Balance 4 0 00 1 1 1 00 1 0 9 4 00 2 5 7 1 50

250

Credit

DR CR

Balance

50 0 0 0 00

ACCOUNT NO.

CRJ

ACCOUNT NO.

CRJ

Explanation

1 2 0 5 00 1 4 7 7 50

NAME: ROYCE LAMOUREUX, CAPITAL Date 2016 Aug 1

Credit

4 0 00 7 1 00

SJ1

Explanation

ACCOUNT NO.

NAME: LOAN PAYABLE Date 2016 Aug 20

DR CR Dr

1 9 2 8 00 2 3 6 4 00

SJ1

NAME: GST PAYABLE Date 2016 Aug 13 23 31 31

Credit

210

300

Credit

DR CR

Balance

32 0 0 0 00

PROBLEM 11C-2., Cont. ROYCE’S COMMUNICATION SALES CO. PARTIAL GENERAL LEDGER NAME: RADIO SALES Date 2016 Aug 31 31

ACCOUNT NO.

Explanation

Post Ref.

Debit

Credit 8 9 2 0 00 15 7 5 0 00

SJ1 CRJ

NAME: CELLULAR SALES Date 2016 Aug 31 31

Cr Cr

ACCOUNT NO.

Explanation

Post Ref.

Debit

Credit 15 1 8 0 00 13 8 0 0 00

SJ1 CRJ

NAME: SALES RETURNS AND ALLOWANCES, CELLULAR Date 2016 Aug 13 23

DR CR

Explanation

Post Ref. GJ1 GJ1

DR CR Cr Cr

ACCOUNT NO.

Debit

Credit

8 0 0 00 1 4 2 0 00

DR CR Dr Dr

400 Balance 8 9 2 0 00 24 6 7 0 00

404 Balance 15 1 8 0 00 28 9 8 0 00

406 Balance 8 0 0 00 2 2 2 0 00

ROYCE’S COMMUNICATION SALES CO. SCHEDULE OF ACCOUNTS RECEIVABLE AUGUST 31, 2016 Mountain Explorations Co. Walkins Safety Supply Co. Well’s Hotshot Service Co. Total Accounts Receivable

$4 9 1 5 50 6 5 7 6 60 5 8 1 9 50 $17 3 1 1 6 0

11-91

PROBLEM 11C-3. RARITY COLLECTIBLES SHOP SALES JOURNAL Date 2017 Jan

3 6 8 14 27

11-92

Sales Invoice 344 345 346 347 348

Customer’s Name

Post Ref.

Starcraft Reproductions Burgess Fancys Hard - To - Find Co. Georgina’s Collections Perfect Sales Co.

✔ ✔ ✔ ✔ ✔

Accounts Receivable Dr. 2 9 3 8 00 3 6 1 6 00 4 2 9 4 00 2 8 0 2 40 6 7 8 0 00 20 4 3 0 40 (12 5)

Page 13 HST Merchandise Payable Sales Cr. Cr. 3 3 8 00 2 6 0 0 00 4 1 6 00 3 2 0 0 00 4 9 4 00 3 8 0 0 00 3 2 2 40 2 4 8 0 00 7 8 0 00 6 0 0 0 00 2 3 5 0 40 18 0 8 0 00 (22 1) (40 0)

11-93

Jan

2 10 16 17 21 24

Date 2017

(111)

42 0 0 0 0 0 2 8 8 6 00 3 5 5 2 00 4 6 6 1 25 2 1 9 7 80 5 3 3 3 60 60 6 3 0 6 5

Cash Dr.

PROBLEM 11C-3., Cont.

(125)

8 7 9 1 40

2 2 3 7 40

2 9 3 8 00 3 6 1 6 00

Accounts Receivable Cr.

(221)

6 1 3 60 1 1 4 9 85

5 3 6 25

HST Payable Cr.

(400)

4 7 2 0 00 8 8 4 5 00

4 1 2 5 00

Merchandise Sales Cr.

Description of Receipt

(404)

M. Worth, Capital 5 2 0 0 Starcraft Repr. 6 4 0 0 Burgess Fancys Cash Sales 3 9 6 0 Georgina's Coll. Cash Sales 1 5 5 60

Sales Discounts Dr.

RARITY COLLECTIBLES SHOP CASH RECEIPTS JOURNAL

✔

✔ ✔

300

Post Ref.

(X)

42 0 0 0 0 0

Sundry Cr.

Page 17

PROBLEM 11C-3., Cont. RARITY COLLECTIBLES SHOP GENERAL JOURNAL Date 2017 Jan 20

Post Ref

Account Title and Description Sales Returns and Allowances HST Payable Accounts Receivable, Georgina's Collections Issued Credit Memo #10

Page 19

401 221

Dr. 5 0 0 00 6 5 00

125 / ✔

Sales Returns and Allowances HST Payable Accounts Receivable, Perfect Sales Co. Issued Credit Memo #11

401 221

Cr.

5 6 5 00

1 2 0 0 00 1 5 6 00

125 / ✔

1 3 5 6 00

RARITY COLLECTIBLES SHOP ACCOUNTS RECEIVABLE LEDGER NAME ADDRESS

BURGESS FANCYS 177 PORTMOUTH CRESC., ST. JOHN'S, NF A1C 0S1

Date 2017 Jan 1 Balance 6 16

NAME ADDRESS

Post Ref.

Debit

Credit

✔ SJ13

Dr. Balance

0 3 6 1 6 00

CRJ1

3 6 1 6 00 3 6 1 6 00

Credit

Dr. Balance

GEORGINA'S COLLECTIONS 188 FOREST HILL ROAD, ST. JOHN'S, NF A1C 5H1

Date 2017 Jan 1 Balance 14 20 21

11-94

Explanation

Post Ref.

Debit

✔ SJ13 GJ19 CRJ1

0 2 8 0 2 40 5 6 5 00 2 2 3 7 40

2 8 0 2 40 2 2 3 7 40

PROBLEM 11C-3., Cont. RARITY COLLECTIBLES SHOP ACCOUNTS RECEIVABLE LEDGER NAME ADDRESS Date 2017 Jan 1 8

HARD-TO-FIND CO. 47 CLIFF CLOSE, ST. JOHN’S, NF A1C 7E7 Credit

Dr. Balance 2 0 4 7 56 6 3 4 1 56

4 2 9 4 00

SJ13

PERFECT SALES CO. 217 ATLANTIC CRESC., ST. JOHN’S, NF A1C 1T1 Post Ref

Explanation

Debit

Credit

Dr. Balance

1 3 5 6 00

7 9 6 65 7 5 7 6 65 6 2 2 0 65

Credit

Dr. Balance

2 9 3 8 00

1 8 0 9 13 4 7 4 7 13 1 8 0 9 13

✔

Balance

6 7 8 0 00

SJ13 GJ19

NAME ADDRESS Date 2017 Jan 1 3 10

Debit

✔

Balance

NAME ADDRESS Date 2017 Jan 1 27 31

Post Ref

Explanation

STARCRAFT REPRODUCTIONS 17 HILLHURST CRESC., ST. JOHN’S, NF A1C 0P9 Post Ref

Explanation

Debit

✔

Balance

SJ13

2 9 3 8 00

CRJ1

RARITY COLLECTIBLES SHOP PARTIAL GENERAL LEDGER NAME: CASH Date 2017 Jan 1 31

ACCOUNT NO. Explanation

Post Ref

Debit

✔

Balance

CRJ17

Explanation Balance

DR CR Dr

60 6 3 0 65

NAME: ACCOUNTS RECEIVABLE Date 2017 Jan 1 20 31 31 31

Credit

ACCOUNT NO. Post Ref

Debit

Credit

✔

5 6 5 00 1 3 5 6 00

GJ19 GJ19 SJ13 CRJ1

DR CR

20 4 3 0 40

Dr Dr Dr

8 7 9 1 40

111 Balance 2 6 7 5 32 63 3 0 5 97

125 Balance 4 6 5 3 34 4 0 8 8 34 2 7 3 2 34 23 1 6 2 74 14 3 7 1 34

11-95

PROBLEM 11C-3., Cont. RARITY COLLECTIBLES SHOP PARTIAL GENERAL LEDGER NAME: HST PAYABLE Date 2017 Jan

Explanation 1

ACCOUNT NO. Post Ref.

Debit

✔

Balance

3 1 4 6 90

GJ19

6 5 00

3 0 8 1 90

GJ19

1 5 6 00

2 9 2 5 90

SJ13

2 3 5 0 40

5 2 7 6 30

CRJ17

1 1 4 9 85

6 4 2 6 15

Date 2017 Jan 1

Explanation

ACCOUNT NO. Post Ref.

Debit

42 0 0 0 00

CRJ17

NAME: MERCHANDISE SALES Date 2017 Jan 1

Credit

✔

Balance

Explanation

Post Ref.

Debit

Credit

✔

Balance

48 0 0 0 00

90 0 0 0 00

Balance

82 1 4 5 62 100 2 2 5 62 109 0 7 0 62

18 0 8 0 00

CRJ17

8 8 4 5 00

Explanation

ACCOUNT NO. Post Ref.

Debit

Credit

✔

Balance

400

DR CR

SJ13

Date 2017 Jan 1

300

DR CR

ACCOUNT NO.

NAME: SALES RETURNS AND ALLOWANCES

401

DR CR

Balance

1 1 4 3 56

GJ19

5 0 0 00

1 6 4 3 56

GJ19

1 2 0 0 00

2 8 4 3 56

NAME: SALES DISCOUNTS Date 2017

11-96

DR CR

NAME: MARTHA WORTH, CAPITAL

Jan

Credit

221

Explanation 31

ACCOUNT NO. Post Ref.

Debit

CRJ17

1 5 5 60

Credit

DR CR Dr

402 Balance 1 5 5 60

PROBLEM 11C-3., Cont. RARITY COLLECTIBLES SHOP SCHEDULE OF ACCOUNTS RECEIVABLE JANUARY 31, 2017 Hard - To - Find Co. Perfect Sales Co. Starcraft Reproductions Total Accounts Receivable

$6 3 4 1 6 2 2 0 1 8 0 9 $1 4 3 7 1

56 65 13 34

11-97

11-98

Aug

3 7 10 13 17 24 28 31

Date 2015

Euro. Fabric Co. Eddyn Co. Forward Co. Lavoy Co. Reliant Co. Lavoy Co. Euro. Fabric Co.

Account Credited

PROBLEM 11C-4.

8/27

8/24

8/16

8/13

8/7

8/2

Date of Invoice Terms

Post Ref.

(220)

Accounts Payable Cr. 653 n/15 ✔ 1 4 3 0 10 250 2/10,n/60 ✔ 9 6 6 00 1124 1/10,n/60 ✔ 1 7 0 7 30 712 ✔ 2 8 1 4 00 873 ✔ 2 7 4 0 50 816 2/10,n/3 ✔ 7 6 1 25 713 n/15 ✔ 2 8 7 7 00 13 2 9 6 15 Inv. No.

(500)

2 7 4 0 00 6 6 4 8 00

1 3 6 2 00 9 2 0 00 1 6 2 6 00

Purchases Dr.

(142)

Prepaid GST Dr. 6 8 10 4 6 00 8 1 30 1 3 4 00 1 3 0 50 3 6 25 1 3 7 00 6 3 3 15

FARBER’S FABRIC CO. PURCHASES JOURNAL

(130)

3 4 0 5 00

7 2 5 00

2 6 8 0 00

Store Supplies Dr.

Office Equipment

Account

180

Sundry Dr.

(X)

2 6 1 0 00

Amount

Page 21

PROBLEM 11C-4., Cont. FARBER’S FABRIC CO. - ACCOUNTS PAYABLE LEDGER NAME ADDRESS Date 2015 Aug 1 7 14 NAME ADDRESS Date 2015 Aug 1 3 28 NAME ADDRESS Date 2015 Aug 1 10

NAME ADDRESS Date 2015 Aug 1 13 24 NAME ADDRESS Date 2015 Aug 1 17

EDDYN CO. 164 BRONTE STREET, SASKATOON, SK S7T 5C3 Explanation

Post Ref.

Debit

Credit

Cr. Balance

9 6 6 00

8 4 0 00 1 8 0 6 00 1 6 3 8 00

Credit

Cr. Balance

1 4 3 0 10 2 8 7 7 00

3 2 5 5 00 4 6 8 5 10 7 5 6 2 10

Credit

Cr. Balance

1 7 0 7 30

1 5 7 5 00 3 2 8 2 30

Credit

Cr. Balance

2 8 1 4 00 7 6 1 25

5 2 5 00 3 3 3 9 00 4 1 0 0 25

Credit

Cr. Balance

✔

Balance

PJ21 GJ32

1 6 8 00

EUROPEAN IMPORT FABRICS CO. 58 JASON STREET, REGINA, SK S4V 2G4

Explanation

Post Ref.

Debit

✔

Balance

PJ21 PJ21

FORWARD CO. 8902 BURKE ROAD, YORKTON, SK S3N 3J7

Explanation

Post Ref.

Debit

✔

Balance

PJ21

LAVOY CO. 18 PARK DRIVE, SASKATOON, SK S7T 5J2

Explanation

Post Ref.

Debit

✔

Balance

PJ21 PJ21

RELIANT CO. 2415 RED RIVER DRIVE, SASKATOON, SK S7T 0P0

Explanation Balance

Post Ref.

Debit

✔ PJ21

2 7 4 0 50

2 7 3 0 00 5 4 7 0 50

11-99

PROBLEM 11C-4., Cont. FARBER’S FABRIC CO. - PARTIAL GENERAL LEDGER NAME: STORE SUPPLIES Date 2015 Aug 31

Explanation

ACCOUNT NO. Post Ref.

Debit

PJ21

3 4 0 5 00

NAME: PREPAID GST Date 2015 Aug 1 14 31

Explanation

Post Ref.

Debit

PJ21

8 00

Explanation

Post Ref.

Debit

PJ21

2 6 1 0 00

Post Ref.

Debit

GJ32

Credit

Post Ref.

Debit

Credit

✔

Balance

PJ21

Explanation Balance

Post Ref.

DR CR

Credit

DR CR

1 6 0 00

✔ GJ32

DR CR

ACCOUNT NO. Debit

180

2 6 1 0 00

6 6 4 8 00

2 7 9 5 00 2 7 8 7 00 3 4 2 0 15

ACCOUNT NO. Explanation

Balance

13 2 9 6 15

PJ21

142

DR CR

1 6 8 00

NAME: PURCHASES RETURNS AND ALLOWANCES

11-100

DR CR

ACCOUNT NO.

NAME: PURCHASES

Date 2015 Aug 1 14

3 4 0 5 00

✔

Balance

ACCOUNT NO.

NAME: ACCOUNTS PAYABLE

Date 2015 Aug 1 31

Credit

6 3 3 15

NAME: OFFICE EQUIPMENT

Date 2015 Aug 1 14 31

Balance

GJ32

Explanation

DR CR

ACCOUNT NO.

✔

Balance

Date 2015 Aug 17

Credit

130

220 Balance 8 9 2 5 00 8 7 5 7 00 22 0 5 3 15

500 Balance 86 3 4 0 00 92 9 8 8 00

510 Balance 1 3 7 4 00 1 5 3 4 00

PROBLEM 11C-4., Cont. FARBER’S FABRIC CO. GENERAL JOURNAL Date Account Title and Description 2015 Aug 14 Accounts Payable, Eddyn Co. Purchases Returns and Allowances Prepaid GST Issued Debit Memo #8

Page 32 Post Ref.

Dr.

220/ ✔

1 6 8 00

Cr. 1 6 0 00 8 00

510 142

FARBER’S FABRIC CO. SCHEDULE OF ACCOUNTS PAYABLE AUGUST 31, 2015 Eddyn Co. European Import Fabrics Co. Forward Co. Lavoy Co. Reliant Co. Total Accounts Payable

$1 6 3 8 7 5 6 2 3 2 8 2 4 1 0 0 5 4 7 0 $2 2 0 5 3

00 10 30 25 50 15

11-101

11-102

May

1 2 5 6 13 19 23 27 29 30 31

Date 2017

464 465 466 467 468 469 470 471 472 473

Dominion Gases Co. Delivery Truck Glover Gauges Co. Cash Purchase Prism Accessories Co. Cash Purchase Marker Gloves Co. Rent Expense Utilities Expense Vertal Rod Co.

Chq. Account Debited No.

PROBLEM 11C-5.

✔

690

670

✔

170

✔

Post Ref.

(200)

23 4 8 4 00 (X)

1 8 1 2 95

3 8 6 9 17

8 6 5 23

Accounts Payable Dr. 7 2 7 13

9 0 0 00 8 1 7 4 48

1 7 2 0 00 3 6 4 00

21 4 0 0 00

Sundry Dr.

(145)

1 3 0 9 00

8 6 00 1 8 20

4 2 50

9 2 30

1 0 7 0 00

Prepaid GST Dr.

STOKES’ WHOLESALE WELDING SUPPLIES CO. CASH PAYMENTS JOURNAL

(500)

2 6 9 6 00

8 5 0 00

1 8 4 6 00

Welding Purchases Dr.

Cash Cr.

(510)

(100)

7 1 3 22 4 7 0 8 6 5 1 9 3 8 1 8 4 25 3 6 8 4 8 9 2 3 4 53 1 7 7 8 1 8 0 6 3 8 2 9 0 0 2 3 2 63 35 4 3 0

Purchases Discounts Cr. 1 3 85

Page 45

28 00 23 30 92 50 42 00 20 00 85

PROBLEM 11C-5., Cont. STOKES’ WHOLESALE WELDING SUPPLIES CO. ACCOUNTS PAYABLE LEDGER NAME: ADDRESS: Date 2017 May 1 1

NAME: ADDRESS: Date 2017 May 1 5

NAME: ADDRESS: Date 2017 May 1 23

NAME: ADDRESS: Date 2017 May 1 13

NAME: ADDRESS: Date 2017 May 1 30

DOMINION GASES CO. 143 - 2 ST., FORT LIARD, NT X0G 0A0 Explanation

Post Ref.

Debit

Credit

✔

Balance

CPJ45

Cr. Balance 1 4 5 4 25 7 2 7 12

7 2 7 13

GLOVER GAUGES CO. 322 - 4 AVE., FORT LIARD, NT X0G 0A0

Explanation

Post Ref.

Debit

Credit

Cr. Balance

✔

Balance

CPJ45

8 6 5 23

MARKER GLOVES CO. 477 APEX RD., FORT LIARD, NT X0G 0A0

Explanation

Post Ref.

Debit

Credit

✔

Balance

CPJ45

Cr. Balance 1 8 1 2 95

1 8 1 2 95

PRISM ACCESSORIES CO. 315 - 4 AVE., FORT LIARD, NT X0G 0A0

Explanation

Post Ref.

Debit

Credit

✔

Balance

CPJ45

Cr. Balance 3 8 6 9 17

3 8 6 9 17

VERTAL ROD CO. 355 APEX RD., FORT LIARD, NT X0G 0A0 Explanation Balance

Post Ref.

Debit

✔ CPJ45

9 0 0 00

Credit

Cr. Balance 2 4 3 4 06 1 5 3 4 06

11-103

PROBLEM 11C-5., Cont. STOKES’ WHOLESALE WELDING SUPPLIES CO. PARTIAL GENERAL LEDGER NAME: CASH Date 2017 May 1 31

ACCOUNT NO. Explanation

Post Ref.

Debit

✔

Balance

35 4 3 0 85

CPJ45

Explanation

Post Ref.

CPJ45

Debit 1 3 0 9 00

Explanation

Post Ref.

Debit

CPJ45

21 4 0 0 00

Post Ref.

Debit

CPJ45

11-104

Credit

Explanation

Debit

✔

Balance

CPJ45

Explanation Balance

DR CR

Debit

Credit

✔ CPJ45

DR CR

ACCOUNT NO. Post Ref.

DR CR Cr

2 3 2 63

Balance 2 4 1 8 12 3 7 2 7 12

170

21 4 0 0 00

2 6 9 6 00

145

Credit

22 9 4 1 18 12 4 8 9 67

Balance

ACCOUNT NO. Post Ref.

Balance

DR CR

8 1 7 4 48

NAME: WELDING PURCHASES DISCOUNTS Date 2017 May 1 31

Credit

ACCOUNT NO.

NAME: WELDING PURCHASES Date 2017 May 1 31

✔

Balance

DR CR

ACCOUNT NO.

NAME: ACCOUNTS PAYABLE Date 2017 May 1 31

Credit

NAME: DELIVERY TRUCK Date 2017 May 2

ACCOUNT NO.

✔

Balance

DR CR Dr

NAME: PREPAID GST Date 2017 May 1 31

Credit

100

200 Balance 10 4 3 5 66 2 2 6 1 18

500 Balance 56 4 2 2 29 59 1 1 8 29

510 Balance 5 0 6 20 7 3 8 83

PROBLEM 11C-5., Cont. STOKES’ WHOLESALE WELDING SUPPLIES CO. PARTIAL GENERAL LEDGER NAME: RENT EXPENSE Date 2017 May 1 27

ACCOUNT NO.

Explanation

Post Ref.

Debit

Credit

✔

Balance

CPJ45

1 7 2 0 00

NAME: UTILITIES EXPENSE Date 2017 May 1 29

Explanation Balance

DR CR

670 Balance 3 7 3 0 00 5 4 5 0 00

ACCOUNT NO. Post Ref.

Debit

Credit

✔ CPJ45

DR CR Dr

3 6 4 00

690 Balance 1 2 0 4 66 1 5 6 8 66

STOKES’ WHOLESALE WELDING SUPPLIES CO. SCHEDULE OF ACCOUNTS PAYABLE MAY 31, 2017 Dominion Gases Co. Vertal Rod Total Accounts Payable

$ 7 2 7 12 1 5 3 4 06 $2 2 6 1 1 8

11-105

11-106

Oct

3 8 11 21 28 30 31

Date 2016

Milligan Book Milligan Book Winnipeg Book Suburban Auto Smith. Book Co. Milligan Book

Account Credited

PROBLEM 11C-6.

410 415 311 111 211 436

10/8 10/8 10/19 10/25 10/26

Inv. No.

10/2

Date of Invoice

2/10,n/30

1/15,n/60

2/10,n/30

Terms

Accounts Payable Cr.

Book Purchases Dr.

(210)

(510)

4 8 2 5 10 4 2 7 0 00 ✔ 3 3 2 2 20 2 9 4 0 00 ✔ 2 0 9 2 76 1 8 5 2 00 ✔ ✔ 21 0 1 8 00 6 5 7 6 60 5 8 2 0 00 ✔ 3 5 2 5 60 3 1 2 0 00 ✔ 41 3 6 0 26 18 0 0 2 00

Post Ref.

CARDINAL’S BOOK SHOP PURCHASES JOURNAL

Account

(138)

5 5 5 10 3 8 2 20 2 4 0 76 2 4 1 8 0 0 Delivery Truck 7 5 6 60 4 0 5 60 4 7 5 8 26

Prepaid HST Dr.

180

Amount

(X)

18 6 0 0 00

Sundry Dr.

Page 17

THIS SOLUTION ASSUMES HST (13%)

11-107

Oct

1 8 11 15 22 25 31 31

Date 2016

121 122 123 124 125 126 127

Chq. No.

Prepaid Rent Cleaning Expense Milligan Book Co. Salaries Expense Winnipeg Book Supply Cash Purchase Milligan Book Co.

Account Debited

PROBLEM 11C-6., Cont.

3 5 2 5 60 10 0 3 4 4 0 (210)

39 0 0 0 00 (X)

✔

4 8 2 5 10 1 6 8 3 70

9 2 0 00

2 7 0 0 00 2 8 0 00

(138)

8 0 3 40

4 1 6 00

(510)

3 2 0 0 00

Book Purchases Dr.

(514)

6 2 40 1 6 2 70

1 4 90

8 5 40

Purchases Discounts Cr.

(110)

3 0 5 1 3 1 6 4 7 3 9 9 2 0 1 6 6 8 3 6 1 6 3 4 6 3 17 7 7 5

Cash Cr.

Prepaid HST Dr. 3 5 1 00 3 6 40

Accounts Payable Dr.

Sundry Dr.

✔

650

✔

615

135

Post Ref.

Page 11

CARDINAL’S BOOK SHOP CASH PAYMENTS JOURNAL

00 40 70 00 80 00 20 10

THIS SOLUTION ASSUMES HST (13%)

11-108

Oct

1 14 15 15 18 28 29 29 30 31

Date 2016

Accounts Receivable Cr.

20 0 0 0 0 0 2 7 3 4 60 1 1 8 3 11 3 1 6 1 28 3 2 1 8 24 2 7 8 5 45 2 7 8 5 45 1 0 6 2 20 2 9 9 0 34 3 0 4 4 22 2 6 7 7 32 2 7 2 5 56 12 0 0 0 0 0 48 5 9 4 3 0 1 1 7 7 3 4 7 (110) (120)

Cash Dr.

PROBLEM 11C-6., Cont.

3 1 4 60 1 3 6 11

1 2 2 20

5 7 2 91 (218)

9 4 0 00

4 4 0 7 00 (410)

HST Payable Cr.

2 4 2 0 00 1 0 4 7 00

Book Sales Cr.

Description of Receipt

310

✔ ✔

310

Post Ref.

12 0 0 0 0 0 32 0 0 0 0 0 (X)

2 0 0 0 00

Sundry Cr.

Page 16

THIS SOLUTION ASSUMES HST (13%)

B. Cardinal, Capital Cash Sale Cash Sale 5 6 9 6 District College First City Library Cash Sale 5 3 8 8 First City Library 4 8 2 4 Rural Bookmobile B. Cardinal, Capital 1 5 9 08 (414)

Sales Discounts Dr.

CARDINAL’S BOOK SHOP CASH RECEIPTS JOURNAL

PROBLEM 11C-6., Cont.

THIS SOLUTION ASSUMES HST (13%) CARDINAL’S BOOK SHOP SALES JOURNAL

Date 2016 Oct

Invoice No. 3 7 8 18 22 25 31 31

781 782 783 784 785 786 787

Customer’s Name

Post Ref.

✔ ✔ ✔ ✔ ✔ ✔ ✔

First City Library District College First City Library Rural Bookmobile Co. First City Library Rural Bookmobile Co. Flower & Company

Page 7

Accounts Receivable Dr. 2 7 8 5 45 3 5 7 0 80 2 0 9 7 28 2 8 0 6 92 3 0 4 4 22 2 7 2 5 56 3 5 3 2 38 20 5 6 2 61 (120)

HST Book Payable Sales Cr. Cr. 3 2 0 45 2 4 6 5 00 4 1 0 80 3 1 6 0 00 2 4 1 28 1 8 5 6 00 3 2 2 92 2 4 8 4 00 3 5 0 22 2 6 9 4 00 3 1 3 56 2 4 1 2 00 4 0 6 38 3 1 2 6 00 2 3 6 5 61 18 1 9 7 00 (218)

CARDINAL’S BOOK SHOP GENERAL JOURNAL Date Account Title and Description 2016 Oct 11 Sales Returns and Allowances HST Payable Accounts Receivable, District College Issued Credit Memo #1 15 Accounts Payable, Winnipeg Book Supply Purchase Returns And Allowances Prepaid HST Issued Debit Memo #1

(410)

Page 8 Post Ref. 412 218

Dr. 3 1 2 00 4 0 56

120 / ✔

210 / ✔

Cr.

3 5 2 56

4 0 9 06

512 138

3 6 2 00 4 7 06

11-109

PROBLEM 11C-6., Cont.

THIS SOLUTION ASSUMES HST (13%)

CARDINAL’S BOOK SHOP - ACCOUNTS RECEIVABLE LEDGER NAME: ADDRESS: Date 2016 Oct 7 11 15

Explanation

Post Ref. SJ7

Debit

3 5 2 56 3 2 1 8 24

CRJ1

Date 2016 Oct 3 8 18 22 29

Post Ref. SJ7 SJ7

Debit

SJ7

3 5 7 0 80 3 2 1 8 24

Dr. Balance

3 0 4 4 22

2 7 8 5 4 8 8 2 2 0 9 7 5 1 4 1 2 0 9 7

Credit

Dr. Balance

2 7 8 5 45 3 0 4 4 22

CRJ1

45 73 28 50 28

FLOWER & COMPANY 1010 BELL AVENUE, HALIFAX, NS B3T 4B5 Explanation

Post Ref. SJ7

NAME: ADDRESS:

Credit

2 7 8 5 45 2 0 9 7 28

CRJ1

Date 2016 Oct 31

Dr. Balance

FIRST CITY LIBRARY BAYSHORE MALL, HALIFAX, NS B3T 0P5 Explanation

NAME: ADDRESS:

Credit

3 5 7 0 80

GJ8

NAME: ADDRESS:

Date 2016 Oct 18 25 29

DISTRICT COLLEGE 78 SPENSER ROAD, HALIFAX, NS B3T 1A1

Debit 3 5 3 2 38

3 5 3 2 38

RURAL BOOKMOBILE CO. 535 KING STREET, HALIFAX, NS B3V 9H2 Explanation

Post Ref. SJ7 SJ7

Debit

Credit

2 8 0 6 92 2 7 2 5 56

CRJ1

2 7 2 5 56

Dr. Balance 2 8 0 6 92 5 5 3 2 48 2 8 0 6 92

CARDINAL’S BOOK SHOP SCHEDULE OF ACCOUNTS RECEIVABLE OCTOBER 31, 2016 First City Library Flower & Company Rural Bookmobile Total Accounts Receivable

11-110

$2 0 9 7 3 5 3 2 2 8 0 6 $8 4 3 6

28 38 92 58

PROBLEM 11C-6., Cont.

THIS SOLUTION ASSUMES HST (13%) CARDINAL’S BOOK SHOP - ACCOUNTS PAYABLE

NAME: ADDRESS:

MILLIGAN BOOK COMPANY 425 FARWELL AVENUE, HALIFAX, NS B3V 1V1

Date 2016 Oct 3 8 11 30 31 NAME: ADDRESS:

Explanation

PJ17 CPJ11

Credit

Cr. Balance

4 8 2 5 10 3 3 2 2 20

4 8 2 5 10 8 1 4 7 30 3 3 2 2 20 6 8 4 7 80 3 3 2 2 20

4 8 2 5 10 3 5 2 5 60

PJ17 CPJ11

3 5 2 5 60

SMITHSONIAN BOOK CO. 14 PRINCESS ROAD SE, DARTMOUTH, NS B2X 0P5 Explanation

Post Ref.

Debit

PJ17

Credit

Cr. Balance

6 5 7 6 60

Credit

Cr. Balance

SUBURBAN AUTO SALES CO. 12 ROSEHILL ROAD NW, HALIFAX, NS B3V 1A1

Date 2016 Oct 21

NAME: ADDRESS:

Debit

PJ17

Date 2016 Oct 28

NAME: ADDRESS:

Post Ref.

Explanation

Post Ref.

Debit

21 0 1 8 00 21 0 1 8 00

PJ17

WINNIPEG BOOK SUPPLY 12024 - 45 AVENUE, WINNIPEG, MB R2L 4J7

Date 2016 Oct 11 15 22

Explanation

Post Ref.

Debit

PJ17 GJ8 CPJ11

4 0 9 06 1 6 8 3 70

Credit

Cr. Balance

2 0 9 2 76

2 0 9 2 76 1 6 8 3 70

CARDINAL’S BOOK SHOP SCHEDULE OF ACCOUNTS PAYABLE OCTOBER 31, 2016 Milligan Book Company Smithsonian Book Co. Suburban Auto Sales Total Accounts Payable

$3 3 2 2 20 6 5 7 6 60 21 0 1 8 00 $3 0 9 1 6 8 0

11-111

PROBLEM 11C-6., Cont.

THIS SOLUTION ASSUMES HST (13%)

CARDINAL’S BOOK SHOP - PARTIAL GENERAL LEDGER NAME: CASH Date 2016 Oct 31 31

ACCOUNT NO. Explanation

Post Ref.

Debit

CRJ1

48 5 9 4 30

Explanation

Post Ref.

Debit

SJ7

20 5 6 2 61

Explanation

Post Ref.

Debit

CPJ11

2 7 0 0 00

Post Ref.

Debit

CPJ11

11-112

Explanation

Credit

4 7 5 8 26 8 0 3 40

Post Ref.

Debit

PJ17

18 6 0 0 00

Debit

GJ8

4 0 9 06

DR CR Cr

CPJ11

10 0 3 4 40

3 5 2 56 20 2 1 0 05 8 4 3 6 58

135

138 Balance 4 7 06 4 7 1 1 20 5 5 1 4 60 180

DR CR

Balance

18 6 0 0 00

DR CR Dr

41 3 6 0 26

Balance

2 7 0 0 00

Credit

120

ACCOUNT NO. Post Ref.

48 5 9 4 30 30 8 1 9 20

Balance

Credit

Balance

DR CR

ACCOUNT NO.

PJ17

Credit

4 7 06

GJ8

NAME: ACCOUNTS PAYABLE Date 2016 Oct 15 31 31

ACCOUNT NO.

PJ17

Explanation

ACCOUNT NO.

NAME: DELIVERY TRUCK Date 2016 Oct 21

DR CR

11 7 7 3 47

CRJ1

NAME: PREPAID HST Date 2016 Oct 15 31 31

Credit 3 5 2 56

GJ8

Explanation

ACCOUNT NO.

NAME: PREPAID RENT Date 2016 Oct 1

DR CR Dr

17 7 7 5 10

CPJ11

NAME: ACCOUNTS RECEIVABLE Date 2016 Oct 11 31 31

Credit

110

Cr Cr

210 Balance 4 0 9 06 40 9 5 1 20 30 9 1 6 80

PROBLEM 11C-6., Cont.

THIS SOLUTION ASSUMES HST (13%)

CARDINAL’S BOOK SHOP - PARTIAL GENERAL LEDGER NAME: HST PAYABLE Date 2016 Oct 11 31 31

Explanation

ACCOUNT NO. Post Ref. GJ8

Debit

Credit

4 0 56

NAME: B. CARDINAL, CAPITAL Date 2016 Oct 1 30

Explanation

Post Ref.

Debit

Credit 20 0 0 0 00 12 0 0 0 00

CRJ16 CRJ16

Explanation

Post Ref.

Debit

Credit 18 1 9 7 00 4 4 0 7 00

SJ7 CRJ1

Explanation

Post Ref.

Debit

GJ8

3 1 2 00

Credit

Cr Cr

Balance 20 0 0 0 00 32 0 0 0 00

Explanation

DR CR Cr Cr

410 Balance 18 1 9 7 00 22 6 0 4 00

412

DR CR

Balance

3 1 2 00

ACCOUNT NO. Post Ref.

Debit

CRJ1

1 5 9 08

Credit

NAME: BOOK PURCHASES Date 2016 Oct 31 31

DR CR

310

ACCOUNT NO.

NAME: SALES DISCOUNTS Date 2016 Oct 31

4 0 56 2 3 2 5 05 2 8 9 7 96

ACCOUNT NO.

NAME: SALES RETURNS AND ALLOWANCES Date 2016 Oct 11

Balance

ACCOUNT NO.

NAME: BOOK SALES Date 2016 Oct 31 31

2 3 6 5 61 5 7 2 91

SJ7 CRJ1

DR CR

218

414

DR CR

Balance

1 5 9 08

ACCOUNT NO. Post Ref. PJ17 CPJ11

Debit

Credit

18 0 0 2 00 3 2 0 0 00

DR CR Dr Dr

510 Balance 18 0 0 2 00 21 2 0 2 00

11-113

PROBLEM 11C-6., Cont.

THIS SOLUTION ASSUMES HST (13%)

CARDINAL’S BOOK SHOP - PARTIAL GENERAL LEDGER NAME: PURCHASES RETURNS AND ALLOWANCES Date 2016 Oct 15

Explanation

Post Ref.

ACCOUNT NO. Debit

GJ8

NAME: PURCHASES DISCOUNTS Date 2016 Oct 31

Explanation

Debit

CPJ11

NAME: CLEANING EXPENSE Date 2016 Oct 8

Explanation

11-114

Explanation

DR CR

Balance

3 6 2 00

Post Ref.

Debit

CPJ11

2 8 0 00

DR CR

Balance

1 6 2 70

Credit

Debit

CPJ11

9 2 0 00

Credit

615

DR CR

Balance

2 8 0 00

ACCOUNT NO. Post Ref.

514

Credit

ACCOUNT NO.

NAME: SALARIES EXPENSE Date 2016 Oct 15

Credit

ACCOUNT NO. Post Ref.

512

650

DR CR

Balance

9 2 0 00

11-115

Oct

3 8 11 21 28 30 31

Date 2016

Milligan Book Milligan Book Winnipeg Book Suburban Auto Smith. Book Co. Milligan Book

Account Credited

PROBLEM 11C-6.

1/15,n/60

415 311 111 211 436

10/8 10/8 10/19 10/25 10/26

2/10,n/30

410

2/10,n/30

Terms

10/2

Date of Inv. Invoice No. ✔ ✔ ✔ ✔ ✔ ✔

Post Ref.

Book Purchases Dr.

(210)

(510)

4 4 8 3 50 4 2 7 0 00 3 0 8 7 00 2 9 4 0 00 1 9 4 4 60 1 8 5 2 00 19 5 3 0 00 6 1 1 1 00 5 8 2 0 00 3 2 7 6 00 3 1 2 0 00 38 4 3 2 10 18 0 0 2 00

Accounts Payable Cr.

CARDINAL’S BOOK SHOP PURCHASES JOURNAL

Account

(138)

180

Amount

(X)

18 6 0 0 00

Sundry Dr.

2 1 3 50 1 4 7 00 9 2 60 9 3 0 0 0 Delivery Truck 2 9 1 00 1 5 6 00 1 8 3 0 10

Prepaid GST Dr.

Page 17

THIS SOLUTION ASSUMES GST (5%)

11-116

Oct

1 8 11 15 22 25 31 31

Date 2016

121 122 123 124 125 126 127

Chq. No.

Prepaid Rent Cleaning Expense Milligan Book Co. Salaries Expense Winnipeg Book Supply Cash Purchase Milligan Book Co.

Account Debited

PROBLEM 11C-6., Cont.

✔

(210)

(X)

1 5 6 4 50

4 4 8 3 50

3 2 7 6 00 9 3 2 4 00

9 2 0 00

650

39 0 0 0 00

2 7 0 0 00 2 8 0 00

615

(138)

3 0 9 00

1 6 0 00

(510)

3 2 0 0 00

Book Purchases Dr.

(514)

6 2 40 1 6 2 70

1 4 90

8 5 40

Purchases Discounts Cr.

(110)

2 8 3 5 2 9 4 4 3 9 8 9 2 0 1 5 4 9 3 3 6 0 3 2 1 3 16 5 7 0

Cash Cr.

Prepaid GST Dr. 1 3 5 00 1 4 00

Accounts Payable Dr.

Sundry Dr.

135

Post Ref.

Page 11

CARDINAL’S BOOK SHOP CASH PAYMENTS JOURNAL

00 00 10 00 60 00 60 30

THIS SOLUTION ASSUMES GST (5%

11-117

Oct

1 14 15 15 18 28 29 29 30 31

Date 2016

Accounts Receivable Cr.

20 0 0 0 0 0 2 5 4 1 00 1 0 9 9 35 2 9 3 3 44 2 9 9 0 40 2 5 8 8 25 2 5 8 8 25 9 8 7 00 2 7 7 4 82 2 8 2 8 70 2 4 8 4 36 2 5 3 2 60 12 0 0 0 0 0 47 4 0 8 2 2 1 0 9 3 9 9 5 (110) (120)

Cash Dr.

PROBLEM 11C-6., Cont.

2 2 0 35 (218)

4 7 00

9 4 0 00

4 4 0 7 00 (410)

1 2 1 00 5 2 35

GST Payable Cr.

2 4 2 0 00 1 0 4 7 00

Book Sales Cr.

Description of Receipt

310

✔ ✔

310

Post Ref.

12 0 0 0 0 0 32 0 0 0 0 0 (X)

20 0 0 0 0 0

Sundry Cr.

Page 16

THIS SOLUTION ASSUMES GST (5%)

B. Cardinal, Capital Cash Sale Cash Sale 5 6 9 6 District College First City Library Cash Sale 5 3 8 8 First City Library 4 8 2 4 Rural Bookmobile B. Cardinal, Capital 1 5 9 08 (414)

Sales Discounts Dr.

CARDINAL’S BOOK SHOP CASH RECEIPTS JOURNAL

PROBLEM 11C-6., Cont.

THIS SOLUTION ASSUMES GST (5%) CARDINAL’S BOOK SHOP SALES JOURNAL

Date 2016 Oct

Invoice No . 3 7 8 18 22 25 31 31

781 782 783 784 785 786 787

Customer’s Name

Post Ref.

First City Library District College First City Library Rural Bookmobile Co. First City Library Rural Bookmobile Co. Flower & Company

✔ ✔ ✔ ✔ ✔ ✔ ✔

Page 7

Accounts Receivable Dr. 2 5 8 8 25 3 3 1 8 00 1 9 4 8 80 2 6 0 8 20 2 8 2 8 70 2 5 3 2 60 3 2 8 2 30 19 1 0 6 85 (20)

GST Payable Cr. 1 2 3 1 5 8 9 2 1 2 4 1 3 4 1 2 0 1 5 6 9 0 9

25 00 80 20 70 60 30 85

(218)

CARDINAL’S BOOK SHOP GENERAL JOURNAL Date Account Title and Description 2016 Oct 11 Sales Returns and Allowances GST Payable Accounts Receivable, District College Issued Credit Memo #1 15 Accounts Payable, Winnipeg Book Supply Purchase Returns And Allowances Prepaid GST Issued Debit Memo #18

11-118

Book Sales Cr. 2 4 6 5 3 1 6 0 1 8 5 6 2 4 8 4 2 6 9 4 2 4 1 2 3 1 2 6 18 1 9 7

00 00 00 00 00 00 00 00

(10)

Page 8 Post Ref. 412 218

Dr. 3 1 2 00 1 5 60

120 / ✔

210 / ✔ 512 138

Cr.

3 2 7 60

3 8 0 10 3 6 2 00 1 8 10

PROBLEM 11C-6., Cont.

THIS SOLUTION ASSUMES GST (5%)

CARDINAL’S BOOK SHOP - ACCOUNTS RECEIVABLE LEDGER NAME: ADDRESS: Date 2016 Oct 7 11 15 NAME: ADDRESS: Date 2016 Oct 3 8 18 22 29 NAME: ADDRESS: Date 2016 Oct 31

NAME: ADDRESS: Date 2016 Oct 18 25 29

DISTRICT COLLEGE 78 SPENSER ROAD NW, CALGARY, AB T3C 9J1 Explanation

Post Ref. SJ7

Debit

Credit

3 3 1 8 00 3 2 7 60 2 9 9 0 40

GJ8 CRJ1

Dr. Balance 3 3 1 8 00 2 9 9 0 40

FIRST CITY LIBRARY 3702 - 45 AVENUE SE, CALGARY, AB T2C 0K9 Explanation

Post Ref. SJ7 SJ7

Debit 2 5 8 8 25 1 9 4 8 80

2 8 2 8 70

Credit

Dr. Balance

2 8 2 8 70

CRJ1

Dr. Balance 2 5 8 8 4 5 3 7 1 9 4 8 4 7 7 7 1 9 4 8

2 5 8 8 25

CRJ1 SJ7

Credit

25 05 80 50 80

FLOWER & COMPANY 1010 - LAWN AVENUE NW, CALGARY, AB T3K 0L7 Explanation

Post Ref. SJ7

Debit 3 2 8 2 30

3 2 8 2 30

RURAL BOOKMOBILE CO. 535 KING STREET SE, CALGARY, AB T2T 4B9 Explanation

Post Ref. SJ7 SJ7

Debit

Credit

2 6 0 8 20 2 5 3 2 60 2 5 3 2 60

CRJ1

Dr. Balance 2 6 0 8 20 5 1 4 0 80 2 6 0 8 20

CARDINAL’S BOOK SHOP SCHEDULE OF ACCOUNTS RECEIVABLE OCTOBER 31, 2016 First City Library Flower & Company Rural Bookmobile Total Accounts Receivable

$1 9 4 8 3 2 8 2 2 6 0 8 $7 8 3 9

30 20 30

11-119

PROBLEM 11C-6., Cont.

THIS SOLUTION ASSUMES GST (5%) CARDINAL’S BOOK SHOP - ACCOUNTS PAYABLE

NAME: ADDRESS: Date 2016 Oct 3 8 11 30 31

Post Ref.

Explanation

Debit

PJ17 PJ17 CPJ11

CPJ11

Date 2016 Oct 28

4 4 8 3 7 5 7 0 3 0 8 7 6 3 6 3 3 0 8 7

3 2 7 6 00

Post Ref.

50 50 00 00 00

Debit

Credit

Cr. Balance

6 1 1 1 00

Credit

Cr. Balance

19 5 3 0 00

Credit

Cr. Balance

1 9 4 4 60

1 9 4 4 60 1 5 6 4 50

SUBURBAN AUTO SALES 12 ROSEHILL ROAD NW, CALGARY, AB T3P 0J4 Explanation

Post Ref.

Debit

PJ17

NAME: ADDRESS:

4 4 8 3 50 3 0 8 7 00 3 2 7 6 00

PJ17

Date 2016 Oct 21

Cr. Balance

SMITHSONIAN BOOK CO. 14 PRINCESS ROAD SE, CALGARY, AB T2T 2L0 Explanation

NAME: ADDRESS:

Credit

4 4 8 3 50

PJ17

NAME: ADDRESS:

Date 2016 Oct 11 15 22

MILLIGAN BOOK COMPANY 425 FARWELL AVENUE, EDMONTON, AB T6B 1K1

WINNIPEG BOOK SUPPLY 12024 - 45 AVENUE, WINNIPEG, MB R2L 4J7 Post Ref.

Explanation

Debit

PJ17 GJ8 CPJ11

3 8 0 10 1 5 6 4 50

CARDINAL’S BOOK SHOP SCHEDULE OF ACCOUNTS PAYABLE OCTOBER 31, 2016 Milligan Book Company Smithsonian Book Co. Suburban Auto Sales Total Accounts Payable

11-120

$3 0 8 7 0 0 6 1 1 1 00 19 5 3 0 00 $2 8 7 2 8 0 0

PROBLEM 11C-6., Cont.

THIS SOLUTION ASSUMES GST (5%)

CARDINAL’S BOOK SHOP - PARTIAL GENERAL LEDGER NAME: CASH Date 2016 Oct 31 31

ACCOUNT NO. Explanation

Post Ref.

Debit

CRJ1

47 4 0 8 22

Credit

NAME: ACCOUNTS RECEIVABLE Date 2016 Oct 11 31 31

Explanation

Post Ref.

Debit

SJ7

19 1 0 6 85

Explanation

Post Ref.

Debit

CPJ11

2 7 0 0 00

Credit

Post Ref.

Debit

Credit 1 8 10

PJ17 CPJ11

1 8 3 0 10 3 0 9 00

Explanation

Balance 3 2 7 60 18 7 7 9 25 7 8 3 9 30

135

DR CR

Balance

2 7 0 0 00

DR CR Cr Dr Dr

138 Balance 1 8 10 1 8 1 2 00 2 1 2 1 00

ACCOUNT NO. Post Ref.

Debit

PJ17

18 6 0 0 00

Credit

NAME: ACCOUNTS PAYABLE Date 2016 Oct 15 31 31

120

ACCOUNT NO.

GJ8

Explanation

47 4 0 8 22 30 8 3 7 92

ACCOUNT NO.

NAME: DELIVERY TRUCK Date 2016 Oct 21

DR CR

10 9 3 9 95

CRJ1

NAME: PREPAID GST Date 2016 Oct 15 31 31

Credit 3 2 7 60

GJ8

Explanation

Balance

ACCOUNT NO.

NAME: PREPAID RENT Date 2016 Oct 1

16 5 7 0 30

CPJ11

DR CR

110

180

DR CR

Balance

18 6 0 0 00

ACCOUNT NO. Post Ref.

Debit

GJ8

3 8 0 10

Credit

CPJ11

38 4 3 2 10

PJ17

9 3 2 4 00

DR CR

Cr Cr

210 Balance 3 8 0 10 38 0 5 2 00 28 7 2 8 00

11-121

PROBLEM 11C-6., Cont.

THIS SOLUTION ASSUMES GST (5%)

CARDINAL’S BOOK SHOP - PARTIAL GENERAL LEDGER, Cont. NAME: GST PAYABLE Date 2016 Oct 11 31 31

Explanation

ACCOUNT NO. Post Ref. GJ8

Debit 1 5 60

CRJ1

NAME: B. CARDINAL, CAPITAL Explanation

Post Ref.

Debit

CRJ1

Explanation

Post Ref.

Debit

Explanation

11-122

Explanation

DR CR Cr Cr

ACCOUNT NO. Post Ref.

Debit

GJ8

3 1 2 00

Credit

Post Ref.

Debit

CRJ1

1 5 9 08

Credit

PJ17

Debit 18 0 0 2 00 3 2 0 0 00

Credit

1 5 60 8 9 4 25 1 1 1 4 60 310 Balance 20 0 0 0 00 32 0 0 0 00 410 Balance 18 1 9 7 00 22 6 0 4 00

412 Balance

3 1 2 00

414

DR CR

Balance

1 5 9 08

ACCOUNT NO. Post Ref.

Balance

DR CR

ACCOUNT NO.

CPJ11

Credit 18 1 9 7 00 4 4 0 7 00

SJ7 CRJ1

NAME: BOOK PURCHASES Date 2016 Oct 31 31

ACCOUNT NO.

NAME: SALES DISCOUNTS Date 2016 Oct 31

Credit 20 0 0 0 00 12 0 0 0 00

CRJ16

NAME: SALES RETURNS AND ALLOWANCES Date 2016 Oct 11

ACCOUNT NO.

NAME: BOOK SALES Date 2016 Oct 31 31

DR CR Dr

9 0 9 85 2 2 0 35

SJ7

Date 2016 Oct 1 30

Credit

218

DR CR Dr Dr

510 Balance 18 0 0 2 00 21 2 0 2 00

PROBLEM 11C-6., Cont.

THIS SOLUTION ASSUMES GST (5%)

CARDINAL’S BOOK SHOP - PARTIAL GENERAL LEDGER NAME: PURCHASES RETURNS AND ALLOWANCES Date 2016 Oct 15

Explanation

Post Ref.

ACCOUNT NO. Debit

GJ8

NAME: PURCHASES DISCOUNTS Date 2016 Oct 31

Explanation

Post Ref.

Debit

CPJ11

Explanation

DR CR

Balance

3 6 2 00

514

Credit

DR CR

Balance

1 6 2 70

ACCOUNT NO. Post Ref.

Debit

CPJ11

2 8 0 00

Credit

NAME: SALARIES EXPENSE Date 2016 Oct 15

Credit

ACCOUNT NO.

NAME: CLEANING EXPENSE Date 2016 Oct 8

512

615

DR CR

Balance

2 8 0 00

ACCOUNT NO. Post Ref.

Debit

CPJ11

9 2 0 00

Credit

650

DR CR

Balance

9 2 0 00

11-123

ON-THE-JOB TRAINING, #T-1.

PRT 100

R = 100 × 100 × $20 $980 ×

I = Dollars of Interest R = Rate of Interest (years) I PT 20 360

T = Period of Loan P = Principal = Approx. 36.74%

To solve this problem, the bookkeeper should be informed that competition in the business world is sometimes fierce and all discounts should be taken, if available. This improves the company’s competitive position.

ON-THE-JOB TRAINING, #T-2. SALES JOURNAL Date 2016

Sales Invoice No.

Terms

Page 5 Post Ref.

Account Debited

Acct. Receivable Dr. Sales Cr.

P. Bond M. Raff R. Venner J. Smooth J. Smooth

1 5 0 1 0 0 4 0 0 2 0 0 0 1 0 0 0 3 6 5 0

GENERAL JOURNAL Date 2016

Account Title and Description

00 00 00 00 00 00

Page 2 Post Ref.

Dr.

Sales Returns and Allowances Accounts Receivable, J. Smooth

1 0 0 0 00

Sales Returns And Allowances Accounts Receivable, J. Smooth

5 0 0 00

Cr. 1 0 0 0 00

5 0 0 00

Ron should be advised that using a computer with appropriate software (such as Simply Accounting) can be of great assistance in preventing these sorts of data disasters. However, to ensure that the data is safe, it should be backed up periodically and a copy of the backup maintained at an appropriate off-site location.

11-124

11-125

Date 2016 5 0 0 0 1 4 7 4 0 0 5 0 0 0 1 0 0 0 9 9 0 2 0 0 12 7 3 7

Cash Dr. 00 00 00 00 00 00 00 00 1 5 5 0 00

1 0 0 0 00

1 5 0 00 4 0 0 00

Accounts Receivable Cr.

6 0 0 0 00

5 0 0 0 00 1 0 0 0 00

Sales Cr.

Description of Receipt

M. Rang, Capital 3 0 0 P. Bond R. Venner Cash Sales Cash Sales 1 0 0 0 J. Smooth Shelving Equipment 1 3 00

Sales Discounts Dr.

CASH RECEIPTS JOURNAL

SOLUTION TO ON-THE-JOB TRAINING, #T-2., Cont.

Post Ref.

2 0 0 00 5 2 0 0 00

5 0 0 0 00

Sundry Cr.

Page 1

CONTINUING PROBLEM PRECISION COMPUTER CENTRE SALES JOURNAL Date 2017 Jan.

Invoice No. 3 10 23 30

12690 12691 12692 12693

Customer’s Name Taylor Golf; terms 2/10,n/30 Digital Prints Co.; 2/10,n/30 Noel Aberhart; 4/10,n/30 Anthony Pitale; 2/10, n/30

Post Ref. TA101 DI101 AB101 PI101

Page 5

Accounts Sales Receivable Cr. Dr. 1 0 1 7 00 9 0 00 3 9 5 5 00 3 5 0 0 00 4 5 2 0 00 4 0 0 0 00 1 8 0 8 00 1 6 0 0 00 11 3 0 0 00 10 0 0 0 00 (1020) (4010)

PRECISION COMPUTER CENTRE GENERAL JOURNAL Date 2017 Jan. 9

Account Title and Description Accounts Payable - Computer Connections, PO No. 4016 Purchases Returns and Allowances HST Recoverable Debit memorandum No. 11 issued.

27 Sales Returns and Allowances HST Payable Accounts Receivable - Digital Prints Co. Credit memorandum re Digital Prints Co.

11-126

Post Ref. 2000/C3

Dr.

1020/DI101

Cr.

3 3 9 00 3 0 0 00 3 9 00

2066

2060

1 1 7 00 4 5 5 00 5 2 0 00 2 0 8 00 1 3 0 0 00 (2060)

Page 6

5610

4020

HST Payable Cr.

4 0 0 00 5 2 00 4 5 2 00

11-127

Jan.

3 3 10 10 17 24 27 30 31

Date 2017

Cash Dr.

1 4 3 0 00 6 9 5 5 00 (2060)

1 5 6 0 00 1 8 2 0 00 1 5 6 0 00

5 8 5 00

HST Payable Cr.

Description of Receipt

Carson Engineering Cash Sale Taylor Golf Cash Sale Cash Sale Cash Sale 1 6 0 0 0 Noel Aberhart Digital Prints Co. Cash Sale 1 6 0 00 (4030)

Sales Discounts Dr.

PRECISION COMPUTER CENTRE CASH RECEIPTS JOURNAL Accounts Sales Receivable Cr. Cr. 14 9 9 0 0 0 14 9 9 0 0 0 5 0 8 5 00 4 5 0 0 00 3 2 0 0 00 3 2 0 0 00 13 5 6 0 0 0 12 0 0 0 0 0 15 8 2 0 0 0 14 0 0 0 0 0 13 5 6 0 0 0 12 0 0 0 0 0 4 3 6 0 00 4 5 2 0 00 3 5 0 3 00 3 5 0 3 00 12 4 3 0 0 0 11 0 0 0 0 0 8 6 5 0 8 0 0 2 6 2 1 3 0 0 53 5 0 0 0 0 (1000) (1020) (4010)

CONTINUING PROBLEM, Cont.

DI101

AB101

TA101

CA101

Post Ref.

Sundry Cr.

Page 5

11-128

Jan.

3 6 6 10 10 13

Date 2017

Computer Connect. Multi Systems Staples City Electric Computer Connect West Bell Canada

Account Credited

CONTINUING PROBLEM

n/30

1/30,n/60

4018

4019 W1

3/10,n/30 M1

4017

Post Ref.

3/10,n/30

Terms

4016

Purchase Order No.

Accounts Payable Cr. 2 8 2 5 00 3 3 9 00 2 2 6 00 2 8 2 50 5 6 5 00 1 2 4 30 4 3 6 1 80 (2000) 3 3 0 0 00 (5600)

5 0 0 00

2 5 0 0 00 3 0 0 00

Purchases Dr.

HST Sundry Dr. Recoverable PR Dr. Account 3 2 5 00 3 9 00 1030 2 6 0 0 Supplies 1030 3 2 5 0 Utilities 6 5 00 5040 1 4 3 0 Phone 5 0 1 80 (2066)

PRECISION COMPUTER CENTRE PURCHASES JOURNAL

1 1 0 00 5 6 0 00 (X)

2 0 0 00 2 5 0 00

Amount

Page 4

11-129

Jan.

281 282 283 284 285

3 9 10 13 13

13 286 17 287 31 288

280

Chq. No.

Date 2017

Multi Systems Alpha Office Co. Automated Payroll Service

Staples City Newspaper West Bell Canada Computer Connections Canada Revenue Agency

Able Holdings

Account Debited

CONTINUING PROBLEM, Cont.

5110

2040

2030

2020

1025

5020

Post Ref.

Purchases Dr.

Purchases Discounts Cr.

8 7 4 0 20 11 6 0 4 04 (X)

8 4 9 20 5 4 2 58 2 7 2 06

8 0 0 00 4 0 0 00

4 4 1 3 00 (2000)

3 3 9 00 3 1 8 00

2 5 0 00 8 5 5 00 1 6 5 00 2 4 8 6 00

3 3 0 3 1 8 8 7 4 0 7 5 00 15 9 4 2 (5620) (1000)

9 00

6 6 00

2 5 0 8 5 5 2 4 2 0 1 6 6 3

00 00 20 04

00 00 00 84

1 2 0 0 00

Cash Cr.

HST Recoverable Dr.

Accounts Payable Dr.

Sundry Dr.

Page 5

PRECISION COMPUTER CENTRE CASH PAYMENTS JOURNAL

CONTINUING PROBLEM, Cont. PRECISION COMPUTER CENTRE ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER NAME ADDRESS

NOEL ABERHART AB101 10151 - 108 STREET, EDMONTON, AB T5S 4S2

Date 2017 Jan. 23 27

Explanation

Date 2017 Jan. 1

SJ5

4 5 2 0 00 4 5 2 0 00

Post Ref.

Debit

Credit

Dr. Balance

CARSON ENGINEERING CORP. CA101 9939 EDMONTON WAY, EDMONTON, AB T5A 9A2 Explanation

Post Ref.

Debit

Credit

✔

Balance

Dr. Balance 14 9 9 0 00

CRJ5

NAME ADDRESS

Dr. Balance 4 5 2 0 00

✔

Balance

Date 2017 Jan. 1 3

Credit

ACCU PAC, INC. AC101 11151 - 118 STREET, EDMONTON, AB T5S 2S2 Explanation

NAME ADDRESS

11-130

Debit

CRJ5

NAME ADDRESS

Date 2017 Jan. 10 27 30

Post Ref.

14 9 9 0 00

Credit

Dr. Balance

DIGITAL PRINTS CO. DI101 9939 EDMONTON WAY, EDMONTON, AB T5A 9A2 Explanation

Post Ref.

Debit

SJ5

3 9 5 5 00

GJ6 CRJ5

4 5 2 00 3 5 0 3 00

3 9 5 5 00 3 5 0 3 00

CONTINUING PROBLEM, Cont. PRECISION COMPUTER CENTRE ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER NAME ADDRESS Date 2017 Jan. 1 30

ANTHONY J. PITALE PI101 229 DIAMOND RICH AVENUE, EDMONTON, AB T4K 2L7 Explanation

SJ5

Credit

Dr. Balance 1 6 0 0 00 3 4 0 8 00

1 8 0 8 00

TAYLOR GOLF TA101 232 TAYLOR HEIGHTS, EDMONTON, AB T6E 6R2 Explanation

Post Ref.

Debit

Credit

Dr. Balance

3 2 0 0 00

3 2 0 0 00 4 2 1 7 00 1 0 1 7 00

Credit

Dr. Balance

✔

Balance

SJ5

1 0 1 7

CRJ5

NAME ADDRESS Date 2017 Jan. 1

Debit

✔

Balance

NAME ADDRESS Date 2017 Jan. 1 3 10

Post Ref.

VITA NEEDLE COMPANY VI101 SUITE 204, 10091 89 STREET, EDMONTON, AB T6F 1S1 Explanation Balance

Post Ref.

Debit

✔

PRECISION COMPUTER CENTRE SCHEDULE OF ACCOUNTS RECEIVABLE JANUARY 31, 2017 Anthony Pitale Taylor Golf

3 4 0 8 00 1 0 1 7 00 4 4 2 5 00

11-131

CONTINUING PROBLEM, Cont. PRECISION COMPUTER CENTRE ACCOUNTS PAYABLE SUBSIDIARY LEDGER NAME ADDRESS

ALPHA OFFICE CO. A1 121 WHITEMUD FREEWAY, EDMONTON, AB T6T 2Z1

Date 2017 Jan. 1 Balance 17

NAME ADDRESS

Credit

CPJ5

Cr. Balance 3 1 8 00

3 1 8 00

Post Ref.

Debit

Credit 2 8 2 50

PJ4

Cr. Balance 2 8 2 50

CITY NEWSPAPER C2 10098 EDMONTON WAY, EDMONTON, AB T5A 9S2 Explanation

Post Ref.

Debit

Credit

✔ CPJ5

Cr. Balance 8 5 5 00

8 5 5 00

COMPUTER CONNECTION C3 2400, 4421 16 AVENUE, EDMONTON, AB T6R 1A1

Date 2017 Jan. 1 Balance 3 9 10 13

11-132

Debit

✔

Explanation

Date 2017 Jan. 1 Balance 9

NAME ADDRESS

Post Ref.

CITY ELECTRIC C1 1515 INDUSTRIAL BOULEVARD, EDMONTON, AB T6K 1L7

Date 2017 Jan. 10

NAME ADDRESS

Explanation

Post Ref.

Debit

Credit

Cr. Balance

2 8 2 5 00

2 8 2 5 2 4 8 6 3 0 5 1 5 6 5

✔

PJ4 GJ6

3 3 9 00 5 6 5 00

PJ4 CPJ5

2 4 8 6 00

00 00 00 00

CONTINUING PROBLEM, Cont. PRECISION COMPUTER CENTRE ACCOUNTS PAYABLE SUBSIDIARY LEDGER NAME ADDRESS

MULTI SYSTEMS, INC. M1 310 N. ESCONDIDO BLVD., EDMONTON, AB T7G 1P1

Date 2017 Jan. 1 Balance 6 13

NAME ADDRESS

Post Ref.

Debit

Credit

Cr. Balance

✔

0 3 3 9 00

PJ4 CPJ5

3 3 9

3 3 9 00

STAPLES S1 43 ESCONDIDO AVENUE, EDMONTON, AB T7G

Date 2017 Jan. 1 Balance 3 6

NAME ADDRESS

Explanation

Post Ref.

Debit

Credit

Cr. Balance

✔ CPJ5

2 5 0 00

2 5 0 00 2 2 6 00

PJ4

2 2 6 00

WEST BELL CANADA W1 10149 EDMONTON WAY, EDMONTON, AB T5A 9T1

Date 2017 Jan. 1 Balance 10 13

Explanation

Post Ref.

Debit

Credit

Cr. Balance

✔ CPJ5

1 6 5 00

1 6 5 00 1 2 4

PJ4

1 2 4 30

PRECISION COMPUTER CENTRE SCHEDULE OF ACCOUNTS PAYABLE JANUARY 31, 2017 City Electric Computer Connection Staples West Bell Canada

2 8 2 5 6 5 2 2 6 1 2 4 1 1 9 7

50 00 00 30 80

11-133

CONTINUING PROBLEM, Cont. GENERAL LEDGER OF PRECISION COMPUTER CENTRE NAME: CASH Date 2017 Jan. 1 31 31

1000 Explanation

Post Ref.

Debit

✔

Balance

CRJ5

DR CR Dr

86 5 0 8 00

15 9 4 2 04

CPJ5

NAME: PETTY CASH Date 2017 Jan. 1

Credit

ACCOUNT NO. Explanation

Post Ref.

Debit

Credit

✔

Balance

Explanation

Post Ref.

Debit

Balance

1 0 0 00

SJ5

4 5 2 00 11 3 0 0 00

Explanation Balance

11-134

Balance

Post Ref.

Debit

Credit

Post Ref.

Debit

Credit

Balance 19 7 9 0 19 3 3 8 30 6 3 8 4 4 2 5

00 00 00 00

1023

DR CR

Balance

6 0 0 00

ACCOUNT NO.

1025

DR CR

Balance

4 0 0 00

✔ CPJ5

ACCOUNT NO.

Explanation

DR CR

26 2 1 3 00

CRJ

NAME: PREPAID RENT Date 2017 Jan. 1 3

Credit

GJ6

NAME: PREPAID CLEANING Date 2017 Jan. 1

1010

1020

✔

Balance

12 7 1 6 28 99 2 2 4 28 83 2 8 2 24

DR CR

NAME: ACCOUNTS RECEIVABLE Date 2017 Jan. 1 27 31 31

Balance

0 4 0 0 00

CONTINUING PROBLEM, Cont. GENERAL LEDGER OF PRECISION COMPUTER CENTRE NAME: SUPPLIES Date 2017 Jan. 1 6

ACCOUNT NO. Explanation

Post Ref.

Debit

Credit

✔

Balance

PJ4

2 0 0 00

NAME: MERCHANDISE INVENTORY Date 2017 Jan. 1

Explanation Balance

Post Ref.

Debit

Credit

Explanation

Post Ref.

Debit

Credit

✔

Balance

Explanation

Post Ref.

Debit

Credit

Explanation Balance

Post Ref.

Debit

Credit

Explanation

Post Ref.

Debit

Credit

Explanation Balance

7 1 0 0 00

1080

DR CR

Balance

5 2 0 0 00

DR CR

1081 Balance 9 9 00

1090

DR CR

Balance

1 5 0 0 00

DR CR

1091 Balance 2 0 00

NAME: ACCOUNTS PAYABLE Date 2017 Jan. 1 9 31 31

ACCOUNT NO.

✔

Balance

ACCOUNT NO.

NAME: ACCUMULATED AMORTIZATION, OFFICE EQUIPMENT Date 2017 Jan. 1

DR CR

NAME: OFFICE EQUIPMENT Date 2017 Jan. 1

1040

ACCOUNT NO.

✔

Balance

1 1 1 0 00 1 3 1 0 00

ACCOUNT NO.

NAME: ACCUMULATED AMORTIZATION, COMPUTER SHOP Date 2017 Jan. 1

Balance

ACCOUNT NO.

NAME: COMPUTER SHOP EQUIPMENT Date 2017 Jan. 1

DR CR

1030

ACCOUNT NO. Post Ref.

Debit

Credit

✔ GJ6

3 3 9 00

4 3 6 1 80

PJ4 CPJ5

DR CR

4 4 1 3 00

Cr Cr

2000 Balance 1 5 8 8 1 2 4 9 5 6 1 0 1 1 9 7

00 00 80 80

11-135

CONTINUING PROBLEM, Cont. GENERAL LEDGER OF PRECISION COMPUTER CENTRE NAME: WAGES PAYABLE Date 2017 Jan. 1

Explanation

2010 Post Ref.

Debit

Credit

DR CR

✔

Balance

NAME: INCOME TAX PAYABLE Date 2017 Jan. 1 13

Explanation

2020 Post Ref.

Debit

Credit

✔

Balance

CPJ5

DR CR

Balance

8 4 9 20

NAME: CPP PAYABLE Date 2017 Jan. 1 13

2030 Explanation

Post Ref.

Debit

Credit

✔

Balance

CPJ5

DR CR

Balance

5 4 2 58

NAME: EI PAYABLE Date 2017 Jan. 1 13

2040 Explanation

Balance

Post Ref.

Debit

Credit

4 CPJ5

DR CR

Balance

2 7 2 06

NAME: HST PAYABLE Date 2017 Jan. 27 31 31

11-136

Balance

Explanation

2060 Post Ref. GJ6 PJ5 CPJ5

Debit

Credit

5 2 00

DR CR Dr

1 3 0 0 00 6 9 5 5 00

Cr Cr

Balance 5 2 00 1 2 4 8 00 8 2 0 3 00

CONTINUING PROBLEM, Cont. GENERAL LEDGER OF PRECISION COMPUTER CENTRE NAME: HST RECOVERABLE Date 2017 Jan. 9 31

Explanation

2066 Post Ref.

Debit

3 9 00

GJ6 PJ4

5 0 1 80

NAME: T. FREEDMAN, CAPITAL Date 2017 Jan. 1

Explanation

Post Ref.

Debit

Explanation Balance

Post Ref.

Debit

Credit

Post Ref.

Debit

Credit

DR CR

Balance

7 4 0 6 00

3010

DR CR

Balance

4 0 3 0 00

4000

DR CR

Balance

29 2 4 4 82

ACCOUNT NO. Explanation

Balance

3000

ACCOUNT NO.

NAME: SALES Date 2017 Jan. 1 31 31

3 9 00 4 6 2 80

ACCOUNT NO.

NAME: SERVICE REVENUE Date 2017 Jan. 1

Credit

✔

Balance

✔

Balance

DR CR

ACCOUNT NO.

NAME: T. FREEDMAN, WITHDRAWALS Date 2017 Jan. 1

Credit

Post Ref.

Debit

Credit

✔ SJ5 CRJ5

DR CR Cr

10 0 0 0 00 53 5 0 0 00

Cr Cr

4010 Balance 46 5 5 0 00 56 5 5 0 00 110 0 5 0 0 0

11-137

CONTINUING PROBLEM, Cont. GENERAL LEDGER OF PRECISION COMPUTER CENTRE NAME: SALES RETURNS AND ALLOWANCES Date 2017 Jan. 1 27

Explanation

4020 Post Ref.

Debit

✔

Balance

GJ6

Explanation

4 0 0 00

ACCOUNT NO. Post Ref.

Debit

CRJ5

1 6 0 00

Explanation

Post Ref.

Debit

Explanation

Post Ref.

Debit

Credit

✔

Balance

Explanation

Post Ref.

Debit

Credit

✔

Balance

CPJ5

Explanation

Debit

✔

Balance

PJ4

11-138

Explanation Balance

5015

3 0 0 00

DR CR

5020 Balance 1 6 0 0 00 2 4 0 0 00 5030 Balance 7 5 6 00 1 0 0 6 00 5040

Post Ref.

Debit

✔ PJ4

5010

Balance

NAME: PHONE EXPENSE Date 2017 Jan. 1 10

2 2 0 00 3 8 0 00

DR CR

2 5 0 00

Balance

9 6 0 00

Credit

4030

ACCOUNT NO. Post Ref.

4 0 0 00 8 0 0 00

Balance

8 0 0 00

Balance

DR CR

ACCOUNT NO.

NAME: UTILITIES EXPENSE Date 2017 Jan. 1 10

Credit

ACCOUNT NO.

NAME: RENT EXPENSE Date 2017 Jan. 1 3

✔

Balance

DR CR

ACCOUNT NO.

NAME: CLEANING EXPENSE Date 2017 Jan. 1

Credit

NAME: ADVERTISING EXPENSE Date 2017 Jan. 1

✔

Balance

DR CR Dr

NAME: SALES DISCOUNTS Date 2017 Jan. 1 31

Credit

DR CR Dr

1 1 0 00

Balance 5 9 6 00 7 0 6 00

CONTINUING PROBLEM, Cont. GENERAL LEDGER OF PRECISION COMPUTER CENTRE NAME: POSTAGE EXPENSE Date 2017 Jan. 1

Explanation

ACCOUNT NO. Post Ref.

Debit

Credit

✔

Balance

Explanation

Post Ref.

Debit

Credit

Explanation Balance

Post Ref.

Debit 8 7 4 0 20

2 0 00

5110 Balance 20 8 3 0 20 29 5 7 0 40

ACCOUNT NO. Post Ref.

Debit

Credit

✔

NAME: PURCHASES

5120

DR CR

Balance

8 6 0 69

ACCOUNT NO. Explanation

Post Ref.

Debit

Credit

✔

Balance

PJ4

Explanation

Post Ref.

3 0 0 00

5600 Balance 7 9 5 0 00 11 2 5 0 00

ACCOUNT NO. Debit

Credit

✔

Balance

DR CR Dr

NAME: PURCHASES RETURNS AND ALLOWANCES Date 2017 Jan. 1 9

DR CR Dr

NAME: PAYROLL BENEFITS EXPENSE

Date 2017 Jan. 1 31

Credit

Explanation

Balance

ACCOUNT NO.

CPJ5

Date 2017 Jan. 1

DR CR

5100

NAME: WAGES EXPENSE Date 2017 Jan. 1 31

5 0 00

ACCOUNT NO.

✔

Balance

NAME: MISCELLANEOUS EXPENSE Date 2017 Jan. 1

DR CR

5070

DR CR Cr

3 0 0 00

GJ6

5610 Balance 1 0 0 00 4 0 0 00

NAME: PURCHASES DISCOUNTS Date 2017 Jan. 1 31

Explanation Balance

5620 Post Ref.

Debit

Credit

✔ CPJ6

DR CR

Balance

7 5 00

1 7 50 9 2 50

11-139

12 Preparing a Worksheet for a Merchandising Company

ANSWERS TO DISCUSSION QUESTIONS AND CRITICAL THINKING/ETHICAL CASE 1. 2. 3. 4. 5. 6. 7. 8.

When the company had a large variety of merchandise with low unit prices. The Purchases account records the total amount of merchandise purchased during the period. Reject. The perpetual system is used. Unearned revenue is cash received before the service is performed or goods sold and represents a liability until service is performed. True. Calculates the cost of ending inventory. If a portion of the revenue has been earned, the liability will have to be reduced and the earned revenue increased. The figures for beginning and ending inventory are never combined since we assume the beginning inventory was sold by the end of the period when ending inventory is calculated. It makes no sense to net these two figures since they exist at two widely different points in time. The question in this case is whether Jim should use the petty cash fund for his own personal use. Jim’s poor financial situation should not be an adequate excuse to take advantage of the petty cash fund. I would recommend that Jim return the money to the petty cash fund.

SOLUTIONS TO CLASSROOM DEMONSTRATION EXERCISES 1.

GENERAL JOURNAL Date

Account Title and Description Income Summary Merchandise Inventory To transfer beginning inventory Merchandise Inventory Income Summary To record ending inventory

Page 1 Post Ref. 313

Dr. 60 0 0 0 00

60 0 0 0 00

114

114 313

Cr.

18 0 0 0 00 18 0 0 0 00

12-1

SOLUTIONS TO CLASSROOM DEMONSTRATION EXERCISES, Cont. 2.

GENERAL JOURNAL

Date 2017 Dec. 31

b. 3.

Account Title and Description Unearned Dog Walking Fees Earned Dog Walking Fees Transfer fees earned

Dr.

900

2 1 0 00

A $400

$900

DR 2,000.00

2, 3 CR

50.00 50.00

$900

$400

SOLUTIONS TO EXERCISES, Set A EXERCISE 12-1A. a. Credit

Expense (Contra)

b. Debit

Asset

c. Debit

Expense

d. Debit

Expense

e. Credit

Expense (Contra)

f. Debit

Contra-Revenue

g. Credit

Liability

h. Credit

Liability

EXERCISE 12-2A. a. Net Sales: Sales

- Sales R & A - Sales Disc. = Net Sales

$22,000 - $250

$500

$21,250

b. Cost of Goods Sold: Beg. Inv. + Net Purch. - End Inv. = Cost of Goods Sold $650

+ $13,200

- $510

$13,340

c. Gross Profit: Net Sales - Cost of Goods Sold = Gross Profit $21,250 -

$13,340

$7,910

d. Net Income: Gross Profit - Operating Expenses = Net Income $7,910

$3,600

f. 3

2,000.00

$400

$4,310

Cr. 2 1 0 00

Liability

Income Summary Merchandise Inventory To transfer beginning inventory Merchandise Inventory Income Summary To record ending inventory

12-2

Post Ref.

441

Page 1

$900

EXERCISE 12-3A. Accounts Affected

Category

Rules

Unearned Janitorial Services

Liability

Dr. $400

Janitorial Service Revenue

Revenue

Cr. $400

EXERCISE 12−4A. a. $40,000 + $400,000 -

= $440,000

b. $50,000 + $400,000 - $60,000 = $390,000 c.

+ $400,000 - $30,000 = $370,000

12-3

EXERCISE 12-5A. MOORE CO. WORKSHEET FOR YEAR ENDED DECEMBER 31, 2015

Account Titles Cash Accounts Receivable Merchandise Inventory Store Supplies Store Equipment Acc. Depn., Store Equipment Accounts Payable J. Moore, Capital Income Summary Sales Sales Returns and Allowances Purchases Purchases Discounts Freight-in Salaries Expense Advertising Expense

Store Supplies Expense Depreciation Expense, Equipment Accrued Salaries Payable

Trial Balance Dr.

Adjustments Cr.

8 00 5 00 1 1 00 1 0 00 2 0 00

Dr.

Cr.

1 3 0 0 (A) (C)

1 1 00 6 00

(D)

4 00

(A)

1 1 0 0 (B)

1 3 00

(E)

2 00

6 00 4 00

(B)

6 00 5 00 3 4 00 6 4 00 9 00 2 3 00 3 00 3 00 1 0 00 1 3 00 1 1 2 00

1 1 2 00

(E) 3 6 00

Net Loss

12-4

2 00 3 6 00

EXERCISE 12-5A. MOORE CO. WORKSHEET FOR YEAR ENDED DECEMBER 31, 2015 Adjusted Trial Balance Dr. Cr. 8 00 5 00 1 3 00 4 00 2 0 00 1 0 00 5 00 3 4 00 1 1 00 1 3 00 6 4 00 9 00 2 3 00 3 00 3 00 1 2 00 1 3 00 6 00 4 00 1 3 1 00

Income Statement Dr. Cr.

Balance Sheet Dr.

Cr.

8 00 5 00 1 3 00 4 00 2 0 00 1 0 00 5 00 3 4 00 1 1 00

1 3 00 6 4 00

9 00 2 3 00 3 00 3 00 1 2 00 1 3 00 6 00 4 00

2 00 1 3 1 00

8 1 00 8 1 00

8 0 00 1 00 8 1 00

5 0 00 1 00 5 1 00

2 00 5 1 00 5 1 00

12-5

SOLUTIONS TO EXERCISES, Set B EXERCISE 12-1B. a. Debit Contra-Revenue b. Debit Asset c. Credit Revenue d. Debit Expense e. Debit Expense f. Credit Expense (Contra) g. Credit Liability h. Credit Asset EXERCISE 12-2B. a- Net Sales: Sales - Sales R&A - Sales Disc. = Net Sales $35,000 -

$5.000

$800

= $29.200

b. Cost of Goods Sold: Beg. Inv. + Net Purch. - End lnv. = Cost of Goods Sold $900

+ $13,700

- $650

$13,950

c. Gross Profit: Net Sales - Cost of Goods Sold = Gross Profit $29,200 -

$13,950

$15,250

d. Net Income: Gross Profit - Operating Expenses = Net Income $15,250

$4.900

$10,350

EXERCISE 12-3B. Accounts Affected

Category

Rules

Unearned Janitorial Services

Liability

Dr. $500

Janitorial Service Revenue

Revenue

Cr. $500

EXERCISE 12-4B. a. $34,000 + $400,000 - 0

= $434,000

b. $45,000 + $400,000 - $55,000 = $390,000 c.

12-6

+ $400,000 - $42,000 = $358,000

EXERCISE 12-5B. MOORE CO. WORKSHEET FOR YEAR ENDED DECEMBER 31, 2015 Account Titles Cash Accounts Receivable Merchandise Inventory Store Supplies Store Equipment Acc. Depn., Store Equipment Accounts Payable J. Moore, Capital Income Summary Sales Sales Returns and Allowances Purchases Purchases Discounts Freight-in Salaries Expense Advertising Expense Store Supplies Expense Depreciation Expense, Equipment Accrued Salaries Payable

Trial Balance Dr.

Adjustments Cr.

9 00 8 00 1 2 00 9 00 2 4 00

Dr.

Cr.

1 5 0 0 (A) (C)

1 2 00 4 00

(D)

7 00

(A)

1 2 0 0 (B)

1 5 00

(E)

3 00

4 00 7 00

(B)

7 00 6 00 3 8 00 6 7 00 7 00 2 7 00 5 00 4 00 1 2 00 1 1 00 1 2 3 00

1 2 3 00

(E) 4 1 00

3 00 4 1 00

No Income or Loss

12-7

EXERCISE 12-5B. MOORE CO. WORKSHEET FOR YEAR ENDED DECEMBER 31, 2013 Adjusted Trial Balance Dr. Cr. 9 00 8 00 1 5 00 5 00 2 4 00 1 4 00 6 00 3 8 00 1 2 00 1 5 00 6 7 00 7 00 2 7 00 5 00 4 00 1 5 00 1 1 00 4 00 7 00 1 4 8 00

12-8

Income Statement Dr. Cr.

Balance Sheet Dr.

Cr.

9 00 8 00 1 5 00 5 00 2 4 00 1 4 00 6 00 3 8 00 1 2 00

1 5 00 6 7 00

7 00 2 7 00 5 00 4 00 1 5 00 1 1 00 4 00 7 00

3 00 1 4 8 00

8 7 00 0 00 8 7 00

6 1 00 0 00 6 1 00

3 00 6 1 00 0 00 6 1 00

PROBLEM 12A-1. a. Net Sales: Sales

- SRA -

$10,210 - $275 - $394 = $9,541

b. Cost of Goods Sold: Beg. Inv. + Net Purch. + Freight-in - End Inv. $ 1,565 +

$4,057

$80

- $1,250

= $4,452

(Net Purchases = Purchases ($4,450) - Purchases Returns and Allowances ($251) Purchases Discounts ($142))

c. Gross Profit: Net Sales - COGS $9,541

- $4,452 = $5,089

d. Net Income: Gross Profit - Operating Expenses $5,089

$2,000

= $3,089

12-9

PROBLEM 12A-2. JIM’S HARDWARE WORKSHEET FOR YEAR ENDED DECEMBER 31, 2015

Account Titles Cash Accounts Receivable Merchandise Inventory Prepaid Insurance Store Equipment Acc. Depn., Store Equipment Accounts Payable Jim Spool, Capital Income Summary Sales Sales Returns and Allowances Sales Discounts Purchases Purchases Discounts Purchases Returns and Allowances Wages Expense Rent Expense Telephone Expense Miscellaneous Expense

Insurance Expense Depn. Exp., Store Equipment Accrued Wages Payable Net Income

Trial Balance Dr. Cr. 7 8 6 00 1 1 5 2 00 6 0 0 00 (B) 6 8 4 00 2 1 6 0 00 6 6 0 00 5 1 6 00 1 6 3 2 00 (A) 11 0 4 0 00 5 4 6 00 2 1 6 00 5 2 5 6 00 1 6 8 00 1 0 2 00 1 7 1 6 00 (E) 7 9 2 00 1 1 4 00 9 6 00 14 1 1 8 00 14 1 1 8 00

Adjustments Dr.

Cr.

3 1 5 0 0 (A) (C)

6 0 0 00 1 5 0 00

(D)

6 0 00

6 0 0 0 0 (B)

3 1 5 00

9 0 00

1 5 0 00 6 0 00

2 1 5 00

(E) 9 0 00 1 2 1 5 00

PROBLEM 12A-2., Cont. JIM’S HARDWARE WORKSHEET FOR YEAR ENDED DECEMBER 31, 2015 Adjusted Trial Balance Dr. Cr. 7 8 6 00 1 1 5 2 00 3 1 5 00 5 3 4 00 2 1 6 0 00 7 2 0 00 5 1 6 00 1 6 3 2 00 6 0 0 00 3 1 5 00 11 0 4 0 00 5 4 6 00 2 1 6 00 5 2 5 6 00 1 6 8 00 1 0 2 00 1 8 0 6 00 7 9 2 00 1 1 4 00 9 6 00

1 5 0 00 6 0 00 14 5 8 3 00

Income Statement Dr. Cr.

6 0 0 00

Balance Sheet Dr. Cr. 7 8 6 00 1 1 5 2 00 3 1 5 00 5 3 4 00 2 1 6 0 00 7 2 0 00 5 1 6 00 1 6 3 2 00

3 1 5 00 11 0 4 0 00

5 4 6 00 2 1 6 00 5 2 5 6 00 1 6 8 00 1 0 2 00 1 8 0 6 00 7 9 2 00 1 1 4 00 9 6 00

1 5 0 00 6 0 00 9 0 00 14 5 8 3 00

9 6 3 6 00 1 9 8 9 00 11 6 2 5 00

11 6 2 5 00

4 9 4 7 00

11 6 2 5 00

4 9 4 7 00

9 0 00 2 9 5 8 00 1 9 8 9 00 4 9 4 7 00

12-11

PROBLEM 12A-3. WALTZ COMPANY WORKSHEET FOR YEAR ENDED DECEMBER 31, 2017 Account Titles Cash Petty Cash Accounts Receivable Merchandise Inventory Prepaid Rent Office Supplies Office Equipment Acc. Depn., Office Equipment Accounts Payable K. Waltz, Capital K. Waltz, Withdrawals Income Summary Sales Sales Returns and Allowances Sales Discounts Purchases Purchases Discounts Purchases Returns and Allowances Office Salaries Expense Insurance Expense Advertising Expense Utilities Expense

Office Supplies Expense Rent Expense Depn. Exp., Office Equipment Accrued Office Salaries Payable

Trial Balance Adjustments Cr. Dr. Cr. Dr. 5 4 0 8 00 2 4 0 00 2 5 1 2 00 5 0 9 2 00 (B) 1 8 0 5 0 0 (A) 5 0 9 2 0 0 6 1 6 00 (D) 1 9 5 0 0 9 4 4 00 (C) 2 1 0 00 9 2 8 0 00 7 6 0 0 00 (E) 5 5 0 00 5 9 6 4 00 5 4 7 6 00 4 8 0 0 00 (A) 5 0 9 2 0 0 (B) 1 8 0 5 0 0 52 4 8 4 00 9 6 00 2 4 0 0 00 29 3 1 6 00 1 6 00 3 4 8 00 7 4 0 8 00 (F) 3 1 0 00 2 4 0 0 00 8 0 0 00 5 7 6 00 71 8 8 8 00 71 8 8 8 00 (C) (D) (E)

2 1 0 00 1 9 5 00 5 5 0 00 (F) 8 1 6 2 00

Net Income

3 1 0 00 8 1 6 2 00

PROBLEM 12A-3., Cont. WALTZ COMPANY WORKSHEET FOR YEAR ENDED DECEMBER 31, 2017 Adjusted Trial Balance Dr. Cr. 5 4 0 8 00 2 4 0 00 2 5 1 2 00 1 8 0 5 00 4 2 1 00 7 3 4 00 9 2 8 0 00 8 1 5 0 00 5 9 6 4 00 5 4 7 6 00 4 8 0 0 00 5 0 9 2 00 1 8 0 5 00 52 4 8 4 00 9 6 00 2 4 0 0 00 29 3 1 6 00 1 6 00 3 4 8 00 7 7 1 8 00 2 4 0 0 00 8 0 0 00 5 7 6 00

2 1 0 00 1 9 5 00 5 5 0 00 74 5 5 3 00

Income Statement Dr. Cr.

5 0 9 2 00

Balance Sheet Dr. Cr. 5 4 0 8 00 2 4 0 00 2 5 1 2 00 1 8 0 5 00 4 2 1 00 7 3 4 00 9 2 8 0 00 8 1 5 0 00 5 9 6 4 00 5 4 7 6 00 4 8 0 0 00

1 8 0 5 00 52 4 8 4 00

9 6 00 2 4 0 0 00 29 3 1 6 00 1 6 00 3 4 8 00 7 7 1 8 00 2 4 0 0 00 8 0 0 00 5 7 6 00

2 1 0 00 1 9 5 00 5 5 0 00 3 1 0 00 74 5 5 3 00

49 3 5 3 00 5 3 0 0 00 54 6 5 3 00

54 6 5 3 00

25 2 0 0 00

54 6 5 3 00

25 2 0 0 00

3 1 0 00 19 9 0 0 00 5 3 0 0 00 25 2 0 0 00

12-13

PROBLEM 12A-4. RON’S WHOLESALE CLOTHING COMPANY WORKSHEET FOR YEAR ENDED DECEMBER 31, 2016

Account Titles Cash Petty Cash Accounts Receivable Merchandise Inventory Supplies Prepaid Insurance Store Equipment Acc. Depn., Store Equipment Accounts Payable Income Tax Payable CPP Payable EI Payable Unearned Storage Fees Ron Win, Capital Ron Win, Withdrawals Income Summary Sales Sales Returns and Allowances Sales Discounts Purchases Purchases Discounts Purchases Returns and Allowances Freight-in Salaries Expense Payroll Tax Expense Interest Expense Office Supplies Expense Insurance Expense Depreciation Expense

Trial Balance Adjustments Dr. Cr. Dr. Cr. 4 4 6 0 00 3 0 0 00 7 5 0 0 00 9 0 0 0 00 (B) 6 0 0 0 0 0 (A) 9 0 0 0 0 0 1 0 0 0 00 (C) 6 0 0 00 8 5 0 00 (D) 6 0 0 00 2 5 0 0 00 1 5 0 0 00 (E) 4 0 0 00 10 6 3 5 00 1 0 6 0 00 1 0 8 00 1 5 0 00 3 5 7 0 0 (F) 1 7 6 00 12 5 0 0 00 4 3 0 0 00 (A) 9 0 0 0 0 0 (B) 6 0 0 0 0 0 45 0 0 0 00 (F) 1 7 6 00 1 4 7 5 00 1 3 3 5 00 26 0 0 0 00 5 5 0 00 4 0 0 00 2 2 5 00 12 0 0 0 00 4 2 0 00 8 9 5 00 72 2 6 0 00 72 2 6 0 00 (C) 6 0 0 00 (D) 6 0 0 00 (E) 4 0 0 00 16 7 7 6 0 0 16 7 7 6 00

Net Loss

PROBLEM 12A-4., Cont. RON’S WHOLESALE CLOTHING COMPANY WORKSHEET FOR YEAR ENDED DECEMBER 31, 2016 Adjusted Trial Balance Dr. Cr.

Income Statement Dr. Cr.

Balance Sheet Dr.

4 4 6 0 00 3 0 0 00 7 5 0 0 00 6 0 0 0 00 4 0 0 00 2 5 0 00 2 5 0 0 00

4 4 6 0 00 3 0 0 00 7 5 0 0 00 6 0 0 0 00 4 0 0 00 2 5 0 00 2 5 0 0 00 1 9 0 0 00 10 6 3 5 00 1 0 6 0 00 1 0 8 00 1 5 0 00 1 8 1 00 12 5 0 0 00

4 3 0 0 00 9 0 0 0 00

Cr.

1 9 0 0 00 10 6 3 5 00 1 0 6 0 00 1 0 8 00 1 5 0 00 1 8 1 00 12 5 0 0 00 4 3 0 0 00

6 0 0 0 00 45 1 7 6 00

1 4 7 5 00 1 3 3 5 00 26 0 0 0 00

9 0 0 0 00

6 0 0 0 00 45 1 7 6 00

1 4 7 5 00 1 3 3 5 00 26 0 0 0 00 5 5 0 00 4 0 0 00

5 5 0 00 4 0 0 00

2 2 5 00 12 0 0 0 00 4 2 0 00 8 9 5 00

6 0 0 00 6 0 0 00 4 0 0 00 78 6 6 0 00

6 0 0 00 6 0 0 00 4 0 0 00 52 9 5 0 00

78 6 6 0 00

52 9 5 0 00

52 1 2 6 00 8 2 4 00 52 9 5 0 00

25 7 1 0 00 8 2 4 00 26 5 3 4 00

26 5 3 4 00 26 5 3 4 00

12-15

PROBLEM 12B-1. a. Net Sales: Sales

- SRA

$3,950 - $191

- $500

$3,259

b. Cost of Goods Sold: Beg. Inv. + Net Purch. + Freight-in - End Inv. $79

$1,046

$41

$75

$1,091

(Net Purchases = Purchases ($1,152) - Purchases Returns and Allowances ($64) Purchases Discounts ($42))

c. Gross Profit: Net Sales - COGS $3,259

- $1,091 =

$2,168

d. Net Income: Gross Profit - Operating Expenses $2,168

$895

= $1,273

PROBLEM 12B-2. JIM’S HARDWARE WORKSHEET FOR YEAR ENDED DECEMBER 31, 2015

Account Titles Cash Accounts Receivable Merchandise Inventory Prepaid Insurance Store Equipment Acc. Depn., Store Equipment Accounts Payable J. Spool, Capital Income Summary Sales Sales Returns and Allowances Sales Discounts Purchases Purchases Discounts Purchase Returns and Allowances Wages Expense Rent Expense Telephone Expense Miscellaneous Expense

Insurance Expense Depn. Exp., Store Equipment Accrued Wages

Trial Balance Dr. Cr. 9 6 0 00 1 6 0 0 00 7 3 6 00 (B) 1 1 1 2 00 3 2 0 0 00 1 6 8 0 00 1 4 0 8 00 2 5 7 6 00 (A) 14 8 0 0 00 7 2 8 00 6 8 8 00 7 0 8 8 00 2 4 0 00 2 4 8 00 2 3 0 4 00 (E) 1 8 4 0 00 5 5 2 00 1 4 4 00 20 9 5 2 00 20 9 5 2 00 (C) (D)

Adjustments Dr.

Cr.

4 8 0 0 0 (A) (C)

7 3 6 00 1 1 2 00

(D)

9 0 00

7 3 6 0 0 (B)

4 8 0 00

1 5 0 00

1 1 2 00 9 0 00 (E) 1 5 6 8 00

1 5 0 00 1 5 6 8 00

Net Income

12-17

PROBLEM 12B-2., Cont. JIM’S HARDWARE WORKSHEET FOR YEAR ENDED DECEMBER 31, 2015 Adjusted Trial Balance Dr. Cr. 9 6 0 00 1 6 0 0 00 4 8 0 00 1 0 0 0 00 3 2 0 0 00 1 7 7 0 00 1 4 0 8 00 2 5 7 6 00 7 3 6 00 4 8 0 00 14 8 0 0 00 7 2 8 00 6 8 8 00 7 0 8 8 00 2 4 0 00 2 4 8 00 2 4 5 4 00 1 8 4 0 00 5 5 2 00 1 4 4 00

Income Statement Dr. Cr.

7 3 6 00

4 8 0 00 14 8 0 0 00

7 2 8 00 6 8 8 00 7 0 8 8 00 2 4 0 00 2 4 8 00 2 4 5 4 00 1 8 4 0 00 5 5 2 00 1 4 4 00

1 1 2 00 9 0 00 21 6 7 2 00

Balance Sheet Dr. Cr. 9 6 0 00 1 6 0 0 00 4 8 0 00 1 0 0 0 00 3 2 0 0 00 1 7 7 0 00 1 4 0 8 00 2 5 7 6 00

1 1 2 00 9 0 00 1 5 0 00 21 6 7 2 00

14 4 3 2 00 1 3 3 6 00 15 7 6 8 00

15 7 6 8 00

7 2 4 0 00

15 7 6 8 00

7 2 4 0 00

1 5 0 00 5 9 0 4 00 1 3 3 6 00 7 2 4 0 00

PROBLEM 12B-3 WALTZ COMPANY WORKSHEET FOR YEAR ENDED DECEMBER 31, 2017

Account Titles Cash Petty Cash Accounts Receivable Merchandise Inventory Prepaid Rent Office Supplies Office Equipment Acc. Depn., Office Equipment Accounts Payable K. Waltz, Capital K. Waltz, Withdrawals Income Summary Sales Sales Returns and Allowances Sales Discounts Purchases Purchases Discounts Purchases Returns and Allowances Office Salaries Expense Insurance Expense Advertising Expense Utilities Expense

Office Supplies Expense Rent Expense Depn. Exp., Office Equipment Accrued Office Salaries Payable

Trial Balance Adjustments Dr. Cr. Dr. Cr. 3 8 0 0 00 1 0 0 00 3 4 0 0 00 5 2 0 4 00 (B) 1 6 0 0 0 0 (A) 5 2 0 4 0 0 1 2 0 0 00 (D) 6 0 0 0 0 1 3 6 0 00 (C) 8 9 0 0 0 9 6 8 0 00 4 0 4 0 00 (E) 2 5 0 0 0 7 9 6 4 00 5 4 7 6 00 5 0 0 0 00 (A) 5 2 0 4 0 0 (B) 1 6 0 0 0 0 52 4 6 2 00 1 1 6 00 2 2 0 0 00 29 2 9 6 00 1 2 0 8 00 1 3 5 0 00 7 4 0 8 00 (F) 1 8 0 0 0 2 2 0 0 00 8 0 0 00 7 3 6 00 72 5 0 0 00 72 5 0 0 00 (C) (D) (E)

8 9 0 00 6 0 0 00 2 5 0 00 (F) 8 7 2 4 00

1 8 0 00 8 7 2 4 00

Net Income

12-19

PROBLEM 12B-3., Cont. WALTZ COMPANY WORKSHEET FOR YEAR ENDED DECEMBER 31, 2017 Adjusted Trial Balance Dr. Cr. 3 8 0 0 00 1 0 0 00 3 4 0 0 00 1 6 0 0 00 6 0 0 00 4 7 0 00 9 6 8 0 00 4 2 9 0 00 7 9 6 4 00 5 4 7 6 00 5 0 0 0 00 5 2 0 4 00 1 6 0 0 00 52 4 6 2 00 1 1 6 00 2 2 0 0 00 29 2 9 6 00 1 2 0 8 00 1 3 5 0 00 7 5 8 8 00 2 2 0 0 00 8 0 0 00 7 3 6 00

Income Statement Dr. Cr.

5 2 0 4 00

1 6 0 0 00 52 4 6 2 00

1 1 6 00 2 2 0 0 00 29 2 9 6 00 1 2 0 8 00 1 3 5 0 00 7 5 8 8 00 2 2 0 0 00 8 0 0 00 7 3 6 00

8 9 0 00 6 0 0 00 2 5 0 00 74 5 3 0 00

Balance Sheet Dr. Cr. 3 8 0 0 00 1 0 0 00 3 4 0 0 00 1 6 0 0 00 6 0 0 00 4 7 0 00 9 6 8 0 00 4 2 9 0 00 7 9 6 4 00 5 4 7 6 00 5 0 0 0 00

8 9 0 00 6 0 0 00 2 5 0 00 1 8 0 00 74 5 3 0 00

49 8 8 0 00 6 7 4 0 00 56 6 2 0 00

56 6 2 0 00

24 6 5 0 00

56 6 2 0 00

24 6 5 0 00

1 8 0 00 17 9 1 0 00 6 7 4 0 00 24 6 5 0 00

PROBLEM 12B-4. RON’S WHOLESALE CLOTHING COMPANY WORKSHEET FOR YEAR ENDED DECEMBER 31, 2016

Account Titles Cash Petty Cash Accounts Receivable Merchandise Inventory Supplies Prepaid Insurance Store Equipment Acc. Depn., Store Equipment Accounts Payable Income Tax Payable CPP Payable EI Payable Unearned Storage Fees Ron Win, Capital Ron Win, Withdrawals Income Summary Sales Sales Returns and Allowances Sales Discounts Purchases Purchases Discounts Purchases Returns and Allowances Freight-in Salaries Expense Payroll Tax Expense Interest Expense Supplies Expense Insurance Expense Depreciation Expense

Trial Balance Adjustments Dr. Cr. Dr. Cr. 2 6 0 0 00 3 0 00 3 0 0 0 00 3 6 0 0 00 (B) 3 9 5 0 0 0 (A) 3 6 0 0 0 0 2 7 0 00 (C) 2 2 0 00 1 8 0 00 (D) 5 5 00 1 0 0 0 00 4 9 6 00 (E) 1 0 0 00 4 5 9 0 00 5 9 0 00 7 4 00 1 0 0 00 3 5 0 0 0 (F) 1 1 5 00 2 7 3 4 00 1 8 0 0 00 (A) 3 6 0 0 0 0 (B) 3 9 5 0 0 0 19 4 0 0 00 (F) 1 1 5 00 5 6 0 00 4 8 0 00 8 6 0 0 00 2 4 0 00 1 6 0 00 1 0 0 00 6 0 0 0 00 1 9 4 00 3 2 0 00 28 7 3 4 00 28 7 3 4 00 (C) 2 2 0 00 (D) 5 5 00 (E) 1 0 0 00 8 0 4 0 00 8 0 4 0 00

Net Income

12-21

PROBLEM 12B-4. Cont. RON’S WHOLESALE CLOTHING COMPANY WORKSHEET FOR YEAR ENDED DECEMBER 31, 2016 Adjusted Trial Balance Dr. Cr. 2 6 0 0 00 3 0 00 3 0 0 0 00 3 9 5 0 00 5 0 00 1 2 5 00 1 0 0 0 00 5 9 6 00 4 5 9 0 00 5 9 0 00 7 4 00 1 0 0 00 2 3 5 00 2 7 3 4 00 1 8 0 0 00 3 6 0 0 00 3 9 5 0 00 19 5 1 5 00 5 6 0 00 4 8 0 00 8 6 0 0 00 2 4 0 00 1 6 0 00 1 0 0 00 6 0 0 0 00 1 9 4 00 3 2 0 00 2 2 0 00 5 5 00 1 0 0 00 32 7 8 4 00

32 7 8 4 00

Income Statement Dr. Cr.

Balance Sheet Dr. 2 6 0 0 00 3 0 00 3 0 0 0 00 3 9 5 0 00 5 0 00 1 2 5 00 1 0 0 0 00

Cr.

5 9 6 00 4 5 9 0 00 5 9 0 00 7 4 00 1 0 0 00 2 3 5 00 2 7 3 4 00 1 8 0 0 00 3 6 0 0 00

3 9 5 0 00 19 5 1 5 00

5 6 0 00 4 8 0 00 8 6 0 0 00 2 4 0 00 1 6 0 00 1 0 0 00 6 0 0 0 00 1 9 4 00 3 2 0 00 2 2 0 00 5 5 00 1 0 0 00 20 2 2 9 00 3 6 3 6 00 23 8 6 5 00

23 8 6 5 00

12 5 5 5 00

23 8 6 5 00

12 5 5 5 00

8 9 1 9 00 3 6 3 6 00 12 5 5 5 00

PROBLEM 12C-1. a. Net Sales: Sales

- SRA -

$13,730 - $208 - $424 = $13,098

b. Cost of Goods Sold: Beg. Inv. + Net Purch. + Freight-in - End Inv. $1,940

+ $6,057

+ $157

- $1,670

= $6,484

(Net Purchases = Purchases ($6,785) - Purchases Returns and Allowances ($466) Purchases Discounts ($262))

c. Gross Profit: Net Sales - COGS $13,098

- $6,484

= $6,614

d. Net Income: Gross Profit - Operating Expenses $6,614

$1,150

$5,464

12-23

PROBLEM 12C-2. COROCAN TILE COMPANY WORKSHEET FOR YEAR ENDED OCTOBER 31, 2016

Account Titles Cash Petty Cash Accounts Receivable Merchandise Inventory Supplies Prepaid Insurance GST Prepaid Tile Cutting Equipment Accumulated Depreciation, Equipment Accounts Payable GST Collected Income Tax Payable CPP Payable EI Payable Winnie Corocan, Capital Winnie Corocan, Withdrawals Income Summary Sales Sales Returns and Allowances Sales Discounts Purchases Purchases Discounts Purchases Returns and Allowances Freight-in Salaries Expense Payroll Taxes Expense Interest Expense Supplies Expense Insurance Expense Depreciation Expense Advertising Expense Accrued Salaries Payable Net Income

Trial Balance Adjustments Dr. Cr. Dr. Cr. 1 7 1 0 40 2 0 0 00 4 3 1 6 70 13 4 6 7 00 (b)1 1 4 1 6 0 0 (a)1 3 4 6 7 0 0 7 3 3 00 (c) 3 7 5 90 9 1 4 00 (d) 6 0 9 33 7 4 8 52 (f) 2 5 00 7 8 2 0 00 1 7 5 5 55 (e) 1 0 5 3 3 3 16 7 8 2 40 (f) 5 2 5 00 1 6 7 3 58 1 7 7 1 00 2 4 6 20 3 7 3 80 6 3 9 5 44 6 3 3 8 00 (a)1 3 4 6 7 0 0 (b)1 1 4 1 6 0 0 69 0 6 6 73 1 3 8 8 24 7 1 5 42 42 7 7 2 64 8 8 2 30 5 1 2 86 4 2 5 70 15 8 7 0 00 (g) 1 1 1 6 0 0 1 4 2 6 00 6 1 4 24 99 4 5 9 86 99 4 5 9 86 (c) 3 7 5 90 (d) 6 0 9 33 (e) 1 0 5 3 3 3 (f) 5 0 0 00 (g) 1 1 1 6 0 0 28 5 6 2 56 28 5 6 2 56

PROBLEM 12C-2., Cont. COROCAN TILE COMPANY WORKSHEET FOR YEAR ENDED OCTOBER 31, 2016 Adjusted Trial Balance Dr. Cr. 1 7 1 0 40 2 0 0 00 4 3 1 6 70 11 4 1 6 00 3 5 7 10 3 0 4 67 7 7 3 52 7 8 2 0 00 2 8 0 8 88 17 3 0 7 40 1 6 7 3 58 1 7 7 1 00 2 4 6 20 3 7 3 80 6 3 9 5 44 6 3 3 8 00 13 4 6 7 00 11 4 1 6 00 69 0 6 6 73 1 3 8 8 24 7 1 5 42 42 7 7 2 64 8 8 2 30 5 1 2 86 4 2 5 70 16 9 8 6 00 1 4 2 6 00 6 1 4 24 3 7 5 90 6 0 9 33 1 0 5 3 33 5 0 0 00 113 5 7 0 19

Income Statement Dr. Cr.

13 4 6 7 00

Balance Sheet Dr. Cr. 1 7 1 0 40 2 0 0 00 4 3 1 6 70 11 4 1 6 00 3 5 7 10 3 0 4 67 7 7 3 52 7 8 2 0 00 2 8 0 8 88 17 3 0 7 40 1 6 7 3 58 1 7 7 1 00 2 4 6 20 3 7 3 80 6 3 9 5 44 6 3 3 8 00

11 4 1 6 00 69 0 6 6 73

1 3 8 8 24 7 1 5 42 42 7 7 2 64 8 8 2 30 5 1 2 86 4 2 5 70 16 9 8 6 00 1 4 2 6 00 6 1 4 24 3 7 5 90 6 0 9 33 1 0 5 3 33 5 0 0 00

1 1 1 6 00 113 5 7 0 19

80 3 3 3 80 1 5 4 4 09 8 1 8 7 7 89

81 8 7 7 89

33 2 3 6 39

81 8 7 7 89

33 2 3 6 39

1 1 1 6 00 31 6 9 2 30 1 5 4 4 09 3 3 2 3 6 39

12-25

PROBLEM 12C-3. PATEL ANTIQUE CLOCK COMPANY WORKSHEET FOR YEAR ENDED MAY 31, 2017

Account Titles Cash Petty Cash Accounts Receivable Clock Inventory Repair Supplies Prepaid Insurance GST Prepaid Clock Repair Equipment Accumulated Depreciation, Equipment Accounts Payable GST Collected Income Tax Payable CPP Payable EI Payable Mike Patel, Capital Mike Patel, Withdrawals Income Summary Sales Sales Returns and Allowances Sales Discounts Purchases Purchases Discounts Purchases Returns and Allowances Freight-in Salaries Expense Payroll Taxes Expense Advertising Expense Rent Expense Utilities Expense Supplies Expense Insurance Expense Depreciation Expense Accrued Salaries Payable

Trial Balance Adjustments Cr. Dr. Cr. Dr. 7 6 2 40 1 5 0 00 2 7 1 5 96 10 7 6 6 42 (b)1 2 4 8 8 9 2 (a)1 0 7 6 6 4 2 6 2 4 30 (c) 2 4 7 90 7 5 3 76 (d) 5 0 2 51 6 9 6 12 (f) 1 5 00 4 3 0 0 00 1 4 8 0 00 (e) 3 7 0 00 8 6 8 6 92 (f) 3 1 5 00 9 1 2 48 1 1 5 5 40 1 6 7 70 2 7 8 60 5 5 6 6 08 4 3 8 0 00 (a)1 0 7 6 6 4 2 (b)1 2 4 8 8 9 2 57 0 1 4 08 2 6 7 10 1 7 6 42 30 4 8 8 92 2 7 7 44 5 1 2 86 1 0 9 6 33 13 4 7 5 00 (g) 5 2 2 00 1 2 7 6 40 7 2 1 68 (f) 3 0 0 00 2 7 8 8 00 6 1 2 75 76 0 5 1 56 76 0 5 1 56 (c) (d) (e)

2 4 7 90 5 0 2 51 3 7 0 00 (g) 25 2 1 2 75

Net Income

5 2 2 00 25 2 1 2 75

PROBLEM 12C-3., Cont. PATEL ANTIQUE CLOCK COMPANY WORKSHEET FOR YEAR ENDED MAY 31, 2017 Adjusted Trial Balance Dr. Cr. 7 6 2 40 1 5 0 00 2 7 1 5 96 12 4 8 8 92 3 7 6 40 2 5 1 25 7 1 1 12 4 3 0 0 00 1 8 5 0 00 9 0 0 1 92 9 1 2 48 1 1 5 5 40 1 6 7 70 2 7 8 60 5 5 6 6 08 4 3 8 0 00 10 7 6 6 42 12 4 8 8 92 57 0 1 4 08 2 6 7 10 1 7 6 42 30 4 8 8 92 2 7 7 44 5 1 2 86 1 0 9 6 33 13 9 9 7 00 1 2 7 6 40 1 0 2 1 68 2 7 8 8 00 6 1 2 75 2 4 7 90 5 0 2 51 3 7 0 00 89 7 4 7 48

Income Statement Dr. Cr.

10 7 6 6 42

Balance Sheet Dr. Cr. 7 6 2 40 1 5 0 00 2 7 1 5 96 12 4 8 8 92 3 7 6 40 2 5 1 25 7 1 1 12 4 3 0 0 00 1 8 5 0 00 9 0 0 1 92 9 1 2 48 1 1 5 5 40 1 6 7 70 2 7 8 60 5 5 6 6 08 4 3 8 0 00

12 4 8 8 92 57 0 1 4 08

2 6 7 10 1 7 6 42 30 4 8 8 92 2 7 7 44 5 1 2 86 1 0 9 6 33 13 9 9 7 00 1 2 7 6 40 1 0 2 1 68 2 7 8 8 00 6 1 2 75 2 4 7 90 5 0 2 51 3 7 0 00

5 2 2 00 89 7 4 7 48

63 6 1 1 43 6 6 8 1 87 70 2 9 3 30

70 2 9 3 30

26 1 3 6 05

70 2 9 3 30

26 1 3 6 05

5 2 2 00 19 4 5 4 18 6 6 8 1 87 26 1 3 6 05

12-27

PROBLEM 12C-4. GWENDOLYN’S ARCHERY SALES COMPANY WORKSHEET FOR YEAR ENDED APRIL 30, 2016

Account Titles Cash Petty Cash Accounts Receivable Merchandise Inventory Supplies on Hand Prepaid Insurance GST Prepaid Equipment Accumulated Depreciation, Equipment Accounts Payable GST Collected Income Tax Payable CPP Payable EI Payable Gwen Sterling, Capital Gwen Sterling, Withdrawals Income Summary Sales Sales Returns and Allowances Sales Discounts Purchases Purchases Discounts Purchases Returns and Allowances Freight-in Salaries Expense Payroll Taxes Expense Advertising Expense Rent Expense Utilities Expense

Trial Balance Adjustments Dr. Cr. Dr. Cr. 2 4 6 7 93 7 5 00 7 6 4 82 17 3 6 8 44 (b)2 6 4 0 7 3 0 (a)1 7 3 6 8 4 4 8 9 6 26 (c) 4 8 3 58 1 1 5 8 20 (d) 6 2 6 80 1 4 5 8 76 (f) 5 50 8 9 7 5 00 5 7 6 2 14 (e) 1 2 1 7 8 6 21 4 7 9 50 (f) 1 1 5 50 2 4 4 4 70 9 7 4 70 3 6 7 12 1 9 0 08 11 3 7 3 06 8 4 5 0 00 (a)1 7 3 6 8 4 4 (b)2 6 4 0 7 3 0 78 4 2 2 76 4 6 7 13 4 7 2 38 56 3 8 1 58 7 8 2 40 1 3 2 8 37 3 7 6 82 14 7 6 2 80 (g) 1 6 8 0 0 0 1 8 1 2 61 2 5 7 2 84 3 7 2 0 00 9 4 4 26 (f) 1 1 0 00 123 1 2 4 83 123 1 2 4 83

Supplies Expense Insurance Expense Depreciation Expense Accrued Salaries Payable

Net Income

(g) 1 6 8 0 0 0 47 8 9 9 48

PROBLEM 12C-4., Cont. GWENDOLYN’S ARCHERY SALES COMPANY WORKSHEET FOR YEAR ENDED APRIL 30, 2016 Adjusted Trial Balance Dr. Cr. 2 4 6 7 93 7 5 00 7 6 4 82 2 6 4 0 7 30 4 1 2 68 5 3 1 40 1 4 6 4 26 8 9 7 5 00 6 9 8 0 00 21 5 9 5 00 2 4 4 4 70 9 7 4 70 3 6 7 12 1 9 0 08 11 3 7 3 06 8 4 5 0 00 17 3 6 8 44 26 4 0 7 30 78 4 2 2 76 4 6 7 13 4 7 2 38 56 3 8 1 58 7 8 2 40 1 3 2 8 37 3 7 6 82 16 4 4 2 80 1 8 1 2 61 2 5 7 2 84 3 7 2 0 00 1 0 5 4 26 4 8 3 58 6 2 6 80 1 2 1 7 86 152 5 4 5 49

Income Statement Dr. Cr.

Balance Sheet Dr. 2 4 6 7 93 7 5 00 7 6 4 82 26 4 0 7 30 4 1 2 68 5 3 1 40 1 4 6 4 26 8 9 7 5 00

Cr.

6 9 8 0 00 21 5 9 5 00 2 4 4 4 70 9 7 4 70 3 6 7 12 1 9 0 08 11 3 7 3 06 8 4 5 0 00 17 3 6 8 44

26 78

4 0 7 30 4 2 2 76

7 8 2 40 3 2 8 37

4 6 7 13 4 7 2 38 56 3 8 1 58

3 7 6 82 16 4 4 2 80 1 8 1 2 61 2 5 7 2 84 3 7 2 0 00 1 0 5 4 26 4 8 3 58 6 2 6 80 1 2 1 7 86

1 6 8 0 00 152 5 4 5 49

102 9 9 7 10 3 9 4 3 73 106 9 4 0 83

106 9 4 0 83

49 5 4 8 39

106 9 4 0 83

49 5 4 8 39

1 6 8 0 00 45 6 0 4 66 3 9 4 3 73 49 5 4 8 39

12-29

SOLUTIONS TO ON-THE-JOB TRAINING, #T-1. Cash Professional Fees + Increase for Accrued Fees + Reduction in Unearned Fees Total Professional Fees on an Accrual Basis

$50,000 1,100 $51,100 1,950 $53,050

SOLUTIONS TO ON-THE-JOB TRAINING, #T-2. SITUATION 1. $100,000; $ 60,000; -$ 20,000 (Net Loss) 2. $240,000; $180,000 3. $220,000; $260,000 4. $460,000; $300,000; $ 20,000 5. $180,000; $200,000; $100,000 6. $180,000; $120,000; $ 80,000 7. $400,000; $240,000; $180,000 8. $100,000; $160,000; $120,000 Sales = Cost of Goods Sold plus Gross Profit. Beginning Inventory = Cost of goods on hand at the beginning of an accounting period. Ending Inventory plus Cost of Goods Sold minus Purchases. Purchases = Goods purchased during the current accounting period. Ending Inventory minus Beginning Inventory plus Cost of Goods Sold. Ending Inventory = Cost of goods on hand at the end of the accounting period. The Cost of Goods Sold minus Purchases minus Beginning Inventory. Cost of Goods Sold = Beginning Inventory plus Purchases minus Ending Inventory. Gross Profit = Sales minus Cost of Goods Sold (before operating expenses). Expense = Gross Profit minus Net Income or plus Net Loss (expenses not related to the Sales). Net Income or Loss = Sales minus Cost of Goods Sold minus Expense OR Gross Profit minus Expense.

12-31

Cash Petty Cash Accounts Receivable Prepaid Rent Supplies Prepaid Insurance Merchandise Inventory Computer Shop Equipment Accumulated Depreciation, Computer Shop Equipment Office Equipment Accumulated Depreciation, Office Equipment Accounts Payable Wages Payable Due to CRA Unearned Service Revenue HST Payable HST Recoverable T. Freedman, Capital T. Freedman, Withdrawals Income Summary Service Revenue Sales Sales Returns and Allowances Sales Discounts Service Contracts Sold Advertising Expense Cleaning Expense Rent Expense Utilities Expense Phone Expense Supplies Expense Insurance Expense Postage Expense Depreciation Expense, Computer Shop Equipment Depreciation Expense, Office Equipment Miscellaneous Expense Wages Expense Payroll Benefits Expense Bad Debt Expense Purchases Purchases Returns and Allowances Purchases Discounts Freight In Totals

CONTINUING PROBLEM

9 9 00

8 2 2 18 2 4 5 80

96 8 0 6 0 0 146 4 4 8 0 0

7 4 0 6 00

4 8 0 0 00 3 1 4 9 83

1 1 6 5 82 264 1 5 8 8 1 264 1 5 8 8 1

68 4 1 4 0 6

1 4 3 12 77 9 6 4 8 9 8 3 5 37

1 7 6 11

2 7 1 6 37 9 0 0 00 2 4 0 0 00 2 4 8 2 15 1 9 8 0 04 2 8 6 00

1 3 5 0 00 5 9 0 00

18 7 3 5 0 0

2 8 1 8 64

1 5 0 0 00

Cr.

2 0 00 4 3 6 2 00

Trial Balance Dr. 39 5 7 4 72 1 0 0 00 21 6 2 0 0 0 2 4 0 0 00 1 8 6 0 52 1 8 4 6 00 7 1 0 0 00 5 2 0 0 00

Adjustments Cr.

2 0 0 00

8 6 1 00

30 8 6 0 6 9

(B) 8 6 1 0 0 (B) 2 0 0 0 0

(D) 1 3 3 0 5 2 (E) 7 6 9 1 7

68 4 1 4 0 6

2 7 1 6 37 9 0 0 00 4 8 0 0 00 2 4 8 2 15 1 9 8 0 04 1 6 1 6 52 7 6 9 17 1 7 6 11 8 6 1 00 2 0 0 00 1 4 3 12 77 9 6 4 8 9 8 3 5 37

1 3 5 0 00 5 9 0 00

18 7 3 5 0 0 7 1 0 0 00

2 8 1 8 64

1 5 0 0 00

Dr. 39 5 7 4 72 1 0 0 00 21 6 2 0 0 0 0 00 5 3 0 00 1 0 7 6 83 17 4 0 0 0 0 5 2 0 0 00

8 2 2 18 2 4 5 80

8 0 0 00

17 4 0 0 0 0 96 8 0 6 0 0 146 4 4 8 0 0

7 4 0 6 00

4 0 0 0 00 3 1 4 9 83

2 2 0 00 4 3 6 2 00

9 6 0 00

Cr.

Adjusted Trial Balance

68 4 1 4 0 6

2 7 1 6 37 9 0 0 00 4 8 0 0 00 2 4 8 2 15 1 9 8 0 04 1 6 1 6 52 7 6 9 17 1 7 6 11 8 6 1 00 2 0 0 00 1 4 3 12 77 9 6 4 8 9 8 3 5 37

1 3 5 0 00 5 9 0 00

7 1 0 0 00

8 2 2 18 2 4 5 80

8 0 0 00

17 4 0 0 0 0 96 8 0 6 0 0 146 4 4 8 0 0

Cr.

Income Statement Dr.

18 7 3 5 0 0

2 8 1 8 64

1 5 0 0 00

7 4 0 6 00

4 0 0 0 00 3 1 4 9 83

2 2 0 00 4 3 6 2 00

9 6 0 00

Cr.

Balance Sheet Dr. 39 5 7 4 72 1 0 0 00 21 6 2 0 0 0 0 00 5 3 0 00 1 0 7 6 83 17 4 0 0 0 0 5 2 0 0 00

1 1 6 5 82 1 1 6 5 82 30 8 6 0 6 9 282 6 1 9 8 1 282 6 1 9 8 1 174 0 6 4 6 2 262 5 2 1 9 8 108 5 5 5 1 9 20 0 9 7 8 3 88 4 5 7 3 6 88 4 5 7 3 6 262 5 2 1 9 8 262 5 2 1 9 8 108 5 5 5 1 9 108 5 5 5 1 9

(F) 8 0 0 0 0

(A) 7 1 0 0 0 0 (A)17 4 0 0 0 0

(F) 8 0 0 0 0

(B)

Dr.

PRECISION COMPUTER CENTRE - WORKSHEET JULY 31, 2017

13 Completion of the Accounting Cycle For a Merchandising Company

ANSWERS TO DISCUSSION QUESTIONS AND CRITICAL THINKING/ETHICAL CASE 1. 2.

3. 4.

5. 6. 7.

8. 9. 10.

Income Statement. Beginning Inventory + Net Purchases + Freight-In – Ending Inventory = Cost of Goods Sold Selling and Administrative Expenses Current Assets—Cash and assets converted into cash or used during normal operating cycle of the company or one year, whichever is longer. Capital Assets—Long-lived assets used in the production or sale of other assets or services. Time period it takes a company to buy and sell merchandise and then collect accounts receivable. To bring ledger up to date. a) Close all the balances on the income statement credit column of the worksheet (except Income Summary) by debits, and credit the total to the Income Summary account. b) Close balance of accounts in the income statement debit column of the worksheet (except Income Summary) by credits, and debit the total to the Income Summary account. c) Transfer the balance of Income Summary to Owner’s Capital. d) Transfer the balance of Owner’s Withdrawals to Owner’s Capital account. Disagree. Only permanent accounts. Not mandatory. Reversing entries helps avoid potential errors involving specified adjusting entries. Done on the first day of the new fiscal year after adjusting and closing entries have been completed. The question in this case is whether Janet should only show the income statement to the Canadian National Bank. I feel that, when a company applies for a loan, the bank should be able to know the overall financial stability of the company. In this case, Janet’s action is obstructing the bank from making a reasonable assessment of the company. Thus, it seems unethical for Janet to only report the income statement and not the balance sheet to the bank. In any event, you can be sure that the bank loan officer will insist that Janet supply all relevant statements so her failure to supply the balance sheet may in fact be self-defeating.

13-1

SOLUTIONS TO CLASSROOM DEMONSTRATION EXERCISES 1.

Gross Sales - Sales Returns & Allowances - Sales Discounts = Net Sales $180 $5 $2 = $173

Beginning Inventory + Net Purchases + Freight-In - Ending Inventory = Cost of Goods Sold

$20 50 5 -15 $60

Net Sales - Cost of Goods Sold = Gross Profit - Operating Expenses = Net Income

$173 -60 $113 -15 $98

(a)

1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

a c a c b d c b c a

(b)

a. Date 2015 Jan 1

Post Ref.

Account Title and Description Accrued Salaries Payable Salaries Expense To reverse adjusting entry Salary Expense Cash To record salaries paid

Debit

Credit

3 0 0 00 3 0 0 00 9 0 0 00 9 0 0 00

$600

SOLUTIONS TO EXERCISES—SET A EXERCISE 13-1A. COST OF GOODS SOLD Merchandise Inventory 12/01/17 Purchases Less: Purchases Returns & Allowances Purchases Discounts

$4,000 $58,000 $ 1,100 900

Net Purchases

2,000 56,000

Add: Freight-In Net Cost of Purchases Cost of Goods Available for Sale Less: Merch. Inv. 12/31/17 Cost of Goods Sold

300

EXERCISE 13-2A. a.

Accrued Salaries Payable: Liability, Current Liability, Balance Sheet

Accounts Payable: Liability, Current Liability, Balance Sheet

Mortgage Payable: Liability, Long-Term Liability, Balance Sheet

Unearned Legal Fees: Liability, Current Liability, Balance Sheet

Income Tax Payable: Liability, Current Liability, Balance Sheet

Office Equipment: Asset, Capital Asset, Balance Sheet

Land: Asset, Capital Asset, Balance Sheet

13-2A

56,300 60,300 9,000 $51,300

EXERCISE 13-3A.

A. SLOW CO.

2016 Dec

GENERAL JOURNAL 31 Sales Purchases Returns and Allowances Purchases Discounts Income Summary 31 Income Summary Sales Returns and Allowances Sales Discounts Purchases Salaries Expense Insurance Expense Utilities Expense Plumbing Expense Advertising Expense Depreciation Expense, Office Equipment

Page 8 5 5 2 0 00 3 4 00 5 1 00 5 6 0 5 00 4 8 8 8 00 2 2 3 00 1 0 8 00 2 6 2 8 00 1 0 8 3 00 6 9 6 00 4 8 00 5 7 00 1 5 00 3 0 00 8 0 5 00

31 Income Summary A. Slow, Capital

8 0 5 00

EXERCISE 13-4A. A. SLOW COMPANY BALANCE SHEET DECEMBER 31, 2016 Current Assets Cash Merchandise Inventory Prepaid Advertising Prepaid Insurance Total Current Assets Capital Assets Office Equipment Less: Accumulated Depreciation, Office Equipment Total Plant & Equipment Total Assets

$ 1 9 3 00 4 5 0 00 5 6 1 00 3 0 00 $1 2 3 4 0 0 1 0 8 0 00 2 1 0 00 8 7 0 00 $2 1 0 4 0 0

EXERCISE 13-5A. 2016 Dec

31 Salaries Expense Accrued Salaries Payable To record accrued salaries Salaries Expense 26,000 300

3 0 0 00 3 0 0 00

Accrued Salaries Payable 300

13-3A

SOLUTIONS TO EXERCISES—SET A, Cont. EXERCISE 13-5., Cont. 2017 Jan

1 Accrued Salaries Payable Salaries Expense To reverse adjusting entry

3 0 0 00 3 0 0 00

Salaries Expense 300

Accrued Salaries Payable 300 300

2017 Feb

Salaries Expense Payable Cash To record salaries paid

6 0 0 0 00 6 0 0 0 00

Salaries Expense 6,000 300

Cash 15,000

6,000

SOLUTIONS TO EXERCISES—SET B EXERCISE 13-1B. COST OF GOODS SOLD Merchandise Inventory 12/01/17 Purchases Less: Purchases Returns & Allowances Purchases Discounts

$7,600 $61,000 $ 1,300 800

Net Purchases Add: Freight-In Net Cost of Purchases Cost of Goods Available for Sale Less: Merch. Inv. 12/31/17 Cost of Goods Sold

2,100 58,900 400

EXERCISE 13-2B. a.

Mortgage Payable (current portion): Liability, Current Liability, Balance Sheet

Accounts Receivable: Asset, Current Asset, Balance Sheet

Rent Paid in Advance: Asset, Current Asset

Unearned Accounting Fees: Liability, Current Liability, Balance Sheet

CPP Payable: Liability, Current Liability, Balance Sheet

Vehicles: Asset, Capital Asset, Balance Sheet

Accumulated Depreciation, Vehicles: Contra-Asset, Capital Asset, Balance Sheet

13-4B

59,300 66,900 9,500 $57,400

EXERCISE 13-3B. 2016 Dec

A. SLOW CO. GENERAL JOURNAL

Page 8

31 Sales Purchases Returns and Allowances Purchases Discounts Income Summary 31 Income Summary Sales Returns and Allowances Sales Discounts Purchases Salaries Expense Insurance Expense Utilities Expense Plumbing Expense Advertising Expense Depreciation Expense, Office Equipment

7 7 2 0 00 3 0 4 00 2 8 0 00

31 Income Summary A. Slow, Capital

1 4 3 9 00

8 3 0 4 00 6 8 6 5 00 3 6 4 00 2 7 7 00 3 7 2 6 00 1 5 7 6 00 5 7 8 00 1 3 5 00 8 8 00 5 6 00 6 5 00

1 4 3 9 00

EXERCISE 13-4B. A. SLOW COMPANY BALANCE SHEET DECEMBER 31, 2016 Current Assets Cash Merchandise Inventory Prepaid Advertising Prepaid Insurance Total Current Assets Capital Assets Office Equipment Less: Accumulated Amortization, Office Equipment Total Capital Assets Total Assets

$ 2 0 3 00 6 5 0 00 6 8 0 00 3 6 0 00 $1 8 9 3 0 0 1 9 8 0 00 3 6 0 00 1 6 2 0 00 $3 5 1 3 0 0

13-5B

SOLUTIONS TO EXERCISES—SET B, Cont. EXERCISE 13-5B. 2016 Dec

31 Salaries Expense Accrued Salaries Payable To record accrued salaries

7 0 0 00

Salaries Expense 29,000 700

Accrued Salaries Payable 700

7 0 0 00

2017 Jan

1 Accrued Salaries Payable Salaries Expense To reverse adjusting entry Salaries Expense 700

7 0 0 00 7 0 0 00

Accrued Salaries Payable 700 700

2017 Feb

3 Salaries Expense Cash To record salaries paid Salaries Expense 7,500 700

13-6B

7 5 0 0 00 7 5 0 0 00

Cash 16,500

7,500

PROBLEM 13A-1. PORTER’S PANTS CO. INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2015 Revenue: Gross Sales Less: Sales Returns and Allow. Sales Discounts Net Sales Cost of Goods Sold: Merchandise Inventory, 1/1/15 Purchases Less: Purchases Ret. and Allow. Purchases Discounts Net Purchases Add: Freight-in Net Cost of Purchases Cost of Goods Available for Sale Less: Merch. Inv., 12/31/15 Cost of Goods Sold Gross Profit Operating Expenses: Salaries Expense Insurance Expense Advertising Expense Rent Expense Depn. Exp., Store Equipment Total Operating Expenses Net Income from Operations Other Income: Rental Income Net Income

$2 8 0 0 0 0 $ 1 1 9 00 6 4 00

1 8 3 00 2 6 1 7 00

3 7 0 00 $ 8 7 0 00 $ 1 6 7 00 1 2 9 00

2 9 6 00 5 7 4 00 1 0 2 00 6 7 6 00 1 0 4 6 00 2 6 0 00 7 8 6 00 1 8 3 1 00

3 0 0 00 2 0 0 00 1 5 5 00 2 1 5 00 2 0 0 00 1 0 7 0 00 7 6 1 00

2 0 0 00 $ 9 6 1 00

13-7

PROBLEM 13A-2. JAMES COMPANY STATEMENT OF OWNER’S EQUITY FOR THE YEAR ENDED DECEMBER 31, 2017 H. James, Capital, 1/1/17 Less: Net Loss Less: Withdrawals Decrease in Capital H. James, Capital, 12/31/17

13-8

$7 4 0 0 0 0 $3 7 1 0 0 0 1 0 0 00 3 8 1 0 00 $3 5 9 0 0 0

PROBLEM 13A-2., Cont. JAMES COMPANY BALANCE SHEET DECEMBER 31, 2017 Assets Current Assets: Cash Petty Cash Accounts Receivable Merchandise Inventory Supplies Prepaid Insurance Total Current Assets

$8 5 0 0 0 0 9 0 00 1 3 5 0 00 4 0 0 0 00 3 2 5 00 5 0 0 00 $14 7 6 5 0 0

Capital Assets Store Equipment Less: Accumulated Depreciation, Store Equipment Automobile Less: Accumulated Depreciation, Auto Total Assets

$2 8 0 0 0 0 7 0 0 00 1 7 0 0 00 2 2 5 00

2 1 0 0 00 1 4 7 5 00

3 5 7 5 00 $18 3 4 0 0 0

Liabilities Current Liabilities: Accounts Payable Accrued Salaries Payable Taxes Payable Unearned Rent Mortgage Payable Total Current Liabilities Long-Term Liabilities: Mortgage Payable Total Liabilities

$2 8 0 0 0 0 6 0 0 00 2 4 0 0 00 8 5 0 0 00 2 0 0 00 $14 5 0 0 0 0

2 5 0 00 $14 7 5 0 0 0 Owner’s Equity

H. James, Capital Total Liabilities and Owner’s Equity

3 5 9 0 00 $18 3 4 0 0 0

13-9

PROBLEM 13A-3. JAY’S SUPPLIES WORKSHEET FOR THE YEAR ENDED DECEMBER 31, 2016 Trial Balance

Account Titles Cash Accounts Receivable Merchandise Inventory Prepaid Insurance Equipment Acc. Depn., Equipment Accounts Payable Unearned Training Fees Mortgage Payable P. Jay, Capital P. Jay, Withdrawals Income Summary Sales Sales Returns and Allowances Sales Discounts Purchases Purchase Returns and Allowances Purchase Discounts Freight-in Advertising Expense Rent Expense Salaries Expense

2 3 11 1 3

Cr.

Dr.

Cr.

(B)1 0 4 0 0 0 0 (A)1 1 0 0 0 0 0 (E) 5 0 0 00 1 5 2 1 10

0 8 0 00 0 8 0 00 1 2 0 0 0 (C) 2 0 0 00 5 6 0 00

(D)

4 0 0 00

3 2 0 00

4 2 8 0 00 (A)1 1 0 0 0 0 0 (B)1 0 4 0 0 0 0 95 8 0 0 00 3 2 0 0 00 2 6 0 0 00 63 6 0 0 00 13 6 0 0 00 3 2 0 0 00 2 11 10 13 132

Training Fees Earned Depn. Exp., Equipment Insurance Expense Net Income

13-10

Dr. 0 0 0 00 0 0 0 00 0 0 0 00 8 8 0 00 4 0 0 00

Adjustments

6 8 0 00 4 0 0 00 0 0 0 00 6 0 0 00 6 4 0 00 132 6 4 0 00 (C) (D) (E)

4 0 0 00 5 0 0 00 22 6 2 0 00

3 2 0 00

22 6 2 0 00

PROBLEM 13A-3., Cont. JAY’S SUPPLIES WORKSHEET FOR THE YEAR ENDED DECEMBER 31, 2016 Adjusted Trial Balance Dr. Cr. 2 0 0 0 00 3 0 0 0 00 10 4 0 0 00 1 3 8 0 00 3 4 0 0 00 1 4 8 0 00 5 0 8 0 00 1 8 0 0 00 1 2 0 0 00 10 5 6 0 00 4 2 8 0 00 11 0 0 0 00 10 4 0 0 00 95 8 0 0 00 3 2 0 0 00 2 6 0 0 00 63 6 0 0 00 13 6 0 0 00 3 2 0 0 00 2 6 8 0 00 11 4 0 0 00 10 0 0 0 00 13 6 0 0 00

Income Statement Dr. Cr.

143 4 4 0 00

Dr. 2 0 0 0 00 3 0 0 0 00 10 4 0 0 00 1 3 8 0 00 3 4 0 0 00

Cr.

1 4 8 0 00 5 0 8 0 00 1 8 0 0 00 1 2 0 0 00 10 5 6 0 00 4 2 8 0 00 11 0 0 0 00

10 4 0 0 00 95 8 0 0 00

3 2 0 0 00 2 6 0 0 00 63 6 0 0 00 13 6 0 0 00 3 2 0 0 00 2 6 8 0 00 11 4 0 0 00 10 0 0 0 00 13 6 0 0 00

3 2 0 00 4 0 0 00 5 0 0 00 143 4 4 0 00

Balance Sheet

3 2 0 00 4 0 0 00 5 0 0 00 118 9 8 0 00 4 3 4 0 00 123 3 2 0 00

123 3 2 0 00

24 4 6 0 00

123 3 2 0 00

24 4 6 0 00

20 1 2 0 00 4 3 4 0 00 24 4 6 0 00

13-11

PROBLEM 13A-3., Cont. JAY’S SUPPLIES INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2016 Revenue: Gross Sales Less: Sales Returns and Allowances Sales Discounts Net Sales Cost of Goods Sold: Merchandise Inventory, 1/1/16 Purchases Less: Purchases Returns and Allowances Purchases Discounts Net Purchases Add: Freight-in Net Cost of Purchases Cost of Goods Available for Sale Less: Merchandise Inventory, 12/31/16 Cost of Goods Sold Gross Profit Operating Expenses: Advertising Expenses Rent Expense Salaries Expense Depreciation Expense, Equipment Insurance Expense Total Operating Expenses Net Income From Operations Other Income: Training Fees Earned Net Income

13-12

$9 5 8 0 0 00 $3 2 0 0 00 2 6 0 0 00

5 8 0 0 00 9 0 0 0 0 00

1 1 0 0 0 00 $6 3 6 0 0 00 $1 3 6 0 0 00 3 2 0 0 00

1 6 8 0 0 00 4 6 8 0 0 00 2 6 8 0 00 4 9 4 8 0 00 6 0 4 8 0 00 1 0 4 0 0 00 5 0 0 8 0 00 3 9 9 2 0 00

1 1 4 0 0 00 1 0 0 0 0 00 1 3 6 0 0 00 4 0 0 00 5 0 0 00 3 5 9 0 0 00 4 0 2 0 00

3 2 0 00 $4 3 4 0 00

PROBLEM 13A-3., Cont. JAY’S SUPPLIES STATEMENT OF OWNER’S EQUITY FOR THE YEAR ENDED DECEMBER 31, 2016 P. Jay, Capital, 1/1/16 Net Income Less Withdrawals Increase in Capital P. Jay, Capital, 12/31/16

$1 0 5 6 0 0 0 $4 3 4 0 0 0 4 2 8 0 00 6 0 00 $1 0 6 2 0 0 0

13-13

PROBLEM 13A-3., Cont. JAY’S SUPPLIES BALANCE SHEET DECEMBER 31, 2016 Assets Current Assets: Cash Accounts Receivable Merchandise Inventory Prepaid Insurance Total Current Assets

$2 0 0 0 0 0 3 0 0 0 00 10 4 0 0 00 1 3 8 0 00 $1 6 7 8 0 00

Capital Assets: Equipment Less Accumulated Depreciation Total Assets

3 4 0 0 00 1 4 8 0 00

1 9 2 0 00 $1 8 7 0 0 00

Liabilities Current Liabilities: Accounts Payable Unearned Training Fees Mortgage Payable Total Current Liabilities Long Term Liabilities: Mortgage Payable Total Liabilities

$5 0 8 0 0 0 1 8 0 0 00 8 0 0 00 $7 6 8 0 0 0

4 0 0 00 $8 0 8 0 00 Owner’s Equity

P. Jay, Capital, December 31, 2016 Total Liabilities and Owner’s Equity

13-14

1 0 6 2 0 00 $1 8 7 0 0 00

PROBLEM 13A-3., Cont. JAY’S SUPPLIES GENERAL JOURNAL Date 2016 Dec

Account Title and Description Adjusting Entries 31 Income Summary Merchandise Inventory 31 Merchandise Inventory Income Summary 31 Unearned Training Fees Training Fees Earned 31 Depreciation Expense, Equipment Accumulated Depreciation, Equipment 31 Insurance Expense Prepaid Insurance Closing Entries 31 Sales Training Fees Earned Purchases Returns and Allowances Purchases Discounts Income Summary 31 Income Summary Sales Returns and Allowances Sales Discounts Purchases Freight-in Advertising Expense Rent Expense Salaries Expense Depreciation Expense, Equipment Insurance Expense 31 Income Summary P. Jay, Capital 31 P. Jay, Capital P. Jay, Withdrawals

Page 2 Post Ref.

Dr.

Cr.

11 0 0 0 00 11 0 0 0 00 10 4 0 0 00 10 4 0 0 00 3 2 0 00 3 2 0 00 4 0 0 00 4 0 0 00 5 0 0 00 5 0 0 00 95 8 0 0 00 3 2 0 00 13 6 0 0 00 3 2 0 0 00 112 9 2 0 00 107 9 8 0 00 3 2 0 0 00 2 6 0 0 00 63 6 0 0 00 2 6 8 0 00 11 4 0 0 00 10 0 0 0 00 13 6 0 0 00 4 0 0 00 5 0 0 00 4 3 4 0 00 4 3 4 0 00 4 2 8 0 00 4 2 8 0 00

13-15

PROBLEM 13A-4. CALLAHAN LUMBER WORKSHEET FOR THE YEAR ENDED DECEMBER 31, 2016 Account Titles Cash Accounts Receivable Merchandise Inventory Lumber Supplies Prepaid Insurance Lumber Equipment Acc. Depn., Lumber Equipment Accounts Payable J. Callahan, Capital J. Callahan, Withdrawals Income Summary Sales Sales Returns and Allowances Purchases Purchases Discounts Purchases Returns and Allowances Wages Expense Advertising Expense Rent Expense Lumber Supplies Expense Insurance Expense Depreciation Expense, Lumber Equipment Accrued Wages Payable Net Income

13-16

Trial Balance Adjustments Cr. Dr. Cr. Dr. 1 6 8 0 00 9 6 0 00 4 5 5 0 00 (B) 5 4 2 0 0 0 (A) 4 5 5 0 0 0 2 6 9 00 (C) 1 5 9 00 2 1 8 00 (D) 1 2 0 00 3 0 0 0 00 4 9 0 00 (E) 3 0 0 00 1 1 6 0 00 7 3 5 2 00 3 0 0 0 00 (A) 4 5 5 0 0 0 (B) 5 4 2 0 0 0 22 8 0 0 00 2 0 0 00 14 8 0 0 00 2 8 5 00 3 0 0 00 2 4 8 0 00 (F) 1 2 5 00 4 0 0 00 8 3 0 00 32 3 8 7 00 32 3 8 7 00 (C) 1 5 9 00 (D) 1 2 0 0 0 (E) 3 0 0 00 (F) 1 2 5 00 10 6 7 4 00 10 6 7 4 00

PROBLEM 13A-4., Cont. CALLAHAN LUMBER WORKSHEET - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2016 Adjusted Trial Balance Dr. Cr. 1 6 8 0 00 9 6 0 00 5 4 2 0 00 1 1 0 00 9 8 00 3 0 0 0 00 7 9 0 00 1 1 6 0 00 7 3 5 2 00 3 0 0 0 00 4 5 5 0 00 5 4 2 0 00 22 8 0 0 00 2 0 0 00 14 8 0 0 00 2 8 5 00 3 0 0 00 2 6 0 5 00 4 0 0 00 8 3 0 00 1 5 9 00 1 2 0 00 3 0 0 00 38 2 3 2 00

Income Statement Dr. Cr.

4 5 5 0 00

Balance Sheet Dr. Cr. 1 6 8 0 00 9 6 0 00 5 4 2 0 00 1 1 0 00 9 8 00 3 0 0 0 00 7 9 0 00 1 1 6 0 00 7 3 5 2 00 3 0 0 0 00

5 4 2 0 00 22 8 0 0 00

2 0 0 00 14 8 0 0 00 2 8 5 00 3 0 0 00 2 6 0 5 00 4 0 0 00 8 3 0 00 1 5 9 00 1 2 0 00 3 0 0 00

1 2 5 00 38 2 3 2 00

23 9 6 4 00 4 8 4 1 00 28 8 0 5 00

28 8 0 5 00

14 2 6 8 00

28 8 0 5 00

14 2 6 8 00

1 2 5 00 9 4 2 7 00 4 8 4 1 00 14 2 6 8 00

13-17

PROBLEM 13A-4., Cont. CALLAHAN LUMBER INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2016 Revenue: Gross Sales Less: Sales Returns and Allowancces Net Sales Cost of Goods Sold: Merchandise Inventory, 1/1/16 Purchases Less: Purchases Discounts Purchases Returns and Allowances Net Cost of Purchases Cost of Goods Available for Sale Less: Merchandise Inventory, 12/31/16 Cost of Goods Sold Gross Profit Operating Expenses: Wages Expense Advertising Expense Rent Expense Lumber Supplies Expense Insurance Expense Depreciation Expense, Equipment Total Operating Expenses Net Income from Operations

13-18

$2 2 8 0 0 00 2 0 0 00 2 2 6 0 0 00

$4 5 5 0 00 $14 8 0 0 00 $ 2 8 5 00 3 0 0 00

5 8 5 00 1 4 2 1 5 00 1 8 7 6 5 00 5 4 2 0 00 1 3 3 4 5 00 9 2 5 5 00

2 6 0 5 00 4 0 0 00 8 3 0 00 1 5 9 00 1 2 0 00 3 0 0 00 4 4 1 4 00 $4 8 4 1 00

PROBLEM 13A-4., Cont. CALLAHAN LUMBER STATEMENT OF OWNER’S EQUITY FOR THE YEAR ENDED DECEMBER 31, 2016 J. Callahan, Capital, 1/1/16 Net Income Less Withdrawals Increase in Capital J. Callahan, Capital, 12/31/16

$7 3 5 2 0 0 $4 8 4 1 0 0 3 0 0 0 00 1 8 4 1 00 $9 1 9 3 0 0

13-19

PROBLEM 13A-4., Cont. CALLAHAN LUMBER BALANCE SHEET DECEMBER 31, 2016 Assets Current Assets: Cash Accounts Receivable Merchandise Inventory Lumber Supplies Prepaid Insurance Total Current Assets

$1 6 8 0 0 0 9 6 0 00 5 4 2 0 00 1 1 0 00 9 8 00

Capital Assets: Lumber Equipment Less: Accumulated Depreciation, Lumber Equipment Total Assets

3 0 0 0 00 7 9 0 00

Liabilities Current Liabilities: Accounts Payable Accrued Wages Payable Total Current Liabilities Owner’s Equity J. Callahan, Capital, December 31, 2016 Total Liabilities and Owner’s Equity

13-20

$8 2 6 8 0 0

2 2 1 0 00 $1 0 4 7 8 0 0

$1 1 6 0 0 0 1 2 5 00 $1 2 8 5 0 0

9 1 9 3 00 $1 0 4 7 8 0 0

PROBLEM 13A-4., Cont. CALLAHAN LUMBER GENERAL JOURNAL Date 2016 Dec

31 31 31 31 31 31

31 31 2017 Jan 1

Account Title and Description Adjusting Entries Income Summary Merchandise Inventory Merchandise Inventory Income Summary Lumber Supplies Expense Lumber Supplies Insurance Expense Prepaid Insurance Depreciation Expense, Lumber Equipment Accumulated Depreciation, Lumber Equipment Wages Expense Accrued Wages Payable Closing Entries Sales Purchases Discounts Purchases Returns and Allowances Income Summary Income Summary Sales Returns and Allowances Purchases Wages Expense Advertising Expense Rent Expense Lumber Supplies Expense Insurance Expense Depreciation Expense, Lumber Equipment Income Summary J. Callahan, Capital J. Callahan, Capital J. Callahan, Withdrawals Reversing Entry Accrued Wages Payable Wages Expense

Page 2 Post Ref.

Dr.

332

4 5 5 0 00 4 5 5 0 00

112 112

5 4 2 0 00 5 4 2 0 00

332 664

1 5 9 00 1 5 9 00

113 665

1 2 0 00 1 2 0 00

114 663

3 0 0 00 3 0 0 00

122 660

1 2 5 00 1 2 5 00

221

440 551 552

22 8 0 0 00 2 8 5 00 3 0 0 00 23 3 8 5 00

332 332

19 4 1 4 00 2 0 0 00 14 8 0 0 00 2 6 0 5 00 4 0 0 00 8 3 0 00 1 5 9 00 1 2 0 00 3 0 0 00

441 550 660 661 662 664 665 663 332

4 8 4 1 00 4 8 4 1 00

330 330

Cr.

3 0 0 0 00 3 0 0 0 00

331

1 2 5 00 1 2 5 00

13-21

PROBLEM 13A-4., Cont. CALLAHAN LUMBER GENERAL LEDGER NAME: CASH Date 2016 Dec 31 Balance

ACCOUNT NO. Explanation

Post Ref.

Debit

✔

NAME: ACCOUNTS RECEIVABLE Date 2016 Dec 31 Balance

Explanation

Post Ref.

Debit

Post Ref.

Debit

GJ2

5 4 2 0 00

Post Ref.

Debit

13-22

9 6 0 00

DR CR

Credit

DR CR

1 5 9 00

ACCOUNT NO. Post Ref.

Debit

Credit

DR CR

1 2 0 00

✔

GJ2

Explanation

Balance

✔ GJ2

ACCOUNT NO. Post Ref.

✔

Debit

Credit

111

DR CR

ACCOUNT NO.

NAME: LUMBER EQUIPMENT Date 2016 Dec 31 Balance

1 6 8 0 00

4 5 5 0 00

GJ2

Explanation

NAME: PREPAID INSURANCE Date 2016 Dec 31 Balance 31 Adjusting

Credit

✔

Explanation

Balance

ACCOUNT NO.

NAME: LUMBER SUPPLIES Date 2016 Dec 31 Balance 31 Adjusting

Credit

✔

Explanation

DR CR

ACCOUNT NO.

NAME: MERCHANDISE INVENTORY Date 2016 Dec 31 Balance 31 Adjusting 31 Adjusting

Credit

110

112 Balance 4 5 5 0 00 O 5 4 2 0 00 113 Balance 2 6 9 00 1 1 0 00

114 Balance 2 1 8 00 9 8 00

121

DR CR

Balance

3 0 0 0 00

PROBLEM 13A-4., Cont. NAME: ACCUMULATED DEPRECIATION, LUMBER EQUIPMENT Date 2016 Dec 31 Balance 31 Adjusting

Explanation

Post Ref.

Debit

Post Ref.

Debit

Explanation Balance

Post Ref.

Debit

GJ2

Explanation

Debit

1 1 6 0 00

GJ2

Credit

DR CR

Balance

1 2 5 00

Credit

4 8 4 1 00

Cr Cr

ACCOUNT NO. Post Ref.

Debit

Credit

DR CR

3 0 0 0 00

ACCOUNT NO. Post Ref.

Debit

GJ2

4 5 5 0 00

GJ2

19 4 1 4 0 0 4 8 4 1 00

7 3 5 2 00 12 1 9 3 0 0 9 1 9 3 00

Balance 3 0 0 0 00 O

332

DR CR Dr

5 4 2 0 00 23 3 8 5 0 0

GJ2

Credit

Balance

331

GJ2

Explanation

330

DR CR

3 0 0 0 00

✔

Balance Closing

221

GJ2

Explanation

Adjusting Adjusting Closing Closing Closing

Balance

✔

Balance Closing Closing

4 9 0 00 7 9 0 00

DR CR

ACCOUNT NO. Post Ref.

Balance

220

ACCOUNT NO.

NAME: INCOME SUMMARY Date 2016 Dec 31 31 31 31 31

Credit

✔

Balance

NAME: J. CALLAHAN, WITHDRAWALS Date 2016 Dec 31 31

ACCOUNT NO.

NAME: J. CALLAHAN, CAPITAL Date 2016 Dec 31 31 31

DR CR

3 0 0 00

GJ2

Explanation

122

NAME: ACCRUED WAGES PAYABLE Date 2016 Dec 31

Credit

✔

NAME: ACCOUNTS PAYABLE Date 2016 Dec 31

ACCOUNT NO.

Cr Cr Cr Cr

Balance 4 5 5 0 00 8 7 0 00 24 2 5 5 0 0 4 8 4 1 00 O

13-23

PROBLEM 13A-4., Cont. NAME: SALES Date 2016 Dec 31 31

ACCOUNT NO. Explanation

Post Ref.

Debit

GJ2

22 8 0 0 0 0

Explanation

ACCOUNT NO. Post Ref.

Debit

2 0 0 00

Post Ref.

Debit

Explanation

13-24

DR CR

14 8 0 0 0 0

ACCOUNT NO. Post Ref.

Debit

Credit

GJ2

Explanation

Post Ref.

2 8 5 00

ACCOUNT NO. Debit

Credit

GJ2

Explanation

3 0 0 00

Balance Adjusting Closing

ACCOUNT NO. Post Ref.

Debit

Credit

✔ GJ2 GJ2

DR CR Dr

1 2 5 00

2 6 0 5 00

2 0 0 00 O

Balance 14 8 0 0 0 0 O

Balance 2 8 5 00 O

552

DR CR

✔

Balance Closing

Balance

551

DR CR

✔

Balance Closing

22 8 0 0 0 0 O

550

GJ2

NAME: WAGES EXPENSE Date 2016 Dec 31 31 31

Credit

✔

Balance Closing

NAME: PURCHASES RETURNS AND ALLOWANCES Date 2016 Dec 31 31

DR CR

ACCOUNT NO. Explanation

Balance

441

GJ2

NAME: PURCHASES DISCOUNTS Date 2016 Dec 31 31

Credit

✔

Balance Closing

NAME: PURCHASES Date 2016 Dec 31 31

DR CR

✔

Balance Closing

NAME: SALES RETURNS AND ALLOWANCES Date 2016 Dec 31 31

Credit

440

Balance 3 0 0 00 O

660 Balance 2 4 8 0 00 2 6 0 5 00 O

PROBLEM 13A-4., Cont. NAME: ADVERTISING EXPENSE Date 2016 Dec 31 31

Explanation

ACCOUNT NO. Post Ref.

Debit

✔

Balance Closing

4 0 0 00

GJ2

Explanation

ACCOUNT NO. Post Ref.

Debit

Explanation Adjusting Closing

8 3 0 00

ACCOUNT NO.

Post Ref.

Debit

GJ2

3 0 0 00

Explanation Adjusting Closing

Post Ref.

Debit

GJ2

1 5 9 00

Adjusting Closing

Credit

DR CR Dr

1 5 9 00

GJ2

Explanation

DR CR

ACCOUNT NO.

NAME: INSURANCE EXPENSE Date 2016 Dec 31 31

Credit

3 0 0 00

GJ2

NAME: LUMBER SUPPLIES EXPENSE Date 2016 Dec 31 31

DR CR Dr

GJ2

NAME: DEPRECIATION EXPENSE, LUMBER EQUIPMENT Date 2016 Dec 31 31

Credit

✔

Balance Closing

DR CR Dr

NAME: RENT EXPENSE Date 2016 Dec 31 31

Credit

ACCOUNT NO. Post Ref.

Debit

GJ2

1 2 0 00

GJ2

Credit

DR CR Dr

1 2 0 00

661 Balance 4 0 0 00 O

662 Balance 8 3 0 00 O

663 Balance 3 0 0 00 O

664 Balance 1 5 9 00 O

665 Balance 1 2 0 00 O

13-25

PROBLEM 13A-4., Cont. CALLAHAN LUMBER POST-CLOSING TRIAL BALANCE DECEMBER 31, 2016 Cash Accounts Receivable Merchandise Inventory Lumber Supplies Prepaid Insurance Lumber Equipment Accumulated Dpreciation, Lumber Equipment Accounts Payable Accrued Wages Payable J. Callahan, Capital

1 6 8 0 00 9 6 0 00 5 4 2 0 00 1 1 0 00 9 8 00 3 0 0 0 00

11 2 6 8 0 0

13-26

7 9 0 00 1 1 6 0 00 1 2 5 00 9 1 9 3 00 11 2 6 8 0 0

PROBLEM 13B-1. PORTER’S PANTS CO. INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2015 Revenue: Gross Sales Less: Sales Returns and Allow. Sales Discounts Net Sales Cost of Goods Sold: Merchandise Inventory, 1/1/15 Purchases Less: Purchases Ret. and Allow. Purchases Discounts Net Purchases Add: Freight-in Net Cost of Purchases Cost of Goods Available for Sale Less: Merch. Inv., 12/31/15 Cost of Goods Sold Gross Profit Operating Expenses: Salaries Expense Insurance Expense Advertising Expense Rent Expense Depn. Exp., Store Equipment Total Operating Expenses Net Income from Operations Other Income: Rental Income Net Income

$4 1 0 0 0 0 $ 1 4 5 00 1 7 5 00

3 2 0 00 3 7 8 0 00

3 0 0 00 $2 0 0 0 0 0 $ 1 7 5 00 8 5 00

2 6 0 00 1 7 4 0 00 5 0 00 1 7 9 0 00 2 0 9 0 00 2 9 5 00 1 7 9 5 00 1 9 8 5 00

3 6 0 00 2 7 5 00 1 6 5 00 2 2 5 00 1 1 5 00 1 1 4 0 00 8 4 5 00

2 3 0 00 $1 0 7 5 0 0

13-27

PROBLEM 13B-2. JAMES COMPANY STATEMENT OF OWNER’S EQUITY FOR THE YEAR ENDED DECEMBER 31, 2017 H. James, Capital, 1/1/17 Less: Net Loss Withdrawals Decrease in Capital H. James, Capital, 12/31/17

13-28

$1 0 5 0 0 0 0 $2 8 5 6 0 0 4 0 0 0 00 6 8 5 6 00 $3 6 4 4 0 0

PROBLEM 13B-2., Cont. JAMES COMPANY BALANCE SHEET DECEMBER 31, 2017 Assets Current Assets: Cash Petty Cash Accounts Receivable Merchandise Inventory Supplies Prepaid Insurance Total Current Assets

$2 5 0 0 0 0 5 0 00 1 3 0 0 00 4 2 5 0 00 3 4 4 00 6 0 0 00 $9 0 4 4 0 0

Capital Assets: Store Equipment Less: Accumulated Depreciation, Store Equipment Automobile Less: Accumulated Depreciation, Auto Total Assets

$1 8 0 0 0 0 0 7 5 0 00 2 5 0 0 00 5 0 0 00

17 2 5 0 00 2 0 0 0 00

19 2 5 0 00 $2 8 2 9 4 0 0

Liabilities Current Liabilities: Accounts Payable Accrued Salaries Payable Taxes Payable Unearned Rent Mortgage Payable Total Current Liabilities

$3 4 5 0 0 0 1 0 0 00 2 1 0 0 00 11 0 0 0 00 3 0 0 0 00 $1 9 6 5 0 0 0

Long-Term Liabilities: Mortgage Payable Total Liabilities

5 0 0 0 00 24 6 5 0 00

Owner’s Equity H. James, Capital, December 31, 2017 Total Liabilities and Owner’s Equity

3 6 4 4 00 $2 8 2 9 4 0 0

13-29

PROBLEM 13B-3. JAY’S SUPPLIES WORKSHEET FOR THE YEAR ENDED DECEMBER 31, 2016 Account Titles Cash Accounts Receivable Merchandise Inventory Prepaid Insurance Equipment Acc. Depn., Equipment Accounts Payable Unearned Training Fees Mortgage Payable P. Jay, Capital P. Jay, Withdrawals Income Summary Sales Sales Returns and Allowances Sales Discounts Purchases Purchases Returns and Allowances Purchases Discounts Freight-in Advertising Expense Rent Expense Salaries Expense Training Fees Earned Depn. Exp., Equipment Insurance Expense

Trial Balance Adjustments Dr. Cr. Dr. Cr. 3 0 0 0 00 3 0 0 0 00 11 7 0 0 00 (B) 8 0 0 0 0 0 (A)1 1 7 0 0 0 0 1 0 0 0 00 (E) 3 5 0 00 5 0 0 0 00 1 9 0 0 00 (D) 5 0 0 00 2 1 0 0 00 1 4 5 0 0 0 (C) 4 0 0 00 2 4 0 0 00 27 7 5 0 00 4 0 0 0 00 (A)1 1 7 0 0 0 0 (B) 8 0 0 0 0 0 100 8 0 0 00 4 1 0 0 00 2 8 0 0 00 70 0 0 0 00 2 0 0 0 00 1 4 0 0 00 2 7 0 0 00 8 0 0 0 00 8 5 0 0 00 16 0 0 0 00 139 8 0 0 00 139 8 0 0 00 (C) 4 0 0 00 (D) 5 0 0 00 (E) 3 5 0 00 20 9 5 0 00 20 9 5 0 00

Net Loss

13-30

PROBLEM 13B-3., Cont. JAY’S SUPPLIES WORKSHEET FOR THE YEAR ENDED DECEMBER 31, 2016 Adjusted Trial Balance Dr. Cr. 3 0 0 0 00 3 0 0 0 00 8 0 0 0 00 6 5 0 00 5 0 0 0 00 2 4 0 0 00 2 1 0 0 00 1 0 5 0 00 2 4 0 0 00 27 7 5 0 00 4 0 0 0 00 11 7 0 0 00 8 0 0 0 00 100 8 0 0 00 4 1 0 0 00 2 8 0 0 00 70 0 0 0 00 2 0 0 0 00 1 4 0 0 00 2 7 0 0 00 8 0 0 0 00 8 5 0 0 00 16 0 0 0 00

Income Statement Dr. Cr.

11 7 0 0 00

148 3 0 0 00

8 0 0 0 00 100 8 0 0 00

4 1 0 0 00 2 8 0 0 00 70 0 0 0 00 2 0 0 0 00 1 4 0 0 00 2 7 0 0 00 8 0 0 0 00 8 5 0 0 00 16 0 0 0 00

4 0 0 00 5 0 0 00 3 5 0 00 148 3 0 0 00

Balance Sheet Dr. Cr. 3 0 0 0 00 3 0 0 0 00 8 0 0 0 00 6 5 0 00 5 0 0 0 00 2 4 0 0 00 2 1 0 0 00 1 0 5 0 00 2 4 0 0 00 27 7 5 0 00 4 0 0 0 00

4 0 0 00 5 0 0 00 3 5 0 00 124 6 5 0 00 124 6 5 0 00

112 6 0 0 00 12 0 5 0 00 124 6 5 0 00

23 6 5 0 00 12 0 5 0 00 35 7 0 0 00

35 7 0 0 00 35 7 0 0 00

13-31

PROBLEM 13B-3., Cont. JAY’S SUPPLIES INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2016 Revenue: Gross Sales Less: Sales Returns and Allowances Sales Discounts Net Sales Cost of Goods Sold: Merchandise Inventory, 1/1/16 Purchases Less: Purchases Returns and Allowances Purchases Discounts Net Purchases Add: Freight-in Net Cost of Purchases Cost of Goods Available for Sale Less: Merchandise Inventory, 12/31/16 Cost of Goods Sold Gross Profit Operating Expenses: Advertising Expenses Rent Expense Salaries Expense Depreciation Expense, Equipment Insurance Expense Total Operating Expenses Net Loss From Operations Other Income: Training Fees Earned Net Loss

13-32

$1 0 0 8 0 0 0 0 $4 1 0 0 0 0 2 8 0 0 00

6 9 0 0 00 93 9 0 0 00

11 7 0 0 00 $7 0 0 0 0 0 0 $2 0 0 0 0 0 1 4 0 0 00

3 4 0 0 00 66 6 0 0 00 2 7 0 0 00 69 3 0 0 00 81 0 0 0 00 8 0 0 0 00 73 0 0 0 00 20 9 0 0 00

8 0 0 0 00 8 5 0 0 00 16 0 0 0 00 5 0 0 00 3 5 0 00 33 3 5 0 00 12 4 5 0 00

4 0 0 00 $1 2 0 5 0 0 0

PROBLEM 13B-3., Cont. JAY’S SUPPLIES STATEMENT OF OWNER’S EQUITY FOR THE YEAR ENDED DECEMBER 31, 2016 P. Jay, Capital, 1/1/16 Net Loss Less Withdrawals Decrease in Capital P. Jay, Capital, 12/31/16

$2 7 7 5 0 0 0 $1 2 0 5 0 0 0 4 0 0 0 00 16 0 5 0 00 $1 1 7 0 0 0 0

13-33

PROBLEM 13B-3., Cont. JAY’S SUPPLIES BALANCE SHEET DECEMBER 31, 2016 Assets Current Assets: Cash Accounts Receivable Merchandise Inventory Prepaid Insurance Total Current Assets

$3 0 0 0 0 0 3 0 0 0 00 8 0 0 0 00 6 5 0 00

Capital Assets: Equipment Less Accumulated Depreciation Total Assets

5 0 0 0 00 2 4 0 0 00

$1 4 6 5 0 0 0

2 6 0 0 00 $1 7 2 5 0 0 0

Liabilities Current Liabilities: Accounts Payable Unearned Training Fees Mortgage Payable Total Current Liabilities Long Term Liabilities: Mortgage Payable Total Liabilities

$2 1 0 0 0 0 1 0 5 0 00 8 0 0 00 $3 9 5 0 0 0

1 6 0 0 00 5 5 5 0 00 Owner’s Equity

P. Jay, Capital, December 31, 2016 Total Liabilities and Owner’s Equity

13-34

11 7 0 0 00 $1 7 2 5 0 0 0

PROBLEM 13B-3., Cont. JAY’S SUPPLIES GENERAL JOURNAL Date 2016 Dec

31 31 31 31 31

31 31

Account Title and Description Adjusting Entries Income Summary Merchandise Inventory Merchandise Inventory Income Summary Unearned Training Fees Training Fees Earned Depreciation Expense, Equipment Accumulated Depreciation, Equipment Insurance Expense Prepaid Insurance Closing Entries Sales Training Fees Earned Purchases Returns and Allowances Purchases Discounts Income Summary Income Summary Sales Returns and Allowances Sales Discounts Purchases Freight-in Advertising Expense Rent Expense Salaries Expense Depreciation Expense Insurance Expense P. Jay, Capital Income Summary P. Jay, Capital P. Jay, Withdrawals

Page 2 Post

Dr.

Cr.

11 7 0 0 00 11 7 0 0 00 8 0 0 0 00 8 0 0 0 00 4 0 0 00 4 0 0 00 5 0 0 00 5 0 0 00 3 5 0 00 3 5 0 00 100 8 0 0 00 4 0 0 00 2 0 0 0 00 1 4 0 0 00 104 6 0 0 00 112 9 5 0 00 4 1 0 0 00 2 8 0 0 00 70 0 0 0 00 2 7 0 0 00 8 0 0 0 00 8 5 0 0 00 16 0 0 0 00 5 0 0 00 3 5 0 00 12 0 5 0 00 12 0 5 0 00 4 0 0 0 00 4 0 0 0 00

13-35

PROBLEM 13B-4. CALLAHAN LUMBER WORKSHEET FOR THE YEAR ENDED DECEMBER 31, 2016 Account Titles Cash Accounts Receivable Merchandise Inventory Lumber Supplies Prepaid Insurance Lumber Equipment Acc. Depn., Lumber Equipment Accounts Payable J. Callahan, Capital J. Callahan, Withdrawals Income Summary Sales Sales Returns and Allowances Purchases Purchases Discounts Purchases Returns and Allowances Wages Expense Advertising Expense Rent Expense Lumber Supplies Expense Insurance Expense Depn. Expense, Lumber Equipment Accrued Wages Payable Net Income

13-36

Trial Balance Adjustments Dr. Cr. Dr. Cr. 1 1 4 0 00 1 2 7 0 00 5 6 0 0 00 (B) 4 7 0 0 0 0 (A) 5 6 0 0 0 0 2 6 0 00 (C) 1 8 0 0 0 1 1 7 00 (D) 7 0 00 2 6 0 0 00 3 4 0 00 (E) 4 6 0 0 0 1 3 3 0 00 7 5 6 2 00 3 5 0 0 00 (A) 5 6 0 0 0 0 (B) 4 7 0 0 0 0 23 0 0 0 00 4 0 0 00 14 7 0 0 00 4 4 0 00 5 4 5 00 2 3 9 0 00 (F) 1 6 5 0 0 4 0 0 00 8 4 0 00 33 2 1 7 00 33 2 1 7 00 (C) 1 8 0 0 0 (D) 7 0 00 (E) 4 6 0 0 0 (F) 1 6 5 0 0 11 1 7 5 00 11 1 7 5 00

PROBLEM 13B-4., Cont. CALLAHAN LUMBER WORKSHEET FOR THE YEAR ENDED DECEMBER 31, 2016 Adjusted Trial Balance Dr. Cr. 1 1 4 0 00 1 2 7 0 00 4 7 0 0 00 8 0 00 4 7 00 2 6 0 0 00 8 0 0 00 1 3 3 0 00 7 5 6 2 00 3 5 0 0 00 5 6 0 0 00 4 7 0 0 00 23 0 0 0 00 4 0 0 00 14 7 0 0 00 4 4 0 00 5 4 5 00 2 5 5 5 00 4 0 0 00 8 4 0 00 1 8 0 00 7 0 00 4 6 0 00 38 5 4 2 00

Income Statement Dr. Cr.

5 6 0 0 00

Balance Sheet Dr. Cr. 1 1 4 0 00 1 2 7 0 00 4 7 0 0 00 8 0 00 4 7 00 2 6 0 0 00 8 0 0 00 1 3 3 0 00 7 5 6 2 00 3 5 0 0 00

4 7 0 0 00 23 0 0 0 00

4 0 0 00 14 7 0 0 00 4 4 0 00 5 4 5 00 2 5 5 5 00 4 0 0 00 8 4 0 00 1 8 0 00 7 0 00 4 6 0 00

1 6 5 00 38 5 4 2 00

25 2 0 5 00 3 4 8 0 00 28 6 8 5 00

28 6 8 5 00

13 3 3 7 00

28 6 8 5 00

13 3 3 7 00

1 6 5 00 9 8 5 7 00 3 4 8 0 00 13 3 3 7 00

13-37

PROBLEM 13B-4., Cont. CALLAHAN LUMBER INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2016 Revenue: Gross Sales Less: Sales Returns and Allowancces Net Sales Cost of Goods Sold: Merchandise Inventory, 1/1/16 Purchases Less: Purchases Discounts Purchases Returns and Allowances Net Cost of Purchases Cost of Goods Available for Sale Less: Merchandise Inventory, 12/31/16 Cost of Goods Sold Gross Profit Operating Expenses: Wages Expense Advertising Expense Rent Expense Lumber Supplies Expense Insurance Expense Depreciation Expense, Equipment Total Operating Expenses Net Income from Operations

13-38

$2 3 0 0 0 00 4 0 0 00 2 2 6 0 0 00

$5 6 0 0 00 $1 4 7 0 0 00 $ 4 4 0 00 5 4 5 00

9 8 5 00 1 3 7 1 5 00 1 9 3 1 5 00 4 7 0 0 00 1 4 6 1 5 00 7 9 8 5 00

2 5 5 5 00 4 0 0 00 8 4 0 00 1 8 0 00 7 0 00 4 6 0 00 4 5 0 5 00 $3 4 8 0 00

PROBLEM 13B-4., Cont. CALLAHAN LUMBER STATEMENT OF OWNER’S EQUITY FOR THE YEAR ENDED DECEMBER 31, 2016 J. Callahan, Capital, 1/1/16 Net Income Less Withdrawals Decrease in Capital J. Callahan, Capital, 12/31/16

$7 5 6 2 0 0 $3 4 8 0 0 0 3 5 0 0 00 2 0 00 $7 5 4 2 0 0

13-39

PROBLEM 13B-4., Cont. CALLAHAN LUMBER BALANCE SHEET DECEMBER 31, 2016 Assets Current Assets: Cash Accounts Receivable Merchandise Inventory Lumber Supplies Prepaid Insurance Total Current Assets

$1 1 4 0 0 0 1 2 7 0 00 4 7 0 0 00 8 0 00 4 7 00

Capital Assets: Lumber Equipment Less: Accumulated Depreciation, Lumber Equipment Total Assets

2 6 0 0 00 8 0 0 00

$7 2 3 7 0 0

1 8 0 0 00 $9 0 3 7 0 0

Liabilities Current Liabilities: Accounts Payable Accrued Wages Payable Total Current Liabilities Owner’s Equity J. Callahan, Capital, December 31, 2016 Total Liabilities and Owner’s Equity

13-40

$1 3 3 0 0 0 1 6 5 00 $1 4 9 5 0 0

7 5 4 2 00 $9 0 3 7 0 0

PROBLEM 13B-4., Cont. CALLAHAN LUMBER GENERAL JOURNAL Date 2016

Account Title and Description

Adjusting Entries Income Summary Merchandise Inventory 31 Merchandise Inventory Income Summary 31 Lumber Supplies Expense Lumber Supplies 31 Insurance Expense Prepaid Insurance 31 Depreciation Expense, Lumber Equipment Accumulated Depreciation, Lumber Equipment 31 Wages Expense Accrued Wages Payable Closing Entries 31 Sales Purchases Discounts Purchases Returns and Allowances Income Summary 31 Income Summary Sales Returns and Allowances Purchases Wages Expense Advertising Expense Rent Expense Lumber Supplies Expense Insurance Expense Depreciation Expense 31 Income Summary J. Callahan, Capital 31 J. Callahan, Capital J. Callahan, Withdrawals 2017 Reversing Entry Jan 1 Accrued Wages Payable Wages Expense

Dec

Page 2 Post Ref.

332

Dr. 5 6 0 0 00

5 6 0 0 00

112 112

4 7 0 0 00 4 7 0 0 00

332 664

1 8 0 00 1 8 0 00

113 665

Cr.

7 0 00 7 0 00

114 663

4 6 0 00 4 6 0 00

122 660

1 6 5 00 1 6 5 00

221

440 551 552

23 0 0 0 00 4 4 0 00 5 4 5 00 23 9 8 5 00

332 332

19 6 0 5 00 4 0 0 00 14 7 0 0 00 2 5 5 5 00 4 0 0 00 8 4 0 00 1 8 0 00 7 0 00 4 6 0 00

441 550 660 661 662 664 665 663 332

3 4 8 0 00 3 4 8 0 00

330 330

3 5 0 0 00 3 5 0 0 00

331

1 6 5 00 1 6 5 00

13-41

PROBLEM 13B-4., Cont. CALLAHAN LUMBER GENERAL LEDGER NAME: CASH Date 2016 Dec 31

ACCOUNT NO. Explanation

Post Ref.

Debit

✔

Balance

NAME: ACCOUNTS RECEIVABLE Date 2016 Dec 31

Explanation

Post Ref.

Debit

Explanation

Post Ref.

Debit

GJ2

4 7 0 0 00

Debit

1 8 0 00

Post Ref.

Debit

13-42

Balance

DR CR

Credit

DR CR Dr

7 0 00

GJ2

Explanation

1 2 7 0 00

ACCOUNT NO.

NAME: LUMBER EQUIPMENT Date 2016 Dec 31

Credit

✔

Balance Adjusting

GJ2

Explanation

Balance

ACCOUNT NO. Post Ref.

✔

Debit

Credit

111

DR CR

✔

Balance Adjusting

1 1 4 0 00

5 6 0 0 00

GJ2

Explanation

NAME: PREPAID INSURANCE Date 2016 Dec 31 31

Credit

✔

Balance Adjusting Adjusting

Balance

ACCOUNT NO.

NAME: LUMBER SUPPLIES Date 2016 Dec 31 31

Credit

✔

Balance

DR CR

ACCOUNT NO.

NAME: MERCHANDISE INVENTORY Date 2016 Dec 31 31 31

Credit

110

112 Balance 5 6 0 0 00 O 4 7 0 0 00 113 Balance 2 6 0 00 8 0 00

114 Balance 1 1 7 00 4 7 00

121

DR CR

Balance

2 6 0 0 00

PROBLEM 13B-4., Cont. NAME: ACCUMULATED DEPRECIATION, LUMBER EQUIPMENT Date 2016 Dec 31 31

Explanation

Post Ref.

Debit

Post Ref.

Debit

Explanation Adjusting

Post Ref.

Debit

GJ2

Explanation

Debit

1 3 3 0 00

GJ2

DR CR

Balance

1 6 5 00

Credit

DR CR

3 5 0 0 00

ACCOUNT NO. Post Ref.

Debit

Credit

DR CR

3 5 0 0 00

ACCOUNT NO. Post Ref.

Debit

GJ2

5 6 0 0 00

GJ2

19 6 0 5 0 0 3 4 8 0 00

7 5 6 2 00 11 0 4 2 0 0 7 5 4 2 00

Balance 3 5 0 0 00 O

332

DR CR Dr

4 7 0 0 00 23 9 8 5 0 0

GJ2

Credit

Balance

331

GJ2

Explanation

330

✔

Balance Closing

221

Credit

3 4 8 0 00

GJ2

Explanation

Adjusting Adjusting Closing Closing Closing

Balance

✔

Balance Closing Closing

3 4 0 00 8 0 0 00

DR CR

ACCOUNT NO. Post Ref.

Balance

220

ACCOUNT NO.

NAME: INCOME SUMMARY Date 2016 Dec 31 31 31 31 31

Credit

✔

Balance

NAME: J. CALLAHAN, WITHDRAWALS Date 2016 Dec 31 31

ACCOUNT NO.

NAME: J. CALLAHAN, CAPITAL Date 2016 Dec 31 31 31

DR CR

4 6 0 0 00

GJ2

Explanation

122

NAME: ACCRUED WAGES PAYABLE Date 2016 Dec 31

Credit

✔

Balance Adjusting

NAME: ACCOUNTS PAYABLE Date 2016 Dec 31

ACCOUNT NO.

Dr Cr Cr Cr

Balance 5 6 0 0 00 9 0 0 00 23 0 8 5 0 0 3 4 8 0 00 O

13-43

PROBLEM 13B-4., Cont. NAME: SALES Date 2016 Dec 31 31

ACCOUNT NO. Explanation

Post Ref.

Debit

GJ2

23 0 0 0 0 0

Explanation

ACCOUNT NO. Post Ref.

Debit

4 0 0 00

Post Ref.

Debit

Explanation

13-44

DR CR

14 7 0 0 0 0

ACCOUNT NO. Post Ref.

Debit

Credit

GJ2

Explanation

Post Ref.

4 4 0 00

ACCOUNT NO. Debit

Credit

GJ2

Explanation

5 4 5 00

Balance Adjusting Closing

ACCOUNT NO. Post Ref.

Debit

Credit

✔ GJ2 GJ2

DR CR Dr

1 6 0 00

2 5 5 5 00

4 0 0 00 O

Balance 14 7 0 0 0 0 O

Balance 4 4 0 00 O

552

DR CR

✔

Balance Closing

Balance

551

DR CR

✔

Balance Closing

23 0 0 0 0 0 O

550

GJ2

NAME: WAGES EXPENSE Date 2016 Dec 31 31 31

Credit

✔

Balance Closing

NAME: PURCHASES RETURNS AND ALLOWANCES Date 2016 Dec 31 31

DR CR

ACCOUNT NO. Explanation

Balance

441

GJ2

NAME: PURCHASES DISCOUNTS Date 2016 Dec 31 31

Credit

✔

Balance Closing

NAME: PURCHASES Date 2016 Dec 31 31

DR CR

✔

Balance Closing

NAME: SALES RETURNS AND ALLOWANCES Date 2016 Dec 31 31

Credit

440

Balance 5 4 5 00 O

660 Balance 2 3 9 0 00 2 5 5 5 00 O

PROBLEM 13B-4., Cont. NAME: ADVERTISING EXPENSE Date 2016 Dec 31 31

Explanation

ACCOUNT NO. Post Ref.

Debit

✔

Balance Closing

4 0 0 00

GJ2

Explanation

ACCOUNT NO. Post Ref.

Debit

Explanation Adjusting Closing

Post Ref.

8 4 0 00

ACCOUNT NO. Debit

Explanation Adjusting Closing

4 6 0 00

Post Ref.

Debit

GJ2

1 8 0 00

Adjusting Closing

Credit

DR CR Dr

1 8 0 00

GJ2

Explanation

4 6 0 00

ACCOUNT NO.

NAME: INSURANCE EXPENSE Date 2016 Dec 31 31

DR CR Dr

NAME: LUMBER SUPPLIES EXPENSE Date 2016 Dec 31 31

Credit

GJ2 GJ2

DR CR Dr

GJ2

NAME: DEPRECIATION EXPENSE, LUMBER EQUIPMENT Date 2016 Dec 31 31

Credit

✔

Balance Closing

DR CR Dr

NAME: RENT EXPENSE Date 2016 Dec 31 31

Credit

ACCOUNT NO. Post Ref. GJ2 GJ2

Debit

Credit

7 0 00

DR CR

661 Balance 4 0 0 00 O

662 Balance 8 4 0 00 O

663 Balance 4 6 0 00 O

664 Balance 1 8 0 00 O

665 Balance

7 0 00

7 0 00 O

13-45

PROBLEM 13B-4., Cont. CALLAHAN LUMBER POST-CLOSING TRIAL BALANCE DECEMBER 31, 2016 Cash Accounts Receivable Merchandise Inventory Lumber Supplies Prepaid Insurance Lumber Equipment Accumulated Depreciation, Lumber Equipment Accounts Payable Accrued Wages Payable J. Callahan, Capital

1 1 4 0 00 1 2 7 0 00 4 7 0 0 00 8 0 00 4 7 00 2 6 0 0 00

9 8 3 7 00

13-46

8 0 0 00 1 3 3 0 00 1 6 5 00 7 5 4 2 00 9 8 3 7 00

PROBLEM 13C-1. KATE’S PIE AND KITE SHOP INCOME STATEMENT FOR THE YEAR ENDED SEPTEMBER 30, 2015 Revenue: Gross Sales Less: Sales Returns and Allowances Sales Discounts Net Sales Cost of Goods Sold: Merchandise Inventory, 10/1/14 Purchases Less: Purchases Returns and Allowances Purchases Discounts Net Purchases Add: Freight-in Net Cost of Purchases Cost of Goods Available for Sale Less: Merchandise Inventory, 9/30/15 Cost of Goods Sold Gross Profit Operating Expenses: Advertising Expense Cleaning Expense Depreciation Expense, Equipment Insurance Expense Rent Expense Salaries Expense Utilities Expense Total Operating Expenses Net Income from Operations Other Income: Rental Income Net Income

$5 3 5 6 8 25 $ 8 3 4 50 3 4 4 75

1 1 7 9 25 5 2 3 8 9 00

4 2 5 7 82 $2 1 4 5 8 34 $ 5 5 8 30 2 3 8 76

7 9 7 06 2 0 6 6 1 28 4 7 1 58 2 1 1 3 2 86 2 5 3 9 0 68 5 4 7 7 26 1 9 9 1 3 42 3 2 4 7 5 58

1 3 5 2 50 2 4 0 0 00 8 7 5 00 3 6 8 75 7 2 0 0 00 1 1 4 5 8 60 2 5 4 2 60 2 6 1 9 7 45 6 2 7 8 13

1 8 0 0 00 $8 0 7 8 13

13-47

PROBLEM 13C-2. CASTELL CERAMICS CO. STATEMENT OF OWNER’S EQUITY FOR THE YEAR ENDED AUGUST 31, 2017 B. Castell, Capital, 9/1/16 Add: Net Income Less: Withdrawals Decrease in Capital B. Castell, Capital, 8/31/17

13-48

$4 2 6 7 5 9 8 $9 3 6 1 6 6 14 6 7 0 00 5 3 0 8 34 $3 7 3 6 7 6 4

PROBLEM 13C-2., Cont. CASTELL CERAMICS CO. BALANCE SHEET AUGUST 31, 2017 Assets Current Assets: Cash Petty Cash Accounts Receivable Merchandise Inventory Supplies Prepaid Insurance Total Current Assets

$1 1 5 3 8 6 2 7 5 00 18 9 7 6 30 22 7 6 6 28 1 2 6 8 75 8 7 5 40 $5 5 5 0 0 35

Capital Assets: Cutting Equipment Less: Accumulated Depreciation, Cutting Equipment Delivery Van Less: Accumulated Depreciation, Delivery Van Total Assets

$1 8 7 6 0 0 0 7 2 5 0 00 21 8 7 5 00 4 7 8 0 00

11 5 1 0 00 17 0 9 5 00

2 8 6 0 5 00 $8 4 1 0 5 35

Liabilities Current Liabilities: Accounts Payable Accrued Salaries Payable GST Collected Unearned Rent Mortgage Payable Total Current Liabilities

$2 7 6 4 8 3 6 8 6 0 00 7 3 6 98 1 7 5 0 00 1 8 0 0 00 $3 2 7 9 5 34

Long-Term Liabilities: Chattel Mortgage Payable, Van Total Liabilities

1 3 9 4 2 37 4 6 7 3 7 71

Owner’s Equity B. Castell, Capital, August 31, 2017 Total Liabilities and Owner’s Equity

3 7 3 6 7 64 $8 4 1 0 5 35

Note: Some students may show Prepaid GST and GST Collected as separate amounts. While this is acceptable for interim statements, it is not the best treatment for formal financial statements and therefore should be combined as has been done in this statement.

13-49

PROBLEM 13C-3. MIKOLASKI MODERN DESIGN COMPANY WORKSHEET FOR THE YEAR ENDED, NOVEMBER 30, 2016 Account Titles Cash Petty Cash Accounts Receivable Merchandise Inventory Prepaid Insurance Prepaid GST Equipment Acc. Depn., Equipment Building Acc. Depn., Building Accounts Payable Mortgage Payable Unearned Rent GST Collected L. Mikolaski, Capital L. Mikolaski, Withdrawals Income Summary Sales Sales Discounts and Returns Purchases Purchases Returns and Allowances Purchases Discounts Freight-in Advertising Expense Cleaning Expense Repair Expense Salaries Expense Utilities Expense

Trial Balance Dr. 3 4 6 5 78 5 0 00 11 5 7 5 20 16 4 7 9 22 7 6 5 85 1 6 5 3 45 21 5 7 5 00

Cr.

Dr.

Cr.

(B)2 5 6 7 2 4 4 (A)1 6 4 7 9 2 2 (E) 2 5 7 75

14 7 6 2 40

(D) 1 3 5 7 6 0

21 6 5 3 70 8 4 0 0 00 11 4 4 6 52 2 4 0 0 0 0 (C) 2 1 6 7 85 32 4 2 0 22

(D)

28 7 0 0 00 6 4 7 82

8 0 0 00

16 4 5 0 00 (A)1 6 4 7 9 2 2 (B)2 5 6 7 2 4 4 77 3 2 7 56 3 5 8 92 42 6 4 9 04 4 5 5 72 5 7 6 22 6 3 2 88 1 2 4 5 00 2 6 0 5 60 8 7 6 20 21 5 7 5 60 9 5 2 45 171 6 1 0 19 171 6 1 0 19

Rental Income Earned Depn. Exp., Equipment and Building Insurance Expense Net Income

13-50

Adjustments

8 0 0 00

45 2 1 4 83

PROBLEM 13C-3., Cont. MIKOLASKI MODERN DESIGN COMPANY WORKSHEET FOR THE YEAR ENDED NOVEMBER 30, 2013 Adjusted Trial Balance Dr. Cr. 3 4 6 5 78 5 0 00 11 5 7 5 20 25 6 7 2 44 5 0 8 10 1 6 5 3 45 21 5 7 5 00 16 1 2 0 00 28 7 0 0 00 22 3 0 1 52 8 4 0 0 00 11 4 4 6 52 1 6 0 0 00 2 1 6 7 85 32 4 2 0 22 16 4 5 0 00 16 4 7 9 22 25 6 7 2 44 77 3 2 7 56 3 5 8 92 42 6 4 9 04 4 5 5 72 5 7 6 22 6 3 2 88 1 2 4 5 00 2 6 0 5 60 8 7 6 20 21 5 7 5 60 9 5 2 45

Income Statement Dr. Cr.

2 8 8 05

Dr. 3 4 6 5 78 5 0 00 11 5 7 5 20 25 6 7 2 44 5 0 8 10 1 6 5 3 45 21 5 7 5 00

Cr.

16 1 2 0 00 28 7 0 0 00 22 3 0 1 52 8 4 0 0 00 11 4 4 6 52 1 6 0 0 00 2 1 6 7 85 32 4 2 0 22 16 4 5 0 00 16 4 7 9 22

25 6 7 2 44 77 3 2 7 56

3 5 8 92 42 6 4 9 04 4 5 5 72 5 7 6 22 6 3 2 88 1 2 4 5 00 2 6 0 5 60 8 7 6 20 21 5 7 5 60 9 5 2 45

8 0 0 00 2 0 0 5 42 2 5 7 75 199 2 8 8 05 199

Balance Sheet

8 0 0 00 2 0 0 5 42 2 5 7 75 89 6 3 8 08 15 1 9 3 86 104 8 3 1 94

104 8 3 1 94

109 6 4 9 97

104 8 3 1 94

109 6 4 9 97

94 4 5 6 11 15 1 9 3 86 109 6 4 9 97

13-51

PROBLEM 13C-3., Cont. MIKOLASKI MODERN DESIGN COMPANY INCOME STATEMENT FOR THE YEAR ENDED NOVEMBER 30, 2016 Revenue: Gross Sales Less: Sales Discounts and Returns Net Sales Cost of Goods Sold: Merchandise Inventory, 12/1/15 Purchases Less: Purchases Returns and Allowances Purchases Discounts Net Purchases Add: Freight-in Net Cost of Purchases Cost of Goods Available for Sale Less: Merchandise Inventory, 11/30/16 Cost of Goods Sold Gross Profit Operating Expenses: Advertising Expense Cleaning Expense Repair Expense Salaries Expense Utilities Expense Depreciation Expense Insurance Expense Total Operating Expenses Net Income from Operations Other Income: Rental Income Net Income

13-52

$7 7 3 2 7 56 3 5 8 92 7 6 9 6 8 64

$1 6 4 7 9 22 $4 2 6 4 9 04 $ 4 5 5 72 5 7 6 22

1 0 3 1 94 4 1 6 1 7 10 6 3 2 88 4 2 2 4 9 98 5 8 7 2 9 20 2 5 6 7 2 44 3 3 0 5 6 76 4 3 9 1 1 88

1 2 4 5 00 2 6 0 5 60 8 7 6 20 2 1 5 7 5 60 9 5 2 45 2 0 0 5 42 2 5 7 75 2 9 5 1 8 02 $1 4 3 9 3 86

8 0 0 00 $1 5 1 9 3 86

PROBLEM 13C-3., Cont. MIKOLASKI MODERN DESIGN COMPANY STATEMENT OF OWNER’S EQUITY FOR THE YEAR ENDED NOVEMBER 30, 2016 L. Mikolaski, Capital, 12/1/2015 Add: Net Income Less: Withdrawals Decrease in Capital L. Mikolaski, Capital, 11/30/2016

$3 2 4 2 0 22 $1 5 1 9 3 86 1 6 4 5 0 00 1 2 5 6 14 $3 1 1 6 4 08

13-53

PROBLEM 13C-3., Cont. MIKOLASKI MODERN DESIGN COMPANY BALANCE SHEET NOVEMBER 30, 2016 Assets Current Assets: Cash Petty Cash Accounts Receivable Merchandise Inventory Prepaid Insurance Total Current Assets

$3 4 6 5 78 5 0 00 1 1 5 7 5 20 2 5 6 7 2 44 5 0 8 10 $4 1 2 7 1 52

Capital Assets: Equipment Less: Accumulated Depreciation, Equipment Building Less: Accumulated Depreciation, Building Total Capital Assets Total Assets

$2 1 5 7 5 00 1 6 1 2 0 00 2 8 7 0 0 00 2 2 3 0 1 52

5 4 5 5 00 6 3 9 8 48 1 1 8 5 3 48 $5 3 1 2 5 00

Liabilities Current Liabilities: Accounts Payable Unearned Rent GST Payable Mortgage Payable (current portion) Total Current Liabilities

$8 4 0 0 00 1 6 0 0 00 5 1 4 40 3 6 0 0 00 $1 4 1 1 4 40

Long Term Liabilities: Mortgage Payable Total Liabilities

7 8 4 6 52 2 1 9 6 0 92

Owner’s Equity L. Mikolaski, Capital, November 30, 2016 Total Liabilities and Owner’s Equity

3 1 1 6 4 08 $5 3 1 2 5 00

13-54

PROBLEM 13C-3., Cont. MIKOLASKI MODERN DESIGN COMPANY GENERAL JOURNAL Date 2016

Account Title and Description

Post Ref.

Page 4 Dr.

Cr.

Adjusting Entries Nov

30 Income Summary Merchandise Inventory

16 4 7 9 22

30 Merchandise Inventory Income Summary

25 6 7 2 44

16 4 7 9 22

25 6 7 2 44

30 Unearned Rent Rental Income Earned 30 Depreciation Expense, Equipment and Building Accumulated Depreciation, Equipment Accumulated Depreciation, Building 30 Insurance Expense Prepaid Insurance

8 0 0 00 8 0 0 00 2 0 0 5 42 1 3 5 7 60 6 4 7 82 2 5 7 75 2 5 7 75

Closing Entries Nov

30 Sales Rental Income Earned Purchases Returns and Allowances Purchases Discounts Income Summary

77 3 2 7 56 8 0 0 00 4 5 5 72 5 7 6 22 79 1 5 9 50

13-55

PROBLEM 13C-3., Cont. MIKOLASKI MODERN DESIGN COMPANY GENERAL JOURNAL Date Account Title and Description 2016 Nov 30 Income Summary Sales Discounts and Returns Purchases Freight-in Advertising Expense Cleaning Expense Repair Expense Salaries Expense Utilities Expense Depreciation Expense, Equipment and Building Insurance Expense

13-56

Post Ref.

Page 5 Dr. 73 1 5 8 86 3 5 8 92 42 6 4 9 04 6 3 2 88 1 2 4 5 00 2 6 0 5 60 8 7 6 20 21 5 7 5 60 9 5 2 45 2 0 0 5 42 2 5 7 75

30 Income Summary L. Mikolaski, Capital

15 1 9 3 86

30 L. Mikolaski, Capital L. Mikolaski, Withdrawals

16 4 5 0 00

Cr.

15 1 9 3 86

16 4 5 0 00

PROBLEM 13C-4. BRENNAN SALES CO. INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2015 Revenue: Gross Sales Less: Sales Returns and Allowances Net Sales Cost of Goods Sold: Merchandise Inventory, 1/1/15 Purchases Less: Purchases Discounts Purchases Returns and Allowances Net Cost of Purchases Cost of Goods Available for Sale Less: Merchandise Inventory, 12/31/15 Cost of Goods Sold Gross Profit Operating Expenses: Wages Expense Advertising Expense Rent Expense Supplies Expense Insurance Expense Depreciation Expense Total Operating Expenses Net Income

$3 1 0 0 0 0 0 6 3 0 00 30 3 7 0 00

$5 9 1 0 0 0 $1 8 4 0 0 0 0 $ 7 3 0 00 2 7 6 00

1 0 0 6 00 17 3 9 4 00 23 3 0 4 00 4 8 7 5 00 18 4 2 9 00 11 9 4 1 00

4 9 2 5 00 8 9 0 00 1 2 0 0 00 2 4 0 00 6 8 00 7 5 0 00 8 0 7 3 00 $3 8 6 8 0 0

13-57

PROBLEM 13C-4., Cont. BRENNAN SALES COMPANY WORKSHEET FOR THE YEAR ENDED DECEMBER 31, 2015 Account Titles Cash Accounts Receivable Merchandise Inventory Supplies Prepaid Insurance Prepaid GST Equipment Acc. Depn., Equipment Accounts Payable GST Collected W. Brennan, Capital W. Brennan, Withdrawals Income Summary Sales Sales Returns and Allowances Purchases Purchases Discounts Purchases Returns and Allowances Wages Expense Advertising Expense Rent Expense Supplies Expense Insurance Expense Depreciation Expense, Equipment Accrued Wages Payable

Trial Balance Dr. 7 2 0 00 1 6 2 0 00 5 9 1 0 00 4 3 0 00 2 3 8 00 6 4 7 00 8 5 0 0 00

Adjustments Cr.

Dr.

(B) 4 8 7 5 0 0 (A) 5 9 1 0 0 0 (C) 2 4 0 0 0 (D) 6 8 00 (G) 1 0 00 1 6 4 0 00 1 6 6 0 00 8 9 7 00 12 0 1 2 00

(E) (G)

13-58

7 5 0 00 2 1 0 00

4 7 0 0 00 (A) 5 9 1 0 0 0 (B) 4 8 7 5 0 0 31 0 0 0 00 6 3 0 00 18 4 0 0 00 7 3 0 00 2 7 6 00 4 5 3 0 00 6 9 0 00 1 2 0 0 00 48 2 1 5 00

(F) (G)

3 9 5 00 2 0 0 00

2 4 0 00 6 8 00 7 5 0 00

48 2 1 5 00

12 4 4 8 00 Net Income

Cr.

(F) 3 9 5 0 0 12 4 4 8 00

PROBLEM 13C-4., Cont. BRENNAN SALES COMPANY WORKSHEET FOR THE YEAR ENDED DECEMBER 31, 2015 Adjusted Trial Balance Dr. Cr. 7 2 0 00 1 6 2 0 00 4 8 7 5 00 1 9 0 00 1 7 0 00 6 5 7 00 8 5 0 0 00 2 3 9 0 00 1 8 7 0 00 8 9 7 00 12 0 1 2 00 4 7 0 0 00 5 9 1 0 00 4 8 7 5 00 31 0 0 0 00 6 3 0 00 18 4 0 0 00 7 3 0 00 2 7 6 00 4 9 2 5 00 8 9 0 00 1 2 0 0 00 2 4 0 00 6 8 00 7 5 0 00 54 4 4 5 00

Income Statement Dr. Cr.

5 9 1 0 00

Balance Sheet Dr. Cr. 7 2 0 00 1 6 2 0 00 4 8 7 5 00 1 9 0 00 1 7 0 00 6 5 7 00 8 5 0 0 00 2 3 9 0 00 1 8 7 0 00 8 9 7 00 12 0 1 2 00 4 7 0 0 00

4 8 7 5 00 31 0 0 0 00

6 3 0 00 18 4 0 0 00 7 3 0 00 2 7 6 00 4 9 2 5 00 8 9 0 00 1 2 0 0 00 2 4 0 00 6 8 00 7 5 0 00

3 9 5 00 54 4 4 5 00

33 0 1 3 00 3 8 6 8 00 36 8 8 1 00

36 8 8 1 00

21 4 3 2 00

36 8 8 1 00

21 4 3 2 00

3 9 5 00 17 5 6 4 00 3 8 6 8 00 21 4 3 2 00

13-59

PROBLEM 13C-4., Cont. BRENNAN SALES CO. STATEMENT OF OWNER’S EQUITY FOR THE YEAR ENDED DECEMBER 31, 2015 W. Brennan, Capital. 1/1/15 Add: Net Income Less: Withdrawals Decrease in Capital W. Brennan, Capital, 12/31/15

13-60

$1 2 0 1 2 0 0 $3 8 6 8 0 0 4 7 0 0 00 8 3 2 00 $1 1 1 8 0 0 0

PROBLEM 13C-4., Cont. BRENNAN SALES CO. BALANCE SHEET DECEMBER 31, 2015 Assets Current Assets: Cash Accounts Receivable Merchandise Inventory Supplies Prepaid Insurance Total Current Assets

$ 7 2 0 00 1 6 2 0 00 4 8 7 5 00 1 9 0 00 1 7 0 00 $7 5 7 5 0 0

Capital Assets: Equipment Less: Accumulated Depreciation, Equipment

8 5 0 0 00 2 3 9 0 00

6 1 1 0 00 $1 3 6 8 5 0 0

Total Assets Liabilities Accounts Payable GST Payable Accrued Wages Payable Total Liabilities

$1 8 7 0 0 0 2 4 0 00 3 9 5 00 $2 5 0 5 0 0

Owner’s Equity W. Brennan, Capital, December 31, 2015

11 1 8 0 00

Total Liabilities and Owner’s Equity

$1 3 6 8 5 0 0

13-61

PROBLEM 13C-4., Cont. BRENNAN SALES CO. GENERAL JOURNAL Date 2015 Dec

Account Title and Description Adjusting Entries 31 Income Summary Merchandise Inventory

Page 5 Post Ref.

3320

Dr. 5 9 1 0 00

5 9 1 0 00

1120

31 Merchandise Inventory Income Summary

1120

31 Supplies Expense Supplies

6640

31 Insurance Expense Prepaid Insurance

6650

31 Depreciation Expense, Equipment Accumulated Depreciation, Equipment

6630

31 Wages Expense Accrued Wages Payable

6600

31 Advertising Expense Prepaid GST Accounts Payable

6610

4 8 7 5 00 4 8 7 5 00

3320

2 4 0 00 2 4 0 00

1130

6 8 00 6 8 00

1140

7 5 0 00 7 5 0 00

1220

3 9 5 00 3 9 5 00

2210

1150

Cr.

2 0 0 00 1 0 00 2 1 0 00

2200

Closing Entries Dec

13-62

31 Sales Purchases Discounts Purchases Returns and Allowances Income Summary

4400 5510 5520 3320

31 0 0 0 00 7 3 0 00 2 7 6 00 32 0 0 6 00

PROBLEM 13C-4., Cont. BRENNAN SALES CO. GENERAL JOURNAL Date Account Title and Description 2015 Dec 31 Income Summary Purchases Sales Returns and Allowances Wages Expense Advertising Expense Rent Expense Depreciation Expense, Equipment Supplies Expense Insurance Expense

Page 6 Post Ref.

Dr.

3320

27 1 0 3 00

4410 6600 6610 6620 6630 6640 6650

3320

31 W. Brennan, Capital W. Brennan, Withdrawals

3300

2016 Reversing Entry Jan 1 Accrued Wages Payable Wages Expense

18 4 0 0 00 6 3 0 00 4 9 2 5 00 8 9 0 00 1 2 0 0 00 7 5 0 00 2 4 0 00 6 8 00

5500

31 Income Summary W. Brennan, Capital

Cr.

3 8 6 8 00 3 8 6 8 00

3300

4 7 0 0 00 4 7 0 0 00

3310

3 9 5 00 3 9 5 00

13-63

PROBLEM 13C-4., Cont. BRENNAN SALES CO. GENERAL LEDGER NAME: CASH Date 2015 Dec 31

ACCOUNT NO. Explanation

Post Ref.

Debit

✔

Balance

NAME: ACCOUNTS RECEIVABLE Date 2015 Dec 31

Explanation

Post Ref.

Debit

Explanation

Post Ref.

Debit

13-64

7 2 0 00

GJ5

4 8 7 5 00

Balance

1 6 2 0 00

DR CR

ACCOUNT NO. Explanation

Post Ref.

Debit

Credit

DR CR

2 4 0 00

✔

Balance Adjusting

GJ5

Explanation

ACCOUNT NO. Post Ref.

Debit

Credit

✔

Balance Adjusting

DR CR Dr

6 8 00

GJ5

ACCOUNT NO. Explanation

Balance Adjusting

Post Ref.

Debit

✔ GJ5

Credit

DR CR Dr

1 0 00

1110

DR CR

5 9 1 0 00

GJ5

NAME: PREPAID GST Date 2015 Dec 31 31

NAME: PREPAID INSURANCE Date 2015 Dec 31 31

Credit

✔

Balance Adjusting Adjusting

Balance

ACCOUNT NO.

NAME: SUPPLIES Date 2015 Dec 31 31

Credit

✔

Balance

DR CR

ACCOUNT NO.

NAME: MERCHANDISE INVENTORY Date 2015 Dec 31 31 31

Credit

1100

1120 Balance 5 9 1 0 00 O 4 8 7 5 00

1130 Balance 4 3 0 00 1 9 0 00

1140 Balance 2 3 8 00 1 7 0 00

1150 Balance 6 4 7 00 6 5 7 00

PROBLEM 13C-4., Cont. NAME: EQUIPMENT Date 2015 Dec 31

ACCOUNT NO. Explanation

Post Ref.

Debit

✔

Balance

NAME: ACCUMULATED DEPRECIATION, EQUIPMENT Date 2015 Dec 31 31

Explanation

Post Ref.

Debit

Explanation

8 5 0 0 00

ACCOUNT NO. Post Ref.

Debit

Credit

2 1 0 00

GJ5

Explanation Adjusting

Debit

GJ5

Explanation

ACCOUNT NO. Post Ref.

Debit

Balance 1 6 6 0 00 1 8 7 0 00

Credit

DR CR

Balance

3 9 5 00

Credit

2220

DR CR

Balance

8 9 7 00

✔

Balance

1 6 4 0 00 2 3 9 0 00

2210

ACCOUNT NO. Post Ref.

Balance

2200

DR CR

✔

Balance Adjusting

1220

DR CR

7 5 0 00

NAME: GST COLLECTED Date 2015 Dec 31

Balance

GJ5

NAME: ACCRUED WAGES PAYABLE Date 2015 Dec 31

Credit

✔

Balance Adjusting

DR CR

ACCOUNT NO.

NAME: ACCOUNTS PAYABLE Date 2015 Dec 31 31

Credit

1210

NAME: W. BRENNAN, CAPITAL Date 2015 Dec 31 31 31

Explanation

ACCOUNT NO. Post Ref.

Debit

3 8 6 8 00

GJ6 GJ6

Explanation Balance Closing

DR CR

✔

Balance Closing Closing

4 7 0 0 00

NAME: W. BRENNAN, WITHDRAWALS Date 2015 Dec 31 31

Credit

3300

ACCOUNT NO. Post Ref.

Debit

Credit

✔ GJ6

DR CR Dr

4 7 0 0 00

Balance 12 0 1 2 0 0 15 8 8 0 0 0 11 1 8 0 0 0

3310 Balance 4 7 0 0 00 O

13-65

PROBLEM 13C-4., Cont. NAME: INCOME SUMMARY Date 2015 Dec 31 31 31 31 31

Explanation Adjusting Adjusting Closing Closing Closing

ACCOUNT NO. Post Ref.

Debit

GJ5

5 9 1 0 00

GJ5

GJ6

Explanation

Post Ref.

Debit

GJ5

13-66

Credit

Explanation

DR CR

ACCOUNT NO. Post Ref.

Debit

Credit

✔

Balance Closing

DR CR

6 3 0 00

ACCOUNT NO. Explanation

Post Ref.

Debit

Credit

✔

Balance Closing

Explanation

DR CR

18 4 0 0 00

ACCOUNT NO. Post Ref.

Debit

Credit

GJ5

Explanation Balance Closing

Post Ref.

7 3 0 00

ACCOUNT NO. Debit

✔ GJ5

Credit

Balance 6 3 0 00 O

Balance 18 4 0 0 00 O

Balance 7 3 0 00 O

5520

DR CR Cr

2 7 6 00

31 0 0 0 00 O

5510

DR CR

✔

Balance Closing

Balance

5500

GJ6

5 9 1 0 00 1 0 3 5 00 30 9 7 1 00 3 8 6 8 00 O

4410

GJ6

Balance

4400

31 0 0 0 00

NAME: PURCHASES RETURNS AND ALLOWANCES Date 2015 Dec 31 31

NAME: PURCHASES DISCOUNTS Date 2015 Dec 31 31

✔

Balance Closing

NAME: PURCHASES Date 2015 Dec 31 31

ACCOUNT NO.

NAME: SALES RETURNS AND ALLOWANCES Date 2015 Dec 31 31

27 1 0 3 00 3 8 6 8 00

NAME: SALES Date 2015 Dec 31 31

DR CR Dr

4 8 7 5 00 32 0 0 6 00

GJ5

GJ6

Credit

3320

Balance 2 7 6 00 O

PROBLEM 13C-4., Cont. NAME: WAGES EXPENSE Date 2015 Dec 31 31 31

Explanation

ACCOUNT NO. Post Ref.

Debit

✔

Balance Adjusting Closing

GJ5

3 9 5 00

ACCOUNT NO. Post Ref.

Debit

GJ5

2 0 0 00

ACCOUNT NO. Post Ref.

Debit

Explanation Adjusting Closing

1 2 0 0 00

ACCOUNT NO. Post Ref.

Debit

GJ5

7 5 0 00

Adjusting Closing

DR CR Dr

ACCOUNT NO. Post Ref.

Debit

GJ5

2 4 0 00

Credit

DR CR Dr

2 4 0 00

GJ6

Explanation

Credit

7 5 0 00

GJ6

Explanation

DR CR Dr

GJ6

NAME: INSURANCE EXPENSE Date 2015 Dec 31 31

Credit

✔

Balance Closing

NAME: SUPPLIES EXPENSE Date 2015 Dec 31 31

8 9 0 00

GJ6

Explanation

DR CR Dr

NAME: DEPRECIATION EXPENSE, EQUIPMENT Date 2015 Dec 31 31

Credit

✔

Balance Adjusting Closing

NAME: RENT EXPENSE Date 2015 Dec 31 31

4 9 2 5 00

GJ6

Explanation

DR CR Dr

NAME: ADVERTISING EXPENSE Date 2015 Dec 31 31 31

Credit

ACCOUNT NO. Post Ref. GJ5 GJ6

Debit

Credit

6 8 00

DR CR

6600 Balance 4 5 3 0 00 4 9 2 5 00 O

6610 Balance 6 9 0 00 8 9 0 00 O 6620 Balance 1 2 0 0 00 O

6630 Balance 7 5 0 00 O

6640 Balance 2 4 0 00 O

6650 Balance

6 8 00

6 8 00 O

13-67

PROBLEM 13C-4., Cont. BRENNAN SALES CO. POST-CLOSING TRIAL BALANCE DECEMBER 31, 2015 Cash Accounts Receivable Merchandise Inventory Supplies Prepaid Insurance Prepaid GST Equipment Accumulated Depreciation, Equipment Accounts Payable Accrued Wages Payable GST Collected W. Brennan, Capital Totals

13-68

7 2 0 00 1 6 2 0 00 4 8 7 5 00 1 9 0 00 1 7 0 00 6 5 7 00 8 5 0 0 00

16 7 3 2 00

2 3 9 0 00 1 8 7 0 00 3 9 5 00 8 9 7 00 11 1 8 0 00 16 7 3 2 00

SOLUTIONS TO ON-THE-JOB TRAINING, #T-1. CHAN COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2017 Revenue: Gross Sales Less: Sales Returns and Allowances Sales Discounts Net Sales Cost of Goods Sold: Merchandise Inventory 01/01/17 Purchases Less: Purchases Returns and Allowances Purchases Discounts Net Cost of Purchases Cost of Goods Available for Sale Less: Merchandise Inventory 12/31/17 Cost of Goods Sold Gross Profit Operating Expenses: Delivery Expense Salaries Expense Rent Expense Office Supplies Expense Advertising Expense Depreciation Expense, Store Equipment Total Operating Expenses Net Income From Operations

$5 5 4 2 0 0 $ 1 4 0 00 3 0 00

1 7 0 00 5 3 7 2 00

1 4 0 0 00 $2 4 0 0 0 0 $ 1 0 0 00 1 2 0 00

2 2 0 00 2 1 8 0 00 3 5 8 0 00 1 0 0 0 00 2 5 8 0 00 2 7 9 2 00

9 0 00 8 4 0 00 3 0 00 5 0 00 1 0 00 4 0 00 1 0 6 0 00 $1 7 3 2 0 0

13-69

ON-THE-JOB TRAINING, #T-2. GREGOT COMPANY BALANCE SHEET DECEMBER 31, 2015 Assets Current Assets: Cash Accounts Receivable Inventory Office Supplies Prepaid Insurance Total Current Assets Capital Assets: Building Less: Accumulated Depreciation, Building Land Total Assets Liabilities Current Liabilities: Notes Payable Accounts Payable Total Current Liabilities Owner’s Equity G. Gregot, Capital, December 31, 2015 Total Liabilities and Owner’s Equity

13-70

$1 1 0 0 0 0 0 38 0 0 0 00 70 0 0 0 00 6 0 0 00 7 5 0 00 $1 2 0 3 5 0 0 0

$5 0 0 0 0 0 0 12 0 0 0 00

38 0 0 0 00 17 5 0 0 00

55 5 0 0 00 $1 7 5 8 5 0 0 0

$4 0 0 0 0 0 0 30 0 0 0 00 $7 0 0 0 0 0 0

105 8 5 0 00 $1 7 5 8 5 0 0 0

CONTINUING PROBLEM PRECISION COMPUTER CENTRE GENERAL JOURNAL Date 2017

Account Title and Description

Page 9 Post Ref.

Dr.

Cr.

Adjusting Entries July

31 Income Summary Merchandise Inventory

3020

7 1 0 0 00 7 1 0 0 00

1040

Opening inventory adjusted

31 Merchandise Inventory Income Summary

1040

17 4 0 0 00 17 4 0 0 00

3020

To establish July 31, 2017 balance

31 Depreciation Expense, Computer Shop Equipment Depreciation Expense, Office Equipment

5080

8 6 1 00

5090

2 0 0 00

Accum. Depreciation, Computer Shop Equipment

1081

8 6 1 00

Accum. Depreciation, Office Equipment

1091

2 0 0 00

Depreciation Aug 1, 2016 to July 31, 2017

31 Rent Expense Prepaid Rent

5020

2 4 0 0 00 2 4 0 0 00

1025

Six months rent expired

31 Supplies Expense

5050

Supplies

1030

1 3 3 0 52 1 3 3 0 52

Supplies used for year

31 Insurance Expense

5060

Prepaid Insurance

1035

7 6 9 17 7 6 9 17

Insurance prepaid to February 28, 2018

30 Unearned Service Revenue Service Contracts Sold

2050 4050

8 0 0 00 8 0 0 00

Portion of service contract earned at year-end

13-71

CONTINUING PROBLEM, Cont. PRECISION COMPUTER CENTRE GENERAL LEDGER NAME: CASH Date 2017 July 31

ACCOUNT NO. Explanation

Post Ref.

Debit

✔

Balance

NAME: PETTY CASH Date 2017 July 31

Explanation

Post Ref.

Debit

Explanation

Post Ref.

Debit

13-72

Credit

✔

Balance

39 5 7 4 7 2

Explanation

Post Ref.

Debit

Credit

✔

Balance Adjusting Entry

Balance

1 0 0 00

2 4 0 0 00

Balance

21 6 2 0 00

DR CR

ACCOUNT NO. Explanation

Post Ref.

Debit

Credit

DR CR

1 3 3 0 52

✔

Balance Adjusting Entry

GJ9

Explanation Balance Adjusting Entry

ACCOUNT NO. Post Ref.

Debit

Credit

✔ GJ9

DR CR Dr

7 6 9 17

1020

DR CR

GJ9

1010

DR CR

ACCOUNT NO.

NAME: PREPAID INSURANCE Date 2017 July 31 31

Balance

ACCOUNT NO.

NAME: SUPPLIES Date 2017 July 31 31

Credit

✔

Balance

NAME: PREPAID RENT Date 2017 July 31 31

DR CR

ACCOUNT NO.

NAME: ACCOUNTS RECEIVABLE Date 2017 July 31

Credit

1000

1025 Balance 2 4 0 0 00 O

1030 Balance 1 8 6 0 52 5 3 0 00

1035 Balance 1 8 4 6 00 1 0 7 6 83

CONTINUING PROBLEM, Cont. PRECISION COMPUTER CENTRE GENERAL LEDGER NAME: MERCHANDISE INVENTORY Date 2017 July 31 31 31

Explanation

ACCOUNT NO. Post Ref.

Debit

✔

Balance Adjusting Entry Adjusting Entry

7 1 0 0 00

GJ9 GJ9

Explanation

17 4 0 0 00

ACCOUNT NO. Post Ref.

Debit

NAME: ACCUM. DEPRECIATION, COMPUTER SHOP EQUIPMENT Date 2017 July 31 31

Explanation

Post Ref.

Debit

Explanation

Post Ref.

Debit

Credit

✔

Balance

Explanation

5 2 0 0 00

Post Ref.

Debit

Credit

Balance

1 5 0 0 00

1091

DR CR Cr

2 0 0 00

✔

Debit

Credit

9 9 00 9 6 0 00

DR CR

ACCOUNT NO. Post Ref.

Balance

1090

ACCOUNT NO.

GJ9

Explanation

1081

DR CR

✔

Balance Adjusting Entry

Balance

ACCOUNT NO.

NAME: ACCOUNTS PAYABLE Date 2017 July 31

Balance

8 6 1 00

GJ9

7 1 0 0 00 O 17 4 0 0 00

DR CR

ACCOUNT NO. Credit

Balance

1080

NAME: ACCUM. DEPRECIATION, OFFICE EQUIPMENT Date 2017 July 31 31

Credit

✔

Balance Adjusting Entry

NAME: OFFICE EQUIPMENT Date 2017 July 31

Dr Dr

✔

Balance

DR CR Dr

NAME: COMPUTER SHOP EQUIPMENT Date 2017 July 31

Credit

1040

Balance 2 0 00 2 2 0 00

2000

DR CR

Balance

4 3 6 2 00

13-73

CONTINUING PROBLEM, Cont. PRECISION COMPUTER CENTRE GENERAL LEDGER NAME: WAGES PAYABLE Date 2017 July 31

Explanation

ACCOUNT NO. Post Ref.

Debit

ACCOUNT NO. Explanation

Post Ref.

Debit

Explanation

ACCOUNT NO. Post Ref.

Debit

GJ9

13-74

DR CR

8 0 0 00

ACCOUNT NO. Explanation

Post Ref.

Debit

Credit

Explanation

Debit

Credit

✔

Balance

Explanation

Balance

3 1 4 9 83

Balance

2066

DR CR

Balance

2 8 1 8 64

ACCOUNT NO. Post Ref.

✔

Debit

Credit

4 8 0 0 00 4 0 0 0 00

2060

ACCOUNT NO. Post Ref.

Balance

DR CR

✔

Balance

2050

NAME: T. FREEDMAN, CAPITAL Date 2017 July 31

Credit

✔

Balance Adjusting Entry

NAME: HST RECOVERABLE Date 2017 July 31

DR CR

NAME: HST PAYABLE Date 2017 July 31

Credit

2015

✔

Balance

Balance O

NAME: UNEARNED SERVICE REVENUE Date 2017 July 31 31

DR CR

✔

Balance

NAME: DUE TO CRA Date 2017 July 31

Credit

2010

3000

DR CR

Balance

7 4 0 6 00

CONTINUING PROBLEM, Cont. PRECISION COMPUTER CENTRE GENERAL LEDGER NAME: T. FREEDMAN, WITHDRAWALS Date 2017 July 31

Explanation

ACCOUNT NO. Post Ref.

Debit

✔

Balance

NAME: INCOME SUMMARY Date 2017 July 31 31

Explanation Adjusting Entry Adjusting Entry

Post Ref.

Debit

GJ9

7 1 0 0 00

Post Ref.

Debit

Explanation

DR CR Dr Cr

Credit

Post Ref.

Debit

Credit

Explanation

Debit

Credit

✔

Balance

Explanation

Balance

96 8 0 6 00

4010

DR CR

Balance

146 4 4 8 0 0

✔

Debit

Credit

4020

DR CR

Balance

1 3 5 0 00

ACCOUNT NO. Post Ref.

7 1 0 0 00 10 3 0 0 00

4000

ACCOUNT NO. Post Ref.

Balance

DR CR

✔

Balance

Credit

3020

ACCOUNT NO.

NAME: SALES DISCOUNTS Date 2017 July 31

18 7 3 5 00

✔

Balance

NAME: SALES RETURNS AND ALLOWANCES Date 2017 July 31

ACCOUNT NO.

NAME: SALES Date 2017 July 31

Balance

17 4 0 0 00

GJ9

Explanation

DR CR

ACCOUNT NO.

NAME: SERVICE REVENUE Date 2017 July 31

Credit

3010

4030

DR CR

Balance

5 9 0 00

13-75

CONTINUING PROBLEM, Cont. PRECISION COMPUTER CENTRE GENERAL LEDGER NAME: SERVICE CONTRACTS SOLD Date 2017 July 31 31

Explanation

ACCOUNT NO. Post Ref.

Debit

GJ9

Explanation

Post Ref.

Debit

Explanation

Post Ref.

Debit

13-76

Credit

Explanation

Post Ref.

Debit

Credit

✔

Balance Adjusting Entry

GJ9

Explanation

Debit

✔

Balance

Explanation

Post Ref.

Debit

Credit

Explanation Balance Adjusting Entry

Balance

9 0 0 00

DR CR

Debit

✔ GJ9

Credit

Balance 2 4 0 0 00 4 8 0 0 00

5030 Balance

2 4 8 2 15

5040

DR CR

Balance

1 9 8 0 04

DR CR Dr

1 3 3 0 52

5520

DR CR

ACCOUNT NO. Post Ref.

5015

DR CR

ACCOUNT NO.

✔

Balance

2 7 1 6 37

Credit

5010

ACCOUNT NO. Post Ref.

O 8 0 0 00

Balance

2 4 0 0 00

Balance

DR CR

ACCOUNT NO.

NAME: SUPPLIES EXPENSE Date 2017 July 31 31

Credit

✔

Balance

NAME: PHONE EXPENSE Date 2017 July 31

ACCOUNT NO.

NAME: UTILITIES EXPENSE Date 2017 July 31

8 0 0 00

✔

Balance

NAME: RENT EXPENSE Date 2017 July 31 31

DR CR

ACCOUNT NO.

NAME: CLEANING EXPENSE Date 2017 July 31

Credit

✔

Balance Adjusting Entry

NAME: ADVERTISING EXPENSE Date 2017 July 31

4050

5050 Balance 2 8 6 00 1 6 1 6 52

CONTINUING PROBLEM, Cont. PRECISION COMPUTER CENTRE GENERAL LEDGER NAME: INSURANCE EXPENSE Date 2017 July 31 31

Explanation

ACCOUNT NO. Post Ref.

Debit

GJ9

7 6 9 17

Explanation

Post Ref.

Debit

Explanation

Post Ref.

Debit

GJ9

8 6 1 00

Explanation

Post Ref.

✔

Balance Adjusting Entry

GJ9

Explanation

DR CR

ACCOUNT NO. Post Ref.

Debit

Credit

✔

Balance

DR CR

2 0 0 00

NAME: WAGES EXPENSE Date 2017 July 31

1 7 6 11

Credit

✔

Debit

Credit

5080 Balance O 8 6 1 00

5090 Balance O 2 0 0 00

5100

DR CR

Balance

1 4 3 12

ACCOUNT NO. Post Ref.

5070

ACCOUNT NO. Debit

O 7 6 9 17

Balance

ACCOUNT NO. Credit

Balance

DR CR

✔

Balance Adjusting Entry

NAME: MISCELLANEOUS EXPENSE Date 2017 July 31

Credit

✔

Balance

NAME: DEPRECIATION EXPENSE, OFFICE EQUIPMENT Date 2017 July 31 31

ACCOUNT NO.

NAME: DEPRECIATION EXPENSE, COMPUTER SHOP EQUIPMENT Date 2017 July 31 31

DR CR

✔

Balance Adjusting Entry

NAME: POSTAGE EXPENSE Date 2017 July 31

Credit

5060

5110

DR CR

Balance

77 9 6 4 89

13-77

CONTINUING PROBLEM, Cont. PRECISION COMPUTER CENTRE GENERAL LEDGER NAME: PAYROLL BENEFITS EXPENSE Date 2017 July 31

Explanation

ACCOUNT NO. Post Ref.

Debit

✔

Balance

NAME: BAD DEBTS EXPENSE Date 2017 July 31

Explanation

Post Ref.

Debit

13-78

8 3 5 37

Credit

5140

DR CR

ACCOUNT NO. Explanation

Post Ref.

Debit

Credit

✔

Balance

Explanation

Post Ref.

DR CR

Balance

68 4 1 4 06

Debit

Credit

Explanation

Balance

8 2 2 18

ACCOUNT NO. Post Ref.

Debit

Credit

5620

DR CR

Balance

2 4 5 80

✔

Balance

5610

DR CR

✔

Balance

ACCOUNT NO. Explanation

Balance

Post Ref.

✔

Balance

5600

ACCOUNT NO.

NAME: FREIGHT IN Date 2017 July 31

NAME: PURCHASES DISCOUNTS Date 2017 July 31

Balance

✔

Balance

NAME: PURCHASES RETURNS AND ALLOWANCES Date 2017 July 31

DR CR

ACCOUNT NO.

NAME: PURCHASES Date 2017 July 31

Credit

5120

Debit

Credit

5630

DR CR

Balance

1 1 6 5 82

CONTINUING PROBLEM, Cont. PRECISION COMPUTER CENTRE INCOME STATEMENT FOR THE YEAR ENDED JULY 31, 2017 Revenue: Service Revenue Sales Less: Sales Returns and Allowances Sales Discounts Service Contracts Sold Net Revenue: Cost of Goods Sold: Beginning Merchandise Inventory Purchases Less: Purchases Returns & Allowances Purchases Discounts Net Purchases Add: Freight In Net Cost of Purchases Cost of Goods Available for Sale Less: Merchandise Inventory, July 31/17 Cost of Goods Sold Gross Profit Operating Expenses: Advertising Expense Cleaning Expense Rent Expense Utilities Expense Phone Expense Supplies Expense Insurance Expense Postage Expense Depreciation, Exp., Computer Shop Equipment Depreciation, Exp., Office Equipment Miscellaneous Expense Wages Expense Payroll Benefits Expense Total Operating Expenses Net Income

$96 8 0 6 0 0 $146 4 4 8 0 0 $1 3 5 0 0 0 5 9 0 00

1 9 4 0 0 0 144 5 0 8 0 0 8 0 0 00 242 1 1 4 0 0

7 1 0 0 00 68 4 1 4 0 6 $ 8 2 2 18 2 4 5 80

1 0 6 7 98 67 3 4 6 0 8 1 1 6 5 82 68 5 1 1 9 0 75 6 1 1 9 0 17 4 0 0 0 0 58 2 1 1 9 0 183 9 0 2 1 0

2 7 1 6 37 9 0 0 00 4 8 0 0 00 2 4 8 2 15 1 9 8 0 04 1 6 1 6 52 7 6 9 17 1 7 6 11 8 6 1 00 2 0 0 00 1 4 3 12 77 9 6 4 8 9 8 3 5 37 95 4 4 4 7 4 $ 88 4 5 7 3 6

13-79

CONTINUING PROBLEM, Cont. PRECISION COMPUTER CENTRE STATEMENT OF OWNER’S EQUITY FOR THE YEAR ENDED JULY 31, 2017 T. Freedman, Capital, August 1, 2016 Add: Net Income Less: Withdrawals Increase in Capital T. Freedman, Capital, July 31, 2017

$7 4 0 6 0 0 $88 4 5 7 3 6 18 7 3 5 0 0 69 7 2 2 3 6 $77 1 2 8 3 6

PRECISION COMPUTER CENTRE BALANCE SHEET JULY 31, 2017 Assets Current Assets: Cash Petty Cash Accounts Receivable Prepaid Rent Supplies Prepaid Insurance Merchandise Inventory Total Current Assets Capital Assets: Computer Shop Equipment Less: Accum. Depreciation, Computer Shop Equipment Office Equipment Less Accum. Depreciation, Office Equipment Total Assets Liabilities Current Liabilities: Accounts Payable Unearned Services Revenue HST Payable Total Liabilities Owner’s Equity T. Freedman, Capital, July 31, 2017 Total Liabilities and Owner’s Equity

13-80

$39 5 7 4 7 2 1 0 0 00 21 6 2 0 0 0 5 3 0 00 1 0 7 6 83 17 4 0 0 0 0 $80 3 0 1 5 5

$5 2 0 0 0 0 9 6 0 00 1 5 0 0 00 2 2 0 00

4 2 4 0 00 1 2 8 0 00

5 5 2 0 00 85 8 2 1 5 5

4 3 6 2 00 4 0 0 0 00 3 3 1 19 8 6 9 3 19

77 1 2 8 3 6 $85 8 2 1 5 5

MINI PRACTICE SET THE CORNER DRESS SHOP GENERAL JOURNAL Date Account Title and Description 2016 Mar 15 GST Collected GST Prepaid Preparation for remittance to CRA 19 Sales Returns & Allowances, Credit Memo 001 GST Collected Accounts Receivable Bing Company return re CD1082 29 Wages Expense Income Taxes Payable EI Payable CPP Payable Medical Plan Payable Charitable Donations Payable Accrued Wages Payable Distribution re March payroll 29 EI Expense CPP Expense EI Payable CPP Payable To record March payroll tax expenses

Page 4 Post Ref.

Dr.

2400

4 3 6 34 4 3 6 34

1150

4150 2400

1 4 9 95 7 50 1 5 7 45

1120

5400

9 1 6 0 00 1 1 2 2 79 1 7 2 21 4 1 0 10 1 1 2 00 9 0 00 7 2 5 2 90

2330 2335 2340 2350 2360 2200

5430 5440

Cr.

2 4 1 09 4 1 0 10 2 4 1 09 4 1 0 10

2335 2340

Adjusting Entries Mar.

31 Income Summary Inventory 31 Inventory Income Summary Recording ending inventory 31 Rent Received in Advance Rental Income 31 Depn. Expense - Computer & Office Equipment Acc. Depn. - Computer & Office Equipment 31 Depn. Expense - Software Acc. Depn. - Computer Software

3380

8 3 0 9 00 8 3 0 9 00

1210 1210

13 4 2 4 00 13 4 2 4 00

3380

2500

3 0 0 00 3 0 0 00

4200 5550

1 3 0 56 1 3 0 56

1335 5560

3 0 79

1345

3 0 79

13-81

MINI PRACTICE SET, Cont. THE CORNER DRESS SHOP GENERAL JOURNAL Date Account Title and Description 2016 Mar 31 Depn. Expense - Delivery Truck Acc. Depn. - Delivery Truck 31 Insurance Expense Prepaid Insurance

Page 5 Post

Dr.

5570

1 7 0 00 1 7 0 00

1355 5510

Cr.

1 0 0 00 1 0 0 00

1145

Closing Mar

13-82

31 Sales Rental Income Purchases Discounts Income Summary 31 Income Summary Sales Discounts Sales Returns & Allowances Cost of Goods Sold Wages Expense EI Expense CPP Expense Postage Expense Insurance Expense Cleaning Expense Rent Expense Delivery Expense Depn. Exp - Comp & Office Equip. Depn. Expense - Software Depn. Expense - Delivery Truck Accounting Expense Miscellaneous Expense 31 Income Summary Betty Loeb, Capital 31 Betty Loeb, Capital Betty Loeb, Withdrawals

4110 4200 5140

75 7 3 0 65 3 0 0 00 5 7 00 76 0 8 7 65

3380 3380

64 4 3 2 47 1 8 68 1 4 9 95 29 2 5 8 38 27 2 8 0 00 7 1 8 01 1 2 2 0 40 1 2 00 3 0 0 00 3 0 0 00 2 7 0 0 00 5 00 3 9 1 68 9 2 37 5 1 0 00 1 4 6 0 00 1 6 00

4140 4150 5040 5400 5430 5440 5500 5510 5520 5530 5540 5550 5560 5570 5590 5595 3380

16 7 7 0 18 16 7 7 0 18

3110 3110 3120

8 3 0 0 00 8 3 0 0 00

13-83

Mar

Date 2016

31 29 31

1 4 7 11 28

1 2 3 4

Voucher No. Description

Balance 3/31/16 Replenishment New Balance

Balance Forward Misc. Expense - Doughnuts Postage Expense Delivery Expense Misc Exp-First Aid Emergency

MINI PRACTICE SET, Cont.

1 6 40 3 3 60 5 0 00

5 0 00

Receipts

3 3 60 1 6 40 5 0 00

6 00 1 2 60 5 00 1 0 00

Payment

THE CORNER DRESS SHOP AUXILIARY PETTY CASH RECORD

1 2 00

Postage Expense

5 00

Delivery Expense

Misc

Misc GST

Account

Category of Payment

1 6 60

1 0 00

6 00 60

Amount

Sundry

MINI PRACTICE SET, Cont. THE CORNER DRESS SHOP - PAYROLL REGISTER

Employee Mel Case Jane Holl Jackie Moore Totals

* Federal and Provincial Income Taxes combined

13-84

Net Claim Code 4 1 3

Monthly Salary 1 9 6 0 00 2 9 0 0 00 4 3 0 0 00 9 1 6 0 00

Cumulative CPP

Tax* 5 8 24 3 8 0 55 6 8 4 00 1 1 2 2 79

MINI PRACTICE SET, Cont. PAYROLL REGISTER, Cont. Deductions CPP 8 2 58 1 2 9 11 1 9 8 41 4 1 0 10

EI 3 6 85 5 4 52 8 0 84 1 7 2 21

Health 2 8 00 4 2 00 4 2 00 1 1 2 00

Charitable 2 0 00 3 0 00 4 0 00 9 0 00

Net Pay

Chq. No.

1 7 3 4 33 2 2 6 3 82 3 2 5 4 75 7 2 5 2 90

131 132 133

THE CORNER DRESS SHOP SALES JOURNAL

Date Invoice 2016 No. Mar 4 CD1081 15 CD1082 21 CD1084 31

Customer’s Name Morris Company Bing Company Sally’s Store

Post Ref.

✔ ✔ ✔

Accounts Receivable Dr. 9 8 0 60 1 5 7 45 2 2 0 4 48 3 3 4 2 53 (1120)

Page 3

GST Collected Cr. 4 6 70 7 50 1 0 4 98 1 5 9 18 (2400)

Dress Sales Cr. 9 3 3 90 1 4 9 95 2 0 9 9 50 3 1 8 3 35 (4110)

13-85

13-86

Mar

Date 2016

5 8 12 18

CD1078 CD1076 CD1081 CD1083

Invoice No.

Ronald Company Sally’s Store Morris Co. Cash Sale

Description of Receipt

MINI PRACTICE SET, Cont.

✔ ✔ ✔

Post Ref.

O (X)

Sundry Cr.

9 2 7 2 45 (1120)

5 5 3 8 00 2 7 5 3 85 9 8 0 60

Accounts Receivable Cr.

6 3 4 11 6 3 4 11 (2400)

GST Collected Cr.

THE CORNER DRESS SHOP CASH RECEIPTS JOURNAL

12 6 8 2 25 12 6 8 2 25 (4110)

Sales Cr.

1 8 68 (4140)

1 8 68

Sales Discounts Dr.

5 5 3 8 00 2 7 5 3 85 9 6 1 92 13 3 1 6 36 22 5 7 0 13 (1110)

Cash Dr.

Page 6

13-87

Mar

Date 2016

4 12 13 26

Jones Company Dresses by Shelley Blew Company Dresses by Shelley

Account Credited

MINI PRACTICE SET, Cont.

Mar 4 Mar 12 Mar 13 Mar 26

Date of Invoice JC 59087 DS 12947 BC 1896 DS 13062

Invoice No.

(5040)

10 1 8 5 00

10 6 9 4 25

✔ ✔ ✔ ✔

(2100)

1 0 0 0 00 2 8 5 0 00 4 4 3 5 00 1 9 0 0 00

1 0 5 0 00 2 9 9 2 50 4 6 5 6 75 1 9 9 5 00

Post Ref.

Cost of Goods Sold Dr.

Accounts Payable Cr.

THE CORNER DRESS SHOP PURCHASES JOURNAL

(1150)

5 0 9 25

5 0 00 1 4 2 50 2 2 1 75 9 5 00

GST Prepaid Dr.

Account

Post Ref.

Sundry Dr. Amount

Page 4

13-88

121 122 123 124 125 125 125 126 127 128 129 130 131 132 133 134 134 134

Mar

1 5 8 12 15 15 15 15 15 18 19 20 29 29 29 29 29 29

Chq. No.

Date 2016

Smithstone Realty Dresses by Shelley, DS 12895 Blew Company, BC 1795 Cleaners Inc. CRA- Income Taxes Payable CRA - EI Payable CRA - CPP Payable CRA - GST Collected Gov. of Ont. Medical Plan Pay. Jones Company, JC 59087 Dresses by Shelley, DS 12947 Betty Loeb, Withdrawals Mel Case Jane Holl Jackie Moore Postage Delivery Miscellaneous

Account Debited

MINI PRACTICE SET, Cont.

5595

5540

5500

2200

3120

✔ ✔

2350

2400

2340

2335

2330

5520

✔ ✔

5530

Post Ref.

1 0 0 0 00 1 7 3 4 33 2 2 6 3 82 3 2 5 4 75 1 2 00 5 00 1 6 00 13 8 0 3 12 (X)

3 0 0 00 1 1 0 8 82 4 0 8 79 8 1 0 30 1 8 7 7 31 1 1 2 00

9 0 0 00

Sundry Dr.

8 0 9 6 49 (2100)

1 0 5 0 00 2 9 9 2 50

1 5 1 0 22 2 5 4 3 77

Accounts Payable Dr.

THE CORNER DRESS SHOP CASH PAYMENTS JOURNAL

6 0 60 (1150)

1 5 00

4 5 00

GST Prepaid Dr.

(5040)

Cost of Goods Sold Dr.

5 7 00 (5140)

5 7 00

Purchases Discount Cr.

3 3 60 21 9 0 3 21 (1110)

2 4 1 9 83 1 8 7 7 31 1 1 2 00 1 0 5 0 00 2 9 3 5 50 1 0 0 0 00 1 7 3 4 33 2 2 6 3 82 3 2 5 4 75

9 4 5 00 1 5 1 0 22 2 5 4 3 77 3 1 5 00

Cash Cr.

Page 7

MINI PRACTICE SET, Cont. ACCOUNTS RECEIVABLE LEDGER NAME:

BING COMPANY

ADDRESS Date 2016 Mar 15 19

NAME:

Explanation

Post Ref.

Debit

SJ3

1 5 7 45

Credit 1 5 7 45

GJ4

Dr. Balance 1 5 7 45 O

MORRIS COMPANY

ADDRESS Date 2016 Mar 4 12

NAME:

Explanation

Post Ref.

Debit

SJ3

9 8 0 60

Credit 9 8 0 60

CRJ4

Dr. Balance 9 8 0 60 O

RONALD COMPANY

ADDRESS Date 2016 Mar 1 Balance 5

NAME:

Explanation

Post Ref.

Debit

Credit

Dr. Balance

5 5 3 8 00

5 5 3 8 00 O

Credit

Dr. Balance

2 7 5 3 85

2 7 5 3 85 O 2 2 0 4 48

✔ CRJ6

SALLY’S STORE

ADDRESS Date 2016 Mar 1 Balance 8 21

Explanation

Post Ref.

Debit

✔ CRJ6 SJ3

2 2 0 4 48

THE CORNER DRESS SHOP SCHEDULE OF ACCOUNTS RECEIVABLE MARCH 31, 2016

Sally’s Store Total Accounts Receivable

2 2 0 4 48 2 2 0 4 48

13-89

MINI PRACTICE SET, Cont. ACCOUNTS PAYABLE LEDGER NAME:

BLEW COMPANY

ADDRESS Date 2016 Mar. 1 Balance 8 13 NAME:

Explanation

Post Ref.

Debit

Credit

Cr. Balance

4 6 5 6 75

2 5 4 3 77 O 4 6 5 6 75

Credit

Cr. Balance

2 9 9 2 50 1 9 9 5 00

1 5 1 0 22 O 2 9 9 2 50 O 1 9 9 5 00

Credit

Cr. Balance

1 0 5 0 00

1 0 5 0 00 O

Credit

Cr. Balance

✔ CPJ7

2 5 4 3 77

PJ4

DRESSES BY SHELLEY

ADDRESS Date 2016 Mar. 1 Balance 5 12 19 26

NAME:

Explanation

Post Ref.

Debit

✔ CPJ7

1 5 1 0 22

PJ4 CPJ7

2 9 9 2 50

PJ4

JONES COMPANY

ADDRESS Date 2016 Mar. 4 8

NAME:

Explanation

Post Ref.

Debit

PJ4 CPJ7

1 0 5 0 00

Post Ref.

Debit

SILK MAGIC

ADDRESS Date 2016 Mar. 1 Balance

Explanation

✔

7 3 5 00

THE CORNER DRESS SHOP SCHEDULE OF ACCOUNTS PAYABLE MARCH 31, 2016 Blew Company Dresses by Shelley Silk Magic

13-90

4 6 5 6 75 1 9 9 5 00 7 3 5 00 7 3 8 6 75

MINI PRACTICE SET, Cont. THE CORNER DRESS SHOP - GENERAL LEDGER NAME: CASH Date 2016 Mar. 1 Balance 31 31

ACCOUNT NO. Explanation

Post Ref.

Debit

✔ 21 9 0 3 21

CPJ7 CRJ6

22 5 7 0 13

Explanation

Post Ref.

Debit

Explanation

Post Ref.

Debit

Credit

✔ CRJ

Explanation

DR CR

3 3 4 2 53

Dr Cr Dr

ACCOUNT NO. Post Ref.

Debit

Credit

✔

Post Ref.

Debit

Credit

✔

Explanation

Debit

Credit

✔ GJ5

8 2 9 1 85 8 1 3 4 40 1 1 3 8 05 2 2 0 4 48 1135

6 2 4 30

1140

DR CR

Balance

1 8 0 0 00

DR CR Dr

1 0 0 00

Balance

ACCOUNT NO. Post Ref.

5 0 00

DR CR

ACCOUNT NO. Explanation

Balance

1120

1 5 7 45 9 2 7 2 45

GJ4

SJ3

30 7 7 5 31 8 8 7 2 10 31 4 4 2 23 1115

ACCOUNT NO.

NAME: PREPAID INSURANCE Date 2016 Mar. 1 Balance 31 Adjusting

Credit

Balance

NAME: PREPAID RENT Date 2016 Mar. 1 Balance

✔

NAME: OFFICE SUPPLIES Date 2016 Mar. 1 Balance

ACCOUNT NO.

NAME: ACCOUNTS RECEIVABLE Date 2016 Mar. 1 Balance 19 31 31

DR CR Dr

NAME: PETTY CASH Date 2016 Mar. 1 Balance

Credit

1110

1145 Balance 1 0 0 0 00 9 0 0 00

13-91

MINI PRACTICE SET, Cont. NAME: GST PREPAID Date 2016 Mar. 1 Balance 15 31 31

ACCOUNT NO. Explanation

Post Ref.

Debit

✔ 4 3 6 34

GJ4

6 0 60 5 0 9 25

CPJ7 PJ4

Explanation

Post Ref.

Debit

GJ4

Explanation

13 4 2 4 00

13-92

ACCOUNT NO. Post Ref.

Debit

Credit

✔

Explanation

DR CR Dr

Post Ref.

Debit

Credit

Explanation

5 0 0 0 00

DR CR

1 3 0 56

Credit

✔

Explanation

1335

Debit

Credit

✔ GJ4

2 6 1 12 3 9 1 68

DR CR

Balance

7 3 9 00

1345

DR CR Cr

3 0 79

Balance

1340

ACCOUNT NO. Post Ref.

8 3 0 9 00 O 13 4 2 4 00

Balance

ACCOUNT NO. Post Ref.

Balance

DR CR

✔ GJ4

4 3 6 34 O 6 0 60 5 6 9 85

1330

ACCOUNT NO.

NAME: ACC. DEPN. - COMPUTER SOFTWARE Date 2016 Mar. 1 Balance 31 Adjusting

Credit

Balance

1210

8 3 0 9 00

NAME: COMPUTER SOFTWARE Date 2016 Mar. 1 Balance

✔ GJ4

NAME: ACC. DEPN. - COMPUTER & OFFICE EQUIPMENT Date 2016 Mar. 1 Balance 31 Adjusting

ACCOUNT NO.

NAME: COMPUTER AND OFFICE EQUIPMENT Date 2016 Mar. 1 Balance

DR CR Dr

NAME: INVENTORY Date 2016 Mar. 1 Balance 31 Adjusting 31 Adjusting

Credit

1150

Balance 6 1 58 9 2 37

MINI PRACTICE SET, Cont. NAME: DELIVERY TRUCK Date 2016 Mar. 1 Balance

Explanation

ACCOUNT NO. Post Ref.

Debit

✔

NAME: ACC. DEPN. - DELIVERY TRUCK Date 2016 Mar. 1 Balance 31 Adjusting

Explanation

Post Ref.

Debit

12 0 0 0 00

Credit

Explanation

ACCOUNT NO. Post Ref.

Debit

Credit

CPJ7

8 0 9 6 49

ACCOUNT NO. Post Ref. CPJ7 CPJ7 CPJ7

Debit

Credit

Cr Cr Cr

7 2 5 2 90

ACCOUNT NO. Post Ref.

Debit

Credit

1 1 0 8 82 1 1 2 2 79

GJ4

ACCOUNT NO. Explanation

Post Ref.

Debit

Credit

✔ CPJ7 GJ4 GJ4

4 7 8 8 99 3 3 0 7 50 7 3 8 6 75

Balance 1 7 3 4 33 3 9 9 8 15 7 2 5 2 90 O

Balance 1 1 0 8 82 O 1 1 2 2 79 2335

DR CR Cr

4 0 8 79 1 7 2 21 2 4 1 09

Balance

2330

DR CR

✔ CPJ7

3 4 0 00 5 1 0 00

2200

DR CR

1 7 3 4 33 2 2 6 3 82 3 2 5 4 75

GJ4

Explanation

10 6 9 4 25

PJ4

Balance

2100

DR CR

✔

Explanation

1355

DR CR

1 7 0 00

GJ5

NAME: EI PAYABLE Date 2016 Mar. 1 Balance 15 29 29

NAME: INCOME TAXES PAYABLE Date 2016 Mar. 1 Balance 15 29

Balance

✔

NAME: ACCRUED WAGES PAYABLE Date 2016 Mar. 29 29 29 31

DR CR

ACCOUNT NO.

NAME: ACCOUNTS PAYABLE Date 2016 Mar. 1 Balance 31 31

Credit

1350

Cr Cr

Balance 4 0 8 79 O 1 7 2 21 4 1 3 30

13-93

MINI PRACTICE SET, Cont. NAME: CPP PAYABLE Date 2016 Mar. 1 Balance 15 29 29

ACCOUNT NO. Explanation

Post Ref.

Debit

8 1 0 30 4 1 0 10 4 1 0 10

GJ4 GJ4

Explanation

Post Ref.

Debit

CPJ7

13-94

DR CR

1 1 2 00 1 1 2 00

GJ4

Explanation

ACCOUNT NO. Post Ref.

Debit

Credit

9 0 00

GJ4

Explanation

ACCOUNT NO. Post Ref.

Debit

Credit

GJ4 CPJ7 GJ4

4 3 6 34 1 8 7 7 31 7 50

SJ3

Explanation

6 3 4 11 1 5 9 18

CRJ6

Cr Cr

ACCOUNT NO. Post Ref.

Debit

Credit

GJ4

3 0 0 00

Explanation

ACCOUNT NO. Post Ref.

Debit

GJ5

DR CR

16 7 7 0 18

8 3 0 0 00

Balance 1 8 0 00 2 7 0 00

Balance 2 3 1 3 65 1 8 7 7 31 O 7 50 6 2 6 61 7 8 5 79

Balance 6 0 0 00 3 0 0 00

3110

Credit

✔ GJ5

1 1 2 00 O 1 1 2 00

2500

DR CR

✔

Balance

2400

DR CR

✔

8 1 0 30 O 4 1 0 10 8 2 0 20

2360

DR CR

✔

NAME: B. LOEB, CAPITAL Date 2016 Mar. 1 Balance 31 Closing 31 Closing

Credit

Balance

2350

NAME: RENT RECEIVED IN ADVANCE Date 2016 Mar. 1 Balance 31 Adjusting

✔

NAME: GST COLLECTED Date 2016 Mar. 1 Balance 15 15 19 31 31

ACCOUNT NO.

NAME: CHARITABLE DONATIONS PAYABLE Date 2016 Mar. 1 Balance 29

DR CR

✔ CPJ7

NAME: MEDICAL PLAN PAYABLE Date 2016 Mar. 1 Balance 15 29

Credit

2340

Balance 48 0 7 8 80 64 8 4 8 98 56 5 4 8 98

MINI PRACTICE SET, Cont. NAME: B. LOEB, WITHDRAWALS Date 2016 Mar. 1 Balance 20 31 Closing

Explanation

ACCOUNT NO. Post Ref.

Debit

✔ CPJ7

1 0 0 0 00

Adjusting Adjusting Closing Closing Closing

ACCOUNT NO. Post Ref.

Debit

GJ4

8 3 0 9 00

GJ5 GJ5 GJ5

Post Ref.

Debit

Cr Cr

Credit

DR CR

12 6 8 2 25 3 1 8 3 35

CRJ6 SJ3 GJ5

Explanation

CRJ6

Debit

Credit

1 8 68

Post Ref.

Debit

GJ4

1 4 9 95

DR CR

Balance 59 8 6 5 05 72 5 4 7 30 75 7 3 0 65 O

Balance 1 8 68 O

Credit

4150

DR CR Dr

1 4 9 95

ACCOUNT NO. Debit

GJ4 GJ5

8 3 0 9 00 5 1 1 5 00 81 2 0 2 65 16 7 7 0 18 O

4140

ACCOUNT NO.

Post Ref.

Balance

1 8 68

GJ5

Explanation

75 7 3 0 65

GJ5

Explanation

ACCOUNT NO. Post Ref.

7 3 0 0 00 8 3 0 0 00 O

4110

NAME: RENTAL INCOME Date 2016 Mar. 31 Adjusting 31 Closing

✔

NAME: SALES RETURNS & ALLOWANCES Date 2016 Mar. 18 31 Closing

ACCOUNT NO. Explanation

Balance

3380

DR CR

64 4 3 2 47 16 7 7 0 18

NAME: SALES DISCOUNTS Date 2016 Mar. 31 31 Closing

Credit

13 4 2 4 00 76 0 8 7 65

GJ4

NAME: SALES Date 2016 Mar. 1 Balance 31 31 31 Closing

8 3 0 0 00

GJ5

Explanation

DR CR Dr

NAME: INCOME SUMMARY Date 2016 Mar. 31 31 31 31 31

Credit

3120

3 0 0 00

Balance 1 4 9 95 O

4200

Credit

DR CR

3 0 0 00

Balance 3 0 0 00 O

13-95

MINI PRACTICE SET, Cont. NAME: COST OF GOODS SOLD Date 2016 Mar. 1 Balance 31 31 Closing

Explanation

ACCOUNT NO. Post Ref.

Debit

✔ PJ4

10 1 8 5 00

ACCOUNT NO. Post Ref.

Debit

GJ5

Explanation

Debit

Post Ref.

Debit

13-96

Credit

✔

DR CR

GJ4

DR CR Dr

9 1 6 0 00

27 2 8 0 00

GJ5

ACCOUNT NO. Explanation

Post Ref.

Debit

Credit

✔ GJ4

DR CR Dr

2 4 1 09

7 1 8 01

GJ5

NAME: CPP EXPENSE Date 2016 Mar. 1 Balance 31 31 Closing

ACCOUNT NO.

NAME: EI EXPENSE Date 2016 Mar. 1 Balance 31 31 Closing

DR CR

ACCOUNT NO. Post Ref.

ACCOUNT NO. Explanation

Post Ref.

Debit

Credit

✔ GJ4 GJ5

DR CR Dr

4 1 0 10

1 2 2 0 40

Balance 19 0 7 3 38 29 2 5 8 38 O 5140

5 7 00

NAME: WAGES EXPENSE Date 2016 Mar. 1 Balance 31 31 Closing

Credit 5 7 00

CPJ7

NAME: PURCHASES RETURNS & ALLOWANCES Date 2016

29 2 5 8 38

GJ5

Explanation

DR CR Dr

NAME: PURCHASES DISCOUNTS Date 2016 Mar. 31 31 Closing

Credit

5040

Balance 5 7 00 O

5150 Balance

5400 Balance 18 1 2 0 00 27 2 8 0 00 O 5430 Balance 4 7 6 92 7 1 8 01 O 5440 Balance 8 1 0 30 1 2 2 0 40 O

MINI PRACTICE SET, Cont. NAME: POSTAGE EXPENSE Date 2016 Mar. 30 31 Closing

NAME:

Explanation

ACCOUNT NO. Post Ref.

Debit 1 2 00

CPJ7

Explanation

Post Ref.

Debit

1 0 0 00

ACCOUNT NO. Post Ref.

Debit

CPJ7

3 0 0 00

Post Ref.

Debit

Credit

CPJ7

9 0 0 00

2 7 0 0 00

GJ5

ACCOUNT NO. Post Ref.

Debit

GJ5

DR CR

5510 Balance 2 0 0 00 3 0 0 00 O

5520 Balance 3 0 0 00 O

5530 Balance 1 8 0 0 00 2 7 0 0 00 O 5540 Balance 5 00

ACCOUNT NO.

Debit

Credit

✔ GJ4

1 2 00 O

5 00

GJ5

Post Ref.

Credit

5 00

CPJ7

Explanation

DR CR Dr

NAME: DEPN. EXP - COMPUTER AND OFFICE EQUIPMENT Date 2016 Mar. 1 Balance 31 Adjusting 31 Closing

✔

Explanation

DR CR

ACCOUNT NO.

NAME: DELIVERY EXPENSE Date 2016 Mar. 30 31 Closing

Credit 3 0 0 00

GJ5

Explanation

3 0 0 00

GJ5

Explanation

DR CR Dr

NAME: RENT EXPENSE Date 2016 Mar. 1 Balance 1 31 Closing

Credit

✔ GJ5

Balance

ACCOUNT NO.

NAME: CLEANING EXPENSE Date 2016 Mar. 12 31 Closing

DR CR

1 2 00

GJ5

INSURANCE EXPENSE

Date 2016 Mar. 1 Balance 31 Adjusting 31 Closing

Credit

5500

DR CR Dr

1 3 0 56

3 9 1 68

5550 Balance 2 6 1 12 3 9 1 68 O

13-97

MINI PRACTICE SET, Cont. NAME: DEPN. EXP - SOFTWARE Date 2016 Mar. 1 Balance 31 Adjusting 31 Closing NAME:

Explanation

ACCOUNT NO. Post Ref.

Debit

✔ GJ4

3 0 79

ACCOUNT NO. Post Ref.

Debit

13-98

5 1 0 00

GJ5

Explanation

ACCOUNT NO. Post Ref.

Debit

Credit

✔

DR CR Dr

1 4 6 0 00

GJ5

Explanation

DR CR Dr

1 7 0 00

NAME: MISCELLANEOUS EXPENSE Date 2016 Mar. 29 31 Closing

Credit

✔ GJ5

NAME: ACCOUNTING EXPENSE Date 2016 Mar. 1 Balance 31 Closing

9 2 37

GJ5

Explanation

DR CR Dr

DEPN. EXPENSE - DELIVERY TRUCK

Date 2016 Mar. 1 Balance 31 Adjusting 31 Closing

Credit

ACCOUNT NO. Post Ref. CPJ7 GJ5

Debit

Credit

1 6 00

DR CR Dr

1 6 00

5560 Balance 6 1 58 9 2 37 O 5570 Balance 3 4 0 00 5 1 0 00 O

5590 Balance 1 4 6 0 00 O

5595 Balance 1 6 00 O

MINI PRACTICE SET, THE CORNER DRESS SHOP, Cont. THE CORNER DRESS SHOP - MARCH 31, 2016 Account Titles Cash Petty Cash Accounts Receivable Office Supplies Prepaid Rent Prepaid Insurance GST Prepaid Inventory Computer and Office Equipment Acc. Depn. - Computer & Office Equip Computer Software Acc. Depn. - Computer Software Delivery Truck Acc. Depn. - Delivery Truck Accounts Payable Income Taxes Payable EI Payable CPP Payable Medical Plan Payable Charitable Donations Payable GST Collected Rent Received in Advance Betty Loeb, Capital Betty Loeb, Withdrawals Income Summary Sales Sales Discounts Sales Returns & Allowances Rental Income Cost of Goods Sold Purchases Discounts Wages Expense EI Expense CPP Expense Postage Expense Insurance Expense

Trial Balance Dr.

Adjustments Cr.

31 4 4 2 23 5 0 00 2 2 0 4 48 6 2 4 30 1 8 0 0 00 1 0 0 0 00 5 6 9 85 8 3 0 9 00 5 0 0 0 00

Dr.

Cr.

1 0 0 00 13 4 2 4 00

8 3 0 9 00

2 6 1 12

1 3 0 56

6 1 58

3 0 79

3 4 0 00 7 3 8 6 75 1 1 2 2 79 4 1 3 30 8 2 0 20 1 1 2 00 2 7 0 00 7 8 5 79 6 0 0 00 48 0 7 8 80

1 7 0 00

7 3 9 00 12 0 0 0 00

3 0 0 00

8 3 0 0 00 8 3 0 9 00

13 4 2 4 00

75 7 3 0 65 1 8 68 1 4 9 95 3 0 0 00 29 2 5 8 38 5 7 00 27 2 8 0 00 7 1 8 01 1 2 2 0 40 1 2 00 2 0 0 00

1 0 0 00

Continued on page 13-99B

13-99A

MINI PRACTICE SET, THE CORNER DRESS SHOP, Cont. THE CORNER DRESS SHOP - MARCH 31, 2016 Account Titles Cleaning Expense Rent Expense Delivery Depn. Expense-Comp & Office Equip. Depn. Expense - Software Depn. Expense - Delivery Truck Accounting Expense Miscellaneous Expense

Trial Balance Dr. Cr. 3 0 0 00 2 7 0 0 00 5 00 2 6 1 12 6 1 58 3 4 0 00 1 4 6 0 00 1 6 00 136 0 3 9 98 136 0 3 9 98

Net Income

Continued from page 13-99A

13-99B

Adjustments Dr.

Cr.

1 3 0 56 3 0 79 1 7 0 00

22 4 6 4 35

WORKSHEET - FOR MONTH ENDED MARCH 31, 2016 Adjusted Trial Balance Dr. Cr. 31 4 4 2 23 5 0 00 2 2 0 4 48 6 2 4 30 1 8 0 0 00 9 0 0 00 5 6 9 85 13 4 2 4 00 5 0 0 0 00 3 9 1 68 7 3 9 00 9 2 37 12 0 0 0 00 5 1 0 00 7 3 8 6 75 1 1 2 2 79 4 1 3 30 8 2 0 20 1 1 2 00 2 7 0 00 7 8 5 79 3 0 0 00 48 0 7 8 80 8 3 0 0 00 8 3 0 9 00 13 4 2 4 00 75 7 3 0 65 1 8 68 1 4 9 95 3 0 0 00 29 2 5 8 38 5 7 00 27 2 8 0 00 7 1 8 01 1 2 2 0 40 1 2 00 3 0 0 00

Income Statement Dr. Cr.

Balance Sheet Dr. 31 4 4 2 23 5 0 00 2 2 0 4 48 6 2 4 30 1 8 0 0 00 9 0 0 00 5 6 9 85 13 4 2 4 00 5 0 0 0 00

Cr.

3 9 1 68 7 3 9 00 9 2 37 12 0 0 0 00 5 1 0 00 7 3 8 6 75 1 1 2 2 79 4 1 3 30 8 2 0 20 1 1 2 00 2 7 0 00 7 8 5 79 3 0 0 00 48 0 7 8 80 8 3 0 0 00 8 3 0 9 00

13 4 2 4 00 75 7 3 0 65

1 8 68 1 4 9 95 3 0 0 00 29 2 5 8 38 5 7 00 27 2 8 0 00 7 1 8 01 1 2 2 0 40 1 2 00 3 0 0 00

13-100A

WORKSHEET - FOR MONTH ENDED MARCH 31, 2016 Adjusted Trial Balance Dr. Cr. 3 0 0 00 2 7 0 0 00 5 00 3 9 1 68 9 2 37 5 1 0 00 1 4 6 0 00 1 6 00 149 7 9 5 33 149 7 9 5 33

13-100B

Income Statement Dr. Cr. 3 0 0 00 2 7 0 0 00 5 00 3 9 1 68 9 2 37 5 1 0 00 1 4 6 0 00 1 6 00 72 7 4 1 47 89 5 1 1 65 16 7 7 0 18 89 5 1 1 65 89 5 1 1 65

Balance Sheet Dr.

Cr.

77 0 5 3 86

60 2 8 3 68 16 7 7 0 18 77 0 5 3 86

77 0 5 3 86

MINI PRACTICE SET , Cont. THE CORNER DRESS SHOP INCOME STATEMENT FOR THE MONTH ENDED MARCH 31, 2016 Revenue: Gross Sales Less: Sales Returns and Allowances Sales Discounts Net Sales Cost of Goods Sold: Inventory, 3/01/16 Cost of Goods Sold Less: Purchases Discounts Net Cost of Purchases Cost of Goods Available for Sale Less: Inventory, 3/31/16 Cost of Goods Sold Gross Profit Operating Expenses: Wages Expense EI Expense CPP Expense Postage Expense Insurance Expense Cleaning Expense Rent Expense Delivery Expense Depn. Expense - Comp. & Office Equip. Depn. Expense - Software Depn. Expense - Delivery Truck Accounting Expense Miscellaneous Expense Total Operating Expenses Net Income from Operations

$7 5 7 3 0 6 5 $1 4 9 9 5 1 8 68

1 6 8 63 75 5 6 2 02

8 3 0 9 00 $2 9 2 5 8 3 8 5 7 00 29 2 0 1 38 37 5 1 0 38 13 4 2 4 00 24 0 8 6 38 51 4 7 5 64

27 2 8 0 00 7 1 8 01 1 2 2 0 40 1 2 00 3 0 0 00 3 0 0 00 2 7 0 0 00 5 00 3 9 1 68 9 2 37 5 1 0 00 1 4 6 0 00 1 6 00 35 0 0 5 46 16 4 7 0 18

Other Income: Rental Income Net Income

3 0 0 00 $1 6 7 7 0 1 8

13-101

MINI PRACTICE SET , Cont. THE CORNER DRESS SHOP STATEMENT OF OWNER’S EQUITY FOR THE MONTH ENDED MARCH 31, 2016 Betty Loeb, Capital, March 1, 2016 Net Income Less: Withdrawals Increase in Capital Betty Loeb, Capital, March 31, 2016

13-102

$4 8 0 7 8 8 0 $1 6 7 7 0 1 8 8 3 0 0 00 8 4 7 0 18 $5 6 5 4 8 9 8

MINI PRACTICE SET , Cont. THE CORNER DRESS SHOP BALANCE SHEET MARCH 31, 2016 Assets Current Assets: Petty Cash Cash Accounts Receivable Office Supplies Prepaid Rent Prepaid Insurance Prepaid GST Inventory Total Current Assets Capital Assets: Computer & Office Equipment Less: Accumulated Depreciation, Comp. & Office Equip. Computer Software Less: Accumulated Depreciation, Software Delivery Truck Less: Accumulated Depreciation, Delivery Truck Total Assets Liabilities Current Liabilities: Accounts Payable Income Taxes Payable EI Payable CPP Payable Medical Plan Payable Charitable Donations Payable GST Collected Rent Received in Advance Total Liabilities Owner’s Equity Betty Loeb, Capital, 3/31/16 Total Liabilities and Owner’s Equity

$ 5 0 00 31 4 4 2 23 2 2 0 4 48 6 2 4 30 1 8 0 0 00 9 0 0 00 5 6 9 85 13 4 2 4 00 $5 1 0 1 4 8 6 $5 0 0 0 0 0 3 9 1 68 7 3 9 00 9 2 37 12 0 0 0 00 5 1 0 00

$4 6 0 8 3 2 6 4 6 63 11 4 9 0 00

16 7 4 4 95 $6 7 7 5 9 8 1

$7 3 8 6 7 5 1 1 2 2 79 4 3 1 30 8 2 0 20 1 1 2 00 2 7 0 00 7 8 5 79 3 0 0 00 $1 1 2 1 0 8 3

56 5 4 8 98 $6 7 7 5 9 8 1

13-103

MINI PRACTICE SET , Cont. THE CORNER DRESS SHOP POST-CLOSING TRIAL BALANCE MARCH 31, 2016 Cash Petty Cash Accounts Receivable Office Supplies Prepaid Rent Prepaid Insurance GST Prepaid Inventory Computer and Office Equipment Acc. Depn.-Computer & Office Equipment Computer Software Acc. Depn.-Computer Software Delivery Truck Acc. Depn.- Delivery Truck Accounts Payable Income Taxes Payable EI Payable CPP Payable Medical Plan Payable Charitable Donations Payable GST Collected Rent Received in Advance B. Loeb, Capital Totals

13-104

31 4 2 2 23 5 0 00 2 2 0 4 48 6 2 4 30 1 8 0 0 00 9 0 0 00 5 6 9 85 13 4 2 4 00 5 0 0 0 00 3 9 1 68 7 3 9 00 9 2 37 12 0 0 0 00

68 7 5 3 86

5 1 0 00 7 3 8 6 75 1 1 2 2 79 4 1 3 30 8 2 0 20 1 1 2 00 2 7 0 00 7 8 5 79 3 0 0 00 56 5 4 8 98 68 7 5 3 86

14 Accounting for Bad Debts

ANSWERS TO DISCUSSION QUESTIONS AND CRITICAL THINKING/ETHICAL CASE

1. 2. 3.

4. 5. 6. 7. 8. 9.

10.

11. 12. 13. 14.

The matching principle estimates the bad debts expense in the same period the sale is made, although the actual bad debt may not occur until future periods. The Allowance for Doubtful Accounts accumulates estimated amounts of accounts receivable that will not be collectible. Accounts Receivable - Allowance for Doubtful Accounts = Net Realizable Value False. In the allowance method, Allowance for Doubtful Accounts would be debited. It has the opposite balance of Accounts Receivable and is deducted from that account. False. It is an adjusting entry, not a closing entry. Reject. The income statement approach is based on net sales on the income statement. Balance sheet approach. A company would age its accounts receivable to identify uncollected amounts due from individual customers by the number of days that they are past due. This would indicate the efficiency of the collection process. a. Allowance for Doubtful Accounts XXX Accounts Receivable XXX b. Accounts Receivable XXX Allowance for Doubtful Accounts XXX Cash XXX Accounts Receivable XXX Both the Allowance account and Accounts Receivable are decreasing by the same amount. The direct write-off method recognizes a bad debts expense when a customer is deemed uncollectible. This method doesn't fulfill the matching principle. In the direct write-off method, Bad Debts Recovered is a revenue account that is used when a bad debt is reinstated after the fiscal year in which the write-off occurred. Pete could avoid bad debts by use of credit cards. It is common practice to pass on the cost of credit cards to customers. The issue of the allowance method should have minimal influence in his decision.

14-1

SOLUTIONS TO CLASSROOM DEMONSTRATION EXERCISES, Set A

Bad Debts Expense Allowance for Doubtful Accounts Bad Debts Expense - Income Statement Allowance for Doubtul Accounts -- Balance Sheet

Expense Asset (Contra)

Debit Credit

The balance in the Allowance account is ignored in the Income Statement approach. If the balance in the Allowance account is $300 and the new estimate is $500, the full $500 should be put in the Reserve.

Page 3 Date

Account Title and Description

a. Bad Debts Expense

Post Ref.

Dr.

Cr.

7 0 0 00

Allowance for Doubtful Accounts

7 0 0 00

To provide for doubtful accounts based on sales

Bad Debts Expense

3 0 0 00

Allowance for Doubtful Accounts

3 0 0 00

To provide for doubtful accounts based on receivables

#1 Allowance for Doubtful Accounts

1 0 0 00

Accounts Receivable, Mia Kaminsky

1 0 0 00

To transfer uncollectible account

Accounts Receivable, Mia Kaminsky

1 0 0 00

Allowance for Doubtful Accounts

1 0 0 00

To reverse entry made (date) Cash

1 0 0 00 Accounts Receivable, Mia Kaminsky

1 0 0 00

To record cash received from Mia Kaminsky

#1 Bad Debts Expense

1 0 0 00

Accounts Receivable, Mia Kaminsky

1 0 0 00

To write off uncollectible account

#2 Accounts Receivable, Mia Kaminsky

1 0 0 00

Bad Debts Recovered

1 0 0 00

To record recovery of bad debt Cash

1 0 0 00 Accounts Receivable, Mia Kaminsky Cash received from Mia Kaminsky

14-2

1 0 0 00

SOLUTIONS TO CLASSROOM DEMONSTRATION EXERCISES, Set B

Bad Debts Expense Accounts Receivable Bad Debts Expense -- Income Statement Accounts Receivable -- Balance Sheet Bad Debts Expense -- Temporary Account Accounts Receivable -- Permanent Account

b. c.

A. B. C. D.

Expense Asset

Debit Credit

Bad Debts Expense Allowance for Doubtful Accounts Income Statement Approach Balance Sheet Approach Page 3

Date

Post Ref.

Account Title and Description Bad Debts Expense

Dr.

Cr.

4 0 0 00

Allowance for Doubtful Accounts

4 0 0 00

To provide for doubtful accounts based on sales

Bad Debts Expense

3 0 0 00

Allowance for Doubtful Accounts

3 0 0 00

To provide for doubtful accounts based on receivables

#1 Allowance for Doubtful Accounts

5 0 00

Accounts Receivable, Bill Allen

5 0 00

To transfer uncollectible account

Accounts Receivable, Bill Allen

5 0 00

Allowance for Doubtful Accounts

5 0 00

To reverse entry made (date) Cash

5 0 00 Accounts Receivable, Bill Allen

5 0 00

To record cash received from Bill Allen

#1 Bad Debts Expense

5 0 00

Accounts Receivable, Bill Allen

5 0 00

To write off uncollectible account

#2 Accounts Receivable, Bill Allen

5 0 00

Bad Debts Recovered

5 0 00

To record recovery of bad debt Cash

5 0 00 Accounts Receivable, Bill Allen

5 0 00

Cash received from Bill Allen

14-3

SOLUTIONS TO EXERCISES

EXERCISE 14-1. ROBSON CO. PARTIAL BALANCE SHEET DECEMBER 31, 2012 Current Assets: Cash

$1 1 5 0 0 0 0 0

Petty Cash

6 0 00

Accounts Receivable Less: Allowance for Doubtful Accounts

$6 0 0 0 0 0 0 12 0 0 0 00

Merchandise Inventory

48 0 0 0 00 18 0 0 0 00

Total Current Assets

$1 8 1 0 6 0 0 0

EXERCISE 14-2. Date 2012 Dec

Account Title and Description

Post Ref.

31 Bad Debts Expense

Dr.

Cr.

4 0 0 0 00

Allowance for Doubtful Accounts

4 0 0 0 00

To record Allowance at 4% of net sales

EXERCISE 14-3. Date 2012 Dec

Account Title and Description

31 Bad Debts Expense Allowance for Doubtful Accounts To increase Allowance to $8,000, based on aging of Accounts Receivable

14-4

Post Ref.

Dr.

Cr.

3 0 0 0 00 3 0 0 0 00

EXERCISE 14-4. a.

Page 5

Date 2013 Dec

Account Title and Description

Post Ref.

31 Bad Debt Expense

Dr.

Cr.

12 0 0 0 00

Allowance for Doubtful Accounts

12 0 0 0 00

2014 April

1 Allowance for Doubtful Accounts

4 0 0 0 00

Accounts Receivable, Angie Ring June

4 0 0 0 00

3 Allowance for Doubtful Accounts

3 0 0 0 00

Accounts Receivble, Mike Catuc

3 0 0 0 00

2015 Aug

7 Accounts Receivable, Mike Catuc

5 0 0 00

Allowance for Doubtful Accounts

5 0 0 00

7 Cash

5 0 0 00

Accounts Receivable, Mike Catuc

5 0 0 00

Page 12

Date Account Title and Description 2014 June 3 Bad Debts Expense

Post Ref.

Dr.

Cr.

3 0 0 0 00

Accounts Receivable, Mike Catuc

3 0 0 0 00

2015 Aug

7 Accounts Receivable, Mike Catuc

5 0 0 00

Bad Debts Recovered

5 0 0 00

7 Cash

5 0 0 00

Accounts Receivable, Mike Catuc

5 0 0 00

EXERCISE 14-5. Date 2014

Page 15 Account Title and Description

Post Ref.

Dr.

Cr.

a. Dec

31 Bad Debts Expense

1 0 0 0 00

Allowance for Doubtful Accounts

1 0 0 0 00

(.005 of net sales - $200,000) b. Dec

31 Bad Debts Expense Allowance for Doubtful Accounts

3 2 0 0 00 3 2 0 0 00

14-5

PROBLEM 14A-1. Date 2012 Dec

YUEN CO. GENERAL JOURNAL Account Title and Description

31 Bad Debts Expense

Page 14 Post Ref.

Dr.

Cr.

13 0 0 0 00

Allowance for Doubtful Accounts

13 0 0 0 00

To provide for doubtful accounts based on sales 2013 Jan

7 Allowance for Doubtful Accounts

8 0 0 00

Accounts Receivable, Gene Smore

8 0 0 00

Transfer uncollectible account Mar

5 Allowance for Doubtful Accounts

6 0 0 00

Accounts Receivable, Paul Jane

6 0 0 00

Transfer uncollectible account July

9 Accounts Receivable, Paul Jane

3 0 0 00

Allowance for Doubtful Accounts

3 0 0 00

Reverse entry; now collected 9 Cash

3 0 0 00

Accounts Receivable, Paul Jane

3 0 0 00

To record cash received from Paul Jane Aug

19 Allowance for Doubtful Accounts

1 3 0 0 00

Accounts Receivable, Bob Seager

1 3 0 0 00

Transfer uncollectible account 23 Allowance for Doubtful Accounts

7 5 0 00

Accounts Receivable, Jill Neuman

7 5 0 00

Transfer uncollectible account Nov

19 Accounts Receivable, Bob Seager

4 0 0 00

Allowance for Doubtful Accounts

4 0 0 00

Reverse entry; now collected 19 Cash

4 0 0 00

Accounts Receivable, Bob Seager To record cash received from Bob Seager

14-6

4 0 0 00

PROBLEM 14A-2. ALVIE CO. GENERAL JOURNAL Date 2013 a.

Dec

Page 5 Post Ref.

Account Title and Description 31 Bad Debt Expense

Dr.

Cr.

5 0 5 0 00

Allowance for Doubtful Accounts

5 0 5 0 00

($5,350 = $1,300 + $450 + $1,600 + $2,000; $5,350 - $300 = $5,050) c.

31 Bad Debts Expense

5 6 5 0 00

Allowance for Doubtful Accounts

5 6 5 0 00

($5,350 + $300)

ALVIE CO. PARTIAL BALANCE SHEET DECEMBER 31, 2013 b.

Current Assets: Cash Accounts Receivable Less: Allowance for Doubtful Accounts Merchandise Inventory Total Current Assets

$3 0 0 0 0 0 0 $1 5 2 0 0 0 0 0 5 3 5 0 00

146 6 5 0 00 12 0 0 0 00 $1 8 8 6 5 0 0 0

14-7

T. J. RACK COMPANY GENERAL JOURNAL

PROBLEM 14A-3. Date 2014 Mar

Account Title and Description 11 Bad Debts Expense

Page 4 Post Ref.

Dr.

Cr.

1 8 0 0 00

Accounts Receivable, S. Rose

1 8 0 0 00

Write off uncollectible account Apr

14 Bad Debts Expense

7 5 0 00

Accounts Receivable, P. Soy

7 5 0 00

Write off uncollectible account 2015 Nov

6 Accounts Receivable, P. Soy

7 5 0 00

Bad Debts Recovered

7 5 0 00

Recovery of bad debt written off 6 Cash

7 5 0 00

Accounts Receivable, P. Soy

7 5 0 00

To record cash received from P. Soy Dec

8 Bad Debts Expense

2 8 5 00

Accounts Receivable, J. Miller

2 8 5 00

Write off uncollectible account Dec

11 Bad Debts Expense Accounts Receivable, D. Lovejoy Write off uncollectible account

14-8

3 7 5 00 3 7 5 00

PROBLEM 14A-4. Date 2013 Jan

SIMON COMPANY GENERAL JOURNAL

Page 2 Post Ref.

Account Title and Description 8 Accounts Receivable, Ray's Supply

Dr.

Cr.

1 5 0 0 00

Sales

1 5 0 0 00 Sale of merchandise 114

15 Allowance for Doubtful Accounts

6 0 0 00

Accounts Receivable, Pete Runnels

6 0 0 00

Transfer of uncollectible account Mar

15 Accounts Receivable, Roland Co.

4 0 0 00 114

Allowance for Doubtful Accounts

4 0 0 00

To record collection of bad debt 15 Cash

4 0 0 00

Accounts Receivable, Roland Co.

4 0 0 00

Cash received from Roland Co. Apr

9 Cash

4 0 0 00 114

Allowance for Doubtful Accounts

3 6 0 0 00

Accounts Receivable, Lane Drug

4 0 0 0 00

Received portion of receivable and write off balance June

14 Accounts Receivable, Mel's Garage Allowance for Doubtful Accounts

1 2 0 0 00 114

Cash

1 2 0 0 00 1 2 0 0 00

Accounts Receivable, Mel's Garage

1 2 0 0 00

Reverse entry of 2010 written off account. Paid June 14 Oct

18 Allowance for Doubtful Accounts

114

1 2 0 0 00

Accounts Receivable, Jane's Diner

2 0 0 00

Accounts Receivable, Keen Auto

4 0 0 00

Accounts Receivable, Ralph's Hardware

6 0 0 00

Transfer of uncollectible accounts Nov

12 Accounts Receivable, J. B. Rug

1 9 0 0 00

Sales

1 9 0 0 00 Sale of merchandise

Dec

31 Bad Debts Expense Allowance for Doubtful Accounts

612

6 7 0 0 00

114

6 7 0 0 00

Provide for Doubtful Accounts based on A/R 31 Income Summary Bad Debt Expense

313 612

6 7 0 0 00 6 7 0 0 00

14-9

PROBLEM 14A-4., Cont.

SIMON COMPANY PARTIAL GENERAL LEDGER

NAME: ALLOWANCE FOR DOUBTFUL ACCOUNTS Date 2013 Jan 1 Balance

Post Ref

ACCOUNT NO.

114

DR CR

Balance

GJ2

Mar

GJ2

Apr

GJ2

Jun

GJ2

Oct

GJ2

Dec

31 Adjusting Entry

GJ2

4 1 0 0 00 3 5 0 0 00 3 9 0 0 00 3 0 0 00 1 5 0 0 00 3 0 0 00 7 0 0 0 00

Explanation

NAME:

INCOME SUMMARY

Date 2013

Explanation

Dec

NAME:

BAD DEBTS EXPENSE

Date 2013

Explanation

Dec

Debit

Credit

6 0 0 00 4 0 0 00

3 6 0 0 00 1 2 0 0 00 6 7 0 0 00

Debit

GJ2

6 7 0 0 00

Post Ref

Debit

31 Adjusting Entry

GJ2

6 7 0 0 00

31 Closing Entry

GJ2

Cr Cr

1 2 0 0 00

Post Ref

ACCOUNT NO.

312

DR CR

Balance

6 7 0 0 00

Credit

ACCOUNT NO.

612

DR CR

Balance

6 7 0 0 00

Credit

6 7 0 0 00

SIMON COMPANY PARTIAL BALANCE SHEET DECEMBER 31, 2013 Current Assets: Cash Accounts Receivable Less: Allowances for Doubtful Accounts Merchandise Inventory Office Supplies Prepaid Rent Total Current Assets

$1 3 0 0 0 0 0 $1 6 0 0 0 0 0 0 7 0 0 0 00

153 0 0 0 00 103 0 0 0 00 2 1 1 0 00 1 2 5 0 00 $2 7 2 3 6 0 0 0

PROBLEM 14B-1. Date 2012 Dec

YUEN CO. GENERAL JOURNAL Account Title and Description

31 Bad Debts Expense

Page 14 Post Ref.

Dr.

Cr.

14 8 0 0 00

Allowance for Doubtful Accounts

14 8 0 0 00

Provide for Doubtful Accounts 2013 Jan

8 Allowance for Doubtful Accounts

1 2 0 0 00

Accounts Receivable, Woody Tree

1 2 0 0 00

Transfer of uncollectible account Mar

5 Allowance for Doubtful Accounts

6 0 0 00

Accounts Receivable, Jim Lantz

6 0 0 00

Transfer of uncollectible account July

9 Accounts Receivable, Jim Lantz

6 0 0 00

Allowance for Doubtful Accounts

6 0 0 00

Reverse entry, now collected 9 Cash

6 0 0 00

Accounts Receivable, Jim Lantz

6 0 0 00

Cash received from Jim Lantz Aug

20 Allowance for Doubtful Accounts

7 5 0 00

Accounts Receivable, Mabel Hest

7 5 0 00

Transfer of uncollectible account 23 Allowance for Doubtful Accounts

9 5 0 00

Accounts Receivable, Jim O'Reilly

9 5 0 00

Transfer of uncollectible account Nov

19 Accounts Receivable, Mable Hest

5 0 0 00

Allowance for Doubtful Accounts

5 0 0 00

Reverse entry, now collected 19 Cash

5 0 0 00

Accounts Receivable, Mable Hest

5 0 0 00

Cash received from Mable Hest

14-11

PROBLEM 14B-2. ALVIE CO. GENERAL JOURNAL Date 2013 a.

Dec

Account Title and Description 31 Bad Debt Expense

Page 5 Post Ref.

Dr.

Cr.

6 6 0 0 00

Allowance for Doubtful Accounts

6 6 0 0 00

($7,000 = $3,000 + $600 + $1,800 + $1,600: $7,000 - $400 = $6,600)

31 Bad Debts Expense

7 4 0 0 00

Allowance for Doubtful Accounts

7 4 0 0 00

($7,000 + $400)

ALVIE CO. PARTIAL BALANCE SHEET DECEMBER 31, 2013 b.

Current Assets: Cash Accounts Receivable Less: Allowance for Doubtful Accounts Merchandise Inventory Total Current Assets

$4 2 0 0 0 0 0 $1 7 3 0 0 0 0 0 7 0 0 0 00

166 0 0 0 00 12 0 0 0 00 $2 2 0 0 0 0 0 0

PROBLEM 14B-3. Date 2014 Mar

T. J. RACK COMPANY GENERAL JOURNAL Account Title and Description

11 Bad Debts Expense

Page 4 Post Ref.

Dr.

Cr.

1 9 5 0 00

Accounts Receivable, Jill Diamond

1 9 5 0 00

Write off uncollectible account Apr

14 Bad Debts Expense

9 0 0 00

Accounts Receivable, Buffy Hall

9 0 0 00

Write off uncollectible account 2015 Nov

6 Accounts Receivable, Buffy Hall

9 0 0 00

Bad Debts Recovered

9 0 0 00

Recovery of bad debt written off 6 Cash

9 0 0 00

Accounts Receivable, Buffy Hall

9 0 0 00

Cash received from Buffy Hall Dec

10 Bad Debts Expense

8 8 0 00

Accounts Receivable, Joe Francis

8 8 0 00

Write off uncollectible account Dec

15 Bad Debts Expense Accounts Receivable, Joe Martin

4 1 0 00 4 1 0 00

Write off uncollectible account

14-13

PROBLEM 14B-4. Date 2013 Jan

SIMON COMPANY GENERAL JOURNAL Account Title and Description

Page 2 Post Ref.

8 Accounts Receivable, Lowe's Supply

Dr.

Cr.

1 9 0 0 00

Sales

1 9 0 0 00 Sale of merchandise

15 Allowance for Doubtful Accounts

114

7 0 0 00

Accounts Receivable, Kevin Reese

7 0 0 00

Transfer of uncollectible account Mar

14 Accounts Receivable, J. James Allowance for Doubtful Accounts

3 0 0 00 114

3 0 0 00

Reversing entry; now collected 14 Cash

3 0 0 00

Accounts Receivable, J. James

3 0 0 00

Cash received from J. James Apr

9 Cash

1 0 0 0 00

Allowance for Doubtful Accounts

114

4 0 0 0 00

Accounts Receivable, Long Drug

5 0 0 0 00

Received portion of receivable and write off balance June

13 Accounts Receivable, Morse's Garage Allowance for Doubtful Accounts

3 1 0 0 00 114

Cash

3 1 0 0 00 3 1 0 0 00

Accounts Receivable, Morse's Garage

3 1 0 0 00

Reverse entry of 2010 written off account. Pd June 13. Oct

18 Allowance for Doubtful Accounts

114

2 9 0 0 00

Accounts Receivable, Sal's Diner

8 0 0 00

Accounts Receivable, Ring Auto

1 3 0 0 00

Accounts Receivable, Neel's Hardware

8 0 0 00

Transfer of uncollectible accounts Nov

12 Accounts Receivable, Able Roy

1 9 5 0 00

Sales

1 9 5 0 00 Sale of merchandise

Dec

31 Bad Debts Expense Allowance for Doubtful Accounts

612

8 9 0 0 00

114

8 9 0 0 00

Provide for Doubtful Accounts based on A/R 31 Income Summary Bad Debts Expense Closing entry

313 612

8 9 0 0 00 8 9 0 0 00

PROBLEM 14B-4., Cont.

SIMON COMPANY PARTIAL GENERAL LEDGER NAME: ALLOWANCE FOR DOUBTFUL ACCOUNTS Date 2013 Jan 1 Balance

Post Ref

Explanation

DR CR

Balance

Cr Cr

3 3 0 0 00 2 6 0 0 00 2 9 0 0 00 1 1 0 0 00 2 0 0 0 00 9 0 0 00 8 0 0 0 00

GJ2

Mar

GJ2

Apr

GJ2

Jun

GJ2

Oct

GJ2

Dec

31 Adjusting Entry

GJ2

NAME:

INCOME SUMMARY

Date 2013

Explanation

Dec

NAME:

BAD DEBTS EXPENSE

Date 2013

Explanation

Dec

114

ACCOUNT NO.

Debit

Credit

7 0 0 00 3 0 0 00

4 0 0 0 00 3 1 0 0 00 8 9 0 0 00

Debit

GJ2

8 9 0 0 00

Debit

31 Adjusting Entry

GJ2

8 9 0 0 00

31 Closing Entry

GJ2

ACCOUNT NO.

313

DR CR

Balance

8 9 0 0 00

Credit

Post Ref

Cr Dr

2 9 0 0 00

Post Ref

ACCOUNT NO.

612

DR CR

Balance

8 9 0 0 00

Credit

8 9 0 0 00

$2 4 0 0 0 0 0 $1 7 0 0 0 0 0 0 8 0 0 0 00

162 0 0 0 00 94 0 0 0 00 3 0 0 0 00 1 2 0 0 00 $2 8 4 2 0 0 0 0

14-15

PROBLEM 14C-1. REDTAIL CO. GENERAL JOURNAL Date 2012 Dec

Account Title and Description 31 Bad Debts Expense

Page 5 Post Ref.

Dr.

Cr.

11 2 0 0 00

Allowance for Doubtful Accounts

11 2 0 0 00

Provide for Doubtful Accounts based on Sales 2013 Jan

8 Allowance for Doubtful Accounts

8 5 0 00

Accounts Receivable, Helen Jamison

8 5 0 00

Transfer of uncollectible account Mar

5 Allowance for Doubtful Accounts

4 0 0 00

Accounts Receivable, Rob Hart

4 0 0 00

Transfer of uncollectible account July

9 Accounts Receivable, Rob Hart

2 0 0 00

Allowance for Doubtful Accounts

2 0 0 00

Reverse entry, now collected 9 Cash

2 0 0 00

Accounts Receivable, Rob Hart

2 0 0 00

Cash received from Rob Hart Aug

20 Allowance for Doubtful Accounts

1 6 4 0 00

Accounts Receivable, Brian Brisk

1 6 4 0 00

Transfer of uncollectible account 27 Allowance for Doubtful Accounts

5 2 5 00

Accounts Receivable, Ellen Watt

5 2 5 00

Transfer of uncollectible account Nov

19 Accounts Receivable, Brian Brisk

7 0 0 00

Allowance for Doubtful Accounts

7 0 0 00

Reverse entry, now collected 19 Cash

7 0 0 00

Accounts Receivable, Brian Brisk Cash received from Brian Brisk

7 0 0 00

PROBLEM 14C-2. DOMINION COMPANY GENERAL JOURNAL Date 2014 a.

Dec

Page 8 Post Ref.

Account Title and Description 31 Bad Debts Expense

Dr.

Cr.

3 1 0 0 00

Allowance for Doubtful Accounts

3 1 0 0 00

($760 + $240 + $480 + $520 + $1,800 = $3,800; $3,800 - $700 = $3,100)

Dec

31 Bad Debts Expense

4 3 0 0 00

Allowance for Doubtful Accounts

4 3 0 0 00

($3,800 + $500 = $4,300)

DOMINION COMPANY PARTIAL BALANCE SHEET DECEMBER 31, 2014 b.

Current Assets: Cash Accounts Receivable Less: Allowance for Doubtful Accounts Inventory Total Current Assets

$1 6 4 0 0 0 0 $1 0 6 0 0 0 0 0 3 8 0 0 00

102 2 0 0 00 53 7 0 0 00 $1 7 2 3 0 0 0 0

14-17

CAMPING EQUIPMENT COMPANY GENERAL JOURNAL

PROBLEM 14C-3. Date 2012 Mar

Account Title and Description 23 Bad Debt Expense

Post Ref.

Page 9 Dr.

Cr.

1 2 8 0 00

Accounts Receivable, F. Robichaud

1 2 8 0 00

Write off uncollectible account Jun

7 Bad Debts Expense

9 1 5 00

Accounts Receivable, K. Cheung

9 1 5 00

Write off uncollectible account 2013 Aug

16 Accounts Receivable, K. Cheung

9 1 5 00

Bad Debts Recovered

9 1 5 00

Recovery of bad debt written off 16 Cash

9 1 5 00

Accounts Receivable, K. Cheung

9 1 5 00

Cash received from K. Cheung Dec

6 Bad Debts Expense

4 1 8 00

Accounts Receivable, S. Lowe

4 1 8 00

Write off uncollectible account 17 Bad Debts Expense Accounts Receivable, R. Patel Write off uncollectible account

3 1 6 00 3 1 6 00

PROBLEM 14C-4. Date 2013 Jan

PROSPECTING SUPPLY COMPANY GENERAL JOURNAL Post Ref.

Account Title and Description 8 Accounts Receivable, May Expeditions

Page 2 Dr.

Cr.

4 1 6 0 00

Sales

4 1 6 0 00 Sale of merchandise

Feb

1124

19 Allowance for Doubtful Accounts

6 2 4 00

Accounts Receivable, Avery Fischer

6 2 4 00

Transfer of uncollectible account Mar

15 Accounts Receivable, Maximum Co.

6 0 0 00 1124

Allowance for Doubtful Accounts

6 0 0 00

Reverse entry; now collected 15 Cash

6 0 0 00

Accounts Receivable, Maximum Co.

6 0 0 00

Cash received from Maximum Co. Apr

5 Cash

1 6 0 0 00 1124

Allowance for Doubtful Accounts

4 8 0 0 00

Accounts Receivable, Airborne Surveys

6 4 0 0 00

Received portion of receivable and write off balance Jul

19 Accounts Receivable, Hallicrafter Explorations

3 0 0 0 00 1124

Allowance for Doubtful Accounts

3 0 0 0 00

Reverse entry writing off account in 2010. Pd Jul 19. 19 Cash

3 0 0 0 00

Accounts Receivable, Hallicrafter Explorations

3 0 0 0 00

Cash received from Hallicrafter Explorations Oct

29 Allowance for Doubtful Accounts

1124

1 1 7 6 00

Accounts Receivable, Corbett Co.

2 7 5 00

Accounts Receivable, Quark Co.

6 5 4 00

Accounts Receivable, Lonely Expeditions

2 4 7 00

Transfer of uncollectible accounts Nov

14 Accounts Receivable, Partridge Surveys

4 2 8 0 00

Sales

4 2 8 0 00 Sale of merchandise

Dec

31 Bad Debts Expense Allowance for Doubtful Accounts

6125

3 7 0 0 00 3 7 0 0 00

1124

Provision of Doubtful Accounts based on A/R 31 Income Summary Bad Debts Expense

3100 6125

3 7 0 0 00 3 7 0 0 00

14-19

PROBLEM 14C-4., Cont. PROSPECTING SUPPLY COMPANY PARTIAL GENERAL LEDGER ALLOWANCE FOR DOUBTFUL ACCOUNTS NAME: ACCOUNT NO. Date 2013

Post Ref

Explanation 1 Balance Forward

GJ2

Mar

GJ2

Apr

GJ2

Jul

GJ2

Oct

GJ2

Dec

31 Adjusting Entry

GJ2

Jan Feb

NAME:

INCOME SUMMARY

Date 2013

Explanation

Dec

NAME:

BAD DEBTS EXPENSE

Date 2013

Explanation

Dec

Debit

Credit

6 2 4 00 4 8 0 0 00 1 1 7 6 00

GJ2

3 7 0 0 00

Post Ref

Debit

31 Adjusting Entry

GJ2

3 7 0 0 00

31 Closing Entry

GJ2

6 1 5 0 00 5 5 2 6 00 6 1 2 6 00 1 3 2 6 00 4 3 2 6 00 3 1 5 0 00 6 8 5 0 00

Cr Cr

3 7 0 0 00

Debit

Balance

3 0 0 0 00

Post Ref

DR CR

6 0 0 00

1124

ACCOUNT NO.

3100

DR CR

Balance

3 7 0 0 00

Credit

ACCOUNT NO.

6125

DR CR

Balance

3 7 0 0 00

Credit

3 7 0 0 00

PROSPECTING SUPPLY COMPANY PARTIAL BALANCE SHEET DECEMBER 31, 2013 Current Assets: Cash Accounts Receivable Less: Allowance for Doubtful Accounts Office Supplies

$1 6 7 4 2 0 0 $1 4 2 0 0 0 0 0 6 8 5 0 00

135 1 5 0 00 2 6 3 0 00

Merchandise Inventory

107 0 0 0 00

Prepaid Rent

3 5 0 0 00 $2 6 5 0 2 2 0 0

Total Current Assets

SOLUTIONS TO ON-THE-JOB TRAINING, #T-1. DAYS OVERDUE

COMPANY

TODAY'S DATE

INVOICE DATE

DUE DATE

Bill Co.

31 Dec 2013

03 Oct 2013

02 Nov 2013

Doe Co.

31 Dec 2013

01 Nov 2013

01 Dec 2013

Doe Co.

31 Dec 2013

17 Dec 2013

16 Jan 2014

Not Yet Due

Francis

31 Dec 2013

08 July 2013

07 Aug 2013

146

Francis

31 Dec 2013

15 Jul 2013

14 Aug 2013

139

Joe Co.

31 Dec 2013

06 Sep 2013

06 Oct 2013

Jones Co.

31 Dec 2013

14 May 2013

13 Jun 2013

201

Roger Co.

31 Dec 2013

17 Dec 2013

16 Jan 2013

Not Yet Due

Ron Co.

31 Dec 2013

20 Aug 2013

19 Sep 2012

103

CUSTOMER

TOTAL BALANCE

Bill Co.

$ 125

Doe Co.

2,100

NOT YET DUE DATE

DAYS PAST DUE 1 - 30

31 - 60

61 - 90

125 1,200

900

600

Francis Co. Joe Co.

1,200

Jones Co.

1,500

Roger Co.

1,400

Ron Co.

700

OVER 90

600 1,200 1,500 1,400 700 900

125

$2,600

0.01

$ 26

1 - 30

900

0.03

31 - 60

125

0.08

61 - 90

1,200

0.12

144

OVER 90

2,800

0.30

840

$7,625 NOT DUE YET

2,600

1,200

2,800

DAYS PAST DUE:

$1,047 - 350 Journal Entry Required

$697

SOLUTIONS TO ON-THE-JOB TRAINING, #T-2. When the Account Receivable is written off using the allowance method, the questionable debt is expensed in the period the sale occurs. This allows the matching principal to be met. In the direct write-off method the debt is written off regardless of the period in which the sale occurs.

14-21

CONTINUING PROBLEM

PRECISION COMPUTER CENTRE Allowance Calculation: Accu Pac 50% of $1,450 Balance of Accounts (21,620 - 1,450) x 5%

$ 725.00 1,008.50 $1,733.50

GENERAL JOURNAL Date 2014 July

Account Title and Description 31 Bad Debts Expense Allowance for Doubtful Accounts

Post Ref.

Dr.

5140

1 7 3 3 50

1022

Cr.

1 7 3 3 50

To establish necessary allowance at year-end

If this entry had been included in Chapter 12, the net income would be reduced by $1,733.50. On the balance sheet, the asset account, Accounts Receivable, would be shown, less the $1,733.50 (net $19,886.50) and owner's equity would also be reduced by the same amount. To write off the Accu Pac account in November would require the following entry:

GENERAL JOURNAL Date 2014 Nov.

Account Title and Description 30 Allowance for Doubtful Accounts Accounts Receivable - Accu Pac

Post Ref.

Dr.

1022

1 4 5 0 00

1020

To write off the Accu Pac balance

There is no effect on net income for the year ending July 31, 2015 because of this entry.

Cr.

1 4 5 0 00

15 Accounting for Property, Plant Equipment, And Intangible Assets

ANSWERS TO DISCUSSION QUESTIONS AND CRITICAL THINKING/ETHICAL CASE 1. 2. 3.

6. 7. 8. 9. 10. 11. 12.

13.

The payments involved in acquiring it and getting the asset in position and condition for use in the company. The Land Improvements account records improvements to land with a limited useful life. Improvements are subject to amortization. Revenue expenditures debit expenses relating to plant assets that do not extend the plant asset's useful life but maintain its normal operation. Capital expenditures improve or enlarge existing assets and are debited to the asset account. (Extraordinary repairs are debited to the asset account.) Straight line: Amortization expense is the same each year. Units-of-Production: Amortization is related to use and not passage of time. Declining-Balance: Accelerated method; rate times book value at beginning of year. Sum-of-the-Years'-Digits: Accelerated method; cost less salvage times fraction for year. CCA -- Capital Cost Allowance -- is used for tax purposes. It is the permitted method of computing the maximum amount of amortization a business can deduct from net income in one year. False; it is a capital expenditure. Declining-balance method. False. If cash received is less that the book value, a loss results. True. The Capital Cost Allowance can be deferred until the company experiences a profit again. It is a contra-asset that records the amount of depletion accumulated. Patent: An exclusive right to sell or produce a discovery or invention. Copyright: An exclusive right to the owner to publish an artistic or literary work. Goodwill: Cost of net assets purchased less the value of net assets identified. The question in this case is whether the dealer is being fair to Pete. It does not seem that the dealer is telling Pete the truth about buying a car. Sure some cars appreciate, but most do not. Also, leasing is becoming more popular every year. Thus, I feel that the dealer is being unethical in his selling approach to Pete.

15-1

SOLUTIONS TO CLASSROOM DEMONSTRATION EXERCISES, Set A 1.

$3,000 -

180

(.06 x $3,000)

$2,820 +

200

60 $3,140

$7,000 - $2,000

$5,000 =

5 years 3.

$1,000 Amortization per year

$6,000 -

500 $5,500

$7,000 - $2,000

Book Value =

50,000

$5,000

$.10

50,000

7,000 x $.10 = $700 Amortization in year 1 5.

$7,000 x .40 = $2,800

5(5 + 1) = 15 2 5/15 x $5,000 = $1,666.67 = $1,667

7. a.

Extraordinary Repair (Capital Expenditure)

Revenue Expenditure

Capital Expenditure (Addition)

8. a.

Gain on Sale of Plant Assets

Other Income

Income Statement

Accumulated Depletion

Contra Asset

Balance Sheet

Loss on Disposal of Plant Assets

Other Expense

Income Statement

9. a.

$20,000 - 11,000 -

9,000

Book Value

6,000

Trade-In

$ 3,000

15-2

Loss

CLASSROOM DEMONSTRATION EXERCISES, Set A, Cont. 9. b.

GENERAL JOURNAL

Date

Account Title and Description

Page 10 Post Ref.

Machinery

Dr.

Cr.

19 0 0 0 00

Loss on Exchange of Machinery

3 0 0 0 00

Accumulated Amortization, Machinery

11 0 0 0 00

Machinery

20 0 0 0 00

Cash

13 0 0 0 00

10. $10,000 - 9,000 $ 1,000

Trade-In Book Value Gain

GENERAL JOURNAL Date

Account Title and Description

Page 10 Post Ref.

Dr.

Machinery

19 0 0 0 00

Accumulated Amortization, Machinery

11 0 0 0 00

Machinery

Cr.

20 0 0 0 00

Cash

9 0 0 0 00

Gain on Exchange of Machinery

1 0 0 0 00

15-3

SOLUTIONS TO CLASSROOM DEMONSTRATION EXERCISES, Set B 1.

$2,000 -

100

(.05 x $2,000)

$1,900 +

150

50 $2,150

$6,000 - $1,000

$5,000 =

10 years 3.

$500 Amortization per year

$4,000 -

1,000 $3,000

$6,000 - $1,000

Book Value =

100,000

$5,000

$.05

100,000

8,000 x $.05 = $400 Amortization in year 1 5.

$6,000 x .20 = $1,200

10(10 + 1)

= 55

2 10/55 x $5,000 = $909 7. a.

Revenue Expenditure

Capital Expenditure (Betterment)

Extraordinary Repair (Capital Expenditure)

Capital Expenditure (Addition)

8. a.

Accumulated Amortization

Contra Asset

Balance Sheet

Loss on Disposal of Plant Assets

Other Expense

Income Statement

Gain on Sale of Plant Assets

Other Income

Income Statement

9. a.

$10,000 -

6,000 $ 4,000

Book Value

3,000

Trade-In

$ 1,000

15-4

Loss

CLASSROOM DEMONSTRATION EXERCISES, Set B, Cont. 9. b.

GENERAL JOURNAL

Date

Account Title and Description

Page 10 Post Ref.

Machinery

Dr.

Cr.

13 0 0 0 00

Loss on Exchange of Machinery

1 0 0 0 00

Accumulated Amortization, Machinery

6 0 0 0 00

Machinery

10 0 0 0 00

Cash

10 0 0 0 00

10. $ 5,000 - 4,000 $ 1,000

Trade-In Book Value Gain

GENERAL JOURNAL Date

Account Title and Description Machinery Accumulated Amortization, Machinery Machinery

Page 10 Post Ref.

Dr.

Cr.

13 0 0 0 00 6 0 0 0 00 10 0 0 0 00

Cash

8 0 0 0 00

Gain on Exchange of Machinery

1 0 0 0 00

15-5

SOLUTIONS TO EXERCISES 15-1. List Price

$30,000

Less: Cash Discount (.10 x $30,000)

- 3,000

Net Purchase Price

27,000

Freight

500

Assembly

1,400

Special Base

505

Total Cost of Machine

$29,405

15-2. a. Straight-Line $1,440 - $240

$240

5 years

YEAR

COST

AMORT. EXPENSE

ACCUM. AMORT. END OF YR.

BOOK VALUE END OF YR.

$1,440

$240

$1,200

$1,440

$240

$480

$ 960

15-2. b. Units-of-Production $1,440 - $240

600

YEAR

COST

OUTPUT

AMORT. EXP.

ACC. AMORT. END OF YR.

BOOK VALUE END OF YR.

$1,440

100

$200

$1,240

$1,440

200

$400

$600

$ 840

15-6

SOLUTIONS TO EXERCISES, Cont. 15-2. c. Double-Declining-Balance ACC. AMORT. BOOK VALUE BEG. OF YR. BEG. OF YR.

YEAR

COST

$1,440

$576

864

AMORT. EXP.

ACC. AMORT. BOOK VALUE END OF YR. END OF YR.

$ 576 345.60*

$576

$864

921.60

518.40

* The amortization formula for year 1: $1,440 x .40 = $576; for year 2: $864 x .40 = $345.60. 15-2. d. Sum-of-the-Years'-Digits (Optional)

YEAR

COST LESS RESIDUAL

FRACTION FOR YEAR

YEARLY AMORT. EXP.

ACC. BOOK AMORT. VALUE END OF YR. END OF YR.

$1,200

5/15

$ 400

$400

$1,200

4/15

320

720

$1,040 720**

** The book value goes down each year until residual is reached. 15-3. a. Straight-Line $6,800 - $800

$600

10 years YEAR

COST

$6,800

ACCUM. AMORT. END OF YR.

BOOK VALUE END OF YR.

$600

$ 600

$6,200

$600

$1,200

$5,600

AMORT. EXPENSE

15-3. b. Double-Declining-Balance ACC. AMORT. BOOK VALUE BEG. OF YR. BEG. OF YR.

AMORT. EXP.

ACC. AMORT. BOOK VALUE END OF YR. END OF YR.

YEAR

COST

$6,800

$1,360

$5,440***

$6,800

$1,360

$5,440

$1,088****

$2,448

$4,352***

*** Book Value = original cost minus accumulated amortization at end of year. **** Amortization Expense = book value multiplied by the doubled annual rate, which in this case is 20 percent.

15-7

SOLUTIONS TO EXERCISES, Cont. 15-3. c. Sum-of-the-Years'-Digits (Optional)

YEAR

COST LESS RESIDUAL

FRACTION FOR YEAR

YEARLY AMORT. EXP.

ACC. BOOK AMORT. VALUE END OF YR. END OF YR.

$6,000

10/55

$1,090.91

$5,709.09***

$6,000

9/55

$ 981.82

$2,072.73

$4,727.27***

*** Book Value = original cost minus accumulated amortization at end of year. 15-4. a.

Cost - Accumulated Amortization $9,000 - $3,900 Loss = $5,100 - $800

= = =

Book Value $5,100 $4,300

GENERAL JOURNAL

c. Date

Account Title and Description

Page 5 Post Ref.

Dr.

Machinery (new)

5 8 0 0 00

Loss on Trade In

4 3 0 0 00

Accumulated Amortization, Machinery

3 9 0 0 00

Machinery (old)

9 0 0 0 00

Cash

5 0 0 0 00

Cost of Old Machinery

$9,000

- Accumulated Amortization

-3,900

Book Value

5,100

+ Cash Paid

+5,000

Cost Basis of New Machine

$10,100 GENERAL JOURNAL

Date

Account Title and Description Machinery (new) Accumulated Amortization, Machinery

15-8

Cr.

Page 5 Post Ref.

Dr.

Cr.

10 1 0 0 00 3 9 0 0 00

Machinery

9 0 0 0 00

Cash

5 0 0 0 00

SOLUTIONS TO EXERCISES, Cont. 15-5. $5,000

$500

10 years

GENERAL JOURNAL 2014 Dec

Account Title and Description

Page 5 Post Ref.

31 Amortization of Patents

Dr.

Cr.

3 3 3 33

Patents

3 3 3 33 $500 x 8/12 = $333.33

2015 Dec

31 Amortization of Patents

5 0 0 00

Patents

5 0 0 00

15-6. Class 10 Asset $41,000 9,000 $50,000 x .30

from 2012 year 50% of 2013 purchase = half-year rate =

$15,000 = Maximum CCA allowed for 2013

15-9

PROBLEM 15A-1.

ORANGE CO. GENERAL JOURNAL

2012 Feb

Account Titles and Description

Page 8 Post. Ref.

Dr.

90 0 0 0 00

6 Land

90 0 0 0 00

Cash 17 Land Improvements

5 4 0 0 00

Cash Mar

5 4 0 0 00 90 0 0 0 00

23 Building Cash

27 0 0 0 00 63 0 0 0 00

Mortgage Payable 30 Equipment

36 0 0 0 00

Cash May

11 Building

36 0 0 0 00 175 0 0 0 0 0 175 0 0 0 0 0

Cash June

15 Repairs Expense

7 5 0 00

Cash July

7 5 0 00 14 0 0 0 00

3 Truck

14 0 0 0 00

Cash Oct

15 Truck

2 2 0 0 00 2 2 0 0 00

Cash Nov

30 Repairs Expense

3 3 00 3 3 00

Cash Dec

Cr.

28 Truck

9 0 0 00 Cash

31 Repairs Expense Cash

9 0 0 00 3 2 5 00 3 2 5 00

PROBLEM 15A-2. a.

Straight-Line $58,000 - $18,000

$40,000

4 years

$10,000

END OF YEAR

COST OF EQUIPMENT

YEARLY AMORT. EXPENSE

ACC. AMORT. END OF YR.

BOOK VALUE END OF YR.

2014 2015 2016 2017

$58,000 58,000 58,000 58,000

$10,000 10,000 10,000 10,000

$10,000 20,000 30,000 40,000

$48,000 38,000 28,000 18,000

Units-of-Production $58,000 - $18,000

80,000

$40,000

$.50*

80,000

YEAR

COST

OUTPUT

AMORT. EXP.

ACC. AMORT. END OF YR.

BOOK VALUE END OF YR.

2014 2015 2016 2017

$58,000 58,000 58,000 58,000

12,000 27,000 15,000 26,000

$ 6,000 13,500 7,500 13,000

$ 6,000 19,500 27,000 40,000

$52,000 38,500 31,000 18,000

* If units exceeded 80,000, amortization would be taken only on the 80,000 units.

Double-Declining-Balance at twice the Straight-Line rate

YEAR

COST

ACC. AMORT. BOOK VALUE BEG. OF YR. BEG. OF YR.

AMORT. EXP.

ACC. AMORT. BOOK VALUE END OF YR. END OF YR.

2014 $58,000 $58,000 $29,000* $29,000 $29,000 2015 58,000 29,000 29,000 11,000** 40,000 18,000 2016 2017 * (58,000 x .50) ** In year 2, amortize only up to $11,000 so that book value does not go below residual value of $18,000.

Sum-of-the-Years'-Digits (Optional)

YEAR

COST LESS RESIDUAL

FRACTION PER YEAR

YEARLY AMORT. EXP.

2014 2015 2016 2017

$40,000 40,000 40,000 40,000

X X X X

4/10 3/10 2/10 1/10

= = = =

$16,000 12,000 8,000 4,000

ACC. BOOK AMORT. VALUE END OF YR. END OF YR. $16,000 28,000 36,000 40,000

$42,000 30,000 22,000 18,000

15-11

PROBLEM 15A-3. a.

Straight-Line $4,080 - $240

$960

4 years END OF YEAR

COST OF EQUIPMENT

YEARLY AMORT. EXPENSE

ACCUM. AMORT. END OF YR.

BOOK VALUE END OF YR.

2013

$4,080

$560 ($960 X 7/12)

$ 560

$3,520

2014

4,080

960

1,520

2,560

2015

4,080

960

2,480

1,600

Double-Declining-Balance at twice the Straight-Line rate

YEAR

COST

ACC. AMORT. BEG. OF YR.

BOOK VALUE BEG. OF YR.

2013

$4,080

---

$4,080

2014 2015

4,080 4,080

$1,190 2,635

2,890 1,445

AMORT. EXP.

ACC. AMORT. BOOK VALUE END OF YR. END OF YR.

$1,190 ($4,080 x .50 x 7/12) 1,445 722.50

$1,190 2,635 3,357.50

$2,890 1,445 722.50

Sum-of-the-Years'-Digits (Optional)

YEAR

COST LESS RESIDUAL

FRACTION PER YEAR

YEARLY AMORT. EXP.

2013

$3,840

4/10 x 7/12

$ 896

2014

3,840 3,840 3,840 3,840

X X X X

4/10 x 5/12 3/10 x 7/12 3/10 X 5/12 2/10 X 7/12

= = = =

1,312 (640 + 672) 928 (480 + 448)

2,208

$3,184 (4,080 - 896) 1,872

3,136

944

2015

ACC. BOOK AMORT. VALUE END OF YR. END OF YR.

PROBLEM 15A-4. ROBE COMPANY GENERAL JOURNAL 2014 Jan

Account Titles and Description

Page 18 Post. Ref.

Dr.

1 2 5 0 00

3 Cash Accumulated Amortization, Truck

6 1 0 0 00

Truck

6 7 5 0 00 6 0 0 00

Gain on Sale of Plant Asset $6,750 Book Value Feb

$1,250

6,100

650

$ 650

$ 600 Gain

3 0 0 00 4 5 0 00 2 4 5 0 00

10 Cash Loss from Fire Accumulated Amortization, Machinery

3 2 0 0 00

Machinery

Book Value May

Cr.

$3,200 2,450

$750 300

Book Value Insurance

$ 750

$450

Loss

2 Machinery Loss on Trade-In of Machinery Accumulated Amortization, Machinery Machinery

19 4 0 0 00 22 4 0 0 00

Cash

Book Value

25 1 0 0 00 2 0 0 00 16 5 0 0 00

$19,400

$2,900 Book Value

16,500

2,700 Trade-In

$ 2,900

$ 200 Loss

Cash Paid: ($25,100 - 2,700 = $22,400)

15-13

PROBLEM 15A-4., Cont. ROBE COMPANY GENERAL JOURNAL 2014 Jul

Account Titles and Description 8 Machinery Accumulated Amortization, Machinery

Page 19 Post. Ref.

Dr.

Cr.

45 0 0 0 00 34 0 0 0 00

Machinery

40 0 0 0 00 37 0 0 0 00

Cash Gain on Trade-In of Machinery $40,000

$6,000 Book Value

-34,000

8,000 Trade-In

$ 6,000 Book Value

$2,000 Gain

2 0 0 0 00

(Cash Paid ($43,000 - 8,000) = $37,000) Sept

12 Accumulated Amortization, Truck Truck

7 0 0 0 00 7 0 0 0 00

PROBLEM 15B-1.

ORANGE CO. GENERAL JOURNAL

2012 Apr

Account Titles and Description 3 Machinery

Page 8 Post. Ref.

Dr.

91 0 0 0 00 91 0 0 0 00

Cash

22 0 0 0 00

10 Land Cash

22 0 0 0 00 90 0 0 0 00

16 Building Cash

9 0 0 0 00 81 0 0 0 00

Mortgage Payable 30 Land

1 9 0 0 00 Cash

May

1 Repairs Expense

1 9 0 0 00 1 6 0 00 1 6 0 00

Cash

2 9 0 0 00

8 Building Cash

2 9 0 0 00 65 0 0 0 00

29 Airplane

65 0 0 0 00

Cash June

27 Truck

2 9 0 0 00 2 9 0 0 00

Cash July

30 Airplane

7 9 0 0 00 7 9 0 0 00

Cash Sep

Cr.

28 Building

30 0 0 0 00 Cash

30 0 0 0 00

15-15

PROBLEM 15B-2. a.

Straight-Line $117,000 - $9,000

$27,000

4 years

END OF YEAR

COST OF EQUIPMENT

YEARLY AMORT. EXPENSE

ACC. AMORT. END OF YR.

BOOK VALUE END OF YR.

2014 2015 2016 2017

$117,000 117,000 117,000 117,000

$27,000 27,000 27,000 27,000

$ 27,000 54,000 81,000 108,000

$90,000 63,000 36,000 9,000

Units-of-Production $117,000 - $9,000

$1.20

90,000 YEAR

COST

OUTPUT

AMORT. EXP.

ACC. AMORT. END OF YR.

BOOK VALUE END OF YR.

2014 2015 2016 2017

$117,000 117,000 117,000 117,000

11,000 9,000 11,000 59,000

$13,200 10,800 13,200 70,800

$13,200 24,000 37,200 108,000

$103,800 93,000 79,800 9,000

* If units exceeded 90,000, amortization would be taken only on the 90,000 units.

Double-Declining-Balance at twice the Straight-Line rate

YEAR

COST

ACC. AMORT. BOOK VALUE BEG. OF YR. BEG. OF YR.

AMORT. EXP.

ACC. AMORT. END OF YR.

BOOK VALUE END OR YR.

2014 $117,000 --$117,000 $58,500* $58,500 $58,500 2015 117,000 58,500 58,500 29,250* 87,750 29,250 2016 117,000 87,750 29,250 14,625 102,375 14,625 2017 117,000 102,375 14,625 5,625** 108,000 9,000 * Amort Exp.: 2014 = (.50 x 117,000); and 2015 = (.50 x 58,500) ** In year 4, amortize only up to $5,625 so that book value does not go below residual value of $9,000.

Sum-of-the-Years'-Digits (Optional)

YEAR

COST LESS RESIDUAL

FRACTION PER YEAR

YEARLY AMORT. EXP.

2014 2015 2016 2017

$108,000 108,000 108,000 108,000

X X X X

4/10 3/10 2/10 1/10

= = = =

$43,200 32,400 21,600 10,800

ACC. BOOK AMORT. VALUE END OF YR. END OF YR. $43,200 75,600 97,200 108,000

$73,800 41,400 19,800 9,000

PROBLEM 15B-3. a.

Straight-Line $6,200 - $200

$1,200

5 years END OF YEAR

COST OF EQUIPMENT

YEARLY AMORT. EXPENSE

ACCUM. AMORT. END OF YR.

BOOK VALUE END OF YR.

2013

$6,200

$900 ($1,200 X 9/12)

$ 900

$5,300

2014

6,200

1,200

2,100

4,100

2015

6,200

1,200

3,300

2,900

Double-Declining-Balance at twice the Straight-Line rate

YEAR

COST

2013

$6,200

2014 2015

6,200 6,200

ACC. AMORT. BOOK VALUE BEG. OF YR. BEG. OF YR. --$1,860 3,596

$6,200 4,340 2,604

AMORT. EXP.

ACC. AMORT. BOOK VALUE END OF YR. END OF YR.

$1,860 ($6,200 x .40 x 9/12) 1,736 (4,340 x .40) 1,041.60 (2,604 x .40)

$1,860

$4,340

3,596 4,637.60

2,604 1,562.40

Sum-of-the-Years'-Digits (Optional)

YEAR

COST LESS RESIDUAL

FRACTION PER YEAR

YEARLY AMORT. EXP.

2013

$6,000

5/15 x 9/12

$1,500

2014

6,000 6,000 6,000 6,000

X X X X

5/15 x 3/12 4/15 x 9/12 4/15 x 3/12 3/15 x 9/12

1,700

3,200

$4,700 (6,200 - 1,500) 3,000

1,300

4,500

1,700

2015

ACCUM. BOOK AMORT. VALUE END OF YR. END OF YR.

15-17

PROBLEM 15B-4. ROBE COMPANY GENERAL JOURNAL 2014 Jan

Account Titles and Description 2 Cash

Page 18 Post. Ref.

Dr.

3 6 0 0 00 10 9 0 0 00

Accumulated Amortization, Truck Truck

12 8 0 0 00 1 7 0 0 00

Gain on Sale of Truck $12,800 Book Value Feb

$3,600 Sale Pr.

10,900

1,900 Book Value

$ 1,900

$1,700 Gain

1 5 0 00 4 6 0 00 3 3 9 0 00

6 Cash Loss from Fire Accumulated Amortization, Machinery

4 0 0 0 00

Machinery

Book Value May

$4,000 3,390

$610 150

Book Value Insurance

$ 610

$460

Loss

9 Machinery

26 2 0 0 00 1 5 0 00 15 7 5 0 00

Loss on Trade-In of Machinery Accumulated Amortization, Machinery Machinery

18 5 0 0 00 23 6 0 0 00

Cash

Book Value

$18,500

$2,750 Book Value

-15,750

2,600 Trade-In

$ 2,750

$ 150

Payment: $26,200 - 2,600 = $23,600

Cr.

Loss

PROBLEM 15B-4., Cont. ROBE COMPANY GENERAL JOURNAL 2014 Jul

Account Titles and Description

Page 19 Post. Ref.

Dr.

Cr.

44 0 0 0 00

10 Machinery Accumulated Amortization, Machinery

35 7 0 0 00

Machinery

39 5 0 0 00 32 5 0 0 00 7 7 0 0 00

Cash Gain on Trade-In of Machinery $39,500

$3,800 Book Value

-35,700

11,500 Trade-In

$ 3,800 Book Value

$7,700 Gain

(Cash Paid ($44,000 - 11,500) = $32,500) Sept

12 Accumulated Amortization, Truck Truck

11 0 0 0 00 11 0 0 0 00

15-19

PROBLEM 15C-1. O'HANNIGAN COMPANY GENERAL JOURNAL 2012 Jan

Account Titles and Description

Page 8 Post. Ref.

Dr.

Cr.

317 8 4 0 0 0

26 Land Building GST Paid

476 7 6 0 0 0 39 7 3 0 0 0 834 3 3 0 0 0

Cash To record purchase of land and buildings with GST Mar

14 Metal Lathe

347 4 0 0 0 0

Cash

347 4 0 0 0 0

Purchase of German lathe - Cheque No. 4816 22 Metal-Working Machinery GST Paid

146 5 0 0 0 0 7 3 2 5 00

Cash

153 8 2 5 0 0

Purchase of metal-working machines - Cheque No. 4907 27 Metal-Working Machinery GST Paid

4 8 8 5 00 2 4 4 25 5 1 2 9 25

Cash Delivery of 4 metal-working machines-Cheque No. 4988 Apr

2 Building GST Paid

57 5 0 0 0 0 2 8 7 5 00 60 3 7 5 0 0

Cash Building renovations - Cheque No. 5033 5 Metal-Working Machinery Metal Lathe GST Paid

1 5 0 0 00 3 5 0 0 00 2 5 0 00 5 2 5 0 00

Cash Foundation work - 30%/70% - Cheque No. 5079 9 Metal-Working Machinery GST Paid

8 6 0 0 00 4 3 0 00 9 0 3 0 00

Cash Installed metal-working machinery - Cheque No. 5122 12 Metal Lathe

34 8 5 0 0 0

GST Paid Cash

28 8 4 3 0 0 63 6 9 3 0 0

Brokerage, Transp, Etc., on Metal Lathe-Cheque No. 5185 20 Metal Lathe GST Paid Cash Installation of German Lathe. Cheque No. 5336

14 0 0 0 0 0 7 0 0 00 14 7 0 0 0 0

PROBLEM 15C-1., Cont.

2012 Apr

O'HANNIGAN COMPANY GENERAL JOURNAL

Account Titles and Description

Page 9 Post. Ref.

Dr.

Cr.

11 4 0 0 0 0

30 Metal-Working Machinery Metal Lathe

8 7 7 5 00

Wages Expense

20 1 7 5 0 0

Adjust for wages spent on setup & calibration of new mach. June

19 Metal-Working Machinery GST Paid

12 0 0 0 0 0 6 0 0 00 12 6 0 0 0 0

Cash Upgrade to metal-working machine - Cheque No. 5472 July

13 Repairs Expense GST Paid

8 0 0 0 00 4 0 0 00

Cash

8 4 0 0 00

Repairs to German lathe - Cheque No. 5504 Oct

23 Building Repairs to Roof Expense GST Paid Cash

40 0 0 0 0 0 20 0 0 0 0 0 3 0 0 0 00 63 0 0 0 0 0

Roof repair and upgrade. Cheque No. 5709

15-21

PROBLEM 15C-2.

THE ABRAHMSON COMPANY

Amount to Amortize (except for Double-Declining Balance method) Cost of Asset (GST is not included) $80,000.00 Less Salvage Value 20,000.00 Amount to be amortized $60,000.00 a.

Straight-Line Method $60,000 60 months

$1,000 per month

END OF YEAR

NUMBER OF MONTHS

2013 2014 2015 2016 2017 2018

9 12 12 12 12 3

YEARLY AMORT. EXPENSE $ 9,000.00 12,000.00 12,000.00 12,000.00 12,000.00 3,000.00 $60,000.00

Units-of-Production Method Total Planned Production: 2,800 + 4,200 + 4,600 + 4,800 + 4,000 + 800 = 21,200 sq m Rate per sq metre is 60,000 / 21,200 = $2.83 per sq m

YEAR 2013 2014 2015 2016 2017 2018

OUTPUT

RATE

AMORT. EXP.

2,800 4,200 4,600 4,800 4,000 800

2.83 2.83 2.83 2.83 2.83 2.83

7,924.00 11,886.00 13,018.00 13,584.00 11,320.00 2,268.00 (Rounding) $60,000.00

Double-Declining Method -- Rate is 20% x 2 = 40%.

YEAR

RATE

2013 2014

40% 40% 40% 40% 40% 40% 40% 40% 40% 40%

2015 2016 2017 2018

COST MINUS ACC. AMORT

FRACTION OF YEAR

$80,000 80,000 (80,000 - 32,000) (80,000 - 32,000) (80,000 - 51,200) (80,000 - 51,200) (80,000 - 60,000)

9/12 3/12 9/12 3/12 9/12 3/12 9/12 3/12 9/12 3/12

AMORT. EXP.

$24,000 $8,000.00 14,400.00 4,800.00 8,640.00 160.00

22,400.00 13,440.00 160.00

Total

ACC. AMORT. END OF YR.

$60,000.00

PROBLEM 15C-2., Cont. d.

Sum-of-the-Years'-Digits (Optional) Method 1 + 2 + 3 + 4 + 5 = 15 (denominator)

YEAR

RATE

COST MINUS ACC. AMORT

FRACTION OF YEAR

AMORT. EXP.

2013 2014

5/15 5/15 4/15 4/15 3/15 3/15 2/15 2/15 1/15 1/15

$60,000 60,000 60,000 60,000 60,000 60,000 60,000 60,000 60,000 60,000

9/12 3/12 9/12 3/12 9/12 3/12 9/12 3/12 9/12 3/12

$5,000.00 12,000.00 4,000.00 9,000.00 3,000.00 6,000.00 2,000.00 3,000.00

2015 2016 2017 2018

ACC. AMORT. END OF YR. $15,000.00

Total

17,000.00 13,000.00 9,000.00 5,000.00 1,000.00 $60,000.00

PROBLEM 15C-3. THE ABRAHMSON COMPANY Part A.

2013

2014

CCA Class 44

Asset Cost

60%

CCA (Half Year Rule applies) 50% x 60% x 80,000

24,000.00

UCC - December 31, 2013

$56,000.00

CCA (60% x 56,000) UCC - December 31, 2014

2015

CCA (60% x 22,400) UCC - December 31, 2015

2016

CCA (60% of 8,960.00) UCC - December 31, 2016

2017

$80,000.00

CCA (60% x 3,584) UCC - December 31, 2017

Part C 2018 CCA (60% x 1,433.60)

33,600.00 $22,400.00 13,440.00 $ 8,960.00 5,376.00 $ 3,584.00 2,150.40 $ 1,433.60

Part B

860.16

(It does not matter that the machine is idle.)

15-23

PROBLEM 15C-4. MONTREAL MUSIC COMPANY

Buildings, Class 6-10%

Office Equipment, Class 8-20%

Vehicles, Class 10-30%

Computers, Class 50-55%

Total

UCC - March 31, 2012

$452,072.00

$120,644.00

$378,906.00

$46,403.00

$ 998,025.00

Additions to Year End March 31, 2013

0.00

16,400.00

72,000.00

23,450.00

111,850.00

$452,072.00

$137,044.00

$450,906.00

$69,853.00

$1,109,875.00

On UCC, March 31, 2012

45,207.20

24,128.80

113,671.80

$25,521.65

208,529.45

On additions (1/2 Yr Rule)

0.00

1,640.00

10,800.00

6,448.75

18,888.75

Total CCA for 2013

$45,207.20

$25,768.80

$124,471.80

$31,970.40

$227,418.20

UCC - March 31, 2013

$406,864.80

$111,275.20

$326,434.20

$37,882.60

$882,456.80

Description

Subtotal

CCA for 2013:

PROBLEM 15C-5. a.

EASTERN PRESS COMPANY

Straight-Line Amortization Original Cost

$875,000

Value in 4 Years

350,000

Amount to Amortize

$525,000

Amount per month: $525,000 / 48 = $10,937.50 Schedule: Original Cost

$875,000.00

Amortization - April - June 2012

32,812.50

NBV, June 30, 2012

$842,187.50

Amortization - July 2012 - June 2013

131,250.00

NBV, June 30, 2013

$710,937.50

Amortization - July 2013 - June 2014

131,250.00

NBV, June 30, 2014

$579,687.50

Amortization - July 2014 - June 2015

131,250.00

NBV, June 30, 2015

$448,437.50

Amortization - July 2015 - June 2016

98,437.50

NBV, June 30, 2016

$350,000.00

(3 x 10,937.50)

(12 x 10,937.50)

(9 x 10,937.50)

Double-Declining Balance Straight Line rate is 25% (100% / 4) Double-Declining Balance is therefore 50% (2 x 25%) Original Cost

$875,000.00

Amortization - April - June 2012 3/12 x 50% x 875,000

109,375.00

NBV, June 30, 2012

$765,625.00

Amortization - July 2012 - June 2013 9/12 x 50% x 875,000

328,125.00

3/12 x 50% x (875,000 - 437,500)

54,687.50

NBV, June 30, 2013

382,812.50 $382,812.50

Amortization - July 2013 - June 2014 9/12 x 50% x (875,000 - 437,500)

Limited to

$ 32,812.50

3/12 x 50% x (875,000 -656,250) NBV, June 30, 2014

15-25

PROBLEM 15C-5., Cont. c.

Sum-of-the-Year's Digits (Optional) Method 1 + 2 + 3 + 4 = 10 (Denominator) Original Cost

$875,000.00

Amortization - April 2012 - June 2012 3/12 x 4/10 x 525,000

52,500.00

NBV, June 2012

$822,500.00

Amortization - July 2012 - June 2013 9/12 x 4/10 x 525,000

157,500.00

3/12 x 3/10 x 525,000

39,375.00

NBV, June 2013

196,875.00 $625,625.00

Amortization - July 2013 - June 2014 9/12 x 3/10 x 525,000

118,125.00

3/12 x 2/10 x 525,000

26,250.00

NBV, June 2014

144,375.00 $481,250.00

Amortization - July 2014 - June 2015 9/12 x 2/10 x 525,000

78,750.00

3/12 x 1/10 x 525,000

13,125.00

NBV, June 2015

91,875.00 $389,375.00

Amortization - July 2015 - June 2016 9/12 x 1/10 x 525,000 NBV, June 2016

39,375.00 $350,000.00

PROBLEM 15C-6. THE KINGSLY COMPANY GENERAL JOURNAL Account Titles and Description

2013 Feb

23 Cash Accumulated Amortization - Office Equipment Loss on Sale of Equipment

Page 23 Post. Ref.

Dr.

Cr.

2 1 0 0 00 8 6 8 0 00 6 2 0 00 1 0 0 00

GST Payable Office Equipment

11 3 0 0 00

To record sale of office equipment for $2,000 plus GST Mar

5 Accumulated Amortization - Computers Loss on Theft of Laptop

2 7 1 0 00 1 5 4 0 00 4 2 5 0 00

Computer Equipment To record theft of laptop Apr

23 Amortization Expense

8 3 00 8 3 00

Accumulated Amortization - Forklift To record amortization for April 2010

Accumulated Amortization - Forklift (Old)

34 0 0 0 0 0 12 6 5 3 0 0

GST Paid

1 2 2 5 00

23 Fortklift Equipment (New)

Forklift Equipment (Old)

18 6 0 0 0 0 25 7 2 5 0 0 3 5 5 3 00

Cash Gain on Disposal of Forklift Oct

12 Cash Accumulated Amortization - Crusher Crusher GST Payable Gain on Sale of Crusher

210 0 0 0 0 0 1600 0 0 0 0 0 1600 0 0 0 0 0 10 0 0 0 0 0 200 0 0 0 0 0

To record sale of old crusher for $200,000 plus GST

15-27

ON-THE-JOB TRAINING, #T-1 AND T-2. T-1. Cost

$102,000

- Accum. Amort.

36,250

= Book Value

$ 65,750

- Salvage Overhaul

($96,000 + $6,000) ($6,250 + $15,000 + $15,000) As of December 31, 2015

12,000

$68,750 x 12 = $12,313.43 per year

New amortization if

53,750

67 months

overhaul is completed.

+15,000 $68,750

By CCA rules

Class 10 - 30% rate

Amount

UCC

2016

.3 x $100,000 = $30,000 x .5 (first year rule)

$15,000

$85,000

2017

.3 x $ 85,000 =

25,500

59,500

2018

.3 x $ 59,500 =

17,850

41,650

2019

.3 x $ 41,650 =

12,495

29,155

2020

.3 x $ 29,155 =

8,747

20,408

2021

.3 x $ 20,408 =

6,122

14,286

By CCA, a new truck substantially increases amortization expense. The overhaul may be appropriate if liquidity is a problem for Hope Co. Since a trade-in brings in only $12,000, additional cash or financing will be needed. There is no question of the tax savings effect of CCA. T-2. CCA is generally not used in preparing financial reports. It is required for tax purposes. There is no question that CCA will result in substantially writing off the truck in 5 years. CCA

UCC

.3 x $20,000

= (x .5 -- half year rule)

$3,000

$17,000

.3 x

17,000

5,100

11,900

.3 x

11,900

3,570

8,330

.3 x

8,330

2,499

5,831

.3 x

5,831

1,749.30

4,081.70

.3 x

4,081.70 =

1,224.51

2,857.19

Note that, in a straight-line method, $3,000 of amortization would be taken each year. Straight-line:

$20,000 - $5,000 = $15,000 = $3,000 Amortization Expense per year. 5

16 Statement of Cash Flows

ANSWERS TO DISCUSSION QUESTIONS AND CRITICAL THINKING/ETHICAL CASE

1. 2.

3. 4. 5.

The three main sections of the statement of cash flows are net cash flows from operating activities; net cash flows from investing activities; and net cash flows from financing activities. Net income from operations + Amortization + Current assets decrease + Current liabilities increase - Current assets increase - Current liabilities decrease In the direct method, we list each major group of operating cash flows including cash received from customers, cash paid for inventory, and cash paid for each of the operating expenses. Disagree. Issuance of shares to shareholders is a financing activity. (Note: purchase of ANOTHER company's shares is an investing activity.) Creditors look at net cash flows from operating activities to see how a company can generate cash from its operations. The other two sections reveal the company's cash flow involving investment as well as financing activities. Financing activities are those transactions involved with raising the money necessary to run the business. Examples are issuing shares, bonds, long-term notes as well as retiring bonds, repaying long-term notes, paying cash dividends, and repurchasing a company's own common shares. Amortization is added because it was subtracted on the income statement to compute net income. Amortization is a non-cash expense and therefore did not involve a cash outflow like most other expenses. The question in this case is whether Debbie Kreiger should release the statement of cash flows to the public. Although the cash flow statement might hurt the reputation of the company or disclose information to competitors, the public has a right to know how the money is distributed. Thus I would rule that the statement of cash flows should be included with the income statement and the balance sheet. It complies with generally accepted accounting principles.

16-1

SOLUTION TO CLASSROOM DEMONSTRATION EXERCISES, SET A 1.

added

subtracted

added

Net cash flows from operating activities (indirect method) Net Income

$1,700

Amortization Expense

2,000

Increase in Inventory

(500)

Increase in Accounts Receivable

(200)

Decrease in Prepaid Insurance

200

Decrease in Accounts Payable

(200)

Increase in Salaries Payable

200

Net Cash provided by Operating Activities 3.

$3,200

Net cash flows from operating activities (direct method) Cash received from customers

$7,700

Cash paid for inventory

$2,600

Cash paid for salaries

2,000

Cash paid for insurance

200

Cash paid for miscellaneous expenses

300

Total cash paid for operating activities

5,100

Net cash flows from operating activities Explanations of computations: Cash received from customers Cash paid for inventory Cash paid for salaries Cash paid for insurance Cash paid for miscellaneous expenses 4.

7,900 - 200 = 7,700 2,300 + 500 - 200 = 2,600 2,200 - 200 = 2,000 400 - 200 = 200 300

Cash provided by financing activities: Payments of dividends

$ (7,000)

Issue Common Shares

2,500

Issue L. T. Note

16,000

Cash provided by financing activites 5.

= = = = =

$ 11,500

Net change in cash: Net cash flows from operating activities

$4,000

Net cash used by investing activities

(2,500)

Net cash provided by financing activities Net change in cash

16-2

900 $2,400

$2,600

SOLUTION TO CLASSROOM DEMONSTRATION EXERCISES, SET B 1.

subtracted

added

subtracted

Net cash flows from operating activities (indirect method) Net Income

$1,900

Amortization Expense

500

Increase in Inventory

(500)

Increase in Accounts Receivable

(200)

Decrease in Prepaid Insurance

100

Decrease in Accounts Payable

(400)

Increase in Salaries Payable

200

Net Cash provided by Operating Activities 3.

$1,600

Net cash flows from operating activities (direct method) Cash received from customers

$7,800

Cash paid for inventory

$3,300

Cash paid for salaries

2,000

Cash paid for insurance

600

Cash paid for miscellaneous expenses

300

Total cash paid for operating activities

6,200

8,000 - 200 = 7,800 2,400 + 500 + 400 = 3,300 2,200 - 200 = 2,000 700 - 100 = 600 300

Cash provided by financing activities: Payments of dividends

$ (6,000)

Issue Common Shares

2,000

Issue L. T. Note

14,000

Cash provided by financing activites 5.

= = = = =

$1,600

$10,000

Net change in cash: Net cash flows from operating activities

$3,000

Net cash used by investing activities

(1,000)

Net cash provided by financing activities Net change in cash

16-3

SOLUTION TO EXERCISES EXERCISE 16-1. Add to Net Income

Subtract from Net Income

CURRENT ASSETS

Decrease

Increase

CURRENT LIABILITIES

Increase

Decrease

EXERCISE 16-2. Net cash flows from operating activities (indirect method) Net Income

$17,000

Amortization Expense

4,000

Increase in Accounts Receivable

(2,000)

Decrease in Prepaid Insurance

Increase in Accounts Payable

600

Increase in Salaries Payable

1,000

Net Cash provided by Operating Activities

$20,650

EXERCISE 16-3. Net cash flows from operating activities (direct method) Cash received from customers

$8,400

Cash paid for inventory

$4,800

Cash paid for salaries

1,800

Cash paid for insurance

650

Cash paid for miscellaneous expenses Total cash paid for operating activities

8,250

Net cash flows from operating activities

$ 150

Explanations of computations: Cash received from customers Cash paid for inventory Cash paid for salaries Cash paid for insurance Cash paid for miscellaneous expenses

EXERCISE 16-4.

16-4

1,000

= = = = =

9,000 - 600 = 8,400 4,400 + 500 - 100 = 4,800 1,600 + 200 = 1,800 800 - 150 = 650 1,000

PROBLEM 16A-1.

DENT CORPORATION STATEMENT OF CASH FLOWS - INDIRECT METHOD FOR THE YEAR ENDED DECEMBER 31, 2013

Net Cash Flows from Operating Activities Net Income

$3 1 0 0 0 0

Add (Deduct) Items to Convert Net Income from Accrual Basis to Cash Basis Amortization Expense Increase in Accounts Receivable Increase in Merchandise Inventory Decrease in Prepaid Rent Increase in Short-Term Notes Payable Decrease in Accounts Payable

7 0 0 0 00 (1 1 0 0 0 0) (2 0 0 0 0) 2 0 0 00 1 6 0 0 00 (4 0 0 0 0) $1 0 2 0 0 0 0

Net Cash Flows from Operating Activities Cash Flows from Investing Activities Purchase of Plant Asset

(8 0 0 0 0 0)

Net Cash Used by Investing Activities

(8 0 0 0 0 0)

Cash Flows from Financing Activities Retirement of Bonds Payable

(2 5 0 0 0 0)

Issuance of Common Shares

2 5 0 0 00 (1 4 0 0 0 0)

Payment of Dividends Net Cash Used by Financing Activities Net Increase in Cash Beginning Balance of Cash Ending Balance of Cash

(1 4 0 0 0 0) 8 0 0 00 2 6 0 0 00 $3 4 0 0 0 0

16-5

PROBLEM 16A-2.

DENT CORPORATION STATEMENT OF CASH FLOWS - DIRECT METHOD FOR THE YEAR ENDED DECEMBER 31, 2013

Net Cash Flows from Operating Activities Cash Received from Customers Cash Paid for Inventory Cash Paid for Salaries Cash Paid for Rent Cash Paid for Miscellaneous Expenses

$95 4 0 0 0 0 $68 1 0 0 0 0 6 6 0 0 00 7 3 0 0 00 3 2 0 0 00 85 2 0 0 0 0

Total Cash Paid for Operating Activities Net Cash Flows from Operating Activities

10 2 0 0 0 0

Cash Flows from Investing Activities Purchase of Plant Asset

(8 0 0 0 0 0)

Net Cash Used by Investing Activities

(8 0 0 0 0 0)

Cash Flows from Financing Activities Retirement of Bonds Payable Issuance of Common Shares Payment of Dividends Net Cash Used by Financing Activities Net Increase in Cash Beginning Balance of Cash Ending Balance of Cash Computations of cash flows from operating activities: Cash received from customers = 96,500 - 1,100 = 95,400 Cash paid for inventory = 69,100 + 200 + 400 - 1,600 = 68,100 Cash paid for salaries = 6,600 Cash paid for rent = 7,500 - 200 = 7,300 Cash paid for miscellaneous expenses = 3,200

16-6

(2 5 0 0 0 0) 2 5 0 0 00 (1 4 0 0 0 0) (1 4 0 0 0 0) 8 0 0 00 2 6 0 0 00 $3 4 0 0 0 0

PROBLEM 16B-1.

BLUMER LIMITED STATEMENT OF CASH FLOWS - INDIRECT METHOD FOR THE YEAR ENDED DECEMBER 31, 2013

Net Cash Flows from Operating Activities Net Income

$3 6 4 0 0 0

Add (Deduct) Items to Convert Net Income from Accrual to Cash Basis Amortization Expense Decrease in Accounts Receivable Increase in Inventory Increase in Short-Term Notes Payable Decrease in Accounts Payable

1 3 0 0 00 2 3 0 00 (7 7 0 0 0) 1 0 0 00 (5 0 0 0)

Net Cash Flows from Operating Activities

$4 4 5 0 0 0 Cash Flows from Investing Activities Purchase of Equipment

(2 3 0 0 0 0)

Purchase of Machinery

(2 3 0 0 0 0) (7 0 0 0 0)

Purchase of Land

(5 3 0 0 0 0)

Net Cash Used by Investing Activities

Cash Flows from Financing Activities Increase in Mortgage Payable Issuance of Common Shares Net Cash Provided by Financing Activities Net Increase in Cash Beginning Balance of Cash Ending Balance of Cash

3 5 0 00 2 0 0 0 00 2 3 5 0 00 1 5 0 0 00 5 4 0 00 $2 0 4 0 0 0

Computations of cash paid for equipment and machinery: Equipment: 6,030 + 800 = 6,830; 6,830 - 4,530 = 2,300 Machinery: 4,830 + 500 = 5,330; 5,330 - 3030 = 2,300

16-7

PROBLEM 16B-2.

BLUMER LIMITED STATEMENT OF CASH FLOWS - DIRECT METHOD FOR THE YEAR ENDED DECEMBER 31, 2013

Net Cash Flows from Operating Activities Cash Received from Customers Cash Paid for Inventory Cash Paid for Salaries Cash Paid for Advertising Cash Paid for Miscellaneous Expenses

$36 2 3 0 0 0 $25 7 2 0 0 0 1 8 0 0 00 6 6 0 00 3 6 0 0 00 31 7 8 0 0 0

Total Cash Paid for Operating Activities Net Cash Flows from Operating Activities

4 4 5 0 00

Cash Flows from Investing Activities Purchase of Equipment Purchase of Machinery Purchase of Land

(2 3 0 0 0 0) (2 3 0 0 0 0) (7 0 0 0 0)

Net Cash Used by Investing Activities

(5 3 0 0 0 0)

Cash Flows from Financing Activities Increase of Mortgage Payable Issuance of Common Shares Net Cash Provided by Financing Activities Net Increase in Cash Beginning Balance of Cash Ending Balance of Cash

Computations of cash flows from operating activities: Cash received from customers = 36,000 + 230 = 36,230 Cash paid for inventory = 25,000 + 770 - 100 + 50 = 25,720 Cash paid for salaries = 1,800 Cash paid for advertising = 660 Cash paid for miscellaneous expenses = 3,600 Computations of cash paid for equipment and machinery: Equipment: 6,030 + 800 = 6,830; 6,830 - 4,530 = 2,300 Machinery: 4,830 + 500 = 5,330; 5,330 - 3,030 = 2,300

16-8

3 5 0 00 2 0 0 0 00 2 3 5 0 00 1 5 0 0 00 5 4 0 00 $2 0 4 0 0 0

PROBLEM 16C-1.

EMPIRE COMPANY LTD. STATEMENT OF CASH FLOWS - INDIRECT METHOD FOR THE YEAR ENDED MAY 31, 2015

Net Cash Flows from Operating Activities Net Income

$36 5 2 0 0 0

Add (Deduct) Items to Convert Net Income from Accrual Basis to Amortization Expense Increase in Accounts Receivable Increase in Inventory Increase in Prepaid Insurance Increase in Bank Loan Payable Increase in Accounts Payable Decrease in Salaries Payable

23 9 1 0 0 0 (11 4 6 5 0 0) (22 6 5 6 0 0) (5 9 0 0 0) 2 6 0 0 00 7 7 1 1 00 (6 5 1 0 0) 35 3 7 9 0 0

Net Cash Flows from Operating Activities Cash Flows from Investing Activities Purchase of Automotive Purchase of Computers and Related Purchase of Store Equipment

(16 1 2 0 0 0) (5 5 4 0 0 0) (7 9 2 0 0 0)

Net Cash Used by Investing Activities

(29 5 8 0 0 0)

Cash Flows from Financing Activities Decrease in Automotive Loan Payable (5,299) + (1,590) Increased Preferred Shares Issuance of Common Shares Payment of Dividends Net Cash Provided by Financing Activities Net Increase in Cash Beginning Balance of Cash Ending Balance of Cash

(6 8 8 9 0 0) 30 0 0 0 0 0 5 0 0 0 00 (12 0 0 0 0 0) 16 1 1 1 0 0 21 9 1 0 0 0 38 6 7 0 0 0 $60 5 8 0 0 0

Computations of cash paid for equipment: Automotive: 88,600 - 72,480 = 16,120 Computers and Related: 42,880 - 37,340 = 5,540 Store Equipment: 146,540 - 138,620 = 7,920

16-9

PROBLEM 16C-2.

EMPIRE COMPANY LTD. STATEMENT OF CASH FLOWS - DIRECT METHOD FOR THE YEAR ENDED MAY 31, 2015

Net Cash Flows from Operating Activities Cash Received from Customers Cash Paid for Insurance Cash Paid for Inventory Cash Paid for Rent Cash Paid for Salaries Cash Paid for Misc. Expenses inc Miscellaneous, Advertising and Interest Total Cash Paid for Operating Activities

$501 0 5 5 0 0 $18 2 2 8 0 0 302 4 8 5 0 0 36 0 0 0 0 0 64 0 5 3 0 0 44 9 1 0 0 0 465 6 7 6 0 0 35 3 7 9 0 0

Net Cash Flows from Operating Activities Cash Flows from Investing Activities Purchase of Automotive Purchase of Computers and Related Purchase of Store Equipment

(16 1 2 0 0 0) (5 5 4 0 0 0) (7 9 2 0 0 0)

Net Cash Used by Investing Activities

(29 5 8 0 0 0)

Cash Flows from Financing Activities Decrease of Automotive Loan Increased Preferred Shares Issuance of Common Shares Payment of Dividends Net Cash Provided by Financing Activities Net Increase in Cash Beginning Balance of Cash Ending Balance of Cash

See next page for Computations

(6 8 8 9 0 0) 30 0 0 0 0 0 5 0 0 0 00 (12 0 0 0 0 0) 16 1 1 1 0 0 21 9 1 0 0 0 38 6 7 0 00 $6 0 5 8 0 0 0

PROBLEM 16C-2., Cont. Computations of cash flows from operating activities: Cash received from customers = 512,520 - 11,465 = 501,055 Cash paid for insurance = 17,638 + (8405 - 7,815 (Prepaid Insurance)) = 18,228 Cash paid for inventory = 290,140 + 22,656 (re Merch Inv.) - 7,711 (re A/P) - 2,600 (re Bank Loan) = 302,485 Cash paid for rent = 36,000 Cash paid for salaries = 63,402 + 651 = 64,053 Cash paid for miscellaneous = 18,400, cash paid for advertising = 21,480, cash paid for interest = 5,030 Total Cash paid for Misc. Expenses includes miscellaneous, advertising, and interest = 44,910 Computations of cash paid for equipment and machinery: Automotive: 49,200 + 7,000 = 56,200; 56,200 - 40,080 = 16,120 Computers and Related: 16,680 + 8,800 = 25,480; 25,480 - 19,940 = 5,540 Store Equipment: 84,050 +8,110 = 92,160; 92,160 - 84,240 = 7,920

SOLUTION TO ON-THE-JOB TRAINING, #T-1 AND #T-2. T-1. Cash Received from Customers

Cash Paid for Advertising

Sales - Increase in Accounts Receivable

$360,000 - $35,000 = $325,000

Advertising Expense - Decrease in Prepaid Advertising

$6,000 - $400 = $5,600

T-2. Cash Paid for Inventory:

Cost of Goods Sold

$190,500

Decrease in Inventory

(2,600)

Positive cash effect (lowers cost)

Decrease in Accounts Payable

2,200

Negative cash effect (raises cost)

Increase in Notes Payable

(2,000)

Positive cash effect (lowers cost)

Total

$188,100

16-11

17 Analyzing Financial Statements

ANSWERS TO DISCUSSION QUESTIONS AND CRITICAL THINKING/ETHICAL CASE

2. 3. 4. 5. 6. 7.

8. 9. 10. 11. 12. 13.

Investor's needs: profitability, dividends, financing, etc. Creditor's needs: can company pay debts on time? Management's needs: are we operating efficiently? Disagree. It is used on comparative statements. In vertical analysis, each item is analyzed as a percent of a certain base total. Disagree. Vertical analysis. The base year allows each item to be stated as a percentage of the amount of the base year. Ratios can be expressed as amounts, percents, fractions, or stated ratios. a. Liquidity: ability to meet short-term obligations. b. Asset management: effective use of assets. c. Debt management: mix of debt and equity. d. Profitability: ability to earn profits. Merchandise Inventory. Prepaid Expenses. Both not easily converted into cash. Slow collection process. Disagree. Just the opposite. A low ratio would mean creditors would be likely to be paid, since the ratio indicates the amount of assets that are financed by creditors. Agree. The question in this case is whether Loon Company is holding too much cash at the risk of alienating customers. The company's goal is to serve the best interest of the shareholders. Currently the company has a strong cash position and this does not please all shareholders. Holding cash might not be in the best interest of shareholders. This money could be used to expand, research, etc. The company should look at how to better service its customers. In the long run poor customer relations could mean a decrease in earnings and a poor return on shareholders' equity. However, I agree that in business you cannot please everyone.

17-1

CLASSROOM DEMONSTRATION EXERCISES Set A 1., 2. and 3. 1. a. +$160 b.

-$200

$160 = + 32.7% $490 $-200 = -28.6% $700

$ 600/$4,100 $ 700/$4,100 $ 800/$4,100 $2,000/$4,100

Net Sales Cost of Goods Sold Gross Profit from Sales Operating Expenses Net Income

= = = =

14.6% 17.1% 19.5% 48.8% 100% 33% 67% 25% 41.7%

4. 2014

2013

2012

2011

Sales

225%

150%

125%

100%

Gross Profit

200%

150%

200%

100%

Net Income

333%

150%

100%

5. a.

$51,000/$19,000

2.68

($51,000 - $6,000 - $4,000) / $19,000

2.16

$250,000/$151,000

1.66

$106,000/$250,000

42.4%

17-2

CLASSROOM DEMONSTRATION EXERCISES, Set B 1., 2. and 3. 1. a. +$100 b.

-$200

$100 = +20% $500 $-200 = -33.3% $600

$ 500/$3,000 $ 600/$3,000 $ 900/$3,000 $1,000/$3,000

Net Sales Cost of Goods Sold Gross Profit from Sales Operating Expenses Net Income

= = = =

16.7% 20% 30% 33.3% 100% 60% 40% 12% 28%

4. 2014

2013

2012

2011

Sales

160%

140%

120%

100%

Gross Profit

200%

67%

167%

100%

Net Income

200%

120%

50%

100%

5. a.

$42,000/$17,000

2.47

($42,000 - $4,000 - $3,000) / $17,000

2.00

$300,000/$149,000

2.01

$104,000/$300,000

34.67%

17-3

FORMS FOR EXERCISES Exercise 17-1.

AUSTER CO. COMPARATIVE INCOME STATEMENT FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014 Amount of December 31 Increase or Decrease 2015 2014 During 2015

Assets

Percent Increase or Decrease During 2015

Net Sales

70 0 0 0 00

40 0 0 0 00

30 0 0 0 00

7 5 0 0*

Cost of Goods Sold

30 0 0 0 00

20 0 0 0 00

10 0 0 0 00

5 0 00

Gross Profit from Sales

40 0 0 0 00

20 0 0 0 00

1 0 0 00

Operating Expenses

17 0 0 0 00

12 0 0 0 00

5 0 0 0 00

4 1 67

Operating Income

23 0 0 0 00

8 0 0 0 00

15 0 0 0 00

1 8 7 50

5 0 0 0 00

4 0 0 0 00

1 0 0 0 00

2 5 00

18 0 0 0 00

4 0 0 0 00

14 0 0 0 00

3 5 0 00

Less Interest Expense Net Income

$30,000/$40,000

Exercise 17-2. TED CO. COMMON SIZE COMPARATIVE INCOME STATEMENT FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014 2015 - %

2014 - %

1 0 0 0%

Cost of Goods Sold

8 0 0%

8 8 7%

Gross Profit from Sales

2 0 0%

1 1 3%

Operating Expenses

1 2 0%

7 5%

8 0%

3 8%

Net Sales

Net Income

17-4

EXERCISE 17-3. HOSTER CO. COMMON SIZE COMPARATIVE INCOME STATEMENT DECEMBER 31, 2015 AND 2014 2015 - %

2014 - %

Current Assets

1 6 7%

1 3 9%

Plant and Equipment

8 3 3%

8 6 1%

1 0 0 0%

Current Liabilities

1 9%

8 3%

Long-Term Liabilities

5 6%

2 7 8%

Common Shares

5 5 6%

Retained Earnings

3 7 0%

8 3%

1 0 0 0%

Total Assets

Total Liabilities and Shareholders' Equity Rounded to 100%

Exercise 17-4.

2014

2013

2012

2011

Sales

200%

167%

133%

100%

Gross Profit

134%

114%

90%

100%

Net Income

126%

108%

58%

100%

Exercise 17-5. a.

Asset Turnover for 2013 Net Sales/Total Assets $800,000/$230,000

3.48 times

Inventory turnover for 2013 COGS/Average Inventory $710,000/$80,000*

8.88

* ($90,000 + $70,000) / 2 = $80,000 c.

Accounts Receivable Turnover Net Credit Sales/Average Accounts Receivable $800,000/$55,000*

14.55

* ($60,000 + $50,000) / 2 = $55,000

17-5

FORMS FOR END OF CHAPTER PROBLEMS PROBLEM 17A-1. HESLER CORPORATION COMPARATIVE BALANCE SHEET FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 Amount of December 31 Increase or Decrease 2014 2013 During 2014

Percent Increase or Decrease During 2014

Assets Current Assets Cash

$3 9 0 0 0 0

$3 7 0 0 0 0

$2 0 0 0 0

5 4%*

Accounts Receivable, Net

28 0 0 0 0 0

16 1 0 0 0 0

11 9 0 0 0 0

7 3 9%

Merchandise Inventory

47 0 0 0 0 0

15 0 0 0 0 0

32 0 0 0 0 0

2 1 3 3%

Prepaid Expenses

1 6 0 0 00

1 3 0 0 00

3 0 0 00

2 3 1%

$80 5 0 0 0 0

$36 1 0 0 0 0

$44 4 0 0 0 0

1 2 3 0%

$115 0 0 0 0 0 $110 0 0 0 0 0

$5 0 0 0 0 0

4 5%

$195 5 0 0 0 0 $146 1 0 0 0 0

$49 4 0 0 0 0

3 3 8%

Notes Payable

$20 0 0 0 0 0

$26 0 0 0 0 0

$(6 0 0 0 0 0)

(2 3 1)%

Accounts Payable

21 2 0 0 0 0

24 0 0 0 0 0

(2 8 0 0 0 0)

(1 1 7)%

$41 2 0 0 0 0

$50 0 0 0 0 0

$(8 8 0 0 0 0)

(1 7 6)%

$50 0 0 0 0 0

$40 0 0 0 0 0

$10 0 0 0 0 0

2 5 0%

$91 2 0 0 0 0

$90 0 0 0 0 0

$1 2 0 0 0 0

1 3%

Common Shares, $10 par value

$50 0 0 0 0 0

$30 0 0 0 0 0

$20 0 0 0 0 0

6 6 7%

Retained Earnings

54 3 0 0 0 0

26 1 0 0 0 0

28 2 0 0 0 0

1 0 8 0%

$104 3 0 0 0 0

$56 1 0 0 0 0

$48 2 0 0 0 0

8 5 9%

Total Liabilities and Shareholders' Equity $195 5 0 0 0 0 $146 1 0 0 0 0

$49 4 0 0 0 0

3 3 8%

Total Current Assets Plant and Equipment Office Equipment, Net Total Assets

Liabilities Current Liabilities

Total Current Liabilities Long-Term Liabilities Mortgage Payable Total Liabilities

Shareholders' Equity

Total Shareholders' Equity

*$200/ $3,700 = 5.4%

17-6

PROBLEM 17A-1., Cont. HESLER CORPORATION BALANCE SHEET DECEMBER 31, 2014

2014 - $

2014 - %

Assets Current Assets Cash

$3 9 0 0 0 0

2 0%*

Accounts Receivable, Net

28 0 0 0 0 0

1 4 3%

Merchandise Inventory

47 0 0 0 0 0

2 4 0%

Prepaid Expenses

1 6 0 0 00

$80 5 0 0 0 0

4 1 2%

$115 0 0 0 0 0

5 8 8%

$195 5 0 0 0 0

1 0 0 0%

$20 0 0 0 0 0 21 2 0 0 0 0

1 0 2% 1 0 8%

$41 2 0 0 0 0

2 1 1%

Mortgage Payable

$50 0 0 0 0 0

2 5 6%

Total Liabilities

$91 2 0 0 0 0

4 6 6%

$50 0 0 0 0 0 54 3 0 0 0 0

2 5 6% 2 7 8%

Total Shareholders' Equity

$104 3 0 0 0 0

5 3 4%

Total Liabilities and Shareholders' Equity

$195 5 0 0 0 0

1 0 0 0%

Total Current Assets Plant and Equipment Office Equipment, Net Total Assets

Liabilities Current Liabilities Notes Payable Accounts Payable Total Current Liabilities Long-Term Liabilities

Shareholders' Equity Common Shares, $10 Par Value Retained Earnings

* $3,900/$195,500 = 2% (rounded to nearest tenth)

17-7

PROBLEM 17A-2. OPER COMPANY COMPARATIVE INCOME STATEMENT FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 Amount of December 31 Increase or Decrease 2014 2013 During 2014

Percent Increase or Decrease During 2014

Net Sales

$288 0 0 0 0 0 $275 0 0 0 0 0

$13 0 0 0 0 0

4 7%

Cost of Goods Sold

197 0 0 0 0 0

27 0 0 0 0 0

1 5 9%

Gross Profit from Sales

$91 0 0 0 0 0 $105 0 0 0 0 0 $(14 0 0 0 0 0)

(1 3 3)%

170 0 0 0 0 0

Operating Expenses Selling

$50 0 0 0 0 0

$51 0 0 0 0 0

$(1 0 0 0 0 0)

(2 0)%

General and Administrative

21 0 0 0 0 0

23 0 0 0 0 0

(2 0 0 0 0 0)

(8 7)%

$71 0 0 0 0 0

$74 0 0 0 0 0

$(3 0 0 0 0 0)

(4 1)%

$20 0 0 0 0 0

$31 0 0 0 0 0 $(11 0 0 0 0 0)

(3 5 5)%

Total Operating Expenses Operating Income Less Interest Expense

6 0 0 0 00

8 0 0 0 00

(2 0 0 0 0 0)

(2 5 0)%

$14 0 0 0 0 0

$23 0 0 0 0 0

$(9 0 0 0 0 0)

(3 9 1)%

Income Taxes

5 6 0 0 00

Net Income

$8 4 0 0 0 0

9 2 0 0 00 $13 8 0 0 0 0

(3 6 0 0 0 0) $(5 4 0 0 0 0)

(3 9 1)% (3 9 1)%

Income before Taxes

17-8

PROBLEM 17A-2., Cont. OPER COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2014

2014 - $

2014 - %

Net Sales

$288 0 0 0 0 0

1 0 0 0%

Cost of Goods Sold

197 0 0 0 0 0

6 8 4%

Gross Profit from Sales

$91 0 0 0 0 0

3 1 6%

Selling

$50 0 0 0 0 0

1 7 4%

General and Administrative

21 0 0 0 0 0

7 3%

$71 0 0 0 0 0

2 4 7%

$20 0 0 0 0 0

6 9%

6 0 0 0 00

2 1%

Income Taxes

$14 0 0 0 0 0 5 6 0 0 00

4 9% 1 9%

Net Income

$8 4 0 0 0 0

2 9%

Operating Expenses

Total Operating Expenses Operating Income Less Interest Expense Income before Taxes

OPER COMPANY COMMON-SIZE COMPARATIVE INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2014

2014 - %

2013 - %

1 0 0 0%

Cost of Goods Sold

6 8 4%

6 1 8%

Gross Profit from Sales

3 1 6%

3 8 2%

1 7 4%

1 8 5%

7 3%

8 4%

2 4 7%

2 6 9%

6 9%

1 1 3%

2 1%

2 9%

Income before Taxes

4 9%

8 4%

Income Taxes

1 9%

3 3%

Net Income

2 9%

5 0%

Net Sales

Operating Expenses Selling General and Administrative Total Operating Expenses Operating Income Less Interest Expense

17-9

PROBLEM 17A-3. a.

Current Ratio

Current Assets

$119,400

Current Liabilities b.

Acid Test Ratio

2.22

.98

11.1

33 Days

3.9

2.3

50.5%

102%

6.1

44.7%

9.72%

27%

45.63%

$53,800

Current Assets - Merchandise Inv. - Prepaid Expenses Current Liabilities $119,400 - $61,200 - $5,600 $53,800

Accounts Receivable Turnover Net Credit Sales

Average Accounts Receivable d.

Average Collection Period

$430,000

= $430,000

($41,600 + $36,200) / 2

$38,900

365

= 365

Accounts Receivable Turnover e.

Inventory Turnover

Cost of Goods Sold

Average Inventory

($61,200 + $62,400)/2

Asset Turnover

$238,000

11.1 = $238,000

Net Sales

$61,800 =

$430,000

Total Assets g.

Debt to Total Assets

$185,000

Total Liabilities

$93,400

Total Assets h.

$185,000

Debt to Shareholders' Equity Total Liabilities

$93,400

Shareholders' Equity i.

$91,600

Times Interest Earned

Gross Profit Rate

Income Before Taxes and Interest Expense

= $50,000

Interest Expense

$8,200

Gross Profit

$192,000

Net Sales k.

Return on Sales

Net Income Before Taxes = $41,800 Net Sales

$430,000 $430,000

Return on Total Assets Net Income Before Tax and Interest

= $50,000

Total Assets

$185,000

Return on Common Shareholders' Equity Net Income Before Taxes - Preferred Dividends Common Shareholders' Equity =

$41,800 $91,600

PROBLEM 17A-4. a.

Current Ratio

Acid Test

2014

2013

2012

2.05

1.86

3.09

($2,046/ $1,000)

($1,782/$960)

($2,842/$920)

1.56

1.53

2.44

($2,046 - $484) / $1,000

($1,782 - $310) / $960

($2,842 -$600) / $920

VARGO CORPORATION COMMON-SIZE COMPARATIVE INCOME STATEMENT FOR THE YEARS ENDED DECEMBER 31, 2014, 2013 AND 2012

2014 - %

2013 - %

2012 - %

1 0 0 0%

Cost of Goods Sold

7 3 3%*

7 0 0%

7 0 5%

Gross Profit from Sales

2 6 7%

3 0 0%

2 9 5%

1 4 4%

1 7 2%

1 4 2%

7 5%

8 1%

1 0 2%

2 1 9%

2 5 4%

2 4 3%

Operating Income before Taxes

4 8%

4 6%

5 2%

Income Taxes

1 9%

2 1%

Net Income

2 9%

2 8%

3 1%

Net Sales

Operating Expenses Selling General and Administrative Total Operating Expenses

* $23,450 / $32,000

17-11

PROBLEM 17A-4., Cont. c.

VARGO CORPORATION TREND ANALYSIS BASE YEAR -- 2012 2014 - %

2013 - %

2012 - %

Assets Current Assets

7 2 %

6 3 %

1 0 0 %

1 1 9 %

1 0 7 %

1 0 0 %

1 0 7 %

9 6 %

1 0 0 %

Current Liabilities

1 0 9 %

1 0 4 %

1 0 0 %

Common Shares

1 0 9 %

9 7 %

1 0 0 %

Retained Earnings

1 0 3 %

9 2 %

1 0 0 %

1 0 7 %

9 6 %

1 0 0 %

Plant and Equipment Total Assets Liabilities and Shareholders' Equity

Total Liabilities and Shareholders' Equity

PROBLEM 17B-1. HESLER CORPORATION COMPARATIVE BALANCE SHEET FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 Amount of December 31 Increase or Decrease 2014 2013 During 2014

Percent Increase or Decrease During 2014

Assets Current Assets Cash

$16 5 0 0 0 0

$12 3 0 0 0 0

$4 2 0 0 0 0

3 4 1%*

Accounts Receivable, Net

52 5 0 0 0 0

44 7 0 0 0 0

7 8 0 0 00

1 7 4%

Merchandise Inventory

66 0 0 0 0 0

78 0 0 0 0 0

(12 0 0 0 0 0)

(1 5 4)%

Prepaid Expenses

9 3 0 0 00

5 7 0 0 00

3 6 0 0 00

6 3 2%

$144 3 0 0 0 0 $140 7 0 0 0 0

$3 6 0 0 0 0

2 6%

$351 6 0 0 0 0 $330 0 0 0 0 0 $495 9 0 0 0 0 $470 7 0 0 0 0

$21 6 0 0 0 0 $25 2 0 0 0 0

6 5%

Notes Payable

$72 0 0 0 0 0

$54 0 0 0 0 0

$18 0 0 0 0 0

3 3 3%

Accounts Payable

45 0 0 0 0 0

28 5 0 0 0 0

16 5 0 0 0 0

5 7 9%

$117 0 0 0 0 0

$82 5 0 0 0 0

$34 5 0 0 0 0

4 1 8%

Total Current Assets Plant and Equipment Office Equipment, Net Total Assets

5 4%

Liabilities Current Liabilities

Total Current Liabilities

Shareholders' Equity Common Shares, $10 Par Value Retained Earnings

$300 0 0 0 0 0 $300 0 0 0 0 0

88 2 0 0 0 0

(9 3 0 0 0 0)

(1 0 5)%

$378 9 0 0 0 0 $388 2 0 0 0 0 Total Liabilities and Shareholders' Equity $495 9 0 0 0 0 $470 7 0 0 0 0

(9 3 0 0 0 0) $25 2 0 0 0 0

(2 4)%

Total Shareholders' Equity

78 9 0 0 0 0

5 4%

* $4,200/$12,300 = 34.1

17-13

PROBLEM 17B-1., Cont. HESLER CORPORATION BALANCE SHEET DECEMBER 31, 2014

2014 - $

2014 - %

Assets Current Assets Cash

$16 5 0 0 0 0

3 3%*

Accounts Receivable, Net

52 5 0 0 0 0

1 0 6%

Merchandise Inventory

66 0 0 0 0 0

1 3 3%

Prepaid Expenses

9 3 0 0 00

1 9%

$144 3 0 0 0 0

2 9 1%

$351 6 0 0 0 0

7 0 9%

$495 9 0 0 0 0

1 0 0 0%

Accounts Payable

$72 0 0 0 0 0 45 0 0 0 0 0

1 4 5% 9 1%

Total Liabilities

$117 0 0 0 0 0

2 3 6%

$300 0 0 0 0 0

6 0 5%

78 9 0 0 0 0

1 5 9%

$378 9 0 0 0 0 $495 9 0 0 0 0

7 6 4% 1 0 0%

Total Current Assets Plant and Equipment Office Equipment, Net Total Assets

Liabilities Current Liabilities Notes Payable

Shareholders' Equity Common Shares, $10 Par Value Retained Earnings Total Shareholders' Equity Total Liabilities and Shareholders' Equity

16,500 $495,900

PROBLEM 17B-2. OPER COMPANY COMPARATIVE INCOME STATEMENT FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 Amount of December 31 Increase or Decrease 2014 2013 During 2014

Percent Increase or Decrease During 2014

Net Sales

12 2 5 0 0 0

$8 8 8 0 0 0

$3 3 7 0 0 0

3 8 0%

Cost of Goods Sold

6 0 5 0 00

4 2 4 0 00

1 8 1 0 00

4 2 7%

Gross Profit from Sales

$6 2 0 0 0 0

$4 6 4 0 0 0

$1 5 6 0 0 0

3 3 6%

Selling

$2 7 0 0 0 0

$1 9 2 0 0 0

$ 7 8 0 00

4 0 6%

General and Administrative

1 0 5 0 00

9 6 0 00

9 0 00

9 4%

$3 7 5 0 0 0

$2 8 8 0 0 0

$ 8 7 0 00

3 0 2%

$2 4 5 0 0 0

$1 7 6 0 0 0

$ 6 9 0 00

3 9 2%

2 2 5 00

2 2 0 00

5 00

2 3%

Income before Taxes

$2 2 2 5 0 0

$1 5 4 0 0 0

$ 6 8 5 00

4 4 5%

Income Taxes

8 9 0 00 $1 3 3 5 0 0

6 1 6 00 $ 9 2 4 00

2 7 4 00 $ 4 1 1 00

4 4 5% 4 4 5%

17-15

Operating Expenses

Total Operating Expenses Operating Income Less Interest Expense

Net Income

PROBLEM 17B-2., Cont. OPER COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2014

2014 - $ Net Sales

2014 - %

$12 2 5 0 0 0

1 0 0 0%

Cost of Goods Sold

6 0 5 0 00

4 9 4%

Gross Profit from Sales

$6 2 0 0 0 0

5 0 6%

Selling

$2 7 0 0 0 0

2 2 0%

General and Administrative

1 0 5 0 00

8 6%

$3 7 5 0 0 0

3 0 6%

$2 4 5 0 0 0

2 0 0%

2 2 5 00

1 8%

$2 2 2 5 0 0 8 9 0 00 $1 3 3 5 0 0

1 8 2% 7 3%

Operating Expenses

Total Operating Expenses Operating Income Less Interest Expense Income before Taxes Income Taxes Net Income

1 0 9%

OPER COMPANY COMMON-SIZE COMPARATIVE INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2014

2014 - %

2013 - %

1 0 0 0%

Cost of Goods Sold

4 9 4%

4 7 7%

Gross Profit from Sales

5 0 6%

5 2 3%

2 2 0%

2 1 6%

8 6%

1 0 8%

3 0 6%

3 2 4%

2 0 0%

1 9 8%

1 8%

2 5%

1 8 2%

1 7 3%

Income Taxes

7 3%

6 9%

Net Income

1 0 9%

1 0 4%

Net Sales

Operating Expenses Selling General and Administrative Total Operating Expenses Operating Income Less Interest Expense Income before Taxes

PROBLEM 17B-3. a.

Current Ratio

Current Assets

$28,850

Current Liabilities b.

Acid Test Ratio

2.12

.97

$13,600

Current Assets - Merchandise Inv. - Prepaid Expenses Current Liabilities $28,850 - $14,500 - $1,200 $13,600

Accounts Receivable Turnover Net Credit Sales

$99,000

Average Accounts Receivable d.

Average Collection Period

365

Accounts Receivable Turnover e.

Inventory Turnover

Cost of Goods Sold

Average Inventory f.

Asset Turnover

Debt to Total Assets

$50,500

Net Sales

$99,000

Total Liabilities

$23,600

53.9%

117.1%

3.9

49%

13.5%

40.9%

66.3%

Times Interest Earned = $17,900

Gross Profit Rate

Gross Profit

$4,550

$48,500

Net Sales Return on Sales

$99,000

Net Income Before Taxes

$13,350

Net Sales

$99,000

Net Income Before Tax and Interest

= $17,900

Return on Total Assets Total Assets

2.26

$20,150

Interest Expense

Debt to Shareholders' Equity

Income Before Taxes and Interest Expense

3.4

$43,750

Shareholders' Equity

43,750

Total Liabilities i.

34 Days

($14,500 + $14,900) / 2

Total Assets h.

10.73

Total Assets g.

= 10.73

($9,750 + $8,700) / 2

$43,750

Return on Common Shareholders' Equity Net Income Before Taxes - Preferred Dividends Common Shareholders' Equity =

$13,350 $20,150

17-17

PROBLEM 17B-4. a. 2014

2013

2012

2.8

3.08

3.17

($6,720/$2,400)

($5,550/$1,800)

($4,950/$1,560)

2.24

2.08

2.4

Current Ratio

Acid Test

($6,720 - $1,350)/$2,400

($5,550 - $1,800)/$1,800

($4,950-$1,200)/$1,560

VARGO CORPORATION COMMON-SIZE COMPARATIVE INCOME STATEMENT FOR THE YEARS ENDED DECEMBER 31, 2014, 2013 AND 2012

2014 - %

2013 - %

2012 - %

1 0 0 0%

Cost of Goods Sold

7 2 4%*

7 3 8%

6 1 2%

Gross Profit from Sales

2 7 6%

2 6 2%

3 8 8%

Selling

1 3 0%

9 5%

1 4 0%

General and Administrative

1 0 3%

5 4%

9 7%

2 3 2%

1 4 9%

2 3 6%

Operating Income before Taxes

4 3%

1 1 3%

1 5 1%

Income Taxes

1 7%

4 5%

6 0%

Net Income

2 6%

6 8%

9 1%

Net Sales

Operating Expenses

Total Operating Expenses

* $23,450 / $32,000

PROBLEM 17B-4., Cont. c.

VARGO CORPORATION TREND ANALYSIS BASE YEAR -- 2012 2014 - %

2013 - %

2012 - %

Current Assets

1 3 6 %

1 1 2 %

1 0 0 %

Plant and Equipment

1 7 1 %

1 1 4 %

1 0 0 %

Total Assets

1 6 0 %

1 1 4 %

1 0 0 %

Current Liabilities

1 5 4 %

1 1 5 %

1 0 0 %

Common Shares

1 5 6 %

1 4 4 %

1 0 0 %

Retained Earnings

1 6 6 %

7 7 %

1 0 0 %

Total Liabilities and Shareholders' Equity

1 6 0 %

1 1 4 %

1 0 0 %

Assets

Liabilities and Shareholders' Equity

17-19

PROBLEM 17C-1. a.

TITAN COMPANY COMPARATIVE BALANCE SHEET FOR THE YEARS ENDED SEPTEMBER 30, 2015 AND 2014 Amount of September 30 Increase or Decrease to 2015 2014 Sept. 30, 2015

Percent Increase or Decrease to Sept. 30, 2015 *See Note 1

Assets Current Assets Cash Accounts Receivable Merchandise Inventory Prepaid Expenses Total Current Assets

$41 7 6 2 0 0 158 4 0 2 0 0 207 0 8 5 0 0 17 4 6 8 0 0

$28 9 0 4 0 0 126 4 1 7 0 0 220 4 8 6 0 0 18 2 1 0 0 0

$12 8 5 8 0 0 31 9 8 5 0 0 -31 4 0 1 0 0 -7 4 2 0 0

4 4 5% 2 5 3% -6 1% -4 0%

424 7 1 7 0 0

394 0 1 7 0 0

30 7 0 0 0 0

7 8%

382 7 5 0 0 0 183 9 1 4 0 0 166 3 8 5 0 0

394 0 2 0 0 0 169 5 5 0 0 0 148 8 3 2 0 0

-11 2 7 0 0 0 14 3 6 4 0 0 17 5 5 3 0 0 20 6 4 7 0 0 $51 3 4 7 0 0

-2 9% 8 5% 1 1 8%

Capital Assets - net of Accum. Amort. Store Fixtures Office Equipment Vehicles Total Capital Assets Total Assets

733 0 4 9 0 0 712 4 0 2 0 0 $1157 7 6 6 0 0 $1106 4 1 9 0 0

2 9% 4 6%

Liabilities and Shareholders' Equity Current Liabilities Demand Loan Payable Accounts Payable Current Portion of Bank Loan Accrued Liabilities Total Current Liabilities

$85 0 0 0 0 0 154 8 8 2 0 0 33 0 7 0 0 0 14 2 3 0 0 0 287 1 8 2 0 0

$70 0 0 0 0 0 148 7 6 6 0 0 34 1 1 5 0 0 18 5 2 4 0 0 271 4 0 5 0 0

$15 0 0 0 0 0 6 1 1 6 00 -1 0 4 5 0 0 -4 2 9 4 0 0 15 7 7 7 0 0

2 1 4% 4 1% -3 1% -2 3 2%

174 3 1 5 0 0

188 9 0 4 0 0

-14 5 8 9 0 0

-7 7%

-14 5 8 9 0 0 $1 1 8 8 0 0

0 0% -4 3% 0 2%

5 8%

Long-Term Liabilities Long-Term Bank Loans net of Current Amounts Bonds Payable - Due in 2026 Total Long-Term Liabilities Total Liabilities

150 0 0 0 0 0 150 0 0 0 0 0 324 3 1 5 0 0 338 9 0 4 0 0 $611 4 9 7 0 0 $610 3 0 9 0 0

Shareholders' Equity Preferred Shares - $4.00 Dividend Common Shares Retained Earnings Total Shareholders' Equity

180 0 0 0 0 0 150 0 0 0 0 0 250 0 0 0 0 0 250 0 0 0 0 0 116 2 6 9 0 0 96 1 1 0 0 0 $546 2 6 9 0 0 $496 1 1 0 0 0

30 0 0 0 0 0 20 1 5 9 0 0 $50 1 5 9 0 0

2 0 0% 0 0% 2 1 0% 1 0 1%

$1157 7 6 6 0 0 $1106 4 1 9 0 0

$51 3 4 7 0 0

4 6%

Total Liabilities and Shareholders' Equity

* Note 1 Various totals and sub-totals will not equal the sum of the percentages shown above each one. Each percentage number is based only on the three amounts immediately to its left.

PROBLEM 17C-1. b.

TITAN COMPANY COMPARATIVE BALANCE SHEET FOR THE YEARS ENDED SEPTEMBER 30, 2015 AND 2014 September 30 2015 - $

2015 - %

2014 - $

2014 - %

Assets Current Assets Cash Accounts Receivable Merchandise Inventory Prepaid Expenses Total Current Assets

$41 7 6 2 0 0 158 4 0 2 0 0 207 0 8 5 0 0 17 4 6 8 0 0

3 6% 1 3 7% 1 7 9% 1 5%

$28 9 0 4 0 0 126 4 1 7 0 0 220 4 8 6 0 0 18 2 1 0 0 0

2 6% 1 1 4% 1 9 9% 1 6%

424 7 1 7 0 0

3 6 7%

394 0 1 7 0 0

3 5 6%

382 7 5 0 0 0 183 9 1 4 0 0 166 3 8 5 0 0

3 3 1% 1 5 9% 1 4 4%

394 0 2 0 0 0 169 5 5 0 0 0 148 8 3 2 0 0 6 3 3% 712 4 0 2 0 0 1 0 0 0% $1106 4 1 9 0 0

3 5 6% 1 5 3% 1 3 5%

Capital Assets - net of Accum. Amort. Store Fixtures Office Equipment Vehicles Total Capital Assets Total Assets

733 0 4 9 0 0 $1157 7 6 6 0 0

6 4 4% 1 0 0 0%

Liabilities and Shareholders' Equity Current Liabilities Demand Loan Payable Accounts Payable Current Portion of Bank Loan Accrued Liabilities Total Current Liabilities

$85 0 0 0 0 0 154 8 8 2 0 0 33 0 7 0 0 0 14 2 3 0 0 0 287 1 8 2 0 0

7 3% 1 3 4% 2 9% 1 2% 2 4 8%

$70 0 0 0 0 0 148 7 6 6 0 0 34 1 1 5 0 0 18 5 2 4 0 0 271 4 0 5 0 0

6 3% 1 3 4% 3 1% 1 7%

174 3 1 5 0 0

1 5 1%

188 9 0 4 0 0

1 7 1%

150 0 0 0 0 0 324 3 1 5 0 0 $611 4 9 7 0 0

1 3 0% 150 0 0 0 0 0 2 8 0% 338 9 0 4 0 0 5 2 8% $610 3 0 9 0 0

1 3 6% 3 0 6% 5 5 2%

180 0 0 0 0 0 250 0 0 0 0 0 116 2 6 9 0 0 $546 2 6 9 0 0

1 5 5% 150 0 0 0 0 0 2 1 6% 250 0 0 0 0 0 1 0 0% 96 1 1 0 0 0 4 7 2% $496 1 1 0 0 0

1 3 6% 2 2 6% 8 7% 4 4 8%

$1157 7 6 6 0 0

1 0 0 0% $1106 4 1 9 0 0

1 0 0 0%

2 4 5%

Long-Term Liabilities Long-Term Bank Loans net of Current Amounts Bonds Payable - Due in 2026 Total Long-Term Liabilities Total Liabilities Shareholders' Equity Preferred Shares - $4.00 Dividend Common Shares Retained Earnings Total Shareholders' Equity Total Liabilities and Shareholders' Equity

17-21

PROBLEM 17C-2. THE HEATH GROUP, INC. COMPARATIVE INCOME STATEMENT FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 Amount of December 31 Increase or Decrease 2013 During 2014 2014

Sales Less, Cost of Goods Sold Gross Profit

$1258 6 6 4 0 0 $1194 8 8 5 0 0 604 2 1 8 0 0 588 6 4 0 0 0

Percent Increase or Decrease During 2014

$63 7 7 9 0 0 15 5 7 8 0 0

5 3% 2 6%

654 4 4 6 0 0

606 2 4 5 0 0

48 2 0 1 0 0

8 0%*

156 0 8 7 0 0 24 6 8 5 0 0 86 4 1 5 0 0 16 7 8 2 0 0 41 9 0 0 0 0 28 3 3 8 0 0 19 7 5 1 0 0 36 0 0 0 0 0 106 8 5 3 0 0 38 9 4 1 0 0 9 0 5 4 00

145 0 4 0 0 0 28 6 0 4 0 0 91 8 7 6 0 0 17 4 1 5 0 0 45 0 8 4 0 0 25 6 8 1 0 0 20 9 0 4 0 0 36 0 0 0 0 0 101 8 3 6 0 0 31 8 7 6 0 0 10 2 6 8 0 0

11 0 4 7 0 0 -3 9 1 9 0 0 -5 4 6 1 0 0 -6 3 3 0 0 -3 1 8 4 0 0 2 6 5 7 00 -1 1 5 3 0 0 0 00 5 0 1 7 00 7 0 6 5 00 -1 2 1 4 0 0

7 6% -1 3 7% -5 9% -3 6% -7 1% 1 0 3% -5 5% 0 0% 4 9% 2 2 2% -1 1 8%

Total Expenses

564 8 0 6 0 0

554 5 8 4 0 0

10 2 2 2 0 0

1 8%

Income before Income Taxes Income Tax

89 6 4 0 0 0 16 1 3 5 0 0

51 6 6 1 0 0 9 2 9 9 00

37 9 7 9 0 0 6 8 3 6 00

7 3 5% 7 3 5%

Net Income

$73 5 0 5 0 0

$42 3 6 2 0 0

$31 1 4 3 0 0

7 3 5%

Expenses Administrative Salaries and Related Advertising Amortization Insurance Interest Miscellaneous Office Rent Sales Salaries Travel Utilities

* Note Various totals and sub-totals will not equal the sum of the percentages shown above each one. Each percentage number is based only on the three amounts immediately to its left.

PROBLEM 17C-2., Cont. THE HEATH GROUP, INC. COMPARATIVE INCOME STATEMENT FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014

December 31 2015 - $

Sales Less, Cost of Goods Sold Gross Profit

$1258 6 6 4 0 0 604 2 1 8 0 0

2015 - %

2014 - $

2014 - %

1 0 0 0% $1194 8 8 5 0 0 4 8 0% 588 6 4 0 0 0

1 0 0 0% 4 9 3%

654 4 4 6 0 0

5 2 0%

606 2 4 5 0 0

5 0 7%*

156 0 8 7 0 0 24 6 8 5 0 0 86 4 1 5 0 0 16 7 8 2 0 0 41 9 0 0 0 0 28 3 3 8 0 0 19 7 5 1 0 0 36 0 0 0 0 0 106 8 5 3 0 0 38 9 4 1 0 0 9 0 5 4 00

1 2 4% 2 0% 6 9% 1 3% 3 3% 2 3% 1 6% 2 9% 8 5% 3 1% 7%

145 0 4 0 0 0 28 6 0 4 0 0 91 8 7 6 0 0 17 4 1 5 0 0 45 0 8 4 0 0 25 6 8 1 0 0 20 9 0 4 0 0 36 0 0 0 0 0 101 8 3 6 0 0 31 8 7 6 0 0 10 2 6 8 0 0

1 2 1% 2 4% 7 7% 1 5% 3 8% 2 1% 1 7% 3 0% 8 5% 2 7% 9%

Total Expenses

564 8 0 6 0 0

4 4 9%

554 5 8 4 0 0

4 6 4%

Income before Income Taxes Income Tax

89 6 4 0 0 0 16 1 3 5 0 0

7 1% 1 3%

51 6 6 1 0 0 9 2 9 9 00

4 3% 8%

Net Income

$73 5 0 5 0 0

5 8%

$42 3 6 2 0 0

3 5%

Expenses Administrative Salaries and Related Advertising Amortization Insurance Interest Miscellaneous Office Rent Sales Salaries Travel Utilities

* Note Various totals and sub-totals will not equal the sum of the percentages shown above each one. Each percentage number is based only on the three amounts immediately to its left.

17-23

PROBLEM 17C-2., Cont. THE HEATH GROUP, INC. COMMON SIZE COMPARATIVE INCOME STATEMENT FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014

2015 - %

Sales

2014 - %

1 0 0 0% 4 8 0%

1 0 0 0% 4 9 3%

5 2 0%

5 0 7%*

1 2 4% 2 0% 6 9% 1 3% 3 3% 2 3% 1 6% 2 9% 8 5% 3 1% 7%

1 2 1% 2 4% 7 7% 1 5% 3 8% 2 1% 1 7% 3 0% 8 5% 2 7% 9%

Total Expenses

4 4 9%

4 6 4%

Income before Income Taxes Income Tax

7 1% 1 3%

4 3% 8%

Net Income

5 8%

3 5%

Less, Cost of Goods Sold Gross Profit Expenses Administrative Salaries and Related Advertising Amortization Insurance Interest Miscellaneous Office Rent Sales Salaries Travel Utilities

PROBLEM 17C-3. a. b.

2015

Current Ratio Acid Test Ratio

2014

Current Assets

= 223,460

Current Liabilities

133,123

= 1.68

202,519 = 1.43 141,453

Current Assets - Prepd Expenses - Merch. Inv. Current Liabilities (223,460 - 8,006 - 112,506)

= .77

(202,519 - 6,812 - 104,600) = .64

133,123 c.

Accounts Receivable Turnover Net Credit Sales

746,312

Average Accounts Receivable d.

141,453

Average Collection Period =

365

Average Inventory Asset Turnover

(112,506 + 104,600)/2

Sales

Debt to Total Assets =

= 3.9 times

= 746,312

484,050 313,806 = 62%

316,071

507,781

484,050

= 313,806

Shareholders' Equity

Interest Expense

162%

316,071

188%

167,979

= 49,995 +15,008 = 4.33

28,217 + 16,241 = 2.74

Gross Profit Rate = Gross Profit = 323,484

16,241 43%

289,848

746,312

= 42%

687,266

Return on Sales = Net Income Before Taxes = 49,995 = 7%

28,217

Sales

687,266

746,312

= 4%

Return on Total Assets Net Income Before Tax and Interest = 49,995 + 15,008 = 13% Total Assets

65%

193,975

15,008

Sales k.

Times Interest Earned Income Before Taxes and Interest Expense

= 1.42

Debt to Shareholders' Equity Total Liabilities

687,266

507,781

Total Liabilities =

Cannot compute 2014 -no opening Inventory $ given

= 1.47

Total Assets h.

no Accounts Receivable balance

422,828

Total Assets g.

Cannot compute 2014 --

Inventory Turnover Cost of Goods Sold =

9 times

= 365 = 40.53 days

A/R Turnover e.

(84,078 + 81,682) / 2

507,781

28,217 + 16,241 = 9% 484,050

Return on Common Shareholders' Equity Net Income Before Taxes - Preferred Dividends Common Shareholders' Equity

49,995 = 26%

28,217

193,975

167,979

= 17%

17-25

PROBLEM 17C-4. a. Current Ratio i.e. Current Assets/Current Liabilities

2014

2013

1.7

1.6

1.5

$185,787/$109,103

Acid Test i.e. "Quick Assets"/Current Liabilities

2015

$170,011/$107,737

$164,456/$106,289

($12,642+$72,455)

($8,033+$74,500)

($11,086+$64,615)

$109,103

$107,737

$106,289

MBD INCORPORATED COMMON-SIZE COMPARATIVE INCOME STATEMENT FOR THE YEARS ENDED DECEMBER 31, 2015, 2014 AND 2013

2015 - %

2014 - %

2013 - %

1 0 0 0%

5 1 8%

4 9 8%

5 0 2%

4 8 2%

5 0 2%

4 9 8%

1 1 7%

1 2 0%

1 1 5%

Advertising

2 0%

2 2%

1 9%

Amortization

3 8%

4 3%

4 8%

Insurance

Interest

2 6%

3 1%

3 8%

1 0%

Office

1 7%

1 8%

Rent

2 4%

2 5%

2 2%

1 7 1%

1 7 3%

Travel

2 2%

2 0%

3 6%

Utilities

4 5 8%

4 7 8%

4 8 9%

2 4%

2 0%

Sales Less, Cost of Goods Sold Gross Profit

Expenses Administrative ex penses, including salaries

Miscellaneous

Sales Salaries

Total Expenses

Income before Income Taxes Income Tax

Net Income

PROBLEM 17C-4., Cont. MBD INCORPORATED BALANCE SHEET TREND ANALYSIS AS OF DECEMBER 31, 2015, 2014 AND 2013

2015 - %

2014 - %

2013 - %

Assets Current Assets Cash

1 1 4 0%

7 2 5%

1 0 0 0%

Accounts Receivable

1 1 2 1%

1 1 5 3%

1 0 0 0%

Merchandise Inventory

1 1 3 5%

9 8 1%

1 0 0 0%

Prepaid Expenses

1 1 3 1%

1 0 8 4%

1 0 0 0%

1 1 3 0%

1 0 3 4%

1 0 0 0%

9 4 4%

9 6 1%

1 0 0 0%

1 0 4 1%

1 1 9 7%

1 0 0 0%

Total Capital Assets

9 6 0%

9 9 8%

1 0 0 0%

Total Assets

1 0 4 1%

1 0 1 5%

1 0 0 0%

Demand Loan Payable

1 2 5 0%

1 4 0 0%

1 0 0 0%

Income Tax Payable

2 2 3 1%

2 1 1 1%

1 0 0 0%

Payroll Taxes Owed

1 0 2 9%

1 0 5 7%

1 0 0 0%

Accounts Payable

9 5 2%

8 9 6%

1 0 0 0%

Accrued Liabilities

1 3 8 7%

1 4 4 7%

1 0 0 0%

1 0 2 6%

1 0 1 4%

1 0 0 0%

1 0 1 9%

1 0 1 0%

1 0 0 0%

Common Shares

1 0 0 0%

Retained Earnings

1 0 7 7%**

1 0 2 6%*

1 0 0 0%

1 0 5 8%

1 0 2 0%

1 0 0 0%

1 0 4 1%

1 0 1 5%

1 0 0 0%

Total Current Assets Capital Assiets - net of Accum. Amort. Store and Office Equipment Vehicles

Liabilities and Shareholders' Equity Current Liabilities

Total Current Liabilities Long-Term Liabilities Deferred Shareholder's Loan, due 2018 Total Liabilities

Shareholders' Equity

Total Shareholders' Equity Total Liabilities and Shareholders' Equity * After paying a dividend of $10,000 during the year ** After paying a dividend of $7,500 during the year

17-27

FORMS FOR ON-THE-JOB TRAINING, #T-1. and #T-2. T-1. JOYNE CO. SMOKEY CO. Current Ratio 1.98 2.01 Current Assets/Current Liabilities = $115,000/$58,000 (Joyne), $179,000/$89,000 (Smokey) Acid Test .60 .93 "Quick" Assets (Cash + A/R)/Current Liabilities $35,000/$58,000 (Joyne), $83,000/$89,000 (Smokey) Asset Turnover 1.12 1.09 Sales/Total Assets = $230,000/$205,000 (Joyne), $380,000/$349,000 (Smokey) Debt to Total Asset 47.8% 42.7% Total Liabilities/Total Assets = $98,000/$205,000 (Joyne), $149,000/$349,000 (Smokey) Debt to Shareholders' Ratio 91.6% 74.5% Total Liabilities/Total Shareholders' Equity = $98,000/$107,000 (Joyne), $149,000/$200,000 (Smokey) Gross Profit Ratio 30.4% 27.6% Gross Profit/Sales = $70,000/$230,000 (Joyne), $105,000/$30,000 (Smokey) Return on Sales 14.8% 14.7% Net Income before Taxes/Sales = $34,000/230,000 (Joyne), $56,000/$380,000 (Smokey) Return on Shareholders' Equity = Net Income before Taxes/Total Equity = 31.8% 28.0% $34,000/$107,000 (Joyne), $56,000/$380,000 (Smokey) Note: Missing data on average receivables and average inventory. Recommendations: Joyne has more debt to total assets as well as debt to shareholders' equity. The return is higher for Joyne, but not substantially greater than Smokey. Smokey has more cash, yet has more short- and long-term debt. If inventory is in fact difficult to turn into cash, Joyne as well as Smokey would be in a difficult situation. At this point, Joyne has a better gross profit rate and appears to be returning a better profit than Smokey by increased leverage.

T-2. a.

Inventory Turnover =

Cost of Goods Sold

Average Inventory

27 = $270,000 X

X = $10,000 b.

Accounts Receivable Turnover = Net Credit Sales Average Receivables X = $30,000

Cash cannot be determined.

9 = $270,000 X

18 Notes Receivable and Notes Payable ANSWERS TO DISCUSSION QUESTIONS AND CRITICAL THINKING/ETHICAL CASE 1.

2. 3. 4. 5. 6. 7. 8.

9. 10. 11. 12.

13. 14.

A company may use Notes Payable instead of Acounts Payable: a. To get additional time to settle past due accounts. b. To borrow money from the bank. c. To facilitate sales of high-cost items that have long credit periods. The parts of a promissory note are amount borrowed; length of note; payee; rate of interest; maker; and maturity date. Note expressed in months does not need a table or calendar. Months are counted regardless of number of days in each month. Reject. Notes Receivable is a current asset. The information on the note acts as the subsidiary ledger. Notes that have not matured are listed in the Notes Receivable account. Note is transferred back to Accounts Payable or Accounts Receivable. At this time the interest expense or interest income is recorded. a. Find maturity value (remember to add 3 days grace). b. Calculate discount period. c. Calculate bank discount. d. Calculate the proceeds. Contingent liability is the potential liability of one who discounts a note if the maker of the note defaults at maturity date. When one is discounting one's own note, or another note at, say, a bank. Debit is the normal balance of the Discount on Notes Payable account. Maturity Value of Note x Bank Interest Rate Amount of Cash Proceeds Received from Note Debit Interest Expense Credit Discount on Notes Payable The question in this case is whether Kevin should tell his girlfriend confidential information about his friends. It is extremely unethical for Kevin to look up the financial records of his friends. As a teller, he is supposed to be professional and not look up people's records without their consent. Thus I would tell Kevin not to look up the records of his friends.

18-1

SOLUTIONS TO CLASSROOM DEMONSTRATION EXERCISES

a. b.

July 8 + 120 days + 3 days grace = November 8 October 8 + 90 days + 3 days grace = January 9

a. b.

$6,000 x .06 x 9/12 = $270 $8,000 x .07 x 73/365 = $112.00

Purchases

7 0 0 00

Accounts Payable

7 0 0 00

Purchase of merchandise b.

Accounts Payable

7 0 0 00

Notes Payable

7 0 0 00

Acceptance of note by Bore Co. c.

Notes Payable Interest Expense

7 0 0 0 00 1 4 0 00

Cash

7 1 4 0 00

Payout of note on maturity

$9,000 + ($9,000 x .08 x 93/365) = $9,183.45 - $9,100.00 = $83.45 "lost"

a. b. c. d.

$1,000 + ($1,000 x .06 x 63/365) = $1,010.36 63 - 20 = 43 days $1,010.36 x .08 x 43/365 = $9.52 $1,010.36 - $9.52 = $1,000.84

Cash

1 0 0 0 84

Notes Receivable

1 0 0 0 00

Interest Income

Discounted Aluin Co. note to Reel Bank 7.

Accounts Receivable, Aluin Co.

1 0 1 5 36

Cash Aluin Co. defaulted on note

Cash Discount on Notes Payable Notes Payable

Interest Expense

A Liability (Contra) L

Discount on Notes Payable (amount assumed)

18-2

1 0 1 5 36

Dr. Dr. Cr.

4,700 300 5,000

1 0 0 00 1 0 0 00

SOLUTIONS TO EXERCISES EXERCISE 18-1. a. $14,000 X .08 X 1 = $1,120 b. $20,000 X .10 X 7 / 12 = $1,166.67 c. $9,000 X .12 X 83 / 365 = $245.59

EXERCISE 18-2. a. Number of days remaining in January (31 - 17) Days in February to reach 30 + 3 = 33

14 19

Feb. 19

b. Number of days Remaining in July (31 - 14)

17 31 30 15

Oct. 15

Days in August Days in September Days in October to reach 90 + 3 = 93 c. June, July, August, September + 3 days

October 3

d. Number of days Remaining in June (30 - 25) Days in July Days in August Days in September to reach 75 + 3 = 78

5 31 31 11

Sept. 11

EXERCISE 18-3. a. Jan. 17

17 days 33 50 days - search Feb.19

b. July 14 195 days 93 288 days - search c. No Table d. June 25

Oct. 15

176 days 78 254 days - search

Sept. 11

18-3

EXERCISES, Cont. EXERCISE 18-4. 1. Maturity Value = $9,000 X .08 X 183 / 365 = $360.99 = $9,360.99 2. Discount Period = 183 - 67 = 116 July 21 May 15

202 -135

67 3. Bank Discount = $9,360.99 X .09 x 116 / 365 = $267.75 4. Proceeds = $9,360.99 - $267.75 = $9,093.24 a.

July

21 Cash

9 0 9 3 24

Interest Income

9 3 24

Notes Receivable - Ralph Co.

9 0 0 0 00

Discounted Ralph Co. note at 9% b.

Nov

14 Accounts Receivable, Ralph Co.

9 3 6 0 99 9 3 6 0 99

Cash Ralph Co. defaulted on note

EXERCISE 18-5. $30,000 X .10 X 123 / 365 = $1,010.96

Cash

28 9 8 9 04

Discount on Notes Payable Notes Payable Discounted Co. note for $30,000 at 10%

18-4

1 0 1 0 96 30 0 0 0 00

PROBLEM 18A-1. Date 2012

(1) June

GENERAL JOURNAL Account Title and Description

Page 1 Post Ref.

Dr.

C r.

Buyer - Conners Co. 11 Purchases

5 0 0 0 00

Accounts Payable, Morgan Co.

5 0 0 0 00

Purchase of merchandise July

11 Accounts Payable, Morgan Co.

5 0 0 0 00

Notes Payable

5 0 0 0 00

Issue of note to extend time for payment Oct

12 Notes Payable Interest Expense

5 0 0 0 00 1 0 1 92

Cash

5 1 0 1 92 (Int = $5,000 X .08 X 93 / 365 = $101.92) Paid note on maturity

12 Notes Payable Interest Expense

5 0 0 0 00 1 0 1 92

Accounts Payable, Morgan Co.

5 1 0 1 92

Default on note 18 Accounts Payable, Morgan Co.

5 1 0 1 92

Cash

5 1 0 1 92 Paid balance on defaulted note

(2) June

Seller - Morgan Co. 11 Accounts Receivable, Conners Co.

5 0 0 0 00 5 0 0 0 00

Sales Sale of merchandise 11 Notes Receivable

5 0 0 0 00

Accounts Receivable, Conners Co.

5 0 0 0 00

Received note Oct

12 Cash

5 1 0 1 92

Interest Income

1 0 1 92

Notes Receivable

5 0 0 0 00

Note paid on maturity 12 Accounts Receivable, Conners Co.

5 1 0 1 92

Interest Income

1 0 1 92

Notes Receivable

5 0 0 0 00

Note default at maturity 18 Cash

5 1 0 1 92

Accounts Receivable, Conners Co.

5 1 0 1 92

18-5

PROBLEM 18A-2. 1. a. Maturity Value = Principal + Interest I = $30,000 X .09 X 93 / 365= $687.95 MV = $30,000.00 + $687.95 = $30,687.95

b. By Table

By Table

June 20 = 171

May 1 = 121

May 1 = - 121

+ 93

214

93 - 50 = 43 Days Bank Holds Note

Note Due on August 2

c. Bank Discount = $30,687.95 X .10 X 43 / 365 = $361.53

d. Proceeds = $30,687.95 - $361.53 = $30,326.42

APPLES CO. - GENERAL JOURNAL Date 2013

Account Title and Description

June 20 Cash

Dr.

Cr.

30 3 2 6 42

Interest Income

3 2 6 42

Notes Payable

30 0 0 0 00

To record discount at 10% of note from Fletcher Company

18-6

Post Ref.

Page 5

PROBLEM 18A-3. Page 2

JOYE CO. - GENERAL JOURNAL Date 2014

Account Title and Description

June 18 Cash

Post Ref.

Dr.

Cr.

39 0 1 3 70

Discount on Notes Payable

9 8 6 30

Notes Payable

40 0 0 0 00

Discounted Co. note for $40,000 at 10% for 90 days ($40,000.00 X .10 X 90 / 365 = $986.30)

Sept

16 Interest Expense

9 8 6 30

Discount on Notes Payable

9 8 6 30

Transfer discount on maturity 16 Notes Payable

40 0 0 0 00

Cash

40 0 0 0 00

Paid note Nov

2 Cash

19 2 3 6 71

Discount on Notes Payable

7 2 3 29

Notes Payable

20 0 0 0 00

Discounted Co. note for $20,000 at 11% for 120 days ($20,000 X .11 X 120 / 365 = $713.29)

Dec

31 Interest Expense Discount on Notes Payable

35 5 62 3 5 5 62

Adjusting entry on note discounted (59 / 365 X $20,000 X .11 = $355.62)

Dec 31 =

365

Nov

306

2 =

Time Expired 59

18-7

PROBLEM 18A-4. ROCHESTER COMPANY - GENERAL JOURNAL Date 2013 April

Account Title and Description 18 Notes Receivable

Post Ref.

Page 2 Dr.

Cr.

15 0 0 0 00

Accounts Receivable, Mark Castle

15 0 0 0 00

Received note in respect of past due acccount May

9 Allowance for Doubtful Accounts

6 0 0 00

Accounts Receivable, Hal Balmer

6 0 0 00

Transfer of uncollectible account July

Cash

15 3 7 5 21

Interest Income

3 7 5 21

Notes Receivable

15 0 0 0 00

($15,000 X .11 X 83 / 365 = $375.21) Castle paid maturing note Nov

11 Account Payable, Reech Co.

9 0 0 0 00

Notes Payable

9 0 0 0 00

Gave Reech Co. 30 day note at 12% 15 Accounts Receivable, Hal Balmer

6 0 0 00

Allowance for Doubtful Accounts

6 0 0 00

Reverse May 9 entry on payment 15 Cash

6 0 0 00

Accounts Receivable, Hal Balmer

6 0 0 00

Received cash for amount owing Dec

3 Cash

4 8 7 6 71

Discount on Notes Payable

1 2 3 29

Notes Payable

5 0 0 0 00

($5,000 X .10 X 90 / 365 = $127.40) Discounted Co. note with bank at 10% for 90 days 5 Notes Receivable

10 0 0 0 00

Accounts Receivable, Beverly Fields

10 0 0 0 00

Received note in respect of past due account 14 Notes Payable Interest Expense

9 0 0 0 00 9 7 64

Cash

9 0 9 7 64 ($9,000 X .12 X 33 / 365 = $97.64) Paid Reech Co. on maturity of note

16 Notes Receivable Accounts Receivable, Larry Company Received note in respect of past due account

18-8

20 0 0 0 00 20 0 0 0 00

PROBLEM 18A-4., Cont. ROCHESTER COMPANY - GENERAL JOURNAL Date 2013 Dec 28 Cash

Account Title and Description

Post Ref.

Page 3 Dr.

Cr.

10 0 6 1 70

Interest Income

6 1 70

Notes Receivable

10 0 0 0 00

(I = $10,000 X .12 X 63 / 365 = $207.12) (Days = 63 - 23 = 40) (Bank Discount = $10,207.12 X .13 X 40 / 365 = $145.42) (Proceeds = $10,207.12 - $145.42 = $10,061.70) Discounted B. Fields note at 13% 31 Interest Expense

3 8 36

Discount on Notes Payable

3 8 36

(28 / 365 X $5,000 X .10 = $38.36) Adjusting entry on Note discounted Dec. 3 Dec 31 = Dec

365

3 = -337 28

31 Interest Receivable

9 0 41

Interest Income

9 0 41

($20,000 X .11 X 15 / 365 = $90.41) Adjusting entry on Larry Co. Note Receivable

18-9

PROBLEM 18B-1. Date 2012

(1) July

GENERAL JOURNAL Account Title and Description

Page 1 Post Ref.

Dr.

C r.

Buyer - Conners Co. 10 Purchases

8 0 0 0 00

Accounts Payable, Morgan Co.

8 0 0 0 00

Purchase of merchandise Aug

10 Accounts Payable, Morgan Co.

6 0 0 0 00

Notes Payable

6 0 0 0 00

Issue of note to extend time for payment Nov

11 Notes Payable Interest Expense

6 0 0 0 00 1 3 7 59

Cash

6 1 3 7 59 (Int = $6,000 X .09 X 93 / 365 = Paid note on maturity

11 Notes Payable Interest Expense

6 0 0 0 00 1 3 7 59

Accounts Payable, Morgan Co.

6 1 3 7 59

Default on note 19 Accounts Payable, Morgan Co.

6 1 3 7 59

Cash

6 1 3 7 59 Paid balance on defaulted note

(2) July

Seller - Morgan Co. 10 Accounts Receivable, Conners Co.

8 0 0 0 00 8 0 0 0 00

Sales Sale of merchandise Aug

10 Notes Receivable

6 0 0 0 00

Accounts Receivable, Conners Co.

6 0 0 0 00

Received note Nov

11 Cash

6 1 3 7 59

Interest Income

1 3 7 59

Notes Receivable

6 0 0 0 00

Note paid on maturity 11 Accounts Receivable, Conners Co.

6 1 3 7 59

Interest Income

1 3 7 59

Notes Receivable

6 0 0 0 00

Note default at maturity 19 Cash

6 1 3 7 59

Accounts Receivable, Conners Co. Received payment on defaulted note

6 1 3 7 59

PROBLEM 18B-2.

a. Maturity Value = Principal + Interest I = $40,000 X .11 X 93 / 365 = $1,121.10 MV = $40,000.00 + $1,121.10 = $41,121.10

b. By Table

By Table

July 16 = 197

June 2 = 153

May 1 = - 153

+ 93

246

93 - 44 = 49 Days Bank Holds Note

Note Due on Sept 3

c. Bank Discount = $41,121.10 X .12 X 49 / 365 = $662.44

d. Proceeds = $41,121.10 - $662.44 = $40,458.66

APPLES CO. - GENERAL JOURNAL Date 2013 July

Account Title and Description 16 Cash

Post Ref.

Page 5 Dr.

Cr.

40 4 5 8 66

Interest Income Notes Receivable

4 5 8 66 40 0 0 0 00

To record discount at 12% of note from Fletcher Company

18-11

PROBLEM 18B-3. JOYE CO. - GENERAL JOURNAL Date 2014 May

Account Title and Description 9 Cash

Post Ref.

Page 2 Dr.

Cr.

24 3 8 3 56

Discount on Notes Payable

6 1 6 44

Notes Payable

25 0 0 0 00

Discounted Co. note for $25,000 at 10% for 90 days ($25,000 X .10 X 90 / 365 + $616.44)

Aug

7 Interest Expense

6 1 6 44

Discount on Notes Payable

6 1 6 44

Transfer discount on maturity 7 Notes Payable

25 0 0 0 00

Cash

25 0 0 0 00 Paid note

Oct

7 Cash

17 3 4 9 04

Discount on Notes Payable

6 5 0 96

Notes Payable

18 0 0 0 00

Discounted Co. note for $18,000 at 11% for 120 days ($18,000 X .11 X 120 / 365 = $650.96)

Dec

31 Interest Expense

4 6 1 10

Discount on Notes Payable Adjusting entry on note discounted (85 / 365 X $18,000 X .11 = $461.10)

Dec 31 =

365

Oct

7 =

280

Time Expired

4 6 1 10

PROBLEM 18B-4. ROCHESTER COMPANY - GENERAL JOURNAL Date 2013 May

Account Title and Description 12 Notes Receivable

Post Ref.

Page 2 Dr.

Cr.

13 0 0 0 00

Accounts Receivable, Mark Castle

13 0 0 0 00

Received note in respect of past due account June 15 Allowance for Doubtful Accounts

9 0 0 00

Accounts Receivable, Hal Balmer

9 0 0 00

Transfer of uncollectible account Aug

Cash

13 2 9 8 11

Interest Income

2 9 8 11

Notes Receivable

13 0 0 0 00

($13,000 X .09 X 93 / 365 = $298.11) Castle paid maturing note Nov

2 Account Payable, Reech Co.

20 0 0 0 00

Notes Payable

20 0 0 0 00

Gave Reech Co. 30-day note at 8% 18 Accounts Receivable, Hal Balmer

9 0 0 00

Allowance for Doubtful Accounts

9 0 0 00

Reverse June 15 entry on payment 18 Cash

9 0 0 00

Accounts Receivable, Hal Balmer

9 0 0 00

Received cash for amount owing Dec

2 Cash

9 7 7 8 08

Discount on Notes Payable

2 2 1 92

Notes Payable

10 0 0 0 00

($10,000 X .09 X 90 / 365 = $221.92) Discounted Co. note with bank at 9% for 90 days 2 Notes Receivable

6 0 0 0 00

Accounts Receivable, Beverly Fields

6 0 0 0 00

Received note in respect of past due account 5 Notes Payable Interest Expense

20 0 0 0 00 1 4 4 66

Cash

20 1 4 4 66 ($20,000 X .08 X 33 / 365 = $144.66) Paid Reech Co. on maturity of note

16 Notes Receivable Accounts Receivable, Larry Company

2 0 0 0 00 2 0 0 0 00

18-13

PROBLEM 18B-4., Cont. ROCHESTER COMPANY - GENERAL JOURNAL Date 2013 Dec

Account Title and Description 28 Cash

Post Ref.

Page 3 Dr.

Cr.

6 0 3 7 54

Interest Income

3 7 54

Notes Receivable

6 0 0 0 00

(I = $6,000 X .11 X 63 / 365 = $113.92) (Days = 63 - 25 = 38) (Bank Discount = $6,113.92 X .12 X 38 / 365 = $76.38) (Proceeds = $6,113.92 - $76.38 = $6,037.54) Discounted B. Fields note at 12% 31 Interest Expense

7 1 51

Discount on Notes Payable

7 1 51

(29 / 365 X $10,000 X .09 = $71.51) Adjusting entry on Note discounted Dec. 2 31 Interest Receivable Interest Income ($2,000 X .11 X 15 / 365 = $9.04) Adjusting entry on Larry Co. Note Receivable

9 04 9 04

PROBLEM 18C-1. Date 2012

(1) June

GENERAL JOURNAL Account Title and Description

Page 13 Post Ref.

Dr.

Cr.

Buyer - Alexis Co. 11 Purchases

8 0 0 0 00

Accounts Payable, Campbell Co.

8 0 0 0 00

Purchase of merchandise July

11 Accounts Payable, Campbell Co.

8 0 0 0 00

Notes Payable

8 0 0 0 00

Issue of note to extend time for payment Oct

12 Notes Payable Interest Expense

8 0 0 0 00 1 8 3 45

Cash

8 1 8 3 45

(I = $8000 X .09 X 93 / 365 = $183.45) Paid note on maturity 12 Notes Payable Interest Expense

8 0 0 0 00 1 8 3 45

Accounts Payable, Campbell Co.

8 1 8 3 45

Default on note 18 Accounts Payable, Campbell Co.

8 1 8 3 45

Cash

8 1 8 3 45 Paid balance on defaulted note

(2)

Seller - Campbell Co.

June

11 Accounts Receivable, Alexis Co.

8 0 0 0 00

Sales

8 0 0 0 00 Sale of merchandise

July

11 Notes Receivable

8 0 0 0 00

Accounts Receivable, Alexis Co.

8 0 0 0 00

Received note Oct

12 Cash

8 1 8 3 45

Interest Income

1 8 3 45

Notes Receivable

8 0 0 0 00

Note paid on maturity 12 Accounts Receivable, Alexis Co. Interest Income

8 1 8 3 45 1 8 3 45

Notes Receivable

8 0 0 0 00

Note default at maturity 18 Cash

8 1 8 3 45

Accounts Receivable, Alexis Co.

8 1 8 3 45

18-15

PROBLEM 18C-2.

A. Maturity Value = Principal + Interest I = $50,000 X .07 X 123 / 365 = $1,179.45 MV = $50,000 + $1,179.45 = $51,179.45

B. By Table June 20 = 171 May 1 = - 121 50 123 - 50 = 73 Days Bank Holds Note

C. Bank Discount = $51,179.45 X .09 X 73 / 365 = $921.23

D. Proceeds = $51,179.45- $921.23 = $50,258.22

WYNOTT COMPANY - GENERAL JOURNAL Date 20132

Account Title and Description

June 20 Cash

Post Ref.

Page 9 Dr.

Cr.

50 2 5 8 22

Interest Income

2 5 8 22

Notes Payable

50 0 0 0 00

To record discount at 9% of note from Flemming Company

PROBLEM 18C-3. BALLIS COMPANY - GENERAL JOURNAL Date 2014

Post Ref.

Account Title and Description

June 18 Cash

Page 5 Dr.

Cr.

68 6 1 9 18

Discount on Notes Payable

1 3 8 0 82

Notes Payable

70 0 0 0 00

($70,000 X .12 X 60 / 365 = $1,449.86) Discounted Co. note for $70,000 at 12% for 60 days Aug

20 Interest Expense

1 3 8 0 82

Discount on Notes Payable

1 3 8 0 82

Transfer discount on maturity 20 Notes Payable

70 0 0 0 00

Cash

70 0 0 0 00

Paid note Nov

2 Cash

38 0 2 7 40

Discounts on Notes Payable

1 9 7 2 60

Notes Payable

40 0 0 0 00

($40,000 X .10 X 180 / 365 = $1,972.60) Discounted Co. note for $40,000 at 10% for 180 days Dec

31 Interest Expense

6 4 6 58

Discount on Notes Payable

6 4 6 58

(59 / 365 X $40,000 X .10 = $646.58) Adjusting entry on note discounted Dec. 31

365

Nov. 2

306

Time Expired

18-17

PROBLEM 18C-4. DYNAMIC COMPANY - GENERAL JOURNAL Date 2013

Account Title and Description

April 18 Notes Receivable

Post Ref.

Page 21 Dr.

Cr.

25 0 0 0 00

Accounts Receivable, Else Ellford

25 0 0 0 00

Received note in respect of past due account May

9 Allowance for Doubtful Accounts

8 0 0 00

Accounts Receivable, Vic Hallfor

8 0 0 00

Transfer of uncollectible account July

Cash

25 6 3 6 99

Interest Income

6 3 6 99

Notes Receivable

25 0 0 0 00

($25,000 X .10 X 93 / 365 = $636.99) Elford paid maturing note Nov

11 Accounts Payable, Quincy Co.

12 0 0 0 00

Notes Payable

12 0 0 0 00

Gave Quincy Co. 30 day note at 11% 15 Accounts Receivable, Vic Hallfor

4 0 0 00

Allowance for Doubtful Accounts

4 0 0 00

Reverse part May 9 entry on payment 15 Cash

4 0 0 00

Accounts Receivable, Vic Hallfor

4 0 0 00

Received cash for part of amount owing Dec

3 Cash

14 4 0 8 22

Discount on Notes Payable

5 9 1 78

Notes Payable

15 0 0 0 00

($15,000 X .12 X 120 / 365 = $591.78) Discounted Co. note with bank at 12% for 120 days 5 Notes Receivable

24 0 0 0 00

Accounts Receivable, Angela Brown

24 0 0 0 00

Received note in respect of past due account 14 Notes Payable Interest Expense

12 0 0 0 00 1 1 9 34 12 1 1 9 34

Cash ($12,000 X .11 X 33 / 365 = $119.34) Paid Quincy Co. on maturity of note 16 Notes Receivable Accounts Receivable, Copper Company Received note in respect of past due account

27 5 0 0 00 27 5 0 0 00

PROBLEM 18C-4., Cont. DYNAMIC COMPANY - GENERAL JOURNAL Date 2013 Dec

Account Title and Description

Post Ref.

28 Cash

Page 22 Dr.

Cr.

24 1 4 1 07

Interest Income

1 4 1 07

Notes Receivable

24 0 0 0 00

(I = $24,000 X .14 X 93 / 365 = $856.11) (Days = 93 - 23 = 70) (Bank Discount = $24,856.11 X .15 X 70 / 365 = $715.04) (Proceeds = $24,856.11 - $715.04 = $24,141.07) Discounted Angela Brown note at 15% 31 Interest Expense

1 3 8 08

Discount on Notes Payable

1 3 8 08

(28 / 365 X $15,000 X .12 = $138.08) Adjusting entry on note discounted Dec. 3 31 Interest Receivable Interest Income

1 3 5 62 1 3 5 62

(15 / 365 X $27,500 X .12 = $135.62) Adjusting entry on Copper Co. Note Receivable

18-19

SOLUTIONS TO ON-THE-JOB TRAINING, #T-1.

$2,000 X .12 X

63 365

= $41.42

MV = $2,041.42 + 9.00 Protest Fee $2,050.42 March 19 - 78 Feb. 20 - 51 27 day I = $2,050.42 X .14 X

27 365

= $21.23 Total pay back $2,050.42 + $21.23 = $2,071.65

SOLUTIONS TO ON-THE-JOB TRAINING, #T-2. a.

NOTES RECEIVABLE $20,000 X .12 X

153 365

= $1,006.03

Dec. 31 365 Nov. 25 329 36 36 x $986 = $236.71 153 Dec. 31

Interest Receivable Interest Income

236.71 236.71

NOTES PAYABLE $33,600 X .15 X 15 33 Dec. 31

33 365

= $455.67

x $414 = $207.12 Interest Receivable Interest Income

207.12 207.12

SOLUTIONS TO ON-THE-JOB TRAINING, #T-2., Cont.

Reversing Entries are an option as follows: a.

T-Accounts after Reversing

Interest Receivable 237 237

When Co. is paid

Cash Interest Income Notes Receivable

T-Accounts after receipt of note in new year.

Interest Income 237 1,000

T-Accounts after Reversing

Interest Expense 207

When Note is paid

T-Accounts after payment in new

763

Notes Payable Interest Expense Cash

Interest Income 237 Rev. 20,986 986 20,000

$763 is true amount of interest income in new year.

Interest Payable 207 207 33,600 414 34,014

Interest Expense 207 414 207

Balance of $207 is true amount of interest expense in new year.

18-21

19 Accounting for Merchandise Inventory

ANSWERS TO DISCUSSION QUESTIONS AND CRITICAL THINKING/ETHICAL CASE

1. 2. 3. 4. 5.

8. 9. 10. 11. 12. 13.

Because the perpetual system provides up-to-date details about inventory quantities at any given point in time throughout the year; the periodic system will only be adjusted at yearend. The two accounts are Cost of Goods Sold and the Inventory Account. These are used to track the details of items sold through the year. The Merchandise Inventory account is debited. Because the extra entry must be made to reduce the Merchandise Inventory account for each sale. The details of the subsidiary inventory ledger, when added together, will equal the total in the Merchandise Inventory account. This is similar to the operation of the Accounts Receivable or Accounts Payable Subsidiary Ledgers. It is not necessary that the flow of costs match physical movements of merchandise. The business entity may choose the cost flow assumption that matches the physical movement of merchandise, but they are not required to do so by GAAP. Specific Invoice: actual costs of ending inventory known. Weighted-Average: average unit cost assigned to each item in ending inventory. FIFO: most recent cost assigned to goods not sold. LIFO: cost of ending inventory is made up of old inventory. LIFO. FIFO. It uses latest purchases to provide an up-to-date picture of inventory on the balance sheet. Goods in transit (F.O.B. Shipping Point) belong to the buyer as soon as they are invoiced to him. Goods on consignment never become the property of the seller. Cost of goods sold is overstated; net income is understated. The ending inventory value can be estimated by either of the two methods and then be used to prepare fairly reliable interim financial statements. Before switching back, the President should completely look at why the system is not working. Today the use of Perpetual Inventory is increasing with the aid of computers. Periodic Inventory, in the long run, may hurt customer service more than a Perpetual approach.

19-1

SOLUTIONS TO CLASSROOM DEMONSTRATION EXERCISES, Set A 1.

Titles

Classifications

Accounts Receivable

Asset

Sales

Revenue

Cost of Goods Sold

Expense

Merchandise Inventory

Asset

GENERAL JOURNAL Date 2012

April

Post Ref.

Account Title and Description 2 Accounts Receivable

Dr.

Cr.

1 2 0 0 00

Sales

1 2 0 0 00 To records sale of merchandise

2 Cost of Goods Sold

7 0 0 00

Merchandise Inventory

7 0 0 00

To transfer cost of merchandise sold 3. 2012 Mar

13 Sales Returns and Allowances

2 1 0 00

Cash

2 1 0 00 To record return of merchandise

13 Merchandise Inventory

7 5 00

Cost of Goods Sold

7 5 00

To record inventory taken back 4. 2012 Mar

20 Accounts Payable

4 0 0 00

Merchandise Inventory

4 0 0 00

To record damaged inventory returned 5. Jan. 1

Beginning Inventory

Mar. 6 Purchased Aug. 9 Purchased Dec. 10 Purchased Total

Units

Cost per Unit

6 4

$ 3 4

3 5

5 6

$18 16 15 30 $79

FIFO Dec. 10 Purchased Aug. 9 Purchased Total Ending Inventory Cost of Ending Inventory Cost of Goods Sold

19-2

5 2 7

$6 5

(5x$ 6)+(2x$ 5) = $40 $79 - 40 = $39

$ 30 10 $ 40

CLASSROOM DEMONSTRATION EXERCISES, Set A, Cont. 5. Cont.

Units

LIFO Jan. 1 Beginning Inventory

Cost per Unit

Mar. 6 Purchased Total Ending Inventory

Cost of Ending Inventory

(6x$3)+(1x$4) = $22 $79 -22 = $57

Cost of Goods Sold

$ 18

$3 4

6 1

4 $22

Weighted Average 7

$79/18 = $ 4.39/unit 7 x $4.39 = $30.73 $79 .00 - 30.73 = $48.27

Total Ending Inventory Cost of Ending Inventory Cost of Goods Sold 6.

A B C D E

$90 $180 50% $50 $25

7. 90/180 180 - 130

A B C D

$90 70% or .7 $35 $50 x .70 $55 $90 - $35

50 x .5

CLASSROOM DEMONSTRATION EXERCISES, Set B 1.

1 Accounts Affected

2 Category

Merchandise Inventory

Asset

Cost of Goods Sold

Expense

4 Rules Cr. Dr.

GENERAL JOURNAL Date 2013 Mar

Account Title and Description 1 Accounts Receivable

Post

Dr.

Cr.

5 0 0 00

Sales

5 0 0 00 To record sale of merchandise

1 Cost of Goods Sold

3 0 0 00

Merchandise Inventory

3 0 0 00

To transfer cost of merchandise sold 3.

2013 Mar

15 Sales Returns and Allowances

2 5 0 00

Cash

2 5 0 00 To record return of merchandise

15 Merchandise Inventory Cost of Goods Sold

1 2 5 00 1 2 5 00

19-3

SOLUTIONS TO CLASSROOM DEMONSTRATION EXERCISES, Set B 4.

GENERAL JOURNAL Date 2013 Mar

Account Title and Description

Post

22 Accounts Payable

Dr.

1 5 0 00

Merchandise Inventory

1 5 0 00

To record damaged inventory returned

5. Jan. 1

Begining Inventory

Mar. 6 Purchased Aug. 9 Purchased Dec. 10 Purchased

Units

Cost per Unit

5 3

$ 1 2

$ 5 6

2 4

3 4

Total

16 $ 33

FIFO Dec. 10 Purchased Aug. 9 Purchased Total Ending Inventory Cost of Ending Inventory Cost of Goods Sold LIFO Jan. 1 Beginning Inventory

4 2 6

$4 3

$ 16 6 $ 22

(4x$ 4)+(2x$ 3) = $22 $33 - 22 = $11

$1 2

Mar. 6 Purchased

5 1

Total Ending Inventory

Cost of Ending Inventory

(5x$1)+(1x$2) = $ 7 $33 - 7 = $26

Cost of Goods Sold

$ 5 2 $ 7

Weighted Average Total Ending Inventory Cost of Ending Inventory Cost of Goods Sold 6.

A B C D E

$120 $190 120/190 63% $50 190 - 140 $31.50 50 x .63

A B C D

$60 60% or .60 $24 $40 x .60 $36 $60 - $24

19-4

Cr.

6 $33/14 = $ 2.36/unit 6 x $ 2.36 = $14.16 $33 .00 - 14.16 = $18.84

SOLUTIONS TO EXERCISES EXERCISE 19-1.

GENERAL JOURNAL

Date 2013 Feb

Page 10 Post Ref.

Account Title and Description

Dr.

1 Merchandise Inventory

Cr.

4 0 0 00

Accounts Payable/Dealer's Electric

4 0 0 00

Purchased 10 Model 77DX

5 Cash

8 4 00 Sales

8 4 00 Sold 3 Model U67

5 Cost of Goods Sold

5 4 00

Merchandise Inventory

5 4 00

Transfer cost of fixtures sold

8 Sales Returns and Allowances

2 8 00

Cash

2 8 00 Customer returned 1 Model U67

8 Merchandise Inventory

1 8 00

Cost of Goods Sold

1 8 00

To record inventory taken back

11 Accounts Payable/Dealer's Electric

4 0 00

Merchandise Inventory

4 0 00

DM - Returned 1 Model 77DX

EXERCISE 19-2. Date 2013 Nov

INVENTORY REPORT FORM Purchased

Item Sold

U47 Balance

$ 50 00

4 5 units @ $10 = $50 5

3 @ $10 = $30

2 0 00

1 @ $10 = $10

1 0

1 3 0

11 12 units @ $10 = $120

19-5

EXERCISE 19-3. GENERAL JOURNAL

Page 11

Date Account Title and Description 2013 Nov. 4 Merchandise Inventory

Post Ref.

Dr.

114

5 0 00

Accounts Payable

201

Cr.

5 0 00

Purchased 5 units of U47 @ $10 each

111

5 Cash

4 8 00

401

Sales

4 8 00

Sold 3 units of U47

501

5 Cost of Goods Sold

3 0 00

114

Merchandise Inventory

3 0 00

Transfer cost of units sold

111

8 Cash

1 5 50

401

Sales

1 5 50

Sold 1 unit of U47

501

8 Cost of Goods Sold

1 0 00

114

Merchandise Inventory

1 0 00

Transfer cost of unit sold

114

11 Merchandise Inventory

1 2 0 00

201

Accounts Payable

1 2 0 00

Purchased 12 units of U47 at $10

Cash

111

Nov 5 GJ1 48.00 8 GJ1 15.50

Merchandise Inventory 114

Accounts Payable

201

Nov 4 GJ1 50.00 11 GJ1 120.00

Nov 5 GJ1 30.00 8 GJ1 10.00

Nov 4 GJ1 50.00 11 GJ1 120.00

170.00

40.00

170.00

63.50 130.00

Sales Cost of Goods Sold Nov 5 GJ1 30.00 8 GJ1 10.00 40.00

19-6

501

401 Nov 5 GJ1 48.00 8 GJ1 15.50 63.50

EXERCISE 19-4. Inventory Item Date 2013

Units

Oct

Received Cost per Total Unit

Units

Sold Cost per Unit

Total

1 4

Units

2 3 00

1 1 5 00

3 5 2

4 2 00

2 1 00

1 5

4 9

2 4 00

EXERCISE 19-5 Jan. 1 Begining Inventory Mar. 18 Purchased Aug. 19 Purchased Nov. 8 Purchased Total

2 1 00 9 2 00

2 1 00 2 3 00

1 4 4 00

1 1 6

Units

Cost per Unit

50 12

$ 9 10

$ 450 120

40 48

12 13

480

44BX

Balance Cost per Unit

Total

2 1 00 2 1 00 2 3 00

1 7 8 00

2 1 00 2 3 00

1 3 6 00

2 3 00 2 3 00 2 4 00

6 3 00

2 3 00 1 6 7 00

624 $ 1,674

150

FIFO Aug. 19 Purchased Nov. 8 Purchased Total Ending Inventory Cost of Ending Inventory Cost of Goods Sold LIFO Jan. 1 Beginning Inventory

$12 4 48 13 52 (4x$12)+(48x$13) = $672 $1,674 - $672 = $1,002

Mar. 18 Purchased

50 2

Total Ending Inventory

Cost of Ending Inventory Cost of Goods Sold

$ 48 624 $672

$450

$9 10

20 $470

(50x$9)+(2x$10) = $470 $1,674 - $470 = $1,204

Weighted Average $11.16

Average Cost

$1674/150

Cost of Ending Inventory Cost of Goods Sold

52 x $11.16 $1,674 - $580.32

= $580.32 = $1,093.68

19-7

EXERCISE 19-6. Cost of Inventory Less: Consignment Received Add: Goods in Transit Goods on Consignment Total Cost of Inventory

$4,000 300

$3,700 22,000 600 $26,300

Note: Goods enroute shipped F.O.B. Destination - not counted

EXERCISE 19-7. RETAIL METHOD Goods Available for Sale:

Cost

Retail

Beginning Inventory

58 0 0 0 00

72 0 0 0 00

255 0 0 0 00 405 0 0 0 00

Net Purchases

313 0 0 0 00 477 0 0 0 00

Cost of Goods Available for Sale Cost Ratio

313,000 = 65.62% 477,000

Net Sales at Retail

225 0 0 0 00

Inventory at Retail

252 0 0 0 00

Ending Inventory at Cost

165 3 6 2 40

252,000 X 65.62%

EXERCISE 19-8.

GROSS PROFIT METHOD

Goods Available for Sale: Inventory, January 1, 2013

30 0 0 0 00

Net Purchases

67 0 0 0 00 97 0 0 0 00

Cost of Goods Available for Sale Less: Estimated Cost of Goods Sold Net Sales at Retail Cost Percentage (100% - 40%)

106 0 0 0 00 .60

Estimated Cost of Goods Sold

63 6 0 0 00

Estimated Inventory, January 31, 2013

33 4 0 0 00

19-8

PROBLEM 19A-1. WREN COMPANY GENERAL JOURNAL Date 2012 Mar

Account Title and Description 2 Merchandise Inventory

Page 2 Post Ref.

Dr.

Cr.

1 7 5 0 00

Accounts Payable

1 7 5 0 00

Purchase of inventory. Terms: n/30 5 Accounts Receivable/Tommy Dorsey

8 5 00

Sales

8 5 00

5 Cost of Goods Sold

6 3 00

Merchandise Inventory

6 3 00

Sale of goods and transfer of costs 6 Accounts Payable

1 0 0 00

Merchandise Inventory

1 0 0 00

Return of defective merchandise 9 Cash

1 2 5 00 Sales

1 2 5 00

9 Cost of Goods Sold

9 8 00

Merchandise Inventory

9 8 00

Sale of goods and transfer of costs 9 Sales Returns and Allowances

7 00

Accounts Receivable/Tommy Dorsey 9 Merchandise Inventory

7 00 5 00

Cost of Goods Sold

5 00

Return of goods by Dorsey and returned to inventory 12 Merchandise Inventory

8 0 0 00

Accounts Payable/BG Supply

8 0 0 00

Purchase of inventory. Terms: n/30 13 Cash

7 8 00 Accounts Receivable/Tommy Dorsey

7 8 00

Payment by Dorsey of March 5 sale 16 Cash

3 8 0 00 3 8 0 00

Sales 16 Cost of Goods Sold Merchandise Inventory

2 9 0 00 2 9 0 00

Sale of goods and transfer of costs

19-9

PROBLEM 19A-2. SUNSET ELECTRONICS GENERAL JOURNAL Date 2013 Oct

Account Title and Description

Page 2 Post Ref. 114/4

11 Merchandise Inventory

Dr.

7 3 3 20

201

Accounts Payable Purchase of

24 KT88 @ $17.50 = $420.00

and

36 12AX7 @ $8.70 = $313.20

101

14 Cash

7 3 3 20

1 1 0 00

401

Sales

14 Cost of Goods Sold Merchandise Inventory

501

Cr.

1 1 0 00 7 0 00

114/4

7 0 00

Sold 4 KT88 @ $27.50 and transfer of cost

101

14 Cash

7 1 0 60

401

Sales

14 Cost of Goods Sold Merchandise Inventory

501

7 1 0 60 4 6 3 00

114/4

4 6 3 00

Sold 12 KT88, Sold 8 EL34 Sold 14 12AX7 and transfer of costs

15 Sales Returns and Allowances

402

2 7 50

101

Cash

15 Merchandise Inventory

114/4

Cost of Goods Sold

501

2 7 50 1 7 50 1 7 50

Customer Returned 1 KT88

18 Accounts Payable Merchandise Inventory Returned 1 KT88 to supplier

201 114/4

1 7 50 1 7 50

PROBLEM 19A-2., Cont. Inventory Item Date 2013 Oct

Units

Received Cost per Unit

Total

Units

Sold Cost per Unit

Total

1 11

1 7 50

4 2 0 00 4

14 15

1 7 50 1 7 50 Returned to vendor

1 7 50 1 7 50 1 7 50

Units

Balance Cost per Unit

1 7 50

1 7 50 1 7 50 1 7 50 1 7 50 1 7 50

7 0 00 2 1 0 00

1 7 50

12 11

KT88

Total

5 2 50 4 7 2 50 4 0 2 50 1 9 2 50 2 1 0 00 1 9 2 50

Inventory Item Date 2013 Oct

Units

Received Cost per Total Unit

Units

Sold Cost per Unit

Total

Units 22

1 14

1 6 40

1 3 1 20

Balance Cost per Unit

1 6 40 1 6 40

Inventory Item Date 2013 Oct

Units

Received Cost per Unit

Total

Units

Sold Cost per Unit

Total

1 11 14

8 70

3 1 3 20 14

8 70

1 2 1 80

Units

Total

3 6 0 80 2 2 9 60

12AX7

Balance Cost per Unit

8 70

8 70 8 70

EL34

Total

4 3 50 3 5 6 70 2 3 4 90

19-11

PROBLEM 19A-2., Cont. CASH

NAME: Date 2013 Oct

Post Ref

Debit

GJ2

1 1 0 00 7 1 0 60

GJ2

Explanation

1 1 0 00 8 2 0 60 7 9 3 10

Dr Dr

ACCOUNT NO. Post Ref

114

GJ2

4 5 6 80 1 1 9 0 00 1 1 2 0 00 6 5 7 00

GJ2

Explanation

Post Ref

GJ2

NAME: Date 2013

Post Ref

GJ2

Date 2013

GJ2

Date 2013

Post Ref

7 0 00 4 6 3 00 1 7 50

Debit

GJ2

7 0 00 4 6 3 00

GJ2

6 7 4 50 6 5 7 00 201

Credit

DR CR

Balance

7 3 3 20

7 3 3 20 7 1 5 70

ACCOUNT NO.

401

Credit

DR CR

Balance

1 1 0 00 7 1 0 60

1 1 0 00 8 2 0 60

ACCOUNT NO.

402

DR CR

Balance

Credit

2 7 50

Post Ref

ACCOUNT NO.

1 7 50

Debit

1 7 50

COST OF GOODS SOLD Explanation

Credit

7 3 3 20

SALES RETURNS AND ALLOWANCES Explanation

NAME:

Debit

SALES Explanation

NAME:

Oct

Date 2013

Oct

Balance

ACCOUNTS PAYABLE

Oct

DR CR

Credit

DR CR

NAME:

Oct

101

2 7 50

NAME: MERCHANDISE INVENTORY Date Explanation 2013 Oct 1 Balance Forward

ACCOUNT NO.

2 7 50

ACCOUNT NO.

501

DR CR

Balance

7 0 00 5 3 3 00 5 1 5 50

Credit

1 7 50

PROBLEM 19A-3.

Date 2012

Units

Jan

Mar

Apr

Oct

Received Cost per Unit

Total

Units

620 280

6 00

1,420

Total

7 00 4 3 4 0 00

1 6 8 0 00

200 240 Nov

Sold Cost per Unit

1 0 00 1 4 2 0 0 0 0

7 00 2 8 0 00 6 00 1 2 0 0 00 1 4 8 0 00

Units

7 00

4 6 2 0 00

7 00

2 8 0 00

40 280 320

7 00 6 00

2 8 0 00 1 6 8 0 00 1 9 6 0 00

6 00

4 8 0 00

80 220 300

Dec

600

1 1 00

6 6 0 0 00

Total

660

1,420 1,500

Balance Cost per Unit

4 8 0 00 6 00 1 0 00 14 2 0 0 00 14 6 8 0 00

6 00 4 8 0 00 1 0 0 0 2 2 0 0 0 0 1,200 2 6 8 0 00

1 0 00 12 0 0 0 00

1,200 600 1,800

1 0 00 12 0 0 0 00 1 1 00 6 6 0 0 00 18 6 0 0 00

19-13

PROBLEM 19A-4. (a) FIFO Goods Available for Sale 2013

Cost of Ending Inventory

Units

Cost

Total

Units

Cost

Total

Jan 1

Beginning Inventory

250

$15

$ 3,750

Apr 2

Purchased

300

5,400

Jul 5

Purchased

400

8,000

Aug 16 Purchased

500

11,000

375

$ 22

$8,250

Nov 19 Purchased

150

3,600

150

3,600

$31,750

525

1,600 Cost of Goods Available for Sale

$31,750

Less: Cost of Ending Inventory

11,850

Cost of Goods Sold

$19,900

$11,850

(b) LIFO Goods Available for Sale 2013

Cost of Ending Inventory

Units

Cost

Total

Units

Cost

Total

Jan 1 Beginning Inventory

250

$15

$ 3,750

250

$15

$3,750

Apr 2 Purchased

300

5,400

275

4,950

Jul 5 Purchased

400

8,000

Aug 16 Purchased

500

11,000

Nov 19 Purchased

150

3,600

1,600

$31,750

Cost of Goods Available for Sale

$31,750

Less: Cost of Ending Inventory

8,700

Cost of Goods Sold

$23,050

(c) Weighted Average Total cost ($31,750) divided by total units (1,600) = $19.84 Cost of Ending Inventory 525 units x $19.84 = $10,416

Cost of Goods Available for Sale

$31,750

Less: Cost of Ending Inventory

10,416

Cost of Goods Sold

$21,334

525

$8,700

PROBLEM 19A-5. Cost

Retail

17 2 0 0 00 114 2 0 0 00 131 4 0 0 00

33 0 0 0 00 197 0 0 0 00 230 0 0 0 00

Goods Available for Sale: Begining Inventory Net Purchases Cost of Goods Available for Sale Cost Ratio: 131,400 = 57.1% 230,000

193 6 0 0 00 36 4 0 0 00

Net Sales at Retail Inventory at Retail Ending Inventory at Cost

20 7 8 4 40

36,400 x .571

PROBLEM 19A-6. Goods Available for Sale: Inventory January 1, 2012 Purchases Less: Purchase Returns and Allowances

34 0 0 0 00 76 4 0 0 00 1 2 8 0 00 75 1 2 0 00

Net Purchases Cost of Goods Available for Sale

109 1 2 0 00

Less: Estimated Cost of Goods Sold Sales Less: Sales Returns Net Sales at Retail Times Cost Percentage (100% - 30% ) Estimated Cost of Goods Sold Estimated Inventory

125 4 0 0 00 1 9 4 0 00 123 4 6 0 00 .70 86 4 2 2 00 22 6 9 8 00

19-15

PROBLEM 19B-1. WREN COMPANY GENERAL JOURNAL Date 2012 Mar

Account Title and Description 13 Merchandise Inventory

Page 2 Post Ref.

Dr.

Cr.

1 4 5 0 00

Accounts Payable

1 4 5 0 00

Purchase of inventory. Terms: n/30 16 Accounts Receivable/Bobby Hackett

9 2 00

Sales

9 2 00

16 Cost of Goods Sold

7 1 00

Merchandise Inventory

7 1 00

Sale of goods and transfer of costs 19 Accounts Payable

1 2 0 00

Merchandise Inventory

1 2 0 00

Returned defective merchandise 20 Cash

2 3 0 00 Sales

2 3 0 00

20 Cost of Goods Sold

1 7 5 00

Merchandise Inventory

1 7 5 00

Sale of goods and transfer of costs 20 Sales Returns and Allowances

1 4 00

Accounts Receivable/Bobby Hackett 20 Merchandise Inventory

1 4 00 1 1 00

Cost of Goods Sold

1 1 00

Return of goods by Hackett and return to inventory 23 Merchandise Inventory

9 0 0 00

Accounts Payable/JT Supply

9 0 0 00

Purchase of inventory. Terms n/30 26 Cash

7 8 00 Accounts Receivable/Bobby Hackett

7 8 00

Payment by Hackett of March 16 sale 27 Cash

4 1 0 00 4 1 0 00

Sales 27 Cost of Goods Sold Merchandise Inventory Sale of goods and transfer of costs

3 2 0 00 3 2 0 00

PROBLEM 19B-2. Date 2013 Oct

SUNSET ELECTRONICS GENERAL JOURNAL Account Title and Description

Page 2 Post Ref. 114/4

8 Merchandise Inventory

Dr.

4 4 3 40

201

Accounts Payable Purchase

18 6L6 @ $12.50 = $225.00

and

28 12AU7 @ $7.80 = $218.40

101

12 Cash

4 4 3 40

7 4 00

401

Sales

12 Cost of Goods Sold Merchandise Inventory

501

Cr.

7 4 00 3 1 20

114/4

3 1 20

Sold 4 12AU7 @ $18.50 and transfer of costs

101

13 Cash

4 5 2 60

401

Sales

13 Cost of Goods Sold Merchandise Inventory

501

4 5 2 60 3 0 3 20

114/4

3 0 3 20

Sold 10 6L6, Sold 9 EL84, Sold 12 12AU7 and transfer of costs

15 Sales Returns and Allowances

402

1 8 50

101

Cash

15 Merchandise Inventory

114/4

Cost of Goods Sold

501

1 8 50 1 2 50 1 2 50

Customer Returned 1 6L6

18 Accounts Payable Merchandise Inventory

201 114/4

1 2 50 1 2 50

Returned 1 6L6 to supplier

19-17

PROBLEM 19B-2., Cont. Inventory Item Date 2013 Oct

Units

Received Cost per Unit

Total

Units

Sold Cost per Unit

Total

1 8

1 2 50

2 2 5 00 10

13 15

Returned to Vendor

1 2 50

1 2 5 00

1 2 50 1

1 2 50

Units

Balance Cost per Unit

1 2 50

22 12

1 2 50 1 2 50

Inventory Item Date 2013 Oct

Units

Received Cost per Total Unit

Units

Sold Cost per Unit

Total

Units 18

1 13

9 40

8 4 60

Balance Cost per Unit

9 40 9 40

Inventory Item Date 2013 Oct

Units

Received Cost per Unit

Total

Units

Sold Cost per Unit

Total

1 8

7 80

2 1 8 40

7 80 7 80

3 1 20 9 3 60

Units

Balance Cost per Unit

7 80

7 80 7 80 7 80

27 15

6L6

Total

5 0 00 2 7 5 00 1 5 0 00 1 6 2 50 1 5 0 00

EL84

Total

1 6 9 20 8 4 60

12AU7

Total

2 3 40 2 4 1 80 2 1 0 60 1 1 7 00

PROBLEM 19B-2., Cont. CASH

NAME: Date 2013 Oct

Post Ref

Debit

GJ2

7 4 00 4 5 2 60

GJ2

Explanation

7 4 00 5 2 6 60 5 0 8 10

1 8 50

114

ACCOUNT NO. Post Ref

GJ2

2 4 2 60 6 8 6 00 6 5 4 80 3 5 1 60

GJ2

Explanation

Post Ref

GJ2

NAME: Date 2013

Post Ref

GJ2

Date 2013

Post Ref GJ2

Date 2013

Credit

4 4 3 40 3 1 20 3 0 3 20 1 2 50

Debit

GJ2

3 1 20 3 0 3 20

GJ2

3 6 4 10 3 5 1 60

Credit

DR CR

Balance

4 4 3 40

4 4 3 40 4 3 0 90

ACCOUNT NO.

401

Credit

DR CR

Balance

7 4 00 4 5 2 60

7 4 00 5 2 6 60

ACCOUNT NO.

402

DR CR

Balance

1 8 50

Post Ref

Explanation

201

Credit

COST OF GOODS SOLD

ACCOUNT NO.

1 2 50

Debit

1 2 50

SALES RETURNS AND ALLOWANCES Explanation

NAME:

Debit

SALES Explanation

NAME:

Oct

Date 2013

Oct

Balance

ACCOUNTS PAYABLE

Oct

DR CR

Explanation

NAME:

Oct

101

Credit

NAME: MERCHANDISE INVENTORY Date 2013 Oct 1 Balance

ACCOUNT NO.

1 8 50

ACCOUNT NO.

501

DR CR

Balance

3 1 20 3 3 4 40 3 2 1 90

Credit

1 2 50

19-19

PROBLEM 19B-3.

Date Units Jan

Mar

Apr

Nov

12 1,420

Received Cost per Unit

Total

Units

Total

Units

4 8 0 0 00

120

8 00

9 6 0 00

1 6 8 0 00

120 240 360

8 00 7 00

9 6 0 00 1 6 8 0 00 2 6 4 0 00

11 00 15 6 2 0 00

120 240

7 00

120 240 900 1,260

500

Total

8 00

8 00 3 8 4 0 00

1,420 1,780

Dec

Balance Cost per Unit

600 480 240

Sold Cost per Unit

12 00

6 0 0 0 00

8 00

9 6 0 00 7 00 1 6 8 0 00 1 1 0 0 9 9 0 0 0 0 520 12 5 4 0 00 520 500 1,020

8 00 9 6 0 00 7 00 1 6 8 0 00 1 1 00 15 6 2 0 00 18 2 6 0 00

1 1 00

5 7 2 0 00

1 1 00 1 2 00

5 7 2 0 00 6 0 0 0 00 11 7 2 0 00

PROBLEM 19B-4. (a) FIFO Goods Available for Sale

Cost of Ending Inventory

Units

Cost

Total

2013

Cost

Total

Jan 1

Beginning Inventory

200

$24

$4,800

Apr 2

Purchased

210

5,880

Jul 5

Purchased

500

16,000

Aug 16 Purchased

450

17,100

300

$38

$11,400

Nov 19 Purchased

200

8,800

200

8,800

$52,580

500

1,560 Cost of Goods Available for Sale

$52,580

Less: Cost of Ending Inventory

20,200

Cost of Goods Sold

$32,380

$20,200

(b) LIFO Goods Available for Sale

Cost of Ending Inventory

2013

Units

Cost

Total

Units

Cost

Total

Jan 1 Beginning Inventory

200

$24

$4,800

200

$24

$4,800

Apr 2 Purchased

210

5,880

210

5,880

Jul 5

Purchased

500

16,000

2,880

Aug 16 Purchased

450

17,100

Nov 19 Purchased

200

8,800

1,560

$52,580

Cost of Goods Available for Sale

$52,580

Less: Cost of Ending Inventory

13,560

Cost of Goods Sold

$39,020

500

$13,560

(c) Weighted Average Total cost ($52,580) divided by total units (1,560) = $33.71 Cost of Ending Inventory 500 units x $33.71 = $16,855

Cost of Goods Available for Sale

$52,580

Less: Cost of Ending Inventory

16,855

Cost of Goods Sold

$35,725

19-21

PROBLEM 19B-5. Cost

Retail

34 2 0 0 00 241 6 0 0 00 275 8 0 0 00

69 8 0 0 00 407 0 0 0 00 476 8 0 0 00

Goods Available for Sale: Beginning Inventory Net Purchases Cost of Goods Available for Sale Cost Ratio: 275,800 = .5784 476,800

396 0 0 0 00 80 8 0 0 00

Net Sales at Retail Inventory at Retail Ending Inventory at Cost

46 7 3 4 72

80,800 X .5784

PROBLEM 19B-6. Goods Available for Sale: Inventory January 1, 2012 Purchases Less: Purchase Returns and Allowances

7 6 0 0 00 98 9 0 0 00 1 8 0 0 00

Net Purchases

97 1 0 0 00 104 7 0 0 00

Cost of Goods Available for Sale Less: Estimated Cost of Goods Sold Sales Less: Sales Returns Net Sales at Retail Times Cost Percentage (100% - 32% ) Estimated Cost Of Goods Sold Estimated Inventory

139 2 0 0 00 2 4 5 0 00 136 7 5 0 00 .68 92 9 9 0 00 11 7 1 0 00

PROBLEM 19C-1. JAMES COMPANY GENERAL JOURNAL Date 2012 Mar

Account Title and Description 14 Merchandise Inventory

Page 3 Post Ref.

Dr.

Cr.

1 9 4 8 00

Accounts Payable

1 9 4 8 00

Purchase of inventory. Terms: n/30 16 Accounts Receivable/Denise Chan

1 2 5 00

Sales

1 2 5 00

16 Cost of Goods Sold

8 7 00

Merchandise Inventory

8 7 00

Sale of goods and transfer of costs 16 Accounts Payable

2 5 0 00

Merchandise Inventory

2 5 0 00

Return of defective merchandise 19 Cash

3 5 0 00 Sales

3 5 0 00

19 Cost of Goods Sold

2 2 0 00

Merchandise Inventory

2 2 0 00

Sale of goods and transfer of costs 19 Sales Returns and Allowances

2 0 00

Accounts Receivable/Denise Chan 19 Merchandise Inventory

2 0 00 1 4 00

Cost of Goods Sold

1 4 00

Return of goods by Chan and return to inventory 20 Merchandise Inventory

1 2 2 0 00

Accounts Payable/Mercury Sales Co.

1 2 2 0 00

Purchase of inventory. Terms: n/30 23 Cash

1 0 5 00 Accounts Receivable/Denise Chan

1 0 5 00

Payment by Chan of March 16 sale 26 Cash

6 2 5 00 6 2 5 00

Sales 26 Cost of Goods Sold Merchandise Inventory

4 5 5 00 4 5 5 00

Sale of goods and transfer of costs

19-23

PROBLEM 19C-2. Date 2013 Mar

ENGLE LIGHTING CO. GENERAL JOURNAL Account Title and Description

Page 2 Post Ref. 114/4

8 Merchandise Inventory

Dr.

1 3 5 12

201

Accounts Payable Purchase of

3 PL45 @ $10.80 = $32.40

and

16 XGY23 @ $6.42 = $102.72

101

12 Cash

1 3 5 12

9 7 20

401

Sales

12 Cost of Goods Sold Merchandise Inventory

501

Cr.

9 7 20 6 4 80

114/4

6 4 80

Sold 6 PL45 @ $16.20 and transfer of costs

101

15 Cash

2 0 2 30

401

Sales

15 Cost of Goods Sold Merchandise Inventory

501

2 0 2 30 1 2 5 24

114/4

1 2 5 24

Sold 3 PL45, Sold 4 KG149, Sold 10 XGY23 and transfer of costs

18 Sales Returns and Allowances

402

3 2 40

101

Cash

18 Merchandise Inventory

114/4

Cost of Goods Sold

501

3 2 40 2 1 60 2 1 60

Customer Returned 2 PL45

19 Accounts Payable Merchandise Inventory Returned defective PL45s

201 114/4

2 1 60 2 1 60

PROBLEM 19C-2., Cont. Inventory Item Date 2013 Mar

Units

Received Cost per Unit

Total

Units

Sold Cost per UnitB

Total

1 0 80

6 4 80

9 3

1 0 80 1 0 80

3 2 40

2 1 60

2 0

1 0 80 1 0 80 1 0 80

9 7 20 3 2 40 0 00 2 1 60 0 00

3 2 40

2 1 60 1 0 80 Returned to Vendor

1 0 80 1 0 80 1 0 80

Inventory Item Date 2013 Mar

Units

Received Cost per Total Unit

Units

Sold Cost per Unit

Total

Units 24

1 4

7 16

2 8 64

Balance Cost per Unit

7 16 7 16

Inventory Item Date 2013 Mar

Units

Received Cost per Unit

Total

Units

Sold Cost per Unit

Total

1 8 15

6 42

1 0 2 72 10

6 42

Total

1 8

Units

Balance Cost per Unit

PL45

6 4 20

Units

Balance Cost per Unit

6 42

21 11

6 42 6 42

KG149

Total

1 7 1 84 1 4 3 20

XGY23

Total

3 2 10 1 3 4 82 7 0 62

19-25

PROBLEM 19C-2., Cont. CASH

NAME: Date 2013 Mar

Post Ref

Debit

GJ2

9 7 20 2 0 2 30

GJ2

Explanation

9 7 20 2 9 9 50 2 6 7 10

Dr Dr

ACCOUNT NO. Post Ref

114

GJ2

2 6 8 74 4 0 3 86 3 3 9 06 2 1 3 82

GJ2

Date 2013

Explanation

Post Ref

GJ2

Mar

NAME: Date 2013

Post Ref

GJ2

Date 2013

GJ2

Date 2013

Post Ref

6 4 80 1 2 5 24 2 1 60

Debit

GJ2

6 4 80 1 2 5 24

GJ2

2 3 5 42 2 1 3 82 201

Credit

DR CR

Balance

1 3 5 12

1 3 5 12 1 1 3 52

ACCOUNT NO.

401

Credit

DR CR

Balance

9 7 20 2 0 2 30

9 7 20 2 9 9 50

ACCOUNT NO.

402

DR CR

Balance

Credit

3 2 40

Post Ref

ACCOUNT NO.

2 1 60

Debit

2 1 60

COST OF GOODS SOLD Explanation

Credit

1 3 5 12

SALES RETURNS AND ALLOWANCES Explanation

NAME:

Debit

SALES Explanation

NAME:

Mar

Balance

ACCOUNTS PAYABLE

Mar

DR CR

Credit

DR CR

NAME:

Mar

101

3 2 40

NAME: MERCHANDISE INVENTORY Date Explanation 2013 Mar 1 Balance Forward

ACCOUNT NO.

3 2 40

ACCOUNT NO.

501

DR CR

Balance

Credit

2 1 60

6 4 80

1 9 0 04 1 6 8 44

PROBLEM 19C-3. (a) FIFO Goods Available for Sale

Cost of Ending Inventory

Units

Cost

Total

Units

Cost

Total

425

$16.20

$6,885.00

Apr 16 Purchased

340

18.46

6,276.40

Jul 25

Purchased

425

21.12

8,976.00

Aug 6

Purchased

550

24.86

13,673.00

325

$24.86

$8,079.50

Nov 26 Purchased

275

27.10

7,452.50

275

27.10

7,452.50

$43,262.90

600

2012 Jan 1

Beginning Inventory

2,015 Cost of Goods Available for Sale

$43,262.90

Less: Cost of Ending Inventory

15,532.00

Cost of Goods Sold

$27,730.90

$15,532.00

(b) LIFO Goods Available for Sale

Cost of Ending Inventory

2012

Units

Cost

Total

Units

Cost

Total

Jan 1 Beginning Inventory

425

$16.20

$6,885.00

425

$16.20

$6,885.00

Apr 15 Purchased

340

18.46

6,276.40

175

18.46

3,230.50

Jul 25 Purchased

425

21.12

8,976.00

Aug 6 Purchased

550

24.86

13,673.00

Nov 26 Purchased

275

27.10

7,452.50

2,015

$43,262.90

Cost of Goods Available for Sale

$43,262.90

Less: Cost of Ending Inventory

10,115.50

Cost of Goods Sold

$33,147.40

600

$ 10,115.50

(c) Weighted Average Total cost ($43,262.90) divided by total units (2,015) = $21.47 Cost of Ending Inventory 600 units x $21.47 = $12,882.00

Cost of Goods Available for Sale

$43,262.90

Less: Cost of Ending Inventory

12,882.00

Cost of Goods Sold

$30,380.90

19-27

PROBLEM 19C-4. Cost

Retail

42 6 0 0 00 184 7 6 0 00 227 3 6 0 00

78 2 0 0 00 337 4 0 0 00 415 6 0 0 00

Goods Available for Sale: Beginning Inventory Net Purchases Cost of Goods Available for Sale Cost Ratio: 227,360 = .547 415,600

356 2 0 0 00 59 4 0 0 00

Net Sales at Retail Inventory at Retail Ending Inventory at Cost

32 4 9 1 80

59,400 x .547

PROBLEM 19C-5. Goods Available for Sale: Inventory January 1, 2013 Purchases Less: Purchase Returns and Allowances

47 0 0 0 00 79 6 0 0 00 1 1 7 0 00

Net Purchases

78 4 3 0 00 125 4 3 0 00

Cost of Goods Available for Sale Less: Estimated Cost of Goods Sold Sales Less: Sales Returns Net Sales at Retail Times Cost Percentage (100% - 35% ) Estimated Cost Of Goods Sold Estimated Inventory

141 2 0 0 00 2 2 0 0 00 139 0 0 0 00 .65 90 3 5 0 00 35 0 8 0 00

PROBLEM 19C-6.

Date 2013

Units

Jan

Mar

Apr

Oct

Nov

Received Cost per Unit

Total

Units

420 260

9 00

180

600

1 5 00

9 0 0 0 00

Units

Total

1 0 00

6 0 0 0 00

180

1 0 00

1 8 0 0 00

180 260 440

1 0 00 9 00

1 8 0 0 00 2 3 4 0 00 4 1 4 0 00

9 00

1 6 2 0 00

1 0 00 1 8 0 0 00 7 2 0 0 0 180 9 00 2 5 2 0 00

9 00 1 6 2 0 00 1 3 00 9 3 6 0 00 10 9 8 0 0 0

Balance Cost per Unit

600

180 1,400

720 900

1 0 00 4 2 0 0 00

1 3 00 18 2 0 0 00

Dec

Total

2 3 4 0 00

180 80 260

12 1,400

Sold Cost per Unit

1,580

9 00 1 6 2 0 00 1 3 00 18 2 0 0 00 19 8 2 0 00

680

1 3 00

8 8 4 0 00

680 600 1,280

1 3 00 1 5 00

8 8 4 0 00 9 0 0 0 00 17 8 4 0 00

19-29

SOLUTIONS TO ON-THE-JOB TRAINING, #T-1. a.

Overstating beginning inventory results in a cost of goods sold being overstated by $200 and net income understated by $200. This net income thus understates owner's equity.

Understating ending inventory by $200 results in cost of goods sold overstated by $200 and net income understated by $200. Understating net income understates owner's equity.

Understating the Purchases account results in understating by $1,100 the cost of merchandise for sale and understating cost of goods sold. The end result is overstating gross profit and net income. Overstating net income results in overstating owner's equity.

Overstated gross profit and owner's equity. No effect on cost of goods sold.

CONTINUING PROBLEM PRECISION COMPUTER CENTRE Units

Cost per Unit

2nd Lot 3rd Lot 4th Lot

100 100 80 100

5th Lot

100

$1.00 $1.75 $2.00 $2.50 $1.65

1st Lot

480

$100 $175 $160 $250 $165 $850

FIFO 100 100 80 20

$1.65 $2.50

100 100 80 20

$1.00 $1.75 $2.00 $2.50

$2.00 $1.75

Total Cost

$165.00 $250.00 $160.00 $35.00 $610.00

LIFO

Total Cost

Weighted Average Total Cost Ending Inventory

$850/480 = $1.77 $1.77 x 300 = $531.00

$100.00 $175.00 $160.00 $50.00 $485.00

D Problems, Chapter 1 – Page D-1

Chapter 1

Group D Problems (To answer the following problems, use the forms for the C problems found on pages 1-17 to 1-23 of the Study Guide with Working Papers.)

The accounting equation.

Check Figure Total Assets $21,000

1D-1. Ruth Jones began a new business called Jones Retirement Consulting, located in Moncton. The following transactions resulted: Transaction A: Ruth invested $18,000 cash from her personal bank account into the retirement consulting company. Transaction B: Bought computer equipment on account, $6,000. Transaction C: Paid $3,000 cash to partially reduce what was owed from Transaction B. Transaction D: Purchased office equipment for cash, $4,000. Record these transactions into the basic accounting equation.

Preparing a balance sheet.

Check Figure Total Assets $70,000

Recording transactions in the expenses accounting equation.

Check Figure Total Assets $14,225

Preparing an income statement, statement of owner’s equity, and balance sheet.

1D-2. Ken Stal has asked you to prepare a balance sheet as of April 30, 2016 for Stal Metal Designs of Edmonton. Could you assist him? Ken Stal, Capital Accounts Payable Equipment Building Cash

$42,000 28,000 21,000 36,000 13,000

1D-3. Lori Greene of Vancouver decided to open her own translations service company at the end of October. Analyze the following transactions by recording their effects on the expanded accounting equation. Transaction A: Lori invested $10,000 in the translations service. Transaction B: Purchased new office equipment on account, $3,000. Transaction C: Received cash for translation services rendered, $1,250. Transaction D: Paid secretary’s salary, $700. Transaction E: Billed customers for translation services rendered, $2,200. Transaction F: Paid rent expense for the month, $450. Transaction G: Lori withdrew cash for personal use, $900. Transaction H: Advertising expense due but unpaid, $375. Transaction I: Repairs to office equipment paid, $175. 1D-4. May Charles, owner of Highwood Equipment Rentals (located in Dorval), has requested that you prepare from the following balances: (a) an income statement for January 2016; (b) a statement of owner’s equity for January; and (c) a balance sheet as of January 31, 2016.

D Problems, Chapter 1 – Page D-2 Cash Accounts Receivable Equipment Accounts Payable May Charles, Capital, January 1, 2016 May Charles, Withdrawals Rental Fees Earned Advertising Expense Repair Expense Travel Expense Supplies Expense Office Rent Expense Office Expenses

Check Figure Total Assets $29,239

Comprehensive problem.

$1,539 4,950 22,750 3,200 25,920 800 4,985 615 520 2,100 252 420 159

1D-5. Harry McGraw of Corner Brook opened McGraw Surveys Inc. As his accountant, analyze the transactions and present to Mr. McGraw the following information, in proper form: 1. The analysis of the transactions by utilizing the expanded accounting equation. 2. A balance sheet showing the financial position of the firm before opening on August 1, 2016. 3. An income statement for the month of August. 4. A statement of owner’s equity for August. 5. A balance sheet as of August 31, 2016.

Check Figure Total Assets $25,608 Aug. 31

2016 July

Aug.

25 Harry invested $15,000 in the surveying business. 27 Bought equipment on account from Majestic Equipment, $4,300. 28 Bought equipment for cash from Black Layton Co., $2,750. 29 Paid $2,100 to Majestic Equipment as partial payment of the July 27 transaction. 1 Surveyed a rural property and immediately collected cash, $2,200. 5 Paid salaries of employees, $1,025. 6 Provided survey to Wells Oilfield on account, $5,195. 10 Received from Wells Oilfield $2,500 cash as partial payment of Aug. 8 transaction. 15 Paid telephone bill, $112. 16 Harry paid his home mortgage from the company’s chequebook, $1,183. 17 Provided a land assessment and received cash, $1,750. 18 Bought additional equipment on account from Rockwell Bros., $2,600. 19 Paid rent expense for the month, $785. 20 Paid supplies expense, $232. 21 Advertising bill received but not paid, $390.

D Problems, Chapter 2 – Page D-3

Chapter 2

Group D Problems (To answer the following problems, use the forms for the C problems on pages 2-17 to 2-21 of the Study Guide with Working Papers.)

Use of a transaction analysis chart.

Check Figure After F Cash 3,250 2,625

245

2D-1. Analea Thomas, CGA, decided to open an accounting firm in Edmonton. Record the following transactions into the transaction analysis charts: Transaction A: Analea invested $3,250 in the accounting firm from her personal savings account. Transaction B: Purchased office equipment on account, $2,125. Transaction C: Rent expense due but unpaid, $437. Transaction D: Performed accounting services for cash, $2,625. Transaction E: Billed clients for accounting services rendered, $1,600. Transaction F: Analea paid a home repair bill from the company chequebook, $245. The chart of accounts for the shop includes Cash; Accounts Receivable; Office Equipment; Accounts Payable; A. Thomas, Capital; A Thomas, Withdrawals; Accounting Fees Earned; and Rent Expense.

Recording transactions into ledger accounts.

Check Figure After G Cash (A) 29,000

775 (D)

500 (E) 3,200 (G)

2D-2. Val McIntyre of Halifax established the Pro Consulting Company. Record the following transactions for Val in T account form. Label each entry with the letter of the transaction. Transaction A: Val McIntyre invested $29,000 in the new company from his personal bank account. Transaction B: Bought computer equipment on account, $9,600. Transaction C: Company rendered service to T. Singer Corp. and received cash, $2,700. Transaction D: Val McIntyre withdrew cash for personal use, $775. Transaction E: Paid advertising expense, $500. Transaction F: Rent expense due but unpaid, $750. Transaction G: Paid $3,200 in partial payment of Transaction B. The chart of accounts includes Cash, 111; Computer Equipment, 121; Accounts Payable, 211; Val McIntyre, Capital, 311; Val McIntyre, Withdrawals, 312; Consulting Fees Earned, 411; Advertising Expense, 511; and Rent Expense, 512.

Preparing a trial balance from the T accounts.

2D-3. From the following T accounts of A1 Software Solutions of Taber, (a) record and foot the balances in the Study Guide and Working Papers where appropriate, and (b) prepare a trial balance for June 30, 2017.

D Problems, Chapter 2 – Page D-4 Cash 111 Check Figure Trial Balance

(A) 4,000 (B) 2,500 (G) 3,000

Total $13,000.00

Accounts Receivable 112

1,500 (C) 360 (D) 200 (E) 750 (I)

Accounts Payable 211

(G) 1,250

Fees Earned 411 2,500 (F) 4,250 (G)

Preparing financial reports from the trial balance.

(B) 2,250 (C) 1,500

Linda Miyagawa, Capital 311

2,250 (B)

Equipment 121

4,000 (A)

Rent Expense 511 (D) 360

Linda Miyagawa, Withdrawals 312 (I) 750

Utilities Expense 512 (E) 200

2D-4. From the trial balance of Hamilton Ames, an engineering consultant from Summerside, prepare (a) an income statement for the month of April, (b) a statement of owner’s equity for the month ended April 30, and (c) a balance sheet as of April 30, 2017.

Check Figure Total Assets $10,630.00

HAMILTON AMES, ENGINEERING CONSULTANT TRIAL BALANCE APRIL 30, 2017

Dr. Cash in Bank

5,090.00

Accounts Receivable

1,275.00

Supplies

265.00

Equipment

4,000.00

Accounts Payable

575.00

Hamilton Ames, Capital Hamilton Ames, Withdrawals

5,480.00 905.00

Fees Earned

Comprehensive problem.

Cr.

7,405.00

Advertising Expense

430.00

Rent Expense

900.00

Utilities Expense

595.00

Totals

13,460.00

2D-5. The chart of accounts of Clara Benson Enterprises includes the following: Cash, 111; Accounts Receivable, 112; Office Equipment, 121; Design

D Problems, Chapter 2 – Page D-5 Equipment, 122; Accounts Payable, 211; Clara Benson, Capital, 311; Clara Benson, Withdrawals, 312; Design Fees Earned, 411; Advertising Expense, 511; Repair Expense, 512; Salaries Expense, 513; and Telephone Expense, 514. The following transactions resulted for Clara Benson Enterprises during the month of September: Check Figure Trial Balance Total $48,850.00

Transaction A: Clara invested $28,000 in the business from her personal savings account. Transaction B: Bought design equipment on account, $12,500. Transaction C: Advertising bill received but unpaid, $650. Transaction D: Bought office equipment for cash, $3,100. Transaction E: Received cash for design services rendered, $4,200. Transaction F: Paid salaries expense, $1,500. Transaction G: Paid repair expense for modifying design equipment, $825. Transaction H: Billed customers for design services rendered, $3,900. Transaction I: Paid telephone bill, $165. Transaction J: Received $1,800 as partial payment of Transaction H. Transaction K: Clara paid home telephone bill from company chequebook, $42. Transaction L: Paid $400 on the bill received in Transaction C. As Clara’s newly employed accountant, your task is to 1. Set up T accounts in a ledger. 2. Record transactions in the T accounts. (Place the letter of the transaction next to the entry. 3. Foot the T accounts where appropriate. 4. Prepare a trial balance at the end of September. 5. Prepare from the trial balance, in proper form, (a) a statement of owner’s equity for the month of September, (b) a statement of owner’s equity; and (c) a balance sheet as of September 30, 2017.

D Problems, Chapter 3 – Page D-6

Chapter 3

Group D Problems (To answer the following problems, use the forms for the C problems on pages 3-27 to 3-36 of the Study Guide with Working Papers.)

Journalizing.

3D-1. In January, John Isaacson opened a personal financial planning centre in downtown Calgary. Please assist him by journalizing the following business transactions.

Check Figure Jan 21 Dr. Advertising Expense $285 Cr. Accounts Payable $285

2015 Jan. 1 John Isaacson invested $4,500 of computer equipment as well as $8,500 cash in the new business. 3 Purchased computer supplies on account from The Computer Warehouse, $325. 10 Purchased office equipment on account from ABE Office Group, $1,800. 12 John paid his home telephone bill from the company chequebook, $48. 20 Received $985 cash for planning services performed. 21 Advertising bill received but not paid, $285. 25 Cleaning bill received but not paid, $85. 28 Performed planning services for Qualicare Corp., $3,400; however, payment will not be received until February. 29 Paid salaries expense, $1,200. 30 Paid ABE Office Group half the amount owed from January 10 transaction, $900. 31 Received bill for repairs on equipment, $180. Not yet paid. The chart of accounts for the company includes: Cash, 111; Accounts Receivable, 112; Prepaid Rent, 114; Computer Supplies, 116; Office Equipment, 120; Computer Equipment, 121; Accounts Payable, 211; John Isaacson, Capital, 311; John Isaacson, Withdrawals, 312; Planning Fees Earned, 411; Advertising Expense, 511; Cleaning Expense 512, Repairs Expense, 513; and Salaries Expense 514.

Comprehensive problem: Journalizing, posting and

3D-2. In May the following transactions occurred for Rodger’s Fitness Training Centre of Sydney.

preparing a trial balance.

Check Figure Trial Balance Total $13,280

2017 May 1 Rodger Baldwin invested $6,900 in the training centre. 1 Paid three months’ rent in advance, $1,200. 3 Purchased supplies on account from Star Supplies, $465. 5 Purchased equipment on account from Amos Company, $2,650. 8 Received $1,200 cash for fitness training program provided to St. Helen’s Dance Troop. 9 Billed Varsity Singles for fitness lessons provided, $1,600. 10 Rodger withdrew $895 from the training centre to buy a new sofa for his

D Problems, Chapter 3 – Page D-7 apartment. 15 Paid salaries expense, $1,100. 28 Paid telephone bill for the centre, $145. 28 Electric bill received but unpaid, $190. 31 Advertising bill received from City Newspaper, $275. Required a. Set up a ledger. b. Journalize (all page 1) and post the May transactions. c. Prepare a trial balance as of May 31, 2017. Chart of accounts includes: Cash, 111; Accounts Receivable, 112; Prepaid Rent, 114; Supplies, 121; Equipment, 131; Accounts Payable, 211; Rodger Baldwin, Capital, 311; Rodger Baldwin, Withdrawals, 321; Fees Earned, 411; Advertising Expense, 511; Electrical Expense, 515; Salaries Expense, 521; Telephone Expense, 531. Comprehensive problem: Journalizing, posting, and

3D-3. In February, Matt Nepoose Private Investigators of Oakville had the following transactions:

preparing a trial balance.

Check Figure Trial Balance Total $6,530

2016 Feb. 1 Matt Nepoose invested $3,000 in the new agency. 2 Bought equipment for cash, $1,700. 3 Paid cash for supplies, $270. 5 Paid wage expense re preparations for opening the agency, $1,100. 7 Matt paid his home water and gas bill from the company chequebook, $95. 9 Located missing spouse, receiving $850 cash. 15 Earned investigative fee, $2,200, but payment from client will not be received until later. 25 Received half of the fee earned on February 15, $1,100. 28 Telephone bill received but not paid, $130. 29 Advertising bill received but not paid, $350. The chart of accounts includes: Cash, 111; Accounts Receivable, 112; Supplies, 131; Equipment, 141; Accounts Payable, 211; M. Nepoose, Capital, 311; M. Nepoose, Withdrawals, 321; Investigative Fees Earned, 411; Wage Expense, 511; Telephone Expense, 521; Advertising Rent, 531. Required a. Journalize (all page 1) and post transactions. b. Set up a ledger based on the chart of accounts. c. Prepare a trial balance for February 29, 2016.

D Problems, Chapter 4 – Page D-8

Chapter 4

Group D Problems (To answer the following problems, use the forms for the C problems on pages 4-12 to 4-13 of the Study Guide with Working Papers.)

Completing a partial worksheet up to adjusted trial balance.

Check Figure

4D-1. Please complete a partial worksheet up to the adjusted trial balance for Mayforth Art Gallery & Restorations of Red Deer using the following adjustment data: a. Art supplies on hand, $880. b. Depreciation taken on equipment, $349.

Total of Adjusted Trial Balance

MAYFORTH ART GALLERY & RESTORATIONS

$12,288.00

TRIAL BALANCE APRIL 30, 2017

Dr. Cash

1,825.00

Accounts Receivable

1,475.00

Art Supplies

2,190.00

Equipment

3,760.00

Accumulated Depreciation, Equipment

2,095.00

Candace Mayforth, Capital

5,729.00

Candace Mayforth, Withdrawals

1,025.00

Fees Earned

Completing a worksheet.

Cr.

4,115.00

Advertising Expense

370.00

Rent Expense

850.00

Utilities Expense

444.00

Totals

11,939.00

4D-2. Given the following trial balance and adjustment data of B.C. Carvings and Carpentry of Richmond, your task is to prepare a worksheet as of June 30, 2015.

Check Figure

B.C. CARVINGS & CARPENTRY

Net Income $1,733.35

TRIAL BALANCE JUNE 30, 2015

Dr. Cash

1,038.00

Accounts Receivable

650.00

Prepaid Rent

900.00

Carpentry Supplies

899.00

Carpentry Equipment

4,210.00

Cr.

D Problems, Chapter 4 – Page D-9 Accumulated Depreciation, Carpentry Equipment

2,385.00

Accounts Payable

432.00

B. Chiniki, Capital

1,762.00

Carpentry Service Revenue

6,677.00

Advertising Expense

523.00

Utilities Expense

696.00

Wages Expense

2,340.00

Totals

11,256.00

Adjustment Data a. Carpentry supplies on hand, $369. b. Prepaid rent represents the last two months’ rent on a lease that is due to expire on July 31, 2015. c. Depreciation on carpentry equipment is based on straight-line, eight-year life and a residual value of $500. d. Wages earned but unpaid amounted to 30.5 hours at $12.00 per hour. Comprehensive problem

Check Figure Net Income $11,723.00

4D-3. Using the following trial balance and adjustment data of Aden Network Training of Windsor, prepare 1. A worksheet for the month of May. 2. An income statement for May, a statement of owner’s equity for May, and a balance sheet as of May 31, 2016. Adjustment Data e. One-quarter of the prepaid insurance has expired. f. Computer supplies on hand, $575. g. Depreciation on computer equipment is straight-line, four-year life and a residual value of $720. h. Depreciation on building is also straight-line, 40-year life and zero residual value. i. Wages earned but unpaid amounted to 84 hours at $13.50 per hour at monthend. ADEN NETWORK TRAINING TRIAL BALANCE MAY 31, 2016

Dr. Cash Prepaid Insurance

Cr.

1,594.00 750.00

Computer Supplies

981.00

Computer Equipment

10,520.00

Accumulated Depreciation, Computer Equipment

6,200.00

Land

12,000.00

Building

52,000.00

D Problems, Chapter 4 – Page D-10 Accumulated Depreciation, Building

13,950.00

Accounts Payable

1,103.00

Aden Jackson, Capital

52,089.00

Aden Jackson, Withdrawals

9,260.00

Network Training Fees Revenue

22,185.00

Wages Expense

6,224.00

Utilities Expense

820.00

Advertising Expense

1,378.00

Totals

Comprehensive problem.

Check Figure

95,527.00

4D-4. As the bookkeeper of T. Barnes, P.Eng., Consulting Services of Amherst, use the information that follows to prepare 1. A worksheet for the month of February. 2. An income statement for February, a statement of owner’s equity for February, and a balance sheet as of February 28, 2015. Adjustment Data a. At month-end, one-half of the prepaid insurance is still prepaid. b. Computer supplies on hand, $235. c. Depreciation on computer equipment is based on straight-line, five-year life, and a residual value of $450. d. Wages earned but unpaid amounted to 63 hours at $17.50 per hour at monthend. e. Advertising bill received, not paid, $174.

Net Income $4,932.50 T. BARNES, P.ENG., CONSULTING SERVICES TRIAL BALANCE FEBRUARY 28, 2015

Dr. Cash

829.00

Prepaid Insurance

730.00

Computer Supplies

454.00

Computer Equipment

9,450.00

Accumulated Depreciation, Computer Equipment

5,600.00

Accounts Payable

650.00

T. Barnes, Capital T. Barnes, Withdrawals

2,150.00 3,880.00

Revenue from Services Provided Advertising Expense

Cr.

14,507.00 801.00

Rent Expense

1,530.00

Wages Expense

5,233.00

Totals

22,907.00

D Problems, Chapter 5 – Page D-11

Chapter 5

Group D Problems (To answer the following problems, use the forms for the C problems on pages 5-31 to 5-47 of the Study Guide with Working Papers.)

Review in preparing a worksheet

5D-1.

and journalizing adjusting and

To: Albert Marsh From: Magda Bennett Re: Accounting Procedures

closing entries.

Check Figure

Please prepare from the following information (1) a worksheet and (2) journalized adjusting and closing entries for the period ending July 31, 2017.

Net Income $26,298.44

Adjustment Data: a. Insurance expired, $327. b. Supplies on hand, $680. c. Depreciation on storage equipment is based on the straight-line method, 12year life, and a residual value of $5,000. d. Depreciation on building is also straight-line, 30-year life and a residual value of $14,000. e. Wages earned by employees but not due to be paid till August amounted to 56 hours at $16 per hour, plus 17 hours at $24 per hour. BIG 4 STORAGE INC. TRIAL BALANCE JULY 31, 2017

Cash Prepaid Insurance Accounts Receivable Storage Supplies Storage Equipment Accumulated Depreciation, Storage Equipment Building Accumulated Depreciation, Building Land Accounts Payable Magda Bennett, Capital Magda Bennett, Withdrawals Storage Fees Revenue Advertising Expense Utilities Expense Wages Expense Totals

Dr. 2,238.00 981.00 5,496.00 824.00 23,000.00

Cr.

12,500.00 52,000.00 20,530.00 10,000.00 3060.00 37,887.00 7,742.00 38,720.00 1,250.00 926.00 8,240.00 112,697.00

112,697.00

D Problems, Chapter 5 – Page D-12 Journalizing and posting adjusting and closing entries. Preparing a post-closing trial balance. Check Figure Post-Closing Trial Balance

5D-2. Refer to the worksheet for Chalke’s Computer Repair Service of Brandon shown on the 5D-2.pdf page included at the end of the D Problems. The balances (from the trial balance column) in each account are already entered in your working papers. (1) Journalize and post adjusting and closing entries to each account in the ledger, and (2) prepare from the ledger a post-closing trial balance at the end of November.

$29,485.95 Comprehensive review of the entire accounting cycle, Chapters 1-5.

5D-3. From the following transactions as well as additional data, please complete the entire accounting cycle for Atherton Plumbing Services of Saskatoon (use a chart of accounts similar to the one on page 205 in the College Accounting textbook).

Check Figure Net Income $8,262.79

2016 Aug. 1 1 4 6 8 9 10 14 21 26 28 29 31

To open the business, Martin Atherton invested $10,000 cash and $4,800 worth of plumbing equipment. Paid rent for 4 months in advance, $1,600. Purchased office equipment on account from The Office Standard, $2,050. Bought plumbing supplies, $1,125. Collected $3,600 for plumbing services provided. Martin paid his home utility bill from the company chequebook, $108. Billed Southern Construction Inc. for plumbing fees earned but not to be received until later, $10,200. Advertising bill received from TYDI Radio Co. but not to be paid until next month, $380. Received cheque from Southern Construction Co. in partial payment on transaction dated August 10, $5,100. Paid salaries to employees, $2,850. Paid The Office Standard one-half of amount owed for office equipment, $1,025. Paid telephone bill of company, $142. Received bill from Precise Cleaning to be paid in June, $230.

Adjustment Data a. Plumbing supplies on hand at month-end totalled $420. b. Rent expired during August was for one month. c. Depreciation on office equipment was based on the straight-line method, sixyear life and a residual value of $400. d. Depreciation on plumbing equipment is also straight-line, four-year life and $250 residual value. e. Salary accrued was 25% of the salaries paid on August 26.

D Problems, Chapter 6 – Page D-13

Chapter 6

Group D Problems (To answer the following problems, use the forms for the C problems on pages 6-39 to 6-53 of the Study Guide with Working Papers.)

Multicolumn column journal: Journalizing and posting to

6D-1. The following transactions occurred for Morris Co. of St. Albert for the month of July:

general ledger and recording to accounts receivable ledger and preparing a schedule of accounts

2016 July

receivable.

Check Figure Schedule of Accounts Receivable $7,859.00

1 Sold upholstery merchandise to Joan Timkins Co. on account, $1,750, invoice no. 241. Terms net 30 days. 4 Sold carpet merchandise to Chris Cowan Co. on account, $804, invoice no. 242. Terms net 30 days. 8 Sold upholstery merchandise to Cross & Co. on account, $2,125, invoice no. 243. Terms net 30 days. 10 Issued credit memorandum no. 1 to Joan Timkins Co. for $400 of merchandise returned due to faulty colouring match. 15 Sold carpet merchandise to Chris Cowan Co. on account, $900, invoice no. 244. Terms net 30 days. 19 Sold upholstery merchandise to Cross & Co. on account, $785, invoice no. 245. Terms net 30 days. 24 Sold carpet merchandise to Joan Timkins Co. on account, $1,895, invoice no. 246. Terms net 30 days.

Required 1. Journalize the transactions in the appropriate journals. 2. Record to the accounts receivable ledger and post to general ledger as appropriate. 3. Prepare a schedule of accounts receivable. 6D-2. (In your working papers all the beginning balances needed are provided for the accounts receivable and general ledgers.) The following transactions Comprehensive Problem: occurred for West Market Finest Sausages Ltd. of Bedford: Recording transactions into sales, cash receipts, and general

2017 receivable and posting to general Sept

journals; recording to accounts

ledger; preparing a schedule of accounts receivable.

Check Figure Schedule of Accounts Receivable $6,118.60

1 Karen Blum, owner, invested an additional $13,500 in the business. 3 Sold $2,350 of merchandise on account to Petra’s Meat Market, sales invoice no. W108, terms 1/10, n/30. 4 Sold $785 of merchandise on account to Chapman’s Deli, sales invoice no. W109, terms 1/10, n/30. 8 Sold $850 of merchandise on account to Valemont Variety Meats Co., sales invoice W110, terms 1/10, n/30. 12 Received cash from Petra’s Meat Market in payment of September 3 transaction, sales invoice no. W108, less discount. 21 Sold $1,300 of merchandise on account to Discount Meats, sales invoice no. W111, terms 1/10, n/30.

D Problems, Chapter 6 – Page D-14 22 Received cash payment from Chapman’s Deli in payment of September transaction, sales invoice no. W109. 23 Collected cash sales, $712. 24 Issued credit memorandum no. 111C to Discount Meats for $290 of merchandise returned from September 21 sales on account. 26 Received cash from Discount Meats in payment of September 21 sales invoice no. W111. (Don’t forget about the credit memo and discount.) 27 Collected cash sales, $500. 28 Sold meat cooling equipment for $1,100 cash. (Beware.) 29 Sold $1,694 of merchandise on account to Chapman’s Deli, sales invoice no. W112, terms 1/10, n/30. 30 Issued credit memorandum no. 112C to Chapman’s Deli for $380 of merchandise returned from September 29 transaction, sales invoice no. W112. Required 1. Journalize the transactions in the appropriate journals. 2. Record and post as appropriate. 3. Prepare a schedule of accounts receivable.

Journalizing, recording, and posting a sales journal as well as recording the issuing of a credit memorandum and preparing a schedule of accounts receivable.

Check Figure Total of Schedule of Accounts Receivable $144,948.00

6D-3. Martha Kuerti has started up a new company called Calgary Camera Company (CCC for short) in the Calgary region. CCC specializes in the sale of four types of cameras to customers in "industrial" settings (means they usually buy several items at a time). The four categories of cameras that CCC sells are 1. point and shoot (PS), 2. digital single-lens (DS), 3. surveillance cameras (SC), and 4. video cameras (VC). Martha wants to keep track of each type of sale in total for each month of operations. She employs three salespersons to manage relations with customers, and wants to know the total of sales by salesperson each month. CCC's normal terms are 2% 10 days, net 30 days, but a couple of customers have been granted special terms of 3% 12 days, net 36 days. Here are the sales and sales-related transactions for CCC during their first month of operations in November 2016: 2016 Nov.

1 Sold $3,254 (PS), $3,360 (DS) and $5,279 (VC) to West Calgary Tribal Council. Invoice No. 1001. Normal Terms. Sold by Fred Jacobs (FJ hereafter). 2 Sold $5,629 (PS), $2,712 (DS), $6,109 (SC) and $1,530 (VC) to KGC Investigations. Invoice No. 1002. Special Terms. Sold by Chris Thomas (CT hereafter). 4 Sold $7,310 (PS) and $4,605 (DS) to South Calgary School District. Invoice No. 1003. Special Terms. Sold by Grigov Mahlen (GM hereafter). 6 Sold $4,515 (DS) and $3,630 (VC) to Leisure Light Technologies. Invoice No. 1004. Normal Terms. Sold by CT. 8 KGC Investigations sent an e-mail that there was a minor problem with the lens of several Surveillance Cameras they purchased on November 2. Martha agreed to a credit allowance of $450 and issued credit

D Problems, Chapter 6 – Page D-15

10 12 14 16 18 21

23 25 26 29 30

memorandum No. 101CR dated this date. Martha decided not to keep track of sales returns by product or by salesperson. Sold $3,254 (PS), $4,709 (DS) and $2,625 (VC) to West Calgary Tribal Council. Invoice No. 1005. Normal Terms. Sold by FJ. Sold $4,715 (PS), $3,632 (DS) and $1,145 (VC) to North Calgary College. Invoice No. 1006. Normal Terms. Sold by GM. Sold $2,309 (PS), $3,325 (DS), $3,340 (SC) and $1,716 (VC) to South Calgary School District. Invoice No. 1007. Special Terms. Sold by GM. Sold $2,715 (PS), $1,860 (DS) and $3,434 (VC) to Leisure Light Technologies. Invoice No. 1008. Normal Terms. Sold by CT. Sold $3,525 (PS), $2,308 (SC) and $1,716 (VC) to KGC Investigations. Invoice No. 1009. Normal Terms. Sold by CT. The Program Director for North Calgary College explained that there was a flaw in the GPS devices in a camera they purchased on November 12. The camera is otherwise useable, so an adjustment in price of $185 was agreed to. Issued credit memorandum No. 102CR this date. Sold $2,720 (PS), $3,471 (DS) and $1,590 (VC) to SKH Management Company. Invoice No. 1010. Special Terms. Sold by FJ. Sold $4,618 (PS) and $6,864 (DS) to South Calgary School District. Invoice No. 1011. Special Terms. Sold by GM. Sold $3,950 (PS) and $4,236 (DS) to KGC Investigations. Invoice No. 1012. Special Terms. Sold by CT. Sold $6,508 (PS), $3,435 (DS) and $2,260 (VC) to West Calgary Tribal Council. Invoice No. 1013. Normal Terms. Sold by FJ. Sold $2,315 (PS), $3,720 (DS), $4,910 (SC) and $725 (VC) to Leisure Light Technologies. Invoice No. 1014. Normal Terms. Sold by CT.

Required: 1. Enter the above transactions in both a 5-column sales journal and the general journal. 2. Record all transactions to the customers' accounts in the accounts receivable subsidiary ledger. 3. Ensure that the sales journal is completed (including details of salespersons) and cross-balanced for the month, then 4. Post all transactions to the relevant general ledger accounts at month-end. See account numbers below. 5. Prepare a schedule of accounts receivable as of November 30. Please note - if you are also required to complete problem 6-D4 (see following), then you should only prepare this schedule once, after all cash receipts have been recorded. Here are the general ledger account numbers used by CCC: Accounts Receivable 1500 PS Sales Sales Returns and Allowances 4900 DS Sales Sales Discounts 4950 SC Sales VC Sales

4000 4100 4200 4300

D Problems, Chapter 6 – Page D-16

6D-4. Please refer to problem 6D-3. The sales data listed there form the basis for much of this problem. Journalizing, recording and posting a cash receipts journal. Check Figure Total of Schedule of Accounts Receivable $59,331.00

The following cash was received by CCC during November 2016: 2016 Nov.

3 M. Kuerti contributed $50,000 and deposited this in the CCC bank account. 10 West Calgary Tribal Council paid invoice No. 1001, taking the discount. 11 KGC Investigations paid invoice No. 1002, after deducting credit memorandum, taking the discount. 16 South Calgary School District paid invoice No. 1003, taking their special discount. 21 West Calgary Tribal Council paid invoice No. 1005, taking the discount. Although a day late, the discount was approved by M. Kuerti. 22 North Calgary College paid invoice No. 1006, less the credit memorandum, taking the discount. 25 Leisure Light Technologies paid invoice No. 1004 in full. 26 A major supplier, International Cameras, dropped off a cheque for $4,000. This is their agreed share of an advertising campaign. M. Kuerti agreed that the Advertising Expense account was to be credited. 26 South Calgary School District paid invoice No. 1007, taking special discount. 30 KGC Investigations paid invoice No. 1009 after deducting the discount. M. Kuerti did not approve the discount as it is two days late.

Required: 1. Enter the above transactions in the cash receipts journal. 2. Record all transactions to the customers' accounts in the accounts receivable subsidiary ledger, including all the transactions from 6D-3. 3. Ensure that the cash receipts journal is completed and cross balanced for the month, then 4. Post all transactions to the relevant general ledger accounts at month-end. See account numbers below. 5. Prepare a schedule of accounts receivable as of November 30, and ensure that the total agrees with general ledger account number 1500. The company uses these additional general ledger account numbers: Cash 1100 Owner's Equity, M. Kuerti 3300 Advertising Expense 5001

D Problems, Chapter 7 – Page D-17

Chapter 7

Group D Problems (To answer the following problems, use the forms for the C problems on pages 6-39 to 6-53 of the Study Guide with Working Papers.)

Journalizing, recording, and

7D-1.

posting a purchases journal

Amy Burke recently opened a gift store in Shelburne. As the bookkeeper of her shop, journalize, record, and post when appropriate the following transactions (account numbers are: Store Supplies, 124; Store Equipment, 150; Accounts Payable, 211; Purchases, 500):

Check Figure

2016 Mar.

Total of Purchases Column $2,755.00

2 5 9 17

7D-2.

Bought merchandise on account from Whalen Co., invoice No. 443, dated March 2, terms 2/10, n/30, $1,719. Bought store equipment from Mega Gifts Co., invoice No. 6217, dated March 4, $2,142. Bought merchandise on account from Kelsey Co., invoice No. 8554, dated March 8, terms 2/10, n/30, $1,036. Bought store supplies on account from Whalen Co., invoice No. 449, dated March 16, $1,427.

Super Sweets of Edmonton, owned and operated by Jennifer Blanca, uses a purchases journal (page 15) and a general journal (page 3) to record the following transactions (continued from July):

Journalizing, recording, and posting a purchases journal, as well as recording a debit memorandum and preparing a schedule of accounts

2017 Aug.

5 9 12

Check Figure Total of Schedule of Accounts

Payable $13,522.71

19 25

Purchased merchandise on account from Bakker Co., invoice No. 203, dated Aug 4, terms 2/10, n/60, $1,724.69. Purchased merchandise on account from Holmes Co., invoice No. 1288, dated Aug 8, terms 2/10, n/60, $1,814.23. Purchased store supplies on account from Genesis Co., invoice No. 59616, dated Aug 12, $1,499.85. Issued debit memo No. 5 to Bakker Co. for merchandise returned, $255.00, from invoice No. 203. Purchased display equipment on account from Well-Equip Co., invoice No. 41914, dated Aug 18, $1,800.75. Purchased additional store supplies on account from Genesis Co., invoice No. 59700, dated Aug 24, terms 2/10, n/30, $766.50.

The sweet store has decided to use a separate column for merchandise purchases and one for the purchase of supplies in the purchases journal. Required a. Journalize the transactions. b. Post and record as appropriate. c. Prepare a schedule of accounts payable. Accounts Payable Ledger Name Balance Bakker Co. $1,502.55 Holmes Co. 2,718.85

D Problems, Chapter 7 – Page D-18 Genesis Co. Well-Equip Co.

Partial General Ledger Account Number Store Supplies 110 Display Equipment 120 Accounts Payable 210 Purchases 510 Purchases Returns and Allowances 512

Journalizing, recording, and posting a cash payments journal; preparing a schedule of accounts payable

1,526.37 423.92

7D-3.

Balance $2,092.10 4,415.00 6,171.69 74,467.20 692.14

June Devlin operates a Water Bottling Service in Yellowknife. All transactions requiring the payment of cash are recorded in the cash payments journal (page 14). The account balances as of May 1, 2016 are as follows: Accounts Payable Ledger Name Balance Mansard Co. $3,139.15 Wolfe Co. 1,970.29 Frances Co. 879.00 Higgins Co. 2,677.18

Check Figure Total of Schedule of Accounts Payable $1,424.64

Account Cash Delivery Truck Accounts Payable Purchases Purchases Discount Rent Expense Utilities Expense

Partial General Ledger Number 1110 1500 2100 5100 5150 6400 6800

Balance $20,983.24 -8,665.62 41,079.25 629.17 850.00 275.89

Required a. Journalize the following transactions. b. Record in the accounts payable ledger and post to the general ledger as appropriate. c. Prepare a schedule of accounts payable. 2016 May

4 6 8 9 15 25 28

Paid half the amount owed Wolfe Co. from previous purchases on account, less a 2% purchases discount, cheque No. 547. Bought a used delivery truck for $12,900 cash, cheque No. 548, payable to Northern Motors Co. Bought filter supplies for cash from Prime Filter Co., cheque No. 549, $3,217.45. Paid amount due to Mansard Co, less 3% discount; cheque No. 550. Bought containers from Excel Plastics Co., cheque No. 551, $1,863.70. Paid Higgins Co. the amount owed - no purchases discount, cheque No. 552. Paid rent expense to Industrial Realty, cheque No. 553,

D Problems, Chapter 7 – Page D-19 29 31

7D-4. Comprehensive review problem

$850.00. Paid utilities to Yellowknife Utilities Co., cheque No. 554; $193.38. Paid half the amount owed Frances Co., no discount, cheque No. 555.

Liz Ames owns Fancy Writing Supply Co. in Moncton. As her newly hired accountant, your task is to:

for chapters 6 & 7. All special journals and the general journal; schedules of accounts payable and accounts receivable Check Figure

a. Journalize the below transactions for the month of May. b. Record in subsidiary ledgers and post to the general ledger as appropriate. c. Total, rule and cross-foot the various journals. d. Prepare a schedule of accounts receivable and a schedule of accounts payable at month-end.

Total of Schedule of Accounts Receivable $5,285.25 Total of Schedule of Accounts Payable $18,515.00

The following is the partial chart of accounts for Fancy Writing Supply Co.: Assets 1000 Cash 1100 Accounts Receivable 1350 Prepaid Rent 1800 Printing Press Liabilities 2150 Accounts Payable 2400 Bank Loan Payable Owner’s Equity 3000 E. Ames, Capital

2015 May

1 1 2 3 6 8 9 10 11 12

Revenue 4000 Writing Supplies Sales 4020 Sales Returns and Allowances 4025 Sales Discounts Cost of Goods 5000 Purchases 5100 Purchases Returns and Allowances 5100 Purchases Discounts Expenses 6140 Cleaning Expense 6500 Printing Supplies 6800 Salaries Expense

Liz Ames invested $20,000.00 and a printing press worth $25,000.00 in the business. Paid three months’ rent in advance to Riverfront Realty, cheque no. 3201, $2,250.00. Purchased merchandise from Gant Paper Co. on account, $4,923.00. Invoice No. 28189, dated May 1, terms 2/10, n/30. Sold merchandise to Dr. M. LaPeierre on account, $1,050.00. Invoice No. F1001, terms 2/10, n/30. Sold merchandise to Hon. N. Marachee on account, $2,385.50. Invoice no. F1002, terms 2/10, n/30. Purchased merchandise from Gant Paper Co. on account, $1,400. Invoice No. 28205, dated March 7, terms 2/10, n/30. Sold merchandise to Fern Michaels, LLB on account, $1,175.00. Invoice No. F1003, terms 2/10, n/30. Paid Jenkins Cleaning Service $318.75. Cheque No. 3202. Paid Gant Paper Co. invoice No. 28189, dated May 2, cheque No. 3203, taking discount. Dr. M. LaPeirre returned letterhead that cost $150.00 because

D Problems, Chapter 7 – Page D-20

13 14 15 15

16 16 17 18 19

22 23 23 24 26

26 27 29 30 31

of a design flaw. Liz issued credit memorandum No. CR101 to the customer for this amount. Purchased merchandise from Markham Inks on account, $969.75. Invoice No. M1575, dated March 12, terms 3/15, n/60. Arranged $11,000 bank loan with Royal Bank. Deposited today to the company bank. Sold paper stock for cash - $615.00. Deposited today. Paid casual salaries to D. Lee, $985.00, cheque No. 3204. Returned merchandise to Markham Inks in the amount of $214.50. Liz issued debit memorandum No. DR25 for this amount. Sold more paper stock for cash, $1,600.00. Deposited today. Received payment from Hon. N. Marachee, invoice No. F1002, less discount. Dr. M. LaPeierre paid invoice No. F1001, less return, no discount. Sold stationery supplies to B. Kirk, CA on account, $2,688.75. Invoice No. F1004, terms 2/10, n/30. Purchased used printing press on account from Maritime Equipment Sales, $20,500.00. Invoice No. 39713, dated May 19 (no discount terms). Sold to Dr. M. LaPeierre, additional stationery merchandise on account, $1,075.00. Invoice No. F1005, terms 2/10, n/30. Paid Markham Inks balance owed, cheque No. 3205. Sold card merchandise on account to B. Kirk, CA, $635.25. Invoice No. F1006, terms 2/10, n/30. Purchased for cash, display supplies from MDS Supplies, $350.25. Cheque No. 3206. Purchased envelope merchandise from Findlay and Fortune on account, $3,500.00. Invoice No. 6922, dated May 26, terms 2/10, n/30. Dr. M. LaPeierre, paid invoice No. F1005, dated May 22, taking discount. B. Kirk, CA paid invoice No. F1004, dated May 18, taking discount. Purchased merchandise from Gant Paper Co., $3,365.00. Invoice No. 28415, dated May 28, terms 2/10, n/30. Paid half of the balance to Maritime Equipment Sales on their invoice No. 39713, cheque No. 3207. Sold merchandise to Moncton Hospital on account, $3,475.00. Invoice No. F1007, terms 2/10, n/30.

D Problems, Chapter 8 – Page D-21

Chapter 8

Group D Problems (To answer the following problems, use the forms for the C problems on pages 8-12 to 8-18 of the Study Guide with Working Papers.)

Preparing a bank reconciliation including collection of a note.

Check Figure Reconciled Balance $6,345.00

Preparing a bank reconciliation with NSF using the back of a bank statement.

Check Figure Reconciled Balance $5,565.00

8D-1. Kingsman Inc. of Moncton received a bank statement from Royal Bank of Canada indicating a bank balance of $6,422. Based on Kingsman’s cheque stubs, the ending chequebook balance was $5,929. Your task is to prepare a bank reconciliation for Kingsman Inc. as of March 31, 2016, from the following information (please journalize entries as needed): a. Cheques outstanding: no. K207, $209; no. K209, $483; no. K210, $912. b. Deposits in transit, $1,527. c. Bank service charge, $43. d. Royal Bank of Canada collected a note for Kingsman Inc., $622, less a $12 collection fee. e. Notice received that a cheque from Perry Wolfe, a customer, was returned NSF, $151. 8D-2. From the following June 29, 2017, bank statement, please (1) complete a bank reconciliation for The Fresh Flower Shop of Halifax and (2) journalize the appropriate entries as needed. a. A deposit of $2,342 is in transit. b. The Fresh Flower Shop has an ending chequebook balance of $5,845. c. Cheques outstanding: no. 421, $328; no. 432, $575; no. 433, $87; no. 434, $309. d. Leslie Kraulis’ cheque for $235 bounced due to nonsufficient funds. e. Cheque no. 428 for utilities expense was entered in the cash payments journal as $369. f. The cheque for $655 shown by the bank as paid on June 28 was actually a cheque of Best’s Auto Parts. This error will be corrected by the bank next month. The bank apologized for the error.

D Problems, Chapter 8 – Page D-22 Account Statement

BANK OF INDUSTRY AND COMMERCE MAIN BRANCH

Account No.

HALIFAX, NOVA SCOTIA

914 817 2

Period

The Fresh Flower Shop

From

121 Spring Garden Road Halifax, Nova Scotia B4T 2L0

Establishments and replenishment of petty cash.

May 29/17 to Jun 28/17 Enclosures

Page

Transaction

Cheques &

Deposits &

Date

Description

Debits

Credits

Jun 01

Balance Forward

Jun 02

Cheque

428

396.00

3,143.00

Jun 05

Cheque

427

502.00

2,641.00

Jun 09

Deposit

Jun 09

Cheque

Jun 14

Deposit

Jun 15

Cheque

Jun 16

Deposit

Jun 20

NSF Returned Item

Jun 22

Deposit

Jun 23

Cheque

Jun 26

Deposit

Jun 28

Cheque

Jun 28

Service Charge

Balance

3,539.00

1,867.00 430

275.00

4,233.00 923.00

429

5,156.00

1,304.00

3,852.00 249.00

4,101.00

235.00

3,866.00 1,380.00

435

5,246.00

1,525.00

3,721.00 819.00

1157

4,540.00

655.00 18.00

3,867.00

No. of Debits

Total Amount

No. of Credits

Total Amount

4,910.00

5,238.00

8D-3. The following transactions occurred in April and were related to the cash payments journal and petty cash fund of Samuel & Co. of St. John’s:

Relationship to auxiliary petty cash record.

Check Figure Cash Replenishment $168.00

2016 Apr.

3 Issued cheque no. 280 for $200 to establish a petty cash fund. 5 Paid $33 from petty cash for coffee supplies, voucher no. 1. 10 Paid $42 from petty cash for postage, voucher no. 2. 16 Paid $29 from petty cash for office supplies, voucher no. 3. 23 Paid $45 from petty cash for office supplies, voucher no. 4. 26 Paid $19 from petty cash for postage. 30 Issued cheque no. 281 to Forrest Office Equipment to pay for office equipment, $2,025.

D Problems, Chapter 8 – Page D-23 From the chart of accounts: Cash, 100; Petty Cash, 105: Office Equipment, 170; Miscellaneous Expense, 630; Office Supplies Expense, 640; Postage Expense, 645. Required 1. Record the appropriate entries in the general journal and the auxiliary petty cash record as needed. 2. Be sure to replenish the petty cash fund on April 30 (cheque no. 282). Establishing and replenishing

8D-4.

petty cash including a cash shortage.

2015 Sep.

Check Figure Cash Replenishment $212.00

Realistic bank reconciliation

From the following, record the transactions into Caron Co.’s auxiliary petty cash record and general journal. 1 A cheque was drawn (no. 501) payable to Albert McCabe, petty cashier, to establish a $225 petty cash fund. 2 Paid $43 for postage stamps, voucher no. 1. 7 Paid $13 for delivery charges on goods for resale, voucher no. 2. 12 Paid $26 for postage, voucher no. 3. 14 Paid $50 for donation to a church (Miscellaneous Expense), voucher no. 4. 19 Paid $15 for delivery charges on goods for resale, voucher no. 5. 24 Purchased pens and binder for $9 from petty cash, voucher no. 6. 27 Paid $52 for postage, voucher no. 7. 29 Drew cheque no. 534 to replenish petty cash (a $4 shortage was apparent when the cash was balanced).

8D-5.

Shown below are the following for Wagstaff Energy Consulting:

scenarios:

a. b. c.

Bank reconciliation completed, as of March 31, 2017. General Ledger listing for April 2017. Bank statement for March 29 to April 28, 2017.

Check Figure Reconciled Balance $14,345.41

Required: Reconcile the balance per bank statement ($16,750.54) with the balance per General Ledger of $14,863.45.

D Problems, Chapter 8 – Page D-24

Wagstaff Energy Consulting Bank Reconciliation March 31, 2017 15,359.62 825.00 1,229.54 17,414.16

Balance per Bank Statement Add: Deposits in Transit Less: Outstanding Cheques: Chq 0435 Chq 0436 Chq 0437 Chq 0438 Chq 0439 Balance per General Ledger

151.40 1,205.00 79.54 1,002.00 495.00

2,932.94 14,481.22

D Problems, Chapter 8 – Page D-25

Date: May 12, 2017 2:12 pm Wagstaff Energy Consulting General Ledger Listing as of April 30, 2017 G/L listing for account

Period

Source 1100

1100

Date

Description

Reference

Posting

Batch

Entry

Net Debits

Credits

Bank of Alberta - chequing

Balance 14,481.22

GL-GJ

01-Apr-17

Alberta Phone Co.

GL-GJ

02-Apr-17

Maxim Office Supplies

GL-GJ

02-Apr-17

Handi Print and Graphics

GL-GJ

02-Apr-17

City Truck Stops - Deposit

GL-GJ

03-Apr-17

GL-GJ

05-Apr-17

GL-GJ

08-Apr-17

Performance Oil Change - Deposit

GL-GJ

08-Apr-17

Sinclair Utility

GL-GJ

08-Apr-17

Kenya Coffee Company

GL-GJ

09-Apr-17

The Co-ops of Montana - Deposit

GL-GJ

10-Apr-17

Red's Gas Bar - Deposit

GL-GJ

15-Apr-17

Canada Revenue Agency - GST

CHQ 0446

4 - 12

2,929.65

14,220.73

GL-GJ

15-Apr-17

Canada Revenue Agency

CHQ 0447

4 - 13

2,123.51

12,097.22

GL-GJ

15-Apr-17

Carly's Truck Wash - Deposit

LT490

4 - 14

495.50

12,592.72

GL-GJ

16-Apr-17

W. Canada Truck Stops - Deposit

LT495

4 - 15

400.00

12,992.72

GL-GJ

16-Apr-17

Super Save Service - Deposit

LT501

4 - 16

522.24

13,514.96

GL-GJ

17-Apr-17

April's Mart - Deposit

LT502

4 - 17

175.82

13,690.78

GL-GJ

18-Apr-17

City Newspaper

CHQ 0448

4 - 18

GL-GJ

18-Apr-17

Eldorado Petroleum - Deposit

LT496

4 - 19

GL-GJ

23-Apr-17

Weyburn Refinery

CHQ 0449

4 - 20

GL-GJ

23-Apr-17

Tri-City Gas - Deposit

LT505

4 - 21

700.00

GL-GJ

25-Apr-17

Benny's Auto Repair - Deposit

LT506

4 - 22

1,250.49

GL-GJ

26-Apr-17

BofA Loan Payment

4 - 23

254.93

16,224.11

GL-GJ

26-Apr-17

BofA Loan Interest

4 - 24

42.53

16,181.58

GL-GJ

26-Apr-17

Lesley Tripp - Salary

CHQ 0450

4 - 25

1,350.00

14,831.58

GL-GJ

26-Apr-17

Andrew Goings - Salary

CHQ 0451

4 - 26

1,100.00

13,731.58

GL-GJ

29-Apr-17

Edison Tune-Ups Alberta - Deposit

LT507

4 - 27

CHQ 0440

4-1

181.32

14,299.90

CHQ 0441

4-2

CHQ 0442

4-3

4-2

67.29

14,232.61

4-3

523.61

LT504

4-4

13,709.00

Canada Post

CHQ 0443

4-5

Auto Row Sales & Service - Deposit

LT498

4-6

787.00

15,895.46

LT499

4-7

489.00

16,384.46

CHQ 0444

4-8

187.42

16,197.04

CHQ 0445

4-9

52.00

16,145.04

LT500

4 - 10

879.99

17,025.03

LT503

4 - 11

125.35

17,150.38

1,701.00

15,410.00 301.54

375.23

13,315.55

1,087.00

14,528.55

2,300.00

1,131.87

15,108.46

15,615.55 15,228.55 16,479.04

14,863.45

D Problems, Chapter 8 – Page D-26

BANK OF ALBERTA

Statement of Account

105 Street Branch 4525 - 105 Street

Date

Account No.

Sinclair, Alberta

30 04 2017

2361-445-99

T1Y 4P8 Page

WAGSTAFF ENERGY CONSULTING 5024 - 103 Street SINCLAIR, ALBERTA T1J 2E2 Date

Transaction

Cheques

Deposits

Description

& Debits

& Credits

Balance Forward Error Correction Correction Deposit Apr 1 Deposit Cheque Cheque Cheque NSF Returned NSF Charge Apr 2 Deposit Apr 3 Cheque Cheque Apr 5 Deposit Cheque Cheque Apr 8 Deposit Apr 9 Deposit Cheque Cheque Cheque Apr 10 Deposit Apr 15 Cheque Cheque Deposit Apr 16 Deposit Deposit Apr 17 Deposit Apr 18 Deposit Cheque Apr 19 Bank Service Charge Apr 23 Deposit Apr 25 Deposit Apr 26 Loan Interest Loan Payment Cheque Apr 27 Interest Earned No. of Debits 20 No. of Credits 16 Mar 29

825.00 825.00 825.00 1,229.54 0439 0435 0437

495.00 151.40 79.54 550.04 14.00

0440 0442

181.32 523.61

0438 0441

1,002.00 67.29

1,701.00

787.00

489.00 879.99 0436 0443 0444

1,205.00 301.54 187.42

0447 0446

2,123.51 2,929.65

125.35

495.50 400.00 522.24 175.82 2,300.00 0445

52.00 18.17 700.00 1,250.49

0448

42.53 254.93 375.23 64.17

Total Amount Debits Total Amount Credits

11,379.18 12,770.10

Total Fees Interest Paid

Balance

15,359.62 14,534.62 15,359.62 16,184.62 17,414.16 16,919.16 16,767.76 16,688.22 16,138.18 16,124.18 17,825.18 17,643.86 17,120.25 17,907.25 16,905.25 16,837.96 17,326.96 18,206.95 17,001.95 16,700.41 16,512.99 16,638.34 14,514.83 11,585.18 12,080.68 12,480.68 13,002.92 13,178.74 15,478.74 15,426.74 15,408.57 16,108.57 17,359.06 17,316.53 17,061.60 16,686.37 16,750.54 18.17 64.17

D Problems, Chapter 9 – Page D-27

Chapter Chapter 9

Group D Problems (To answer the following problems, use the forms for the C problems on pages 9-11 to 9-20 of the Study Guide with Working Papers.)

Calculating gross earning with overtime.

9D-1. From the following data, calculate the gross earnings for each of the five employees who are entitled to time-and-a-half for any hours exceeding 40 for the week or 8 in any given day.

Check Figure Joy Huber Gross Earnings

$825.00

B. C. D. E.

Completing the payroll register. Check Figure Net Pay $2,167.67

Employee Ann Timmons Sam White Nancy Harris Maggie Holden Joy Huber

(alternative problem).

Check Figure Net Pay $2,084.45

Recording the payroll entry.

S 4 5 – 5 5

Total Hours 44 42 41 46 50

Hourly Rate $10.00 12.00 11.00 14.00 15.00

9D-2. The employees mentioned in Problem 9D-1 work for Waylon Corporation Ltd. of Thunder Bay Complete a payroll register for the second week of May 2016 using the gross earnings you obtained in answering 9D-1. Assume the following additional information: Employee A B C D E

Completing the payroll register

Daily Time M T W T F 7 8 7 10 8 7 7 8 8 7 8 8 8 9 8 9 6 8 11 7 8 8 8 13 8

Net Claim Code 2 1 3 4 1

Union Dues $14 15 14 15 15

Medical Plan $32.00 48.00 32.00 48.00 32.00

9D-3. (Alternative to 9D-2.) Assume the following gross earnings for the employees of Waylon Corporation Ltd. of Thunder Bay for the third week of May. Other information remains the same as in 9D-2. Complete the payroll register for the third week of May. Employee A B C D E

Gross Earnings $475.00 498.00 440.00 665.00 750.00

9D-4. Refer to the payroll register you completed in 9D-2. Prepare the journal entry necessary to record the payroll for the second week of May.

D Problems, Chapter 9 – Page D-28

Recording the payroll entry (alternative problem).

Completing the payroll register and journalizing the payroll entry. Check Figure Net Pay $3,519.11

9D-5. (Alternative to 9D-4.) Refer to the payroll register you completed in 9D-3. Prepare the journal entry necessary to record the payroll for the third week of May. 9D-6. The payroll clerk for Appleby Supplies Ltd. of Penticton had assembled the following data for the company’s five employees, before suddenly becoming quite ill. You have been approached to complete the payroll register so that the employees can receive their cheques in a timely fashion. You must (1) complete the payroll register for the week ending September 12 and (2) prepare the entry necessary to record the payroll. Hours in excess of 40 in any given week are paid at time-and-a-half. Net Claim Employee Code Fred Mora 2 Pat Samuels 1 Emilia Leung 3 Keith Jones 5 David Jarvis* 1

Daily Time M T W T F – 8 8 8 8 9 – 8 9 7 10 9 8 9 7 8 8 8 8 8 11 9 8 9 7

CPP Union S Rate Dept. To Date Dues Medical 7 $31.50 Sales $2,325.85 $8 $40 8 18.00 Sales 924.96 8 40 5 10.50 Admin. 486.70 8 22 – 17.00 Admin. 464.30 8 22 8 1,450.00* Mgr. 2,356.20 – 40

* Weekly salary. This employee has already earned $47,750 so far this year. Neither Fred or David is required to pay EI in this payroll. Comprehensive payroll problem — completing payroll registers, journalizing payrolls, and recording cheques issued. Check Figure Net Pay $5,325.49

9D-7. Jay Paris Jewellry Design of Grande Prairie is a design firm which employs 4 professional staff, 2 casual clerks, and you as office manager (accountant). Everyone except the clerks is paid a weekly salary. The clerks are paid an hourly rate and receive time-and-a-half for hours worked in excess of 8 per day or 40 per week. Using the information below, complete the payroll register for the week ending August 14, making the necessary entry to record the payroll for that week, and record the issuance of cheques to each employee. Daily hours for the clerks are shown at the end. Net Claim Rate or Life Employee Code Salary Ins. Edgar Montana 3 $1,556.00 $19 May Booth 4 1,200.00 12 Andrew Hilton 1 1,290.00 10 April Mills 2 1,360.00 12 Tony Katz 1 14.00 – Millie Daffern 4 12.50 – Yourself 2 875.00 6

CPP to Cheque Disab. Med. Donations Date No. $32 $36 $25 $2,356.20 611 24 36 18 2,330.14 612 24 18 25 1,889.00 613 25 36 25 976.60 614 – 18 – 706.80 615 – 36 5 695.80 616 18 18 5 983.80 617

D Problems, Chapter 9 – Page D-29

Hourly employees worked: M Tony Katz 8 Millie Daffern 10

T 8 8

W 8 11

T 10 9

F 5 4

S 8 –

Total 47 42

Hourly workers received 1.5 x rate for more than 40 hours in a week, or more than 8 hours in any given day. None of the employees will reach the EI maximum this pay period, except Edgar Montana who reached the limit of $43,200 two pay periods ago.

D Problems, Chapter 10 – Page D-30

Chapter 10 Group D Problems (To answer the following problems, use the forms for the C problems on pages 10-10 to 10-15 of the Study Guide with Working Papers.) 10D-1. The payroll register for Bawlf Hardware Ltd. of Creston for the month of May 2018 is shown below:

Employee Salary IT CPP Jake Jacobson 2,400 251 104 Mary Hind 2,100 185 90 Kyle Good 1,900 141 80 Lily Chau 2,700 313 119 Roy Verhagen 1,800 119 75 10,900 1,009 468 Recording benefits expense and computing and entering cheques issued re payroll.

Check Figure Payroll Tax Expense $944.00 Cheque to CRA - $2,437.00

Deductions EI Health LTD 45 25 45 39 42 34 36 25 36 51 42 48 34 42 26 205 176 189

Net Union Pay 32 1,898 32 1,678 32 1,550 32 2,095 32 1,472 160 8,693

Chq. No. 514 515 516 517 518

Union dues must be submitted to the treasurer of the union by the 20th day of the next month. Bawlf Hardware matches the employees’ contributions to the long term disability plan and the total must be sent to the insurance company by the 10th of each month following the payroll. Assume that all payroll information except for benefits has been recorded as the cheques 514-518 were issued. Required a. Record Bawlf’s benefits expense for the month of May. b. In June, Bawlf Hardware issued the following 3 cheques: 1. Cheque 543, June 10, to ABC Insurance Company for the LTD. 2. Cheque 551, June 15, to the Receiver General for employee deductions. 3. Cheque 567, June 15, to the Hardware Employees Union, Local 523, for union dues. How much was each cheque for? c. What entry would be made in the general journal to record each cheque in b. above?

D Problems, Chapter 10 – Page D-31

10D-2. Counterpoint Counselling Inc. of Edmonton recorded the following details in its Professional Payroll Journal for March 2017: Recording benefits expense and liabilities; calculating dates and amounts of cheques to be issued.

Check Figure Payroll Benefits Expense

Employee Salary IT CPP Paula Amer 5,600 1,073 263 Mike Steeves 6,000 1,192 283 Pat Melvor 5,180 949 242 Debbie Chan 6,800 1,445 322 Boris Hecht 6,900 1,477 327 Kim Gere 6,450 1,330 305 36,930 7,466 1,742

EI 105 113 97 128 130 121 694

Deductions . Life Assn. Net Char. Ins. Dues Health Pay 50 35 45 82 3,947 60 40 45 82 4,185 50 35 45 51 3,711 75 45 45 82 4,658 75 45 45 51 4,750 60 35 45 82 4,472 370 235 270 430 25,723

Chq. No. 1274 1275 1276 1277 1278 1279

$3,083.60

Counterpoint matches the charitable donations of each employee and forwards the total on the 25th of each month to the Canadian Centre for Counselling Research Association dues are sent to the Provincial Counsellors Society on the 20th of each month. Life insurance premiums are remitted to ABCD Insurance Company Ltd. by the 20th day of the following month. Health insurance premiums are remitted to the Provincial Health Care Organization by the 15th of the next month, at the same time as the employee deductions are sent to the Receiver General. Required a. Give the general journal entry necessary to complete the recording of this payroll assuming no entry was made for benefits or related expenses when the payroll was recorded. b. List the cheques along with their amounts and dates which Counterpoint would issue in the month of April, in respect of this payroll. 10D-3. Refer to Problem 9D-2. Check Figure Payroll Benefits Expense $206.26

Required a. Give the general journal entry necessary to recognize all payroll benefits expenses arising from that payroll, given the entry you made in Chapter 9. 10D-4. Refer to Problem 9D-3.

Recording benefits expense and liabilities. Check Figure Payroll Benefits Expenses $197.68

Required a. Give the general journal entry necessary to recognize all payroll benefits expenses arising from that payroll, given the entry you made in Chapter 9.

D Problems, Chapter 10 – Page D-32 10D-5. Munchkin Bakery Ltd. of Timmins pays its employees every two weeks (26 pay periods per year). There are two pay periods in the month of March 2016, and details of each follow: Recording benefits expense and related liabilities for two pay

March 12 Payroll

periods, plus calculating details of

CPP 82 49 55 45 61 292

Deductions Net EI Health Union Pay 34 36 11 1,372 21 36 11 881 24 48 11 962 20 48 11 813 26 36 11 1,055 125 204 55 5,083

Chq. No. 358 359 360 361 362

CPP 82 50 55 45 62 294

Deductions Net EI Health Union Pay 34 36 11 1,372 22 36 11 899 24 48 11 962 20 48 11 813 26 36 11 1,082 126 204 55 5,128

Chq. No. 386 387 388 389 390

payroll benefits cheques to be issued. Check Figures March 26 Payroll Benefits Expense $674.40

Employee Salary Holly Wilson 1,800 Reg Black 1,125 Amos Troy 1,250 Bernie Dyck 1,050 Cindy Nishimura 1,360 6,585

IT 265 127 150 113 171 826

March 26 Payroll

Employee Salary Holly Wilson 1,800 Reg Black 1,150 Amos Troy 1,250 Bernie Dyck 1,050 Cindy Nishimura 1,395 6,645

IT 265 132 150 113 178 838

Union dues must be remitted to the union treasurer by the 28th of the following month, while health premiums are matched by Munchkin and remitted to the provincial treasurer by the 10th of the month following. A cheque is sent to the Receiver General by the 15th of each following month as well. Required a. Assuming that the payroll register has been journalized but no other related entries made, prepare the two journal entries necessary to record the benefits expense for March. b. Give the details of all cheques which Munchkin will issue in April with respect to payroll deductions.

Recording benefits expense and related liabilities for five pay periods in a month, plus calculating details of payroll benefits cheques to be issued.

10D-6. The Grierson Auto Repair Company pays each of its employees weekly each Friday. During the month of May there were five pay periods, which are detailed below. (Note: employees pay 100 percent of the costs of the health and dental plans.)

D Problems, Chapter 10 – Page D-33 Week 1 – May 2, 2017

Employee

Weekly Earnings

Hal Dyer 770.00 Carol James 817.00 LeRoy Cohen 895.00 Peter Tsui 940.00 Wendy Sage 750.00 4,172.00

Deductions Union Health Dental CPP EI Dues Plan Plan

110.60 34.78 121.55 37.11 143.19 40.97 156.85 43.20 105.95 33.79 638.14 189.85

14.48 8.00 15.36 8.00 16.83 8.00 17.67 8.00 14.10 8.00 78.44 40.00

Net Pay

18.65 13.45 570.04 12.50 13.45 609.03 12.50 13.45 660.06 18.75 13.45 682.08 18.75 13.45 555.96 81.15 67.25 3,077.17

Chq. No. 1475 1476 1477 1478 1479

Week 2 – May 9, 2017

Employee

Weekly Earnings

Hal Dyer 745.00 Carol James 769.00 LeRoy Cohen 905.00 Peter Tsui 932.00 Wendy Sage 740.00 4,091.00

Deductions Union Health Dental CPP EI Dues Plan Plan

104.78 33.55 110.37 34.73 146.23 41.47 154.40 42.80 103.61 33.30 619.39 185.85

14.01 8.00 14.46 8.00 17.01 8.00 17.52 8.00 13.91 8.00 76.91 40.00

Net Pay

18.65 13.45 552.56 12.50 13.45 575.49 12.50 13.45 666.34 18.75 13.45 677.08 18.75 13.45 548.98 81.15 67.25 3,020.45

Chq. No. 1512 1513 1514 1515 1516

Week 3 – May 16, 2017

Employee

Weekly Earnings

Hal Dyer 795.00 Carol James 745.00 LeRoy Cohen 855.00 Peter Tsui 946.00 Wendy Sage 750.00 4,091.00

Deductions Union Health Dental CPP EI Dues Plan Plan

116.42 36.02 104.78 33.55 131.08 38.99 158.70 43.50 105.95 33.79 616.93 185.85

14.95 8.00 14.01 8.00 16.07 8.00 17.78 8.00 14.10 8.00 76.91 40.00

Net Pay

18.65 13.45 587.51 12.50 13.45 558.71 12.50 13.45 634.91 18.75 13.45 685.82 18.75 13.45 555.96 81.15 67.25 3,022.91

Chq. No. 1577 1578 1579 1580 1581

D Problems, Chapter 10 – Page D-34 Week 4 – May 23, 2017

Employee

Weekly Earnings

Hal Dyer 840.00 Carol James 770.00 LeRoy Cohen 855.00 Peter Tsui 845.00 Wendy Sage 755.00 4,065.00

Deductions Union Health Dental CPP EI Dues Plan Plan

126.90 38.25 110.60 34.78 131.08 38.99 128.07 38.50 107.11 34.04 603.76 184.56

15.79 8.00 14.48 8.00 16.07 8.00 15.89 8.00 14.19 8.00 76.42 40.00

Net Pay

18.65 13.45 618.96 12.50 13.45 576.19 12.50 13.45 634.91 18.75 13.45 622.34 18.75 13.45 559.46 81.15 67.25 3,011.86

Chq. No. 1604 1605 1606 1607 1608

Week 5 – May 30, 2017

Employee

Weekly Earnings

Hal Dyer 736.00 Carol James 744.00 LeRoy Cohen 896.00 Peter Tsui 934.00 Wendy Sage 760.00 4,070.00

Check Figure Cheque to Receiver General $5,878.57

Deductions Union Health Dental CPP EI Dues Plan Plan

102.68 33.10 104.55 33.50 143.50 41.02 155.01 42.90 108.29 34.29 614.03 184.81

13.84 8.00 13.99 8.00 16.84 8.00 17.56 8.00 14.29 8.00 76.52 40.00

Net Pay

18.65 13.45 546.28 12.50 13.45 558.01 12.50 13.45 660.69 18.75 13.45 678.33 18.75 13.45 562.93 81.15 67.25 3,006.24

Chq. No. 1638 1639 1640 1641 1642

Required a. Assuming that the payroll register has been journalized but no other related entries made, prepare the five journal entries necessary to record the benefits expense for May 2017. b. Give the details of all cheques which Grierson will issue in June 2017 with respect to payroll deductions.

D Problems, Chapter 11 – Page D-35

Chapter 11 Group D Problems (To answer the following problems, use the forms for the C problems on pages 11-44 to 11-75 of the Study Guide with Working Papers.) Multicolumn sales journal: Use of sales tax; journalizing and posting to general ledger and recording to accounts receivable ledger; and preparing a schedule of accounts receivable.

Check Figure Schedule of Accounts Receivable $53,565.75

11D-1. In September the following transactions occurred for Aegean Corporation of Regina (your working papers have balances as of September 1 for certain general ledger and accounts receivable ledger accounts): 2017 Sept 1 Sold merchandise to Ray Fortuna on account, $21,200, invoice no. 502, plus 5 percent PST. 5 Sold merchandise to Wilma Jorge on account, $8,415, invoice no. 503, plus 5 percent PST. 8 Sold merchandise to Cassie Ho on account, $17,800, invoice no. 504, plus 5 percent PST. 10 Issued credit memorandum no. 8 to Ray Fortuna for $4,250 for defective merchandise returned from September 1 transaction. (Be careful to record the reduction in PST payable as well.) 12 Sold merchandise to Wilma Jorge on account, $3,950, invoice no. 505, plus 5 percent PST. Required 1. Journalize the transactions in the appropriate journals. 2. Record to the accounts receivable ledger and post to general ledger as appropriate. 3. Prepare a schedule of accounts receivable.

11D-2. MicroCel Communications began operating in August. There is 7% PST and 5% GST on all sales. Royce’s offers no discounts (all terms are net 30 days). The following transactions occurred in August 2016. transactions into sales, cash Aug. 1 Royce Lamoureux invested $45,000 in Communication Sales Co. from his receipts, and general journals; personal account. recording to accounts receivable 5 From the cash register tapes, cellular cash sales are $16,520 plus taxes. and posting to general ledger; 5 From the cash register tapes, radio cash sales were $8,100 plus taxes. and preparing a schedule of 8 Sold cellular equipment on account to Kelly’s Real Estate Co., $4,098, accounts receivable. PST, and sales invoice no. 401, plus taxes. GST are included. 9 Sold radio equipment on account to Well’s Hotshot Service Co., $3,500, sales invoice no. 402, plus taxes. Check Figure 15 Issued credit memorandum no. 1 to Kelly’s Real Estate Co. for cellular Schedule of Accounts Receivable equipment returned, $775. (Be sure to reduce taxes payable.) $16,800.00 19 Well’s Hotshot Service Co. paid half the amount owed from sales invoice no. 2, dated August 9. 20 Sold cellular equipment on account to Mountain Explorations Co., $6,435, sales invoice no. 403, plus taxes. Comprehensive problem: Using sales tax in recording

D Problems, Chapter 11 – Page D-36 21 Received proceeds of loan from Business Development Bank of Canada, $50,000. 24 Sold radio equipment on account to Walkin’s Safety Supply Co., $6,250, sales invoice no. 404, plus taxes. 25 Issued credit memorandum no. 2 to Mountain Explorations Co. for $1,680, for equipment returned from sales invoices no. 403, dated August 20. Remember to include taxes! 27 Received payment of net amount due from Kelly’s Real Estate Co. as per sales invoice no. 401 less the credit allowed. 29 Cash sales taken from the cash register tape showed: (1) cellular – $10,250 + taxes. (2) radio – $7,900 + taxes. 29 Sold cellular equipment on account to Well’s Hotshot Service Co., $3,995, sales invoice no. 405, plus taxes. 30 Received amount due from Well’s Hotshot Service Co. of sales invoice no. 402, dated August 9. Required 1. Journalize, record, and post as appropriate. 2. Prepare a schedule of accounts receivable for the end of August.

11D-3. Martha Worth owns The Antiques and Importers Warehouse in St. John’s. (In HST in recording transactions into your working papers balances as of January 1 are provided for the accounts sales, cash receipts, and general receivable and general ledger accounts.) In this province it is necessary to add journals; recording to accounts HST of 13 percent to the sales total to arrive at the final invoice amount. receivable and posting to general 2017 ledger; and preparing a schedule Jan 1 Martha Worth invested $31,000 in the business. of accounts receivable. 3 Sold $2,950 (+ HST) of merchandise on account to Starcraft Reproductions, sales invoice no. 859, terms 2/10, n/30. Check Figure 4 Sold $3,500 (+ HST) of merchandise on account to Burgess Fancys, sales Schedule of Accounts Receivable invoice no. 860, terms 2/10, n/30. $9,826.53 9 Sold $2,100 (+ HST) of merchandise on account to Hard-To-Find Co., sales invoice no. 861, terms 2/10, n/30. 10 Received cash from Starcraft Reproductions in payment of January 3 transaction, sales invoice no. 859, less discount. 20 Sold $3,915 (+ HST) of merchandise on account to Georgina’s Collections, sales invoice no. 862, terms 2/10, n/30. 22 Received cash payment from Burgess Fancys in payment of January 4 transaction, sales invoice no. 860. 23 Collected cash sales, $3,860 plus HST. 24 Issued credit memorandum no. 10 to Georgina’s Collections for $500 (+ HST) of merchandise returned from January 20 sales on account. 26 Received cash from Georgina’s Collections in payment of January 20 sales invoice no. 862. (Don’t forget about the credit memo, HST, and discount.) Comprehensive problem: Using

D Problems, Chapter 11 – Page D-37 28 Collected cash sales, $4,750 plus HST. 29 Sold merchandise priced at $5,250 (+ HST) on account to Perfect Sales Co., sales invoice no. 863, terms 2/10, n/30. 30 Issued credit memorandum no. 11 to Perfect Sales Co. for $1,887 (+ HST) of merchandise returned from January 29 transaction, sales invoice no. 863. Required 1. Journalize the transactions. 2. Record to the accounts receivable ledger and post to general ledger as needed. 3. Prepare a schedule of accounts receivable.

Journalizing, recording, and posting a purchases journal with GST as well as recording the

11D-4. Fontes Textiles Ltd. of Saskatoon uses a purchases journal (p. 21) and a general journal (p. 32) to record the following transactions (continued from July). The GST rate is 5 percent.

issuing of a debit memorandum and preparing a schedule of accounts payable.

Check Figure Total of Schedule of Accounts Payable $21,108.15

2015 Aug.

3 Purchased fabric for resale from European Import Fabrics Co., invoice no. 451, dated August 2, terms net 15 days; $2,104 plus GST. 8 Purchased merchandise on account from Eddyn Co., invoice no. 525, dated August 7, terms 2/10, n/30; $875 plus GST. 10 Purchased merchandise on account from Forward Co., invoice no. 1214, dated August 8, terms 1/10, n/60; $1,225 plus GST. 12 Purchased store supplies on account from Lavoy Co., invoice no. 798, dated August 12; $590 plus GST. 14 Issued debit memo no. 8 to Eddyn Co. for merchandise returned, $140 (plus GST), from invoice no. 525. 17 Purchased office equipment on account from Reliant Co., invoice no. 110, dated August 16; $1,999 plus GST. 24 Purchased additional store supplies on account from Lavoy Co., invoice no. 850, dated August 24, terms 2/10, n/30; $1,600 plus GST. 29 Purchased fabric for resale from European Import Fabrics Co., invoice no. 531, dated August 27, terms net 15 days; $3,350 plus GST. The fabric store has decided to keep a separate column for the purchases of supplies in the purchases journal and also has a separate column for GST.

Required 1. Journalize the transactions. 2. Post and record as appropriate. 3. Prepare a schedule of accounts payable.

D Problems, Chapter 11 – Page D-38 Accounts Payable Ledger

Name Eddyn Co. European Import Forward Co. Reliant Co. Lavoy Co.

Balance $ 840 3,255 1,575 2,730 525

Partial General Ledger

Account Number Store Supplies 130 Prepaid GST 142 Office Equipment 180 Accounts Payable 220 Purchases 500 Purchases Returns and Allowances 510 Journalizing, recording, and posting a cash payments journal with GST. Preparing a schedule of accounts payable.

Balance $ – 2,795 – 8,925 86,340 1,374

11D-5. Jim Stokes owns and operates a wholesale welding supplies company in Fort Liaird. All transactions requiring the payment of cash are recorded in the cash payments journal (p. 45). The account balances as of May 1, 2017 are as follows: Accounts Payable Ledger

Check Figure Total of Schedule of Accounts Payable $2,161.19

Name Dominion Gases Co. Vertal Rod Co. Marker Gloves Co. Glover Gauges Co. Prism Accessories Co.

Balance $1,454.25 2,434.06 1,812.95 865.23 3,869.17

GST Included $69.25 115.91 86.33 41.20 184.25

Partial General Ledger

Account Cash Prepaid GST Delivery Truck Accounts Payable Welding Purchases Welding Purchases Discounts Rent Expense Utilities Expense

Number 100 145 170 200 500 510 670 690

Balance $22,941.18 2,418.12 – 10,435.66 56,422.29 506.20 3,730.00 1,204.66

D Problems, Chapter 11 – Page D-39 Required 1. Journalize the following transactions. 2. Record to the accounts payable ledger and post to general ledger as appropriate. 3. Prepare a schedule of accounts payable. 2017 May

1 Paid half the amount owed Dominion Gases Co. from previous purchases on account, less a 2 percent purchases discount, cheque no. 721. 3 Bought a delivery truck for $30,840.00 cash plus GST of $1,542.00, cheque no. 722, payable to City Truck Sales Co. 5 Paid the amount owing to Glover Gauges Co., cheque no. 723. 6 Bought welding merchandise (cash purchase) from Vericon Canada Co., cheque no. 724, $2,402, plus GST. 14 Paid the balance due to Prism Accessories Co. after deducting a 5 percent discount as per usual terms for this company, cheque no. 725. 18 Bought additional welding merchandise (cash purchase) from Pulse Co., cheque no. 726, $375 plus GST. 24 Paid Marker Gloves Co. the amount owed less a 2 percent purchases discount, cheque no. 727. 28 Paid rent expense to Abbott Properties Co., cheque no. 728, $675 plus GST. 29 Paid utilities expense to Stoney Plain Utility Co., cheque no. 729, $319.84 plus GST. 30 Paid $1,000.00 to Vertal Rod Co., no discount, cheque no. 730.

11D-6. Betty Cardinal runs Western Book Suppliers in a downtown location. As her with HST (or, optionally, GST): All newly hired accountant, your task is to special journals and the general 1. Journalize the transactions for the month of October. Substitute GST at journal; schedule of accounts 5% for HST at 13% if your instructor so directs. payable and accounts receivable. 2. Record to subsidiary ledgers and post to general ledger as appropriate. 3. Total, rule, and crossfoot the journals. 4. Prepare a schedule of accounts receivable and a schedule of accounts payable as of October 31. Comprehensive review problem

The following is the partial chart of accounts for Western Book Suppliers:

D Problems, Chapter 11 – Page D-40 Assets

Revenue

110

Cash

410

Book Sales

120

Accounts Receivable

412

Sales Returns and Allowances

135

Prepaid Rent

414

Sales Discounts

138

Prepaid HST/GST

180

Delivery Truck

Cost of Goods 510

Book Purchases

Liabilities

512

Purchases Returns and Allowances

210

Accounts Payable

514

Purchases Discounts

218

HST/GST Payable

Expenses

Check Figures Total of Schedule of Accounts Receivable $8,464.83 (HST 13%) or $7,865.55 (GST 5%) Total of Schedule of Accounts Payable $33,515.80 (HST 13%) or $31,143.00 (GST 5%)

2016 Oct.

Owner’s Equity

615

Cleaning Expense

310

650

Salaries Expense

B. Cardinal, Capital

1 Betty Cardinal invested $32,000 in the bookstore. 1 Paid three months’ rent in advance, cheque no. 001, $2,700 plus HST. 1 Purchased merchandise from Milligan Book Company on account, $5,224 plus HST. Invoice no. 1924, dated October 1, terms 2/10, n/30. 3 Sold merchandise to First City Library on account, $1,887 plus HST. Invoice no. 1001, terms 2/10, n/30. 6 Sold merchandise to District College on account, $2,898 plus HST. Invoice no 1002, terms 2/10, n/30. 8 Purchased merchandise from Milligan Book Co. on account, $4,950 plus HST. Invoice no. 1980, dated October 7, terms 2/10, n/30. 9 Sold merchandise to First City Library on account, $1,592 plus HST. Invoice no. 1003, terms 2/10, n/30. 9 Paid cleaning service $300 plus HST. Cheque no. 002. 10 District College returned merchandise that cost $278 (before HST) to Western Book Suppliers. Western issued credit memorandum no. 1 to District College for $278 plus HST. 10 Purchased merchandise from Winnipeg Book Supply on account, $2,469 plus HST. Invoice no. 3112, dated October 8, terms 1/15, n/60. 11 Paid Milligan Book Co. invoice no. 1924, dated October 1, cheque no. 003. 13 Sold $984 (plus HST) of merchandise for cash. 13 Paid salaries, $1,425, cheque no. 004. 14 Returned merchandise to Winnipeg Book Supply in the amount of $362 plus HST. Western Book Suppliers issued debit memorandum no. 1 to Winnipeg Book Supply. 15 Sold merchandise for cash, $1,250 plus HST. 16 Received payment from District College, invoice no. 1002 (less returned merchandise), less discount. 16 First City Library paid invoice no. 1001. 16 Sold book merchandise to Rural Bookmobile Co. on account, $2,519 plus HST. Invoice no. 1004, terms 2/10, n/30.

D Problems, Chapter 11 – Page D-41 20 Purchased delivery truck on account from Suburban Auto Sales Co., $19,500 plus HST. Invoice no. SA09, dated October 20 (no discount). 22 Sold to First City Library merchandise on account, $2,810 plus HST. Invoice no. 1005, terms 2/10, n/30. 23 Paid Winnipeg Book Supply balance owed, cheque no. 005. 24 Sold book merchandise on account to Rural Bookmobile Co., $1,804 plus HST. Invoice no. 1006, terms 2/10, n/30. 25 Purchased used book merchandise for cash, $2,800 plus HST. Cheque no. 006. 26 Purchased book merchandise from Smithsonian Book Co. on account, $5,210 plus HST. Invoice no. 1211, date October 24, terms 2/10, n/30. 27 Sold merchandise for cash $1,175 plus HST. 28 First City Library paid invoice no. 1005, dated October 22. 28 Rural Bookmobile Co. paid invoice no. 1006, dated October 24. 28 Betty invested an additional $12,000 in the business. 28 Purchased merchandise from Milligan Book Co., $4,356 plus HST. Invoice no. 2103, dated October 27, terms 2/10, n/30. 30 Paid Milligan Book Co. invoice no. 2103, cheque no. 077. 30 Sold merchandise to Flower & Company on account, $3,380 plus HST. Invoice no. 1007, terms 2/10, n/30.

D Problems, Chapter 12 – Page D-42

Chapter 12 Group D Problems (To answer the following problems, use the forms for the C problems on page 12-5 at the end of the Study Guide with Working Papers.) Calculating net sales, cost of

12D-1.

On the basis of the accounts listed below calculate:

goods sold, gross profit, and net income.

a. b. c. d.

Net sales Cost of goods sold Gross profit Net income or net loss

Check Figure Net Loss $7,036.00

Accounts Payable Operating Expenses A. McIver, Capital Purchases Freight-In Ending Merchandise Inventory, Dec. 31, 2018 Sales Accounts Receivable Cash Purchases Discounts Sales Returns and Allowances Beg. Merchandise Inventory, Jan. 1, 2018 Purchases Returns and Allowances Sales Discounts

$8,263 13,997 13,275 11,483 250 1,120 21,067 7,564 6,938 401 1,829 1,921 300 444

merchandising company.

12D-2. From the following trial balance and additional data, complete a worksheet for Rice Apparel of Cranbrook for the 12-month period ending November 30, 2016.

Check Figure

Additional Data

Comprehensive problem: Completing a worksheet for a

Net Income $2,387.06

a. and b. Ending merchandise inventory on November 30, $10,181.39. c. Supplies on hand, $534.75. d. Insurance expired, $204.17. e. Depreciation on equipment for the year ending November 30 is based on the straight-line method, five-year life, and a residual value of $650.00. f. Employees worked for 56 hours in November and will be paid in December. They make $16.00 per hour. g. Advertising bill received, $350 plus HST of $42.

D Problems, Chapter 12 – Page D-43

RICE APPAREL TRIAL BALANCE NOVEMBER 30, 2016 Dr. Cash Petty Cash

200.00

Accounts Receivable

8454.23

Beginning Merchandise Inventory, Nov. 1 Supplies

15,291.41 824.00

Prepaid Insurance

1,225.00

HST Prepaid

1,503.35

Apparel Repair Equipment

5,650.00

Accumulated Depreciation, Equipment

1,225.00

Accounts Payable

20,238.72

HST Collected

2,347.64

Income Tax Payable

3,604.23

CPP Payable

1,398.28

EI Payable

429.53

Tasha Rice, Capital Tasha Rice, Withdrawals Income Summary

10,004.86 12,400.00 –

Sales Sales Returns and Allowances

1,519.82 1,282.25

Purchases

50,111.62

Purchases Discounts

796.09

Purchase Returns and Allowances

599.07

Salaries Expense

425.70 14,825.00

Payroll Taxes Expense

963.60

Interest Expense

285.42

Totals

Completing a worksheet.

– 78,254.75

Sales Discounts

Freight-In

Comprehensive problem:

Cr.

3,936.77

118,898.17

12D-3. The owner of BL Computers of Fort McMurray has asked you to prepare a worksheet for the year ending March 31, 2017 from the following trial balance:

D Problems, Chapter 12 – Page D-44

BL COMPUTERS

Check Figure

TRIAL BALANCE

Net Income $6,485.71

MARCH 31, 2017 Dr. Cash Petty Cash

Cr.

1,929.37 150.00

Accounts Receivable

10,824.95

Beginning Computer Inventory, March 1

9,625.73

Computer Repair Supplies

750.24

Prepaid Insurance

608.00

Prepaid GST

1,201.44

Computer Equipment

4,650.00

Accumulated Depreciation, Computer Equipment

2,150.00

Accounts Payable

15,040.25

GST Collected

2,015.23

Income Tax Payable

1,392.51

CPP Payable

398.00

EI Payable

343.00

Ben Lavens, Capital Ben Lavens, Withdrawals Income Summary

7,809.16 8,150.00 –

Sales Sales Returns and Allowances Sales Discounts Purchases

– 62,511.50

695.00 482.66 36,924.29

Purchases Discounts

484.22

Purchase Returns and Allowances

788.00

Freight-In Salaries Expense

204.50 12,500.00

Payroll Taxes Expense

878.20

Advertising Expense

521.60

Rent Expense

2,400.00

Utilities Expense

435.89

Totals

92,931.87

Additional Data a. and b. Ending computer inventory on March 31, $10,487.29. c. Supplies used during period, $323.09. d. Insurance expired, $203.34. e. Depreciation on equipment for the year ending March 31 is straight-line, three-year life, and zero residual value. f. At year-end, employees had worked, but not been paid for 56.5 hours at $14.00 per hour. g. Advertising bill received, $250.00 plus GST of $12.50.

D Problems, Chapter 12 – Page D-45 12D-4. Comprehensive problem:

From the following trial balance and additional data, complete the worksheet for Nanji Shoes Ltd. of Moncton for the year ending July 31.

Completing a worksheet with payroll and unearned revenue.

NANJI SHOES LTD. TRIAL BALANCE

Check Figure

JULY 31, 2016 Dr.

Net Income $20,378.87 Cash Petty Cash

100.00

Accounts Receivable

9,540.24

Beginning Merchandise Inventory, July 1

24,123.24

Supplies on Hand

350.00

Prepaid Insurance

1,150.00

Prepaid HST

2,100.24

Shoe Stretching Equipment

Cr.

13,520.24

750.00

Accumulated Depreciation, Equipment

250.00

Accounts Payable

22,288.41

HST Collected

4,570.29

Income Tax Payable

876.25

CPP Payable

580.44

EI Payable

273.60

M. Nanji, Capital M. Nanji, Withdrawals Income Summary

15,642.38 10,428.00 –

Sales Sales Returns and Allowances Sales Discounts Purchases

1,599.29 500.00 30,024.11

Purchases Discounts

2,513.32

Purchase Returns and Allowances Freight-In Salaries Expense

3,250.83 650.00 12,019.55

Payroll Taxes Expense

834.83

Advertising Expense

3,214.50

Rent Expense

4,000.00

Utilities Expense Totals

– 65,289.97

631.25 115,535.49

115,535.49

Additional Data a. and b. Ending merchandise inventory on July 31, $28,320.69. c. Supplies on hand at end of July, $228.00. d. Insurance expired, $479.17. e. Depreciation on equipment for the year ending July 31 is based on the straight-line method, five-year life, and a residual value of $150.00 f. At year-end, employees had worked, but not yet been paid, for 41.5 hours at $14.00 per hour. g. Utilities bill received, $97 plus HST of $12.61.

D Problems, Chapter 13 – Page D-46

Chapter 13 Group D Problems (To answer the following problems, use the forms for the C problems on pages 13-26 to 13-43 of the Study Guide with Working Papers.) 13D-1. From the partial worksheet shown below prepare a formal income statement for Jerson’s Panama Hats & Artifacts of Yarmouth.

Check Figure

JERSON’S PANAMA HATS & ARTIFACTS

Net Income from Operations

PARTIAL WORKSHEET

$8,111.07

FOR THE YEAR ENDED JULY 31, 2015

Income Statement Account Titles Income Summary

Dr.

Cr.

8,124.52

10,459.82

Sales Sales Returns and Allowances

75,913.17 802.50

Sales Discounts

1,125.00

Purchases

31,402.15

Purchases Returns and Allowances

309.49

Purchases Discounts

467.55

Freight-In

759.45

Rental Income Advertising Expense Depreciation Expense, Equipment Cleaning Expense Insurance Expense

3,000.00 1,411.64 595.00 1,975.00 425.00

Rent Expense

8,200.00

Salaries Expense

21,774.78

Utilities Expense

2,443.92 79,038.96

Net Income

90,150.03

11,111.07 90,150.03

90,150.03

13D-2. From the partial worksheet of Wulfman Brick & Tile Company of Toronto, shown below, complete a. b.

Statement of owner’s equity Classified balance sheet

Note: Of the Mortgage Payable, $2,300 is due within one year.

D Problems, Chapter 13 – Page D-47

Check Figure

WULFMAN BRICK & TILE COMPANY

Total Assets $114,503.86

PARTIAL WORKSHEET FOR YEAR ENDED APRIL 30, 2017

Balance Sheet Account Titles

Dr.

Petty Cash

100.00

Cash

17,895.23

Accounts Receivable

25,425.40

Merchandise Inventory

35,239.67

Supplies on Hand

2,584.05

Prepaid Insurance

1,255.00

Prepaid HST

3,894.51

Cutting Equipment

17,860.00

Accumulated Depreciation, Cutting Equipment Delivery Van

Cr.

8,400.00 31,245.00

Accumulated Depreciation, Delivery Van

12,595.00

Accounts Payable

28,925.65

HST Collected

5,111.24

Unearned Rent

2,400.00

Chattel Mortgage Payable, Van

23,401.44

D. Wulfman, Capital

49,865.99

D. Wulfman, Withdrawals

16,281.00

Salaries Payable

Net Income Totals

3,129.00

________

17,951.54

151,779.86

13D-3. From the partial worksheet of Rocio’s Herbs & Health Foods, shown on the 13D-3.pdf page included at the end of the D Problems, your task is to

Check Figure Net Income $24,712.40

1. Complete the worksheet. 2. Prepare the income statement, statement of owner’s equity, and classified balance sheet. The amount of the mortgage due the first year is $2,500. 3. Journalize the adjusting and closing entries.

13D-4.From the following ledger balances of WLB Truck Parts Ltd., as September 30, 2015, and the additional data, do the following: 1. Prepare the worksheet. 2. Prepare the income statement, statement of owner’s equity, and balance sheet. 3. Journalize and post adjusting and closing entries. (Be sure to put beginning balances in the ledger first.)

D Problems, Chapter 13 – Page D-48 4. Prepare a post-closing trial balance. 5. Journalize the reversing entry for wages.

Check Figure Net Income $17,413.48

Acct. No. 1100 Cash 1110 Accounts Receivable 1120 Merchandise Inventory 1130 Supplies 1140 Prepaid Insurance 1150 Prepaid GST 1210 Equipment 1220 Accum. Dep., Equipment 2200 Accounts Payable 2210 Accrued Wages 2220 GST Collected 3300 W. Brennan, Capital 3310 W. Brennan, Withdrawals 3320 Income Summary 4400 Sales 4410 Sales Returns and Allowances 5500 Purchases 5510 Purchases Discounts 5520 Purchases Returns and Allowances 6600 Wages Expense 6610 Advertising Expense 6620 Rent Expense 6630 Dep. Exp., Equipment 6640 Supplies Expense 6650 Insurance Expense 6660 Payroll Benefits Expense

$1,768.02 3,255.23 18,525.00 650.00 952.00 264.08 6,600.00 1,825.00 4,592.00 655.56 14,254.88 8,525.00 – 52,444.48 630.00 21,126.46 1,134.85 505.00 10,324.79 690.00 1,200.00

901.19

Additional Data a. and b. Merchandise inventory, September 30 c. Supplies on hand, September 30 d. Insurance expired e. Depreciation for the year f. Accrued wages on September 30 g. Advertising bill received – due next year (add Prepaid GST of $10.60)

$19,758.25 239.13 634.67 950.00 824.12 212.00

5D-2. CHALKE'S COMPUTER REPAIR SERVICE WORKSHEET FOR THE MONTH ENDED NOVEMBER 30, 2016 Trial Balance Dr. Cr.

Insurance Expense Bank Charges Expense Depreciation Expense, Van Salaries Payable Supplies Expense Net Income

1,366.48 714.56 5,277.42 1,597.47 21,675.00

36.90 178.64

929.44

b) f)

451.56 275.20

410.00

8,103.65 3,772.60 12,663.58

Adjusted Trial Balance Dr. Cr.

Income Statement Dr. Cr.

Balance Sheet Dr. Cr.

2,600.00 16,458.70 714.38 f) 2,345.51 375.00 178.14 284.17 e) 3,870.40 40,998.53 40,998.53

275.20

178.64 36.90 451.56

a) b)

410.00

929.44 2,281.74

2,281.74

Chapter 5, D Problem 5D-2 - Page D-49

Cash in Bank Prepaid Insurance Accounts Receivable Repair Parts and Supplies Van Accumulated Depreciation, Van Accounts Payable Tricia Chalke, Capital Tricia Chalke, Withdrawals Repair Revenue Advertising Expense Automotive Expense Cleaning Expense Miscellaneous Expense Postage and Office Expense Salaries Expense

Adjustments Dr. Cr.

Chapter 13, D Problem 13D-3 - Page D-50 13D-3

ROCIO'S HERBS & HEALTH FOODS WORKSHEET FOR THE YEAR ENDED JANUARY 31, 2016

Trial Balance Dr. Cr. Cash in Bank Petty Cash Accounts Receivable Merchandise Inventory Prepaid Insurance Prepaid GST Equipment Accum. Dep., Equipment Building Accum. Dep., Building Accounts Payable Mortgage Payable Unearned Rent GST Collected R. Teran, Capital R. Teran, Withdrawals Income Summary Sales Sales Discounts & Returns Purchases Purchases Returns & Allowances Purchases Discounts Freight-In Advertising Expense Cleaning Expense Repair Expense Salaries Expense Utilities Expense Rental Income Earned Dep. Exp., on Equip & Bldg Insurance Expense

854.00 50.00 11,246.99 14,259.95 1,359.21 1,452.23 16,125.00

Adjustments Dr.

Cr.

21,421.57 A) E)

14,259.95 453.07

12,250.00

1,225.00

24,560.00 6,297.00 8,999.00 2,400.00 C) 3,215.00 22,622.53

890.00

35,100.00

Adjusted Trial Balance Dr. Cr. 854.00 50.00 11,246.99 21,421.57 906.14 1,452.23 16,125.00 13,475.00 35,100.00

1,800.00

18,215.00 A)

25,450.00 6,297.00 8,999.00 600.00 3,215.00 22,622.53

14,259.95 B)

21,421.57

18,215.00 14,259.95

57,485.44 358.86 19,425.00

358.86 19,425.00 605.25 750.21

350.10 1,245.00 2,400.00 876.20 15,241.00 625.89 139,184.43

21,421.57 57,485.44

605.25 750.21 350.10 1,245.00 2,400.00 876.20 15,241.00 625.89

139,184.43 C) D) E)

2,115.00 453.07 40,049.59

1,800.00

40,049.59

1,800.00 2,115.00 453.07 162,721.00

162,721.00

Chapter 1, D Solutions - Page D1-1

PROBLEM 1D-1 JONES RETIREMENT CONSULTING Assets

Cash

TRANSACTION A BALANCE

Office Equipment

Liabilities

Owner's Equity

Accounts Payable

Ruth Jones, Capital

+ $18,000

+$18,000

18,000

BALANCE

18,000 +

TRANSACTION C

- 3,000

BALANCE

15,000 +

TRANSACTION D

-4,000 $11,000 +

18,000

= +$6,000

+$6,000

TRANSACTION B

ENDING

Computer Equipment +

6,000

18,000

- 3,000 6,000

3,000

18,000

$3,000

$18,000

$21,000

+4,000 $6,000

$4,000 $21,000

PROBLEM 1D-2 STAL METAL DESIGNS BALANCE SHEET APRIL 30, 2016 Assets:

Liabilities:

Cash

$1 3 0 0 0 0 0

Accounts Payable

Equipment

21 0 0 0 00

Building

3 6 0 0 0 0 0 Owner's Equity: Ken Stal, Capital

$2 8 0 0 0 0 0

42 0 0 0 00

Total Liabilities and Total Assets

$7 0 0 0 0 0 0

Owner's Equity

$7 0 0 0 0 0 0

Page D1-2 - Chapter 1, D Solutions

PROBLEM 1D-3 GREENE'S TRANSLATIONS SERVICE Assets

Cash

A BALANCE

Liabilities =

Accounts Receivable +

Office Equipment

Accounts Payable +

+1,250

BALANCE

11,250

- 700

BALANCE

10,550

3,000

BALANCE

10,550 +

- 450

BALANCE

10,100 +

- 900

BALANCE

9,200 +

- Expenses

10,000 +$1,250

3,000

10,000

1,250 +$700

3,000

10,000

+$2,200

Revenue

$3,000

+$3,000

L. Greene, Withdrawals +

10,000

L. Greene, Capital +$10,000

+$10,000

BALANCE

Owner's Equity

2,200 +

1,250

700

+2,200 3,000

3,000

10,000

3,450

+450 2,200 +

3,000

3,450

1,150

900 +

3,450

1,150

10,000 + $900

2,200 +

3,000

10,000

+375

H BALANCE

9,200 +

- 175

ENDING BALANCE

$9,025 +

2,200 +

3,000

3,375

+375 +

10,000

900 +

3,450

1,525 175

$2,200 +

$3,000

$3,375

$14,225

$10,000

$900 +

$3,450

$1,700

Chapter 1, D Solutions - Page D1-3

PROBLEM 1D-4 HIGHWOOD EQUIPMENT RENTALS INCOME STATEMENT FOR THE MONTH ENDED JANUARY 31, 2016 Revenue:

$4 9 8 5 0 0

Rental Fees Operating Expenses:

$ 6 1 5 00

Advertising Expense Repair Expense

5 2 0 00

Travel Expense

2 1 0 0 00

Supplies Expense

2 5 2 00

Office Rent Expense

4 2 0 00

Office Expense

1 5 9 00 4 0 6 6 00 $ 9 1 9 00

Total Operating Expenses Net Income

HIGHWOOD EQUIPMENT RENTALS STATEMENT OF OWNER'S EQUITY FOR THE MONTH ENDED JANUARY 31, 2016

$2 5 9 2 0 0 0

May Charles, Capital, January 1, 2016 Net Income for January Less: Withdrawals for January Increase in Capital May Charles, January 31, 2016

$ 9 1 9 00 8 0 0 00 1 1 9 00 $2 6 0 3 9 0 0

Page D1-4 - Chapter 1, D Solutions

PROBLEM 1D-4, Cont.

HIGHWOOD EQUIPMENT RENTALS BALANCE SHEET JANUARY 31, 2016

Assets:

Liabilities:

Cash

$1 5 3 9 0 0

Accounts Receivable

4 9 5 0 00 2 2 7 5 0 0 0 Owner's Equity

Equipment

Accounts Payable

May Charles, Capital

$3 2 0 0 0 0

26 0 3 9 00

Total Liabilities and Total Assets

$2 9 2 3 9 0 0

Owner's Equity

$2 9 2 3 9 0 0

Chapter 1, D Solutions - Page D1-5 PROBLEM 1D-5 McGRAW SURVEYS INC. =

Liabilities

Surveying = Equipment

Accounts Payable

Assets Accounts Cash + Receivable +

07/25

$15,000

BALANCE

15,000

07/28

- 2,750

BALANCE

12,250

07/29

-2,100

BALANCE

10,150

08/01

+2,200

BALANCE

12,350

08/05

-1,025

BALANCE

11,325

4,300

15,000

7,050

4,300

15,000

-2,100 +

7,050

2,200

15,000

2,200 +$1,025

7,050

2,200

15,000

+$5,195 11,325

08/10

+2,500

BALANCE

13,825 +

08/15

- 112

BALANCE

13,713

08/16

- 1,183

BALANCE

12,530

08/17

+1,750

BALANCE

14,280

5,195

2,200

7,050

2,200

15,000

7,395 -

1,025

7,050

2,200

15,000

7,395 -

1,025

- 2,500 2,695

+112 +

2,695

7,050

2,200

15,000

7,395 -

1,137

7,395 -

1,137

+$1,183 +

2,695

7,050

2,200

15,000

1,183

+1,750 +

2,695

7,050

+2,600 14,280 +

2,695

9,650

2,200

15,000

1,183

9,145 -

1,137

15,000

1,183

9,145 -

1,137

+2,600 =

4,800

-785

BALANCE

13,495

08/20

- 232

BALANCE

13,263

+785 +

2,695

9,650

4,800

15,000

1,183

9,145 -

1,922 +232

2,695

9,650

4,800

15,000

1,183

9,145 -

+390

08/21 $13,263

1,025

+5,195

08/18

ENDING BALANCE

2,200

+$2,200

BALANCE

08/19

4,300

+$4,300

+2,750

08/06

BALANCE

Expenses

15,000

= +$4,300

15,000

H. McGraw, H. McGraw, Surveying Capital - Withdrawals + Revenue $15,000

07/27 BALANCE

Owner's Equity

$2,695

$9,650

$5,190

$25,608

2,154 +390

$15,000

$1,183

$9,145 -

$2,544

Page D1-6 - Chapter 1, D Solutions PROBLEM 1D-5, Cont. McGRAW SURVEYS INC. BALANCE SHEET JULY 31, 2016 Assets: Cash Equipment

Liabilities:

$1 0 1 5 0 0 0

Accounts Payable

$2 2 0 0 0 0

7 0 5 0 00 Owner's Equity: H. McGraw, Capital

15 0 0 0 00

Total Liabilities and Total Assets

$1 7 2 0 0 0 0

Owner's Equity

McGRAW SURVEYS INC. INCOME STATEMENT FOR THE MONTH ENDING AUGUST 31, 2016 Revenue: Surveying Revenue

$9 1 4 5 0 0

Operating Expenses: Salaries Expense

$ 1 0 2 5 00

Telephone Expense

1 1 2 00

Rent Expense

7 8 5 00

Supplies Expense

2 3 2 00

Advertising Expense

3 9 0 00

2 5 4 4 00

Total Operating Expenses Net Income

$6 6 0 1 0 0

Chapter 1, D Solutions - Page D1-7 PROBLEM 1D-5, Cont. McGRAW SURVEYS INC. STATEMENT OF OWNER'S EQUITY FOR THE MONTH ENDED AUGUST 31, 2016 H. McGraw, Capital, July 31, 2016

$1 5 0 0 0 0 0

Net Income for August

$6 6 0 1 0 0

Less: Withdrawals for August

1 1 8 3 00

Increase in Capital

5 4 1 8 00 $20 4 1 8 00

H. McGraw, Capital, August 31, 2016

McGRAW SURVEYS INC. BALANCE SHEET AUGUST 31, 2016 Assets: Cash

Liabilities:

$1 3 2 6 3 0 0

Accounts Payable

Accounts Receivable

2 6 9 5 00

Equipment

9 6 5 0 0 0 Owner's Equity: H. McGraw, Capital

$5 1 9 0 0 0

20 4 1 8 00

Total Liabilities and Total Assets

$2 5 6 0 8 0 0

Owner's Equity

$2 5 6 0 8 0 0

Page D2-1 - Chapter 2, D Solutions PROBLEM 2D-1 Accounts Affected

Category

A. Cash

Inc. Dec.

T-Account Update Cash

Dr.

Asset

A. Thomas, Capital

Rules

Owner's Equity

Cr.

B. Office Equipment

Asset

Dr.

Accounts Payable

Liability

Cr.

Expense

Dr.

Liability

Cr.

Asset

Dr.

Bookkeeping Fees

Revenue

Cr.

E. Accounts Receivable

Asset

Dr.

Bookkeeping Fees

Revenue Owner's Equity (Withdrawals)

Cr.

A. Thomas, Capital

3,250 Office Equipment

3,250 Accounts Payable

2,125

C. Rent Expense Accounts Payable D. Cash

Rent Expense 437

2,125 Accounts Payable 2,125 437

Cash Accounting Fees Earned 3,250 2,625 2,625 Accounts Receivable Accounting Fees Earned 1,600

F. A. Thomas, Withdrawals Cash

Dr.

A. Thomas, Withdrawals 245

Asset

2,625 1,600

Cr.

Cash 3,250 2,625

PROBLEM 2D-2

Cash (A) 29,000 (C) 2,700

111

(D)

775 (D) 500 (E) 3,200 (G)

Computer Equipment (B) 9,600

121

Accounts Payable (G) 3,200

211

29,000 (A)

312

775

Consulting Fees Earned

411

2,700 (C)

9,600 (B) 750 (F)

Val McIntyre, Capital

Val McIntyre, Withdrawals

Advertising Expense (E)

311

500

Rent Expense (F)

511

750

512

245

Chapter 2, D Solutions - Page D2-2 PROBLEM 2D-3 (a) Cash

111 (A) 4,000 (F) 2,500 (G) 3,000 9,500

6,690

1,500 (C) 360 (D) 200 (E) 750 (I)

Accounts Receivable

112

Equipment

121

(B) 2,250 (C) 1,500

(G) 1,250

3,750

2,810

Accounts Payable

211

Linda Miyagawa, Capital 4,000 (A)

311

Linda Miyagawa, Withdrawals 312 (I) 750

411

Rent Expense

511

Utilities Expense

2,250 (B)

Fees Earned 2,500 (F) 4,250 (G)

(D) 360

512

(E) 200

6,750

(b) A1 SOFTWARE SOLUTIONS TRIAL BALANCE JUNE 30, 2017 Cash

6 6 9 0 00

Accounts Receivable

1 2 5 0 00

Equipment

3 7 5 0 00

Accounts Payable

2 2 5 0 00

Linda Miyagawa, Capital

4 0 0 0 00

Linda Miyagawa, Withdrawals

7 5 0 00

Fees Earned Rent Expense Utilities Expense Totals

6 7 5 0 00 3 6 0 00 2 0 0 00 13 0 0 0 00

13 0 0 0 00

Page D2-3 - Chapter 2, D Solutions PROBLEM 2D-4 HAMILTON AMES, ENGINEERING CONSULTANT

(a)

INCOME STATEMENT FOR THE MONTH ENDED APRIL 30, 2017 Revenue: Fees Earned

$7 4 0 5 0 0

Operating Expenses: Advertising Expense

$ 4 3 0 00 9 0 0 00 5 9 5 00

Rent Expense Utilities Expense

1 9 2 5 00 $5 4 8 0 0 0

Total Operating Expenses Net Income

HAMILTON AMES, ENGINEERING CONSULTANT

(b)

STATEMENT OF OWNER'S EQUITY FOR THE MONTH ENDED APRIL 30, 2017

$5 4 8 0 0 0

Hamilton Ames,Capital, April 1, 2017

$5 4 8 0 0 0 9 0 5 00

Net Income for April Less: Withdrawals for April

4 5 7 5 00 $1 0 0 5 5 0 0

Increase in Capital Hamilton Ames,Capital, April 30, 2017

LIABILITIES AND OWNER'S EQUITY

Assets: Cash in Bank Accounts Receivable Supplies Equipment

Liabilities: Accounts Payable $5 0 9 0 0 0 1 2 7 5 00 2 6 5 0 0 Owner's Equity: 4 0 0 0 00 Hamilton Ames,Capital

$ 5 7 5 00

10 0 5 5 00

Total Liabilities and Total Assets

$1 0 6 3 0 0 0

Owner's Equity

$1 0 6 3 0 0 0

Chapter 2, D Solutions - Page D2-4

PROBLEM 2D-5 (1,2,3) Cash

111 3,100 (D) 1,500 (F) 825 (G) 165 (I) 42 (K) 400 (L)

(A) 28,000 (E) 4,200 (J) 1,800 34,000 27,968

Accounts Payable (L)

400

211

12,500 (B) 650 (C)

(C)

2,100

Office Equipment

Clara Benson, Capital

311

Design Equipment

Clara Benson, Withdrawals

312

(4)

513

(F) 1,500

42 Telephone Expense

Design Fees Earned

(B) 12,500

825

Salaries Expense

121

122

(G)

512

28,000 (A)

(K)

(D) 3,100

650

Repair Expense

Accounts Receivable 112 1,800 (J)

511

13,150 12,750

6,032

(H) 3,900

Advertising Expense

411

(I)

514

165

4,200 (E) 3,900 (H) 8,100

CLARA BENSON ENTERPRISES TRIAL BALANCE SEPTEMBER 30, 2017

Cash

27 9 6 8 00

Accounts Receivable

2 1 0 0 00

Office Equipment

3 1 0 0 00

Design Equipment

12 5 0 0 00

Accounts Payable

12 7 5 0 00

Clara Benson, Capital

28 0 0 0 00

Clara Benson, Withdrawals

4 2 00

Design Fees Earned

8 1 0 0 00

Advertising Expense

6 5 0 00

Repair Expense

8 2 5 00

Salaries Expense

1 5 0 0 00 1 6 5 00

Telephone Expense Totals

48 8 5 0 00

Page D2-5 - Chapter 2, D Solutions PROBLEM 2D-5,Cont. (5)

CLARA BENSON ENTERPRISES INCOME STATEMENT FOR THE MONTH ENDED SEPTEMBER 30, 2017

Revenue: Design Fees Earned

$8 1 0 0 0 0

Operating Expenses: Advertising Expense

$ 6 5 0 00 8 2 5 00 1 5 0 0 00 1 6 5 00

Repair Expense Salaries Expense Telephone Expense

3 1 4 0 00 $4 9 6 0 0 0

Total Operating Exenses Net Income

CLARA BENSON ENTERPRISES STATEMENT OF OWNER'S EQUITY FOR THE MONTH ENDED SEPTEMBER 30, 2017

$2 8 0 0 0 0 0

Clara Benson, Capital, September 1, 2017

$4 9 6 0 0 0 4 2 00

Net Income for September Less: Withdrawals for September

4 9 1 8 00 $3 2 9 1 8 0 0

Increase in Capital Clara Benson, Capital, September 30, 2017

CLARA BENSON ENTERPRISES BALANCE SHEET SEPTEMBER 30, 2017 LIABILITIES AND OWNER'S EQUITY

ASSETS Assets: Cash Accounts Receivable Office Equipment Design Equipment

Liabilities: Accounts Payable $2 7 9 6 8 0 0 2 1 0 0 00 3 1 0 0 0 0 Owner's Equity: 12 5 0 0 00 Clara Benson, Capital

$1 2 7 5 0 0 0

32 9 1 8 00

Total Liabilities and Total Assets

$4 5 6 6 8 0 0

Owner's Equity

$4 5 6 6 8 0 0

Chapter 3, D Solutions - Page D3-1

PROBLEM 3D-1 ISAACSON FINANCIAL PLANNING CENTRE GENERAL JOURNAL Date 2015 Jan.

Account Title and Description 1 Cash

Post Ref.

Page 1 Dr.

Cr.

8 5 0 0 00

Computer Equipment

4 5 0 0 00

John Isaacson, Capital

13 0 0 0 00

Investment in business.

3 Computer Supplies

3 2 5 00

Accounts Payable

3 2 5 00

Supplies from The Computer Warehouse on account.

10 Office Equipment

1 8 0 0 00

Accounts Payable

1 8 0 0 00

Office equipment from ABE Office Group on account.

12 John Isaacson, Withdrawals

4 8 00

Cash

4 8 00

Personal withdrawal.

20 Cash

9 8 5 00

Planning Fees Earned

9 8 5 00

Fees for cash.

21 Advertising Expense Accounts Payable Advertising bill received.

2 8 5 00 2 8 5 00

Page D3-2 - Chapter 3, D Solutions

PROBLEM 3D-1, Cont. ISAACSON FINANCIAL PLANNING CENTRE GENERAL JOURNAL Date Account Title and Description 2015 Jan. 25 Cleaning Expense

Post Ref.

Page 2 Dr.

Cr.

8 5 00

Accounts Payable

8 5 00

Received cleaning bill.

28 Accounts Receivable

3 4 0 0 00

Planning Fees Earned

3 4 0 0 00

Fees to Qualicare Corp. on account.

29 Salaries Expense

1 2 0 0 00

Cash

1 2 0 0 00

Paid salaries.

30 Accounts Payable

9 0 0 00

Cash

9 0 0 00

Paid half of Jan.10th bill to ABE Office Group.

31 Repairs Expense Accounts Payable Received bill for equipment repairs.

1 8 0 00 1 8 0 00

Chapter 3, D Solutions - Page D3-3

PROBLEM 3D-2

Date 2017 May

RODGER'S FITNESS TRAINING CENTRE GENERAL JOURNAL Account Title and Description

Post Ref.

111

1 Cash Rodger Baldwin, Capital

Page 1 Dr.

Cr.

6 9 0 0 00

311

6 9 0 0 00

Cash investment. 1 Prepaid Rent

114

Cash

111

1 2 0 0 00 1 2 0 0 00

Rent paid in advance. 3 Supplies Accounts Payable

121

4 6 5 00

211

4 6 5 00

Supplies from Star Supplies on account. 5 Equipment Accounts Payable

131

2 6 5 0 00

211

2 6 5 0 00

Equipment from Amos Company on account. 111

8 Cash Fees Earned

1 2 0 0 00

411

1 2 0 0 00

Cash fees from St. Helen's Dance Troop. 9 Accounts Receivable

112

Fees Earned

411

1 6 0 0 00 1 6 0 0 00

Fees to Varsity Singles on account. 10 Rodger Baldwin, Withdrawals Cash

321

8 9 5 00

111

8 9 5 00

Personal withdrawal. 15 Salaries Expense

521

Cash

111

1 1 0 0 00 1 1 0 0 00

Paid salaries. 28 Telephone Expense Cash

531

1 4 5 00

111

1 4 5 00

Paid telephone bill. 28 Electrical Expense Accounts Payable

515

1 9 0 00

111

1 9 0 00

Received electric bill. 31 Advertising Expense

511

Accounts Payable

211

Received advertising bill from City Newspaper.

2 7 5 00 2 7 5 00

Page D3-4 - Chapter 3, D Solutions PROBLEM 3D-2, Cont. GENERAL LEDGER OF RODGER'S FITNESS TRAINING CENTRE ACCOUNT NO.

NAME: CASH Date 2017

Post Ref

Debit

GJ1

6 9 0 0 00

GJ1

DR CR

Balance

Dr.

6 9 0 0 00

1 2 0 0 0 0 Dr.

5 7 0 0 00

Dr.

6 9 0 0 00

GJ1

8 9 5 0 0 Dr.

6 0 0 5 00

GJ1

1 1 0 0 0 0 Dr.

4 9 0 5 00

GJ1

1 4 5 0 0 Dr.

4 7 6 0 00

ACCOUNT NO.

112

Explanation

May

Date 2017 May

Explanation 9

Post Ref

Debit

GJ1

1 6 0 0 00

NAME: PREPAID RENT Date 2017 May

Explanation 1

May

Post Ref

Debit

GJ1

1 2 0 0 00

Post Ref

Debit

GJ1

4 6 5 00

NAME: EQUIPMENT

May

Balance

Dr.

1 6 0 0 00

Credit

Post Ref

Debit

GJ1

2 6 5 0 00

NAME: ACCOUNTS PAYABLE Explanation

Credit

Balance

Dr.

1 2 0 0 00

Debit

Credit

121

DR CR

Balance

Dr.

4 6 5 00

131

DR CR

Balance

Dr.

2 6 5 0 00

ACCOUNT NO. Post Ref

114

DR CR

ACCOUNT NO. Explanation

Date 2017

DR CR

ACCOUNT NO. Explanation

Date 2017

Credit

ACCOUNT NO.

NAME: SUPPLIES Date 2017

Credit

1 2 0 0 00

NAME: ACCOUNTS RECEIVABLE

May

111

DR CR

211 Balance

GJ1

4 6 5 0 0 Cr.

4 6 5 00

GJ1

2 6 5 0 0 0 Cr.

3 1 1 5 00

GJ1

1 9 0 0 0 Cr.

3 3 0 5 00

GJ1

2 7 5 0 0 Cr.

3 5 8 0 00

Chapter 3, D Solutions - Page D3-5 PROBLEM 3D-2, Cont. NAME: RODGER BALDWIN, CAPITAL Date 2017 May

Explanation

ACCOUNT NO. Post Ref

Debit

GJ1

May

Explanation 10

ACCOUNT NO. Post Ref

Debit

GJ1

8 9 5 00

NAME: FEES EARNED Date 2017 May

Explanation

Post Ref

Debit

321

DR CR

Balance

Dr.

8 9 5 00

DR CR

411 Balance

1 2 0 0 0 0 Cr.

1 2 0 0 00

GJ1

1 6 0 0 0 0 Cr.

2 8 0 0 00

Explanation 31

Date 2017

ACCOUNT NO. Post Ref

Debit

GJ1

2 7 5 00

Explanation 28

Date 2017

Explanation 15

Post Ref

Debit

GJ1

1 9 0 00

Explanation 28

Credit

Debit

GJ1

1 1 0 0 00

Credit

Balance

Dr.

2 7 5 00

Debit

GJ1

1 4 5 00

Credit

515

DR CR

Balance

Dr.

1 9 0 00

521

DR CR

Balance

Dr.

1 1 0 0 00

ACCOUNT NO. Post Ref

511

DR CR

ACCOUNT NO. Post Ref

NAME: TELEPHONE EXPENSE Date 2017

Credit

ACCOUNT NO.

NAME: SALARIES EXPENSE

May

6 9 0 0 00

GJ1

NAME: ELECTRICAL EXPENSE

May

Credit

Balance

Date 2017

May

Credit

ACCOUNT NO.

NAME: ADVERTISING EXPENSE

May

DR CR

6 9 0 0 0 0 Cr.

NAME: RODGER BALDWIN, WITHDRAWALS Date 2017

Credit

311

531

DR CR

Balance

Dr.

1 4 5 00

Page D3-6 - Chapter 3, D Solutions

PROBLEM 3D-2, Cont. RODGER'S FITNESS TRAINING CENTRE TRIAL BALANCE MAY 31, 2017 Cash

4 7 6 0 00

Accounts Receivable

1 6 0 0 00

Prepaid Rent

1 2 0 0 00

Supplies

4 6 5 00

Equipment

2 6 5 0 00

Accounts Payable

3 5 8 0 00

Rodger Baldwin, Capital

6 9 0 0 00

Rodger Baldwin, Withdrawals

8 9 5 00 2 8 0 0 00

Fees Earned Advertising Expense

2 7 5 00

Electrical Expense

1 9 0 00

Salaries Expense

1 1 0 0 00 1 4 5 00

Telephone Expense Totals

13 2 8 0 00

Chapter 3, D Solutions - Page D3-7

PROBLEM 3D-3 MATT NEPOOSE PRIVATE INVESTIGATORS GENERAL JOURNAL Date 2016 Feb.

Account Titles and Description 1

Page 1 PR 111

Cash M. Nepoose, Capital

Dr.

Cr.

3 0 0 0 00

311

3 0 0 0 00

Owner investment. 2

Equipment

141

Cash

111

1 7 0 0 00 1 7 0 0 00

Purchased equipment. 3

Supplies

131

Cash

111

2 7 0 00 2 7 0 00

Bought supplies. 5

Wage Expense Cash

511

1 1 0 0 00

111

1 1 0 0 00

Paid wages (preparations for opening agency). 7

M. Nepoose, Withdrawals Cash

321

9 5 00

111

9 5 00

Personal withdrawals. 9

111

Cash Investigative Fees Earned

8 5 0 00

411

8 5 0 00

Cash fees. 15

Accounts Receivable Investigative Fees Earned

112

2 2 0 0 00

411

2 2 0 0 00

Fees on account. 25

111

Cash Accounts Receivable

1 1 0 0 00

112

1 1 0 0 00

Received partial payment on account. 28

Telephone Expense

521

Accounts Payable

211

1 3 0 00 1 3 0 00

Telephone bill received. 29

Advertising Expense

531

Accounts Payable

211

Advertising bill received.

3 5 0 00 3 5 0 00

Page D3-8 - Chapter 3, D Solutions PROBLEM 3D-3, Cont. GENERAL LEDGER OF MATT NEPOOSE PRIVATE INVESTIGATORS NAME: CASH Date 2016

ACCOUNT NO. Post Ref

Debit

GJ1

3 0 0 0 00

DR CR

Balance

Dr.

3 0 0 0 00

GJ1

1 7 0 0 0 0 Dr.

1 3 0 0 00

GJ1

2 7 0 0 0 Dr.

1 0 3 0 00

GJ1

1 1 0 0 0 0 Cr.

7 0 00

GJ1

9 5 0 0 Cr.

1 6 5 00

GJ1

8 5 0 00

Dr.

6 8 5 00

GJ1

1 1 0 0 00

Dr.

1 7 8 5 00

Explanation

Feb.

NAME: ACCOUNTS RECEIVABLE Date 2016 Feb.

Post Ref

Debit

GJ1

2 2 0 0 00

GJ1

Explanation

Date 2016 Feb.

Post Ref

Debit

GJ1

2 7 0 00

NAME: EQUIPMENT

Feb.

Post Ref

Debit

GJ1

1 7 0 0 00

NAME: ACCOUNTS PAYABLE Date 2016

Balance

Dr.

2 2 0 0 00

1 1 0 0 0 0 Dr.

1 1 0 0 00

Credit

Explanation

Credit

Balance

Dr.

2 7 0 00

Debit

Credit

141

DR CR

Balance

Dr.

1 7 0 0 00

ACCOUNT NO. Post Ref

131

DR CR

ACCOUNT NO. Explanation

112

DR CR

Credit

ACCOUNT NO. Explanation

Date 2016

Credit

ACCOUNT NO.

NAME: SUPPLIES

Feb.

111

DR CR

211 Balance

GJ1

1 3 0 0 0 Cr.

1 3 0 00

GJ1

3 5 0 0 0 Cr.

4 8 0 00

Chapter 3, D Solutions - Page D3-9 PROBLEM 3D-3, Cont. GENERAL LEDGER OF MATT NEPOOSE PRIVATE INVESTIGATORS NAME: M. NEPOOSE, CAPITAL Date 2016 Feb.

Explanation

ACCOUNT NO. Post Ref

Debit

GJ1

Feb.

Explanation

ACCOUNT NO. Post Ref

GJ1

Debit

Explanation

Dr.

ACCOUNT NO. Post Ref

Debit

Credit

DR CR

3 0 0 0 00

321 Balance

9 5 00

411 Balance

GJ1

8 5 0 0 0 Cr.

8 5 0 00

GJ1

2 2 0 0 0 0 Cr.

3 0 5 0 00

ACCOUNT NO.

NAME: WAGE EXPENSE Date 2016 Feb.

Explanation 5

Post Ref

Debit

GJ1

1 1 0 0 00

NAME: TELEPHONE EXPENSE Date 2016

Explanation

Date 2016 29

Explanation

Credit

Post Ref

Debit

GJ1

1 3 0 00

Credit

Balance

Dr.

1 1 0 0 00

Debit

GJ1

3 5 0 00

Credit

521

DR CR

Balance

Dr.

1 3 0 00

ACCOUNT NO. Post Ref

511

DR CR

ACCOUNT NO.

NAME: ADVERTISING EXPENSE

Feb.

DR CR

Balance

Feb.

Credit

9 5 00

NAME: INVESTIGATIVE FEES EARNED Date 2016

DR CR

3 0 0 0 0 0 Cr.

NAME: M. NEPOOSE, WITHDRAWALS Date 2016

Credit

311

531

DR CR

Balance

Dr.

3 5 0 00

Page D3-10 - Chapter 3, D Solutions

PROBLEM 3D-3, Cont. MATT NEPOOSE PRIVATE INVESTIGATORS TRIAL BALANCE FEBRUARY 29, 2016 Cash

1 7 8 5 00

Accounts Receivable

1 1 0 0 00

Supplies

2 7 0 00

Equipment

1 7 0 0 00

Accounts Payable

4 8 0 00

M. Nepoose, Capital

3 0 0 0 00

M. Nepoose, Withdrawals

9 5 00 3 0 5 0 00

Investigative Fees Earned Wage Expense

1 1 0 0 00

Telephone Expense

1 3 0 00

Advertising Expense

3 5 0 00 6 5 3 0 00

Totals

6 5 3 0 00

Chapter 4, D Solutions - Page D4-1 PROBLEM 4D-1

MAYFORTH ART GALLERY AND RESTORATIONS WORKSHEET FOR THE PERIOD ENDED APRIL 30, 2017 Trial Balance Dr. Cr. Cash Accounts Receivable Art Supplies Equipment Accum. Depreciation Equipment Candace Mayforth, Capital Candace Mayforth, Withdrawals Fees Earned Advertising Expense Rent Expense Utilities Expense

Art Supplies Expense Depreciation Expense Net Income

Adjustments Dr. Cr.

1,825.00 1,475.00 2,190.00 3,760.00 2,095.00 5,729.00 1,025.00

1,310.00

349.00

Adjusted Trial Balance Dr. Cr. 1,825.00 1,475.00 880.00 3,760.00 2,444.00 5,729.00 1,025.00

4,115.00 370.00 850.00 444.00 11,939.00 11,939.00

4,115.00 370.00 850.00 444.00

a) b)

1,310.00 349.00 1,659.00

1,310.00 349.00 1,659.00 12,288.00

12,288.00

B.C. CARVINGS AND CARPENTRY WORKSHEET FOR THE MONTH ENDED JUNE 30, 2015 Trial Balance Dr. Cr. Cash Accounts Receivable Prepaid Rent Carpentry Supplies Carpentry Equipment Accum. Dep., Carpentry Equipment Accounts Payable B. Chiniki, Capital Carpentry Service Revenue Advertising Expense Utilities Expense Wages Expense

Carpentry Supplies Expense Rent Expense Dep. Expense, Carpentry Equip. Wages Payable

Adjustments Dr. Cr.

1,038.00 650.00 900.00 899.00 4,210.00 2,385.00 432.00 1,762.00 6,677.00 523.00 696.00 d) 2,340.00 11,256.00 11,256.00

38.65

a) b) c)

Income Statement Dr. Cr.

1,038.00 650.00 450.00 369.00 4,210.00 2,423.65 432.00 1,762.00 6,677.00

2,423.65 432.00 1,762.00 6,677.00

366.00

523.00 696.00 2,706.00

530.00 450.00 38.65

366.00 1,384.65

Balance Sheet Dr. Cr. 1,038.00 650.00 450.00 369.00 4,210.00

523.00 696.00 2,706.00

1,384.65 Net Income

450.00 530.00

Adjusted Trial Balance Dr. Cr.

366.00 366.00 11,660.65 11,660.65 4,943.65 6,677.00 6,717.00 4,983.65 1,733.35 1,733.35 6,677.00 6,677.00 6,717.00 6,717.00

Page D4-2 - Chapter 4, D Solutions

PROBLEM 4D-2

PROBLEM 4D-3 ADEN NETWORK TRAINING WORKSHEET FOR THE MONTH ENDED MAY 31, 2016 Trial Balance Dr. Cr.

Insurance Expense Computer Supplies Expense Dep. Exp., Computer Equipment Depreciation Expense, Building Wages Payable

1,594.00 750.00 981.00 10,520.00 6,200.00

204.17

12,000.00 52,000.00

Income Statement Dr. Cr.

1,594.00 562.50 575.00 10,520.00

13,950.00 1,103.00 52,089.00

6,404.17

108.33

12,000.00 52,000.00 14,058.33 1,103.00 52,089.00

14,058.33 1,103.00 52,089.00

9,260.00

22,185.00 1,378.00 820.00 e) 1,134.00 6,224.00 95,527.00 95,527.00

1,378.00 820.00 7,358.00

187.50 406.00 204.17 108.33

a) b) c) d)

9,260.00 22,185.00

1,134.00 2,040.00

Balance Sheet Dr. Cr. 1,594.00 562.50 575.00 10,520.00

12,000.00 52,000.00

2,040.00 Net Income

187.50 406.00

Adjusted Trial Balance Dr. Cr.

22,185.00

1,134.00 1,134.00 96,973.50 96,973.50 10,462.00 22,185.00 86,511.50 74,788.50 11,723.00 11,723.00 22,185.00 22,185.00 86,511.50 86,511.50

Chapter 4, D Solutions - Page D4-3

Cash Prepaid Insurance Computer Supplies Computer Equipment Accum. Dep., Computer Equipment Land Building Accum. Depreciation, Building Accounts Payable Aden Jackson, Capital Aden Jackson, Withdrawals Network Training Fees Revenue Advertising Expense Utilities Expense Wages Expense

Adjustments Dr. Cr.

Page D4-4 - Chapter 4, D Solutions PROBLEM 4D-3, Cont. ADEN NETWORK TRAINING INCOME STATEMENT FOR THE MONTH ENDED MAY 31, 2016 Revenue: Network Training Fees

$22 1 8 5 00

Operating Expenses: Advertising Expense

$1 3 7 8 00 1 0 8 33 2 0 4 17 4 0 6 00 1 8 7 50 8 2 0 00 7 3 5 8 00

Depreciation Expense, Building Depreciation Expense, Computer Equipment Computer Supplies Expense Insurance Expense Utilities Expense Wages Expense

10 4 6 2 00 $11 7 2 3 00

Total Operating Expenses Net Income ADEN NETWORK TRAINING STATEMENT OF OWNER'S EQUITY FOR THE MONTH ENDED MAY 31, 2016

$5 2 0 8 9 0 0

Aden Jackson, Capital, May 1, 2016

$11 7 2 3 00 9 2 6 0 00

Net Income For May Less Withdrawals

2 4 6 3 00 $5 4 5 5 2 0 0

Increase in Capital Aden Jackson, Capital, May 31, 2016

ADEN NETWORK TRAINING BALANCE SHEET MAY 31, 2016 ASSETS

LIABILITIES & OWNER'S EQUITY

Assets

Liabilities

Cash

$1 5 9 4 0 0 5 6 2 50 5 7 5 00

Prepaid Insurance Computer Supplies

Accounts Payable Wages Payable Total Liabilities

$1 1 0 3 00 1 1 3 4 00 2 2 3 7 00

Computer Equipment $10,520.00 Less: Acc. Dep .

(6,404.17)

Building Less: Acc. Dep.

$52,000.00 (14,058.33)

Land Total Assets

4 1 1 5 8 3 Owner's Equity Aden Jackson, Capital

37 9 4 1 67 12 0 0 0 00 $5 6 7 8 9 0 0

Total Liabilities and Owner's Equity

54 5 5 2 00

$5 6 7 8 9 0 0

PROBLEM 4D-4 T. BARNES, P.ENG., CONSULTING SERVICES WORKSHEET FOR THE MONTH ENDED FEBRUARY 28, 2015 Trial Balance Dr. Cr.

Insurance Expense Computer Supplies Expense Depreciation Expense Wages Payable

829.00 730.00 454.00 9,450.00

a) b)

5,600.00 650.00 2,150.00

c) e)

Income Statement Dr. Cr.

829.00 365.00 235.00 9,450.00

150.00 174.00

3,880.00

5,750.00 824.00 2,150.00

14,507.00

5,750.00 824.00 2,150.00 3,880.00

14,507.00

e) 174.00 801.00 1,530.00 d) 1,102.50 5,233.00 22,907.00 22,907.00

975.00 1,530.00 6,335.50

365.00 219.00 150.00

a) b) c)

1,102.50 2,010.50

Balance Sheet Dr. Cr. 829.00 365.00 235.00 9,450.00

3,880.00

2,010.50 Net Income

365.00 219.00

Adjusted Trial Balance Dr. Cr.

1,102.50 24,333.50 24,333.50

1,102.50 9,574.50 14,507.00 14,759.00 9,826.50 4,932.50 4,932.50 14,507.00 14,507.00 14,759.00 14,759.00

Chapter 4, D Solutions - Page 4-5

Cash Prepaid Insurance Computer Supplies Computer Equipment Accum. Dep., Computer Equipment Accounts Payable T. Barnes, Capital T. Barnes, Withdrawals Revenue from Services Provided Advertising Expense Rent Expense Wages Expense

Adjustments Dr. Cr.

Page D4-6 - Chapter 4, D Solutions

PROBLEM 4D-4, Cont. T. BARNES, P.ENG., CONSULTING SERVICES INCOME STATEMENT FOR THE MONTH ENDED FEBRUARY 28, 2015 Revenue:

$1 4 5 0 7 0 0

Revenue From Services Provided Operating Expenses: Advertising Expense

$ 9 7 5 00 1 5 0 00 2 1 9 00 3 6 5 00 1 5 3 0 00 6 3 3 5 50

Depreciation Expense, Computer Equipment Computer Supplies Expense Insurance Expense Rent Expense Wages Expense

9 5 7 4 50 $4 9 3 2 5 0

Total Operating Expenses Net Income

T. BARNES, P.ENG., CONSULTING SERVICES STATEMENT OF OWNER'S EQUITY FOR THE MONTH ENDED FEBRUARY 28, 2015

$2 1 5 0 00

T. Barnes, Capital, February 1, 2015

$4 9 3 2 50 3 8 8 0 00

Net Income For February Less Withdrawals

1 0 5 2 50 $3 2 0 2 50

Increase in Capital T. Barnes, Capital, February 28, 2015

T. BARNES, P.ENG., CONSULTING SERVICES BALANCE SHEET FEBRUARY 28, 2015 ASSETS

LIABILITIES & OWNER'S EQUITY

Assets

Liabilities

Cash

$ 8 2 9 00 3 6 5 00 2 3 5 00

Prepaid Insurance Computer Supplies Computer Equipment

$9,450.00

Less Acc. Dep.

(5,750.00)

Accounts Payable Wages Payable Total Liabilities

$ 8 2 4 00 1 1 0 2 50 $1 9 2 6 5 0

3 7 0 0 0 0 Owner's Equity T. Barnes, Capital

3 2 0 2 50

Total Liabilities and Total Assets

$5 1 2 9 0 0

Owner's Equity

$5 1 2 9 0 0

PROBLEM 5D-1 BIG 4 STORAGE INC. WORKSHEET FOR THE MONTH ENDED JULY 31, 2017 Trial Balance Dr. Cr.

Depreciation Expense, Building Dep. Exp., Storage Equipment Insurance Expense Supplies Expense Wages Payable

2,238.00 981.00 5,496.00 824.00 23,000.00 12,500.00

327.00

144.00

125.00

52,000.00

Income Statement Dr. Cr.

2,238.00 654.00 5,496.00 680.00 23,000.00

20,530.00

10,000.00

Balance Sheet Dr. Cr. 2,238.00 654.00 5,496.00 680.00 23,000.00

12,625.00

52,000.00 105.56

52,000.00 20,635.56

20,635.56

10,000.00 3,060.00 37,887.00

7,742.00

3,060.00 37,887.00

7,742.00 38,720.00

38,720.00

1,250.00 926.00 e) 1,304.00 8,240.00 112,697.00 112,697.00

1,250.00 926.00 9,544.00

105.56 125.00 327.00 144.00

d) c) a) b)

2,005.56 Net Income

Adjusted Trial Balance Dr. Cr.

1,304.00 1,304.00 1,304.00 2,005.56 114,231.56 114,231.56 12,421.56 38,720.00 101,810.00 75,511.56 26,298.44 26,298.44 38,720.00 38,720.00 101,810.00 101,810.00

Chapter 5, D Solutions - Page 5-1

Cash Prepaid Insurance Accounts Receivable Storage Supplies Storage Equipment Accum. Dep., Storage Equip. Building Accum. Depreciation, Building Land Accounts Payable Magda Bennett, Capital Magda Bennett, Withdrawals Storage Fees Revenue Advertising Expense Utilities Expense Wages Expense

Adjustments Dr. Cr.

Page D5-2 - Chapter 5, D Solutions

PROBLEM 5D-1 BIG 4 STORAGE INC. GENERAL JOURNAL Date 2017

Account Title and Description

Page 1 Post Ref.

Dr.

Cr.

Adjusting Entries July

Insurance Expense

3 2 7 00

Prepaid Insurance

3 2 7 00

Insurance expired. 31 Storage Supplies Expense

1 4 4 00

Storage Supplies

1 4 4 00

Supplies used. 31 Depreciation Expense, Storage Equipment

1 2 5 00

Accumulated Depreciation, Storage Equipment

1 2 5 00

Estimated depreciation. 31 Depreciation Expense, Building

1 0 5 56

Accumulated Depreciation, Building

1 0 5 56

Estimated depreciation. 31 Wages Expense

1 3 0 4 00

Wages Payable

1 3 0 4 00

Accrued wages. Closing Entries 31 Storage Fees Revenue

38 7 2 0 00

Income Summary

38 7 2 0 00

To close income account. 31 Income Summary

12 4 2 1 56

Advertising Expense

1 2 5 0 00 9 2 6 00

Utilities Expense Wages Expense

9 5 4 4 00 1 0 5 56

Depreciation Expense, Building Depreciation Expense, Storage Equipment Insurance Expense

1 2 5 00 3 2 7 00

Storage Supplies Expense

1 4 4 00

To close expense accounts. 31 Income Summary

26 2 9 8 44

Magda Bennett, Capital

26 2 9 8 44

Transfer profit to capital. 31 Magda Bennett, Capital Magda Bennett, Withdrawals Transfer withdrawals to capital.

7 7 4 2 00 7 7 4 2 00

Problem 5D-2. CHALKE'S COMPUTER REPAIR SERVICE WORKSHEET FOR THE MONTH ENDED NOVEMBER 30, 2015 Trial Balance Dr. Cr.

Insurance Expense Bank Charges Expense Depreciation Expense, Van Salaries Payable Supplies Expense Net Income

1,366.48 714.56 5,277.42 1,597.47 21,675.00

36.90 178.64

929.44

451.56 275.20

8,103.65 3,772.60 12,663.58

2,600.00

Adjusted Trial Balance Dr. Cr.

Income Statement Dr. Cr.

1,329.58 535.92 5,277.42 668.03 21,675.00

1,329.58 535.92 5,277.42 668.03 21,675.00 8,555.21 4,047.80 12,663.58

8,555.21 4,047.80 12,663.58

2,600.00 16,458.70

714.38 f) 2,345.51 375.00 178.14 284.17 e) 3,870.40 40,998.53 40,998.53

275.20

c) a) b)

16,458.70

410.00

989.58 2,345.51 375.00 178.14 284.17 4,280.40

178.64 36.90 451.56

929.44 2,281.74

410.00 2,281.74

Balance Sheet Dr. Cr.

410.00

929.44 929.44 42,135.29 42,135.29 10,049.34 16,458.70 32,085.95 25,676.59 6,409.36 6,409.36 16,458.70 16,458.70 32,085.95 32,085.95

Chapter 5, D Solutions - Page 5-3

Cash Prepaid Insurance Accounts Receivable Repair Parts and Supplies Van Accumulated Depreciation Van Accounts Payable Tricia Chalke, Capital Tricia Chalke, Withdrawals Repair Revenue Advertising Expense Automotive Expense Cleaning Expense Miscellaneous Expense Postage and Office Expense Salaries Expense

Adjustments Dr. Cr.

Page D5-4 - Chapter 5, D Solutions CHALKE'S COMPUTER REPAIR SERVICE GENERAL JOURNAL

PROBLEM 5D-2 Date 2015

Account Title and Description

Post Ref.

Page 1

Dr.

Cr.

Adjusting Entries Nov

Bank Charges Expense

5114

3 6 90

1100

Cash in Bank

3 6 90

To correct bank account. 30 Depreciation Expense, Van Accumulated Depreciation, Van

5125

4 5 1 56

1250

4 5 1 56

Estimated depreciation. 5140

30 Insurance Expense

1 7 8 64

1120

Prepaid Insurance

1 7 8 64

Insurance expired. 5185

30 Supplies Expense Repair Parts and Supplies

9 2 9 44

1160

9 2 9 44

Supplies used. 30 Salaries Expense

5180

4 1 0 00

2150

Salaries Payable

4 1 0 00

Accrued salaries. 30 Advertising Expense

5100

Accounts Payable

2100

2 7 5 20 2 7 5 20

Accrued charge. Closing Entries 30 Repair Revenue Income Summary

4100

16 4 5 8 70

3199

16 4 5 8 70

To close income accounts. 30 Income Summary

3199

Advertising Expense

5100

Automobile Expense

5112

Cleaning Expense

5120

Miscellaneous Expense

5145

Postage and Office Expense

5160

Salaries Expense

5180

Insurance Expense

5140

Bank Charges Expense

5114

Depreciation Expense, Van

5125

Supplies Expense

5185

10 0 4 9 34 9 8 9 58 2 3 4 5 51 3 7 5 00 1 7 8 14 2 8 4 17 4 2 8 0 40 1 7 8 64 3 6 90 4 5 1 56 9 2 9 44

To close expense accounts. 30

Income Summary Tricia Chalke, Capital

3199

6 4 0 9 36

3100

6 4 0 9 36

Transfer profit to capital. 30

Tricia Chalke, Capital Tricia Chalke, Withdrawls Transfer withdrawals to capital.

3100 3150

2 6 0 0 00 2 6 0 0 00

Chapter 5, D Solutions - Page D5-5

PROBLEM 5D-2, Cont. NAME:

CASH

Date 2015 Nov

Explanation

1 3 6 6 48 1 3 2 9 58

Adjusting

Post Ref

3 6 90

Debit

ACCOUNT NO.

1120

Credit

DR CR

Balance

1 7 8 64

7 1 4 56 5 3 5 92

30 Balance

GJ1

NAME:

Adjusting

ACCOUNTS RECEIVABLE

Date 2015

Explanation

Post Ref

Debit

ACCOUNT NO.

1140

DR CR

Balance

5 2 7 7 42

Credit

30 Balance

NAME:

REPAIR PARTS AND SUPPLIES

Date 2015

Explanation

Post Ref

Debit

ACCOUNT NO.

1160

DR CR

Balance

1 5 9 7 47 6 6 8 03

Credit

30 Balance

GJ1

NAME:

Adjusting

Explanation

Post Ref

Debit

ACCUMULATED DEPRECIATION, VAN

Date 2015

ACCOUNT NO.

1200

DR CR

Balance

21 6 7 5 00

Credit

30 Balance

NAME:

9 2 9 44

VAN

Date 2015

Nov

Balance

GJ1

Explanation

Nov

DR CR

Credit

Date 2015

Nov

Debit

1100

PREPAID INSURANCE

Nov

Post Ref

ACCOUNT NO.

30 Balance

NAME:

Nov

CHALKE'S REPAIR SERVICE GENERAL LEDGER

Explanation

Post Ref

Debit

ACCOUNT NO.

1250

DR CR

Balance

8 1 0 3 65 8 5 5 5 21

Credit

30 Balance

GJ1

Adjusting

4 5 1 56

Page D5-6 - Chapter 5, D Solutions PROBLEM 5D-2, Cont. NAME:

ACCOUNTS PAYABLE

Date 2015

Explanation

Nov

3 7 7 2 60 4 0 4 7 80

GJ1

Post Ref

2 7 5 20

Debit

GJ1

30 Adjusting

NAME:

TRICIA CHALKE CAPITAL

Date 2015

Explanation

Post Ref

Debit

ACCOUNT NO.

2150

Credit

DR CR

Balance

4 1 0 00

ACCOUNT NO.

3100

DR CR

Balance

12 6 6 3 58 19 0 7 2 94 16 4 7 2 94

Credit

30 Balance

30 Closing

GJ1

30 Closing

GJ1

NAME:

TRICIA CHALKE, WITHDRAWALS

Date 2015

Explanation

Post Ref

30 Balance

30 Closing

GJ1

6 4 0 9 36

Date 2015

Explanation

Post Ref

Debit

GJ1

30 Closing

GJ1

10 0 4 9 34

30 Closing

GJ1

6 4 0 9 36

REPAIR REVENUE

Date 2015

Explanation

Post Ref

30 Balane

30 Closing

GJ1

ACCOUNT NO.

3150

DR CR

Balance

2 6 0 0 00

Credit

2 6 0 0 00

30 Closing

NAME:

2 6 0 0 00

NAME: INCOME SUMMARY

Nov

Balance

30 Adjusting

Explanation

Nov

DR CR

Credit

Date 2015

Nov

Debit

2100

SALARIES PAYABLE

Nov

Post Ref

ACCOUNT NO.

30 Balance

NAME:

Nov

TRAN'S REPAIR SERVICE GENERAL LEDGER

Debit

16 4 5 8 70

ACCOUNT NO.

3199

Credit

DR CR

Balance

16 4 5 8 70

6 4 0 9 36

ACCOUNT NO.

4100

DR CR

Balance

16 4 5 8 70

Credit

Chapter 5, D Solutions - Page D5-7

PROBLEM 5D-2, Cont. NAME:

ADVERTISING EXPENSE

Date 2015 Nov

Explanation

30 Adjusting

GJ1

30 Closing

GJ1

Explanation

30 Closing

GJ1

Explanation 30 Adjusting

GJ1

30 Closing

GJ1

NAME:

CLEANING EXPENSE

Date 2015

Explanation

30 Closing

GJ1

DEPRECIATION EXPENSE, VAN

Date 2015

Explanation

Debit

GJ1

4 5 1 56

30 Closing

GJ1

Explanation

Post Ref

30 Balance

30 Closing

GJ1

Balance

7 1 4 38 9 8 9 58

9 8 9 58

ACCOUNT NO.

5112

DR CR

Balance

2 3 4 5 51

Credit

ACCOUNT NO.

5114

DR CR

Balance

Credit

Debit

3 6 90

30 Adjusting

Date 2015

DR CR

Credit

3 6 90

Debit

MISCELLANEOUS EXPENSE

5100

2 3 4 5 51

Post Ref

NAME:

Nov

Post Ref

30 Balance

NAME:

Nov

Post Ref

ACCOUNT NO.

2 7 5 20

BANK CHARGES EXPENSE

Date 2015

Nov

Post Ref

30 Balance

NAME:

Debit

AUTOMOTIVE EXPENSE

Date 2015

Nov

Post Ref

30 Balance

NAME:

Nov

CHALKE'S REPAIR SERVICE GENERAL LEDGER

ACCOUNT NO.

5120

DR CR

Balance

3 7 5 00

Credit

3 7 5 00

ACCOUNT NO.

5125

DR CR

Balance

4 5 1 56

Credit

4 5 1 56

ACCOUNT NO.

5145

DR CR

Balance

1 7 8 14

Credit

1 7 8 14

Page 5-8 - Chapter 5, D Solutions

PROBLEM 5D-2, Cont.

NAME:

INSURANCE EXPENSE

Date 2015 Nov

CHALKE'S REPAIR SERVICE GENERAL LEDGER

Post Ref

Debit

30 Adjusting

GJ1

1 7 8 64

GJ1

Explanation

Closing

NAME:

POSTAGE AND OFFICE EXPENSE

Date 2015

Explanation

Nov

30 Balance

GJ1

Closing

NAME:

SALARIES EXPENSE

Date 2015

Explanation

Nov

Post Ref

Debit

5140

DR CR

Balance

1 7 8 64

Credit

1 7 8 64

ACCOUNT NO.

5160

DR CR

Balance

2 8 4 17

Credit

2 8 4 17

ACCOUNT NO.

5180

DR CR

Balance

3 8 7 0 40 4 2 8 0 40

Credit

30 Balance

Adjusting

GJ1

Closing

GJ1

4 1 0 00

Date 2015

Post Ref

Debit

30 Adjusting

GJ1

9 2 9 44

GJ1

Explanation

Closing

4 2 8 0 40

NAME: SUPPLIES EXPENSE

Nov

ACCOUNT NO.

5185

DR CR

Balance

9 2 9 44

Credit

9 2 9 44

Chapter 5, D Solutions - Page D5-9

PROBLEM 5D-2, Cont.

CHALKE'S REPAIR SERVICE POST-CLOSING TRIAL BALANCE NOVEMBER 30, 2015 Cash

1 3 2 9 58

Prepaid Insurance

5 3 5 92

Accounts Receivable

5 2 7 7 42

Repair Parts and Supplies Van

6 6 8 03 21 6 7 5 00

Accumulated Depreciation Van

8 5 5 5 21

Accounts Payable

4 0 4 7 80

Salaries Payable

4 1 0 00 16 4 7 2 94

Tricia Chalke, Capital Totals

29 4 8 5 95

Page D5-10 - Chapter 5, D Solutions

PROBLEM 5D-3 ATHERTON PLUMBING SERVICES GENERAL JOURNAL Date 2016 Aug.

Post Ref.

Dr.

Cash

111

10 0 0 0 00

Plumbing Equipment

123

4 8 0 0 00

Account Title and Description 1

Page 1

Martin Atherton, Capital

311

Cr.

14 8 0 0 00

Owner investment. 1

Prepaid Rent

114

Cash

111

1 6 0 0 00 1 6 0 0 00

Paid rent in advance. 4

Office Equipment Accounts Payable

121

2 0 5 0 00

211

2 0 5 0 00

Purchased office equipment from The Office Standard. 6

Plumbing Supplies Cash

115

1 1 2 5 00

111

1 1 2 5 00

Purchased plumbing supplies. 8

111

Cash Plumbing Fees

3 6 0 0 00

411

3 6 0 0 00

Collected plumbing service fees. 9

Martin Atherton, Withdrawals Cash

312

1 0 8 00

111

1 0 8 00

Paid personal expenses. 10

Accounts Receivable

112

Plumbing Fees

411

10 2 0 0 00 10 2 0 0 00

Billed Southern Construction for plumbing services. 14

Advertising Expense

512

Accounts Payable

211

Received bill for advertising from TYDI Radio.

3 8 0 00 3 8 0 00

Chapter 5, D Solutions - Page D5-11

PROBLEM 5D-3, Cont. ATHERTON PLUMBING SERVICES GENERAL JOURNAL Date 2016

Account Title and Description

Aug. 21 Cash Accounts Receivable

Page 2

Post Ref.

Dr.

111

5 1 0 0 00

112

Cr.

5 1 0 0 00

Received partial payment from Southern Construction. 26

511

Salaries Expense

2 8 5 0 00

111

Cash

2 8 5 0 00

Paid salaries. 28

211

Accounts Payable

1 0 2 5 00

111

Cash

1 0 2 5 00

Paid The Office Standard one-half owed. 29

513

Telephone Expense

1 4 2 00

111

Cash

1 4 2 00

Paid telephone bill. 31

514

Cleaning Expense

2 3 0 00

211

Accounts Payable

2 3 0 00

Received bill from Precise Cleaning. Adjusting Entries Aug. 31

Plumbing Supplies Expense Plumbing Supplies

515

7 0 5 00

115

7 0 5 00

Supplies used. 31

Rent Expense Prepaid Rent

516

4 0 0 00

114

4 0 0 00

Rent expired. 31

DepreciationExpense, Office Equipment Accumulated Depreciation, Office Equipment

517

2 2 92

122

2 2 92

Estimated depreciation. 31

Depreciation Expense, Plumbing Equipment Accumulated Depreciation, Plumbing Equipment Estimated depreciation.

518 124

9 4 79 9 4 79

Page D5-12 - Chapter 5, D Solutions

PROBLEM 5D-3, Cont.

Date 2016

ATHERTON PLUMBING SERVICES GENERAL JOURNAL

Account Title and Description

Post Ref.

Page 3 Dr.

Cr.

Adjusting Entries Aug.

511

31 Salaries Expense

7 1 2 50

212

Salaries Payable

7 1 2 50

Accrued salaries. Closing Entries Aug.

31 Plumbing Fees Income Summary

411

13 8 0 0 00

313

13 8 0 0 00

To close income account. 31 Income Summary

313

5 5 3 7 21

Salaries Expense

511

3 5 6 2 50

Advertising Expense

512

Telephone Expense

513

3 8 0 00 1 4 2 00

Cleaning Expense

514

Plumbing Supplies Expense

515

2 3 0 00 7 0 5 00

Rent Expense

516

4 0 0 00

Depreciation Expense, Office Equipment

517

Depreciation Expense, Plumbing Equipment

518

2 2 92 9 4 79

To close expense account. 31 Income Summary Martin Atherton, Capital

313

8 2 6 2 79

311

8 2 6 2 79

Transfer profit to capital. 31 Martin Atherton, Capital Martin Atherton, Withdrawals Transfer withdrawals to capital.

311 312

1 0 8 00 1 0 8 00

Chapter 5, D Solutions - Page D5-13 PROBLEM 5D-3, Cont. NAME: CASH Date 2016

Post Ref

Debit

GJ1

10 0 0 0 00

GJ1

GJ2

Explanation

Aug.

Date 2016 10

GJ1

10 2 0 0 00

GJ2

Explanation

Aug.

Post Ref

Debit

GJ1

1 6 0 0 00

GJ2

31 Adjusting

Debit

GJ1

1 1 2 5 00

31 Adjusting

GJ2

Aug.

NAME:

OFFICE EQUIPMENT

Date 2016

Explanation

Aug.

8 4 0 0 00

1 1 2 5 00

7 2 7 5 00

10 8 7 5 00

10 7 6 7 00

15 8 6 7 00

2 8 5 0 00

13 0 1 7 00

1 0 2 5 00 14 2 00

11 9 9 2 00 11 8 5 0 00

ACCOUNT NO.

112

DR CR

Balance

10 2 0 0 00 5 1 0 0 00

Credit

ACCOUNT NO.

114

DR CR

Balance

Credit

Dr Dr

ACCOUNT NO. Post Ref

Explanation

1 6 0 0 00

4 0 0 00

NAME: PLUMBING SUPPLIES Date 2016

10 0 0 0 00

5 1 0 0 00

PREPAID RENT

Date 2016

5 1 0 0 00

Debit

NAME:

Balance

1 0 8 00

Post Ref

Explanation

Credit

7 0 5 00

Post Ref

Debit

GJ1

2 0 5 0 00

111

DR CR

Credit

3 6 0 0 00

ACCOUNTS RECEIVABLE

NAME:

Aug.

GENERAL LEDGER OF ATHERTON PLUMBING SERVICES ACCOUNT NO.

1 6 0 0 00 1 2 0 0 00

115

DR CR

Balance

1 1 2 5 00

4 2 0 00

ACCOUNT NO.

121

DR CR

Balance

2 0 5 0 00

Credit

Page D5-14 - Chapter 5, D Solutions PROBLEM 5D-3, Cont. GENERAL LEDGER OF ATHERTON'S PLUMBING SERVICES ACCUMULATED DEPRECIATION, OFFICE EQUIPMENT

NAME: Date 2016

Explanation

Date 2016

Explanation 1

Post Ref

Debit

GJ1

4 8 0 0 00

ACCUMULATED DEPRECIATION, PLUMBING EQUIPMENT

NAME: Date 2016

Explanation

Aug. 31

Post Ref

Debit

GJ2

Adjusting

Explanation

Post Ref

Debit

2 2 92

ACCOUNT NO.

123

DR CR

Balance

4 8 0 0 00

Credit

ACCOUNT NO.

124

DR CR

Balance

Credit

ACCOUNT NO.

9 4 79

211

Credit

DR CR

Balance

GJ1

2 0 5 0 00

GJ1

3 8 0 00

2 4 3 0 00

GJ2

1 4 0 5 00

1 6 3 5 00

1 0 2 5 00

2 3 0 00

NAME:

SALARIES PAYABLE

Date 2016

Explanation

ACCOUNT NO. Post Ref

Debit

GJ3

31 Adjusting

NAME:

MARTIN ATHERTON, CAPITAL

Date 2016

Explanation

Aug.

Balance

Aug.

DR CR

Credit

9 4 79

NAME: ACCOUNTS PAYABLE Date 2016

122

2 2 92

PLUMBING EQUIPMENT

NAME:

Aug.

Debit

GJ2

31 Adjusting

Aug.

Post Ref

ACCOUNT NO.

Credit

DR CR

Balance

7 1 2 50

ACCOUNT NO. Post Ref

GJ1

31 Closing

GJ3

31 Closing

GJ3

Debit

1 0 8 00

212

311

Credit

DR CR

Balance

14 8 0 0 00 8 2 6 2 79

14 8 0 0 00 23 0 6 2 79 22 9 5 4 79

Cr Cr

Chapter 5, D Solutions - Page D5-15 PROBLEM 5D-3, Cont. GENERAL LEDGER OF ATHERTON'S PLUMBING SERVICES MARTIN ATHERTON, WITHDRAWALS

NAME: Date 2016

Post Ref

Debit

GJ1

1 0 8 00

31 Closing

GJ3

Explanation

Aug.

NAME: INCOME SUMMARY Date 2016

Explanation

Aug.

Post Ref

Debit

31 Closing

GJ3

31 Closing

GJ3

5 5 3 7 21

31 Closing

GJ3

8 2 6 2 79

NAME: PLUMBING FEES Date 2016

Explanation

Aug.

GJ1

31 Closing

GJ3

Date 2016

Explanation

Aug.

GJ2

31 Adjusting

GJ3

2 8 5 0 00 7 1 2 50

31 Closing

GJ3

ADVERTISING EXPENSE Debit

GJ1

3 8 0 00

31 Closing

GJ3

TELEPHONE EXPENSE

Date 2016

Post Ref

Debit

GJ2

1 4 2 00

31 Closing

GJ3

Explanation

1 0 8 00

ACCOUNT NO.

313

Credit

DR CR

Balance

13 8 0 0 00

8 2 6 2 79

O 411

Credit

DR CR

Balance

3 6 0 0 00

10 2 0 0 00

13 8 0 0 00

Credit

511

DR CR

Balance

2 8 5 0 00 3 5 6 2 50

3 5 6 2 50

Post Ref

NAME:

Balance

ACCOUNT NO.

Explanation

DR CR

Credit

13 8 0 0 00

Debit

Date 2016

Aug.

Debit

Post Ref

NAME:

Aug.

Post Ref GJ1

SALARIES EXPENSE

312

ACCOUNT NO.

NAME:

ACCOUNT NO.

512

DR CR

Balance

3 8 0 00

Credit

3 8 0 00

ACCOUNT NO.

513

DR CR

Balance

1 4 2 00

Credit

1 4 2 00

Page D5-16 - Chapter 5, D Solutions

PROBLEM 5D-3, Cont. GENERAL LEDGER OF ATHERTON PLUMBING SERVICES CLEANING EXPENSE ACCOUNT NO.

NAME: Date 2016

Post Ref

Debit

GJ2

2 3 0 00

31 Closing

GJ3

Explanation

Aug.

NAME:

PLUMBING SUPPLIES EXPENSE

Date 2016

Explanation

Aug.

Post Ref

Debit

31 Adjusting

GJ2

7 0 5 00

31 Closing

GJ3

NAME:

RENT EXPENSE

Date 2016

Post Ref

Debit

31 Adjusting

GJ2

4 0 0 00

31 Closing

GJ3

Explanation

Aug.

NAME: DEPRECIATION EXPENSE, OFFICE EQUIPMENT Date 2016

Explanation

Aug.

NAME:

Post Ref

31 Adjusting

GJ2

31 Closing

GJ3

Debit

Explanation

Aug. 31 Adjusting 31 Closing

Post Ref GJ2 GJ3

DR CR

Balance

2 3 0 00

ACCOUNT NO.

515

Credit

DR CR

Balance

7 0 5 00

ACCOUNT NO.

516

DR CR

Balance

4 0 0 00

Credit

4 0 0 00

ACCOUNT NO.

517

Credit

DR CR Dr

2 2 92

Debit

Balance

2 2 92

DEPRECIATION EXPENSE, PLUMBING EQUIPMENT

Date 2016

Credit

514

ACCOUNT NO.

518

DR CR

Balance

Credit

9 4 79 9 4 79

9 4 79

PROBLEM 5D-3 Cont. ATHERTON PLUMBING SERVICES WORKSHEET FOR THE MONTH ENDED AUGUST 31, 2016 Trial Balance Dr. Cr.

Adjustments Dr. Cr.

Plumbing Supplies Expense Rent Expense Acc. Dep., Office Equip. Dep. Exp., Office Equip. Acc. Dep., Plumbing Equip. Dep. Exp., Plumbing Equip. Salaries Payable

a) b)

b) a)

11,850.00 5,100.00 400.00 1,200.00 705.00 420.00 2,050.00 4,800.00

Balance Sheet Dr. Cr. 11,850.00 5,100.00 1,200.00 420.00 2,050.00 4,800.00

1,635.00 14,800.00

108.00

108.00 13,800.00

13,800.00

712.50

3,562.50 380.00 142.00 230.00

705.00 400.00

22.92

94.79

22.92

22.92 22.92

94.79

22.92 22.92

94.79 94.79

1,935.21 Net Income

Income Statement Dr. Cr.

712.50 1,935.21 31,065.21

94.79 94.79

712.50 31,065.21

712.50 5,537.21 13,800.00 25,528.00 17,265.21 8,262.79 8,262.79 13,800.00 13,800.00 25,528.00 25,528.00

Chapter 5, D Solutions -- Page D5-17

Cash 11,850.00 Accounts Receivable 5,100.00 Prepaid Rent 1,600.00 Plumbing Supplies 1,125.00 Office Equipment 2,050.00 Plumbing Equipment 4,800.00 Accounts Payable 1,635.00 Martin Atherton, Capital 14,800.00 Martin Atherton, Withdrawals 108.00 Plumbing Fees 13,800.00 e) Salaries Expense 2,850.00 Advertising Expense 380.00 Telephone Expense 142.00 Cleaning Expense 230.00 30,235.00 30,235.00

Adjusted Trial Balance Dr. Cr.

Page D5-18 - Chapter 5, D Solutions PROBLEM 5D-3, Cont.

ATHERTON'S PLUMBING SERVICES INCOME STATEMENT FOR THE MONTH ENDED AUGUST 31, 2016

Revenue: Plumbing Fees

$1 3 8 0 0 0 0

Operating Expenses: Salaries Expense

$3 5 6 2 5 0

Advertising Expense

3 8 0 00

Telephone Expemse

1 4 2 00

Cleaning Expense

2 3 0 00

Plumbing Supplies Expense

7 0 5 00

Rent Expense

4 0 0 00

Depreciation Expense, Office Equipment

2 2 92

Depreciation Expense, Plumbing Euipment

9 4 79

Total Operating Expenses

5 5 3 7 21 $8 2 6 2 7 9

Net Income

ATHERTON'S PLUMBING SERVICES STATEMENT OF OWNER'S EQUITY FOR THE MONTH ENDED AUGUST 31, 2016 Martin Atherton, Capital, August 1, 2016 Net Income for August Less Withdrawals Increase in Capital Martin Atherton, Capital, August 31, 2016

$1 4 8 0 0 0 0 $8 2 6 2 7 9 1 0 8 00 8 1 5 4 79 $2 2 9 5 4 7 9

PROBLEM 5D-3, Cont. ATHERTON PLUMBING SERVICES BALANCE SHEET AUGUST 31, 2016 ASSETS

LIABILITIES & OWNER'S EQUITY

Assets

Liabilities

$1 1 8 5 0 0 0 Accounts Payable

Cash Accounts Receivable

5 1 0 0 00

Salaries Payable

Prepaid Rent

1 2 0 0 00

Total Liabilities

Less Acc. Dep. Plumbing Equipment

$2 3 4 7 5 0

Owner's Equity

$2 0 5 0 0 0 2 2 92

2 0 2 7 08 Martin Atherton, Capital

4 8 0 0 00 9 4 79

22 9 5 4 79

4 7 0 5 21 Total Liabilities and

Total Assets

$2 5 3 0 2 2 9

Owner's Equity

$2 5 3 0 2 2 9

Chapter 5, D Solutions - Page 5-19

Less Acc. Dep.

7 1 2 50

4 2 0 00

Plumbing Supplies Office Equipment

$1 6 3 5 0 0

Page D6-1 - Chapter 6, D Solutions

PROBLEM 6D-1

MORRIS CO. SALES JOURNAL

Invoice No .

Date 2016 July

Customer's Name

Page 3

Post Ref.

Accounts Receivable Dr .

Carpet Sales Cr .

241

Joan Timkins Co.

1 7 5 0 00

242

Chris Cowan Co.

8 0 4 00

243

Cross & Co.

2 1 2 5 00

244

Chris Cowan Co.

9 0 0 00

245

Cross & Co.

7 8 5 00

246

Joan Timkins Co.

1 8 9 5 00

8 2 5 9 00

3 5 9 9 00

4 6 6 0 00

(12)

(40)

(41)

1 7 5 0 00 8 0 4 00 2 1 2 5 00 9 0 0 00 7 8 5 00

MORRIS CO. GENERAL JOURNAL Date 2016 July

Upholstery Sales Cr .

Account Title and Description

10 Sales Returns and Allowances Accounts Receivable, Joan Timkins Co. Issued Credit Memo #1

Page 2 Post Ref. 42 12

Dr.

Cr.

4 0 0 00 4 0 0 00

Chapter 6, D Solutions - Page D6-2

PROBLEM 6D-1, Cont. MORRIS CO. ACCOUNTS RECEIVABLE LEDGER NAME

CHRIS COWAN CO.

ADDRESS

56 SPADIN AVE., EDMONTON, AB

Date 2016

T5A 2R7

Post Ref .

Debit

SJ1

8 0 4 00

SJ1

9 0 0 00

1 7 0 4 00

July

Explanation

NAME

CROSS & CO.

ADDRESS

18 VERLUX STREET, ST. ALBERT, AB

Date 2016

Dr. Balance

T8N 5E3

Post Ref .

Debit

SJ1

2 1 2 5 00

SJ1

7 8 5 00

2 9 1 0 00

July

Explanation

NAME

JOAN TIMKINS CO.

ADDRESS

1120 PATRICK ST., MEDICINE HAT, AB T1A 4S6

Date 2016 July

Credit

Post Ref .

Debit

SJ1

1 7 5 0 00

GJ1

SJ1

Explanation

Credit

Dr. Balance

1 7 5 0 00 4 0 0 00

1 8 9 5 00

Dr. Balance

1 3 5 0 00 3 2 4 5 00

Page D6-3 - Chapter 6, D Solutions PROBLEM 6D-1, Cont. MORRIS CO. PARTIAL GENERAL LEDGER NAME: ACCOUNTS RECEIVABLE Date 2016 July 10

Explanation

ACCOUNT NO. Post Ref

SJ1

Credit

DR CR

Balance

4 0 0 00

4 0 0 00 7 8 5 9 00

Debit

GJ1

8 2 5 9 00

NAME: CARPET SALES Date 2016 July

ACCOUNT NO.

Explanation

Post Ref

DR CR

Balance

3 5 9 9 00

NAME: UPHOLSTERY SALES Date 2016 July

ACCOUNT NO.

Explanation

Post Ref

NAME: SALES RETURNS AND ALLOWANCES Date Explanation 2016 July 10

DR CR

Balance

4 6 6 0 00

ACCOUNT NO. Post Ref

Debit

GJ1

4 0 0 00

Credit

Debit

SJ1

Credit

Debit

SJ1

Credit

DR CR

Balance

4 0 0 00

MORRIS CO. SCHEDULE OF ACCOUNTS RECEIVABLE JULY 31, 2016 Joan Timkins Co.

$3 2 4 5 0 0

Chris Cowan Co.

1 7 0 4 00

Cross & Co.

2 9 1 0 00 $7 8 5 9 0 0

Total Accounts Receivable

Chapter 6, D Solutions - Page D6-4

PROBLEM 6D-2

WEST MARKET FINEST SAUSAGES LTD. SALES JOURNAL Date 2017

Sept

Page 5 Post Ref.

Acct. Receivable-Dr. Sales-Cr.

Sales Invoice No.

Terms

W108

1/10,n/30

Petra's Meat Market

2 3 5 0 00

W109

1/10,n/30

Chapman's Deli

7 8 5 00

W110

1/10,n/30

Valemont Variety Meats

8 5 0 00

W111

1/10,n/30

Discount Meats

1 3 0 0 00

W112

1/10,n/30

Chapman's Deli

1 6 9 4 00 6 9 7 9 00

Account Debited

(125) (400)

WEST MARKET FINEST SAUSAGES LTD. GENERAL JOURNAL Date 2017 Sept

Account Title and Description 24 Sales Returns and Allowances Accounts Receivable, Discount Meats

Page 7 Post Ref. 404 125

Dr.

Cr.

2 9 0 00 2 9 0 00

Issued Credit Memo #111C

30 Sales Returns and Allowances Accounts Receivable, Chapman's Deli Issued Credit Memo #112C

404 125

3 8 0 00 3 8 0 00

WEST MARKET FINEST SAUSAGES LTD. CASH RECEIPTS JOURNAL

Date 2017 Sept

Cash Dr. 1

Accounts Receivable Cr.

Sales Discounts Dr.

2 3 2 6 50

2 3 5 0 00

7 8 5 00

7 1 2 00

9 9 9 90

5 0 0 00 1 1 0 0 00

Description of Receipt

300

2 3 5 0 Petra's Meat Market

Chapman's Deli Cash Sales

7 1 2 00

1 0 1 0 Discount Meats

1 0 1 0 00 5 0 0 00

19 9 2 3 40

4 1 4 5 00

1 2 1 2 00

(110)

(125)

(400)

Post Ref.

Karen Blum, Capital

13 5 0 0 00

Sales Cr.

Page 2

3 3 60

(402)

Sundry Account Cr.

13 5 0 0 00

4 X

Cash Sales

Meat Cooling Equipment

140

1 1 0 0 00 14 6 0 0 00

(X)

Page D6-5 - Chapter 6 Solutions

PROBLEM 6D-2, Cont.

Chapter 6, D Solutions - Page D6-6 PROBLEM 6D-2 Cont. WEST MARKET FINEST SAUSAGES LTD. ACCOUNTS RECEIVABLE LEDGER NAME

CHAPMAN'S DELI

ADDRESS

23 FORTUNE AVE., ST. JOHN, NB E2M 2J6

Date 2017 Sept

Explanation 1

Post Ref .

Debit

Balance

SJ5

CRJ2

SJ5

GJ7

7 8 5 00 1 6 9 4 00

ADDRESS

56 TOWNSHIP BLVD., FREDERICTON, NB E3A 3S7

Sept

Post Ref .

Debit

7 6 4 00 2 4 5 8 00

3 8 0 00

2 0 7 8 00

Credit

Dr. Balance

Balance

1 5 6 8 00

SJ5

GJ7

2 9 0 00

2 5 7 8 00

CRJ2

1 0 1 0 00

1 5 6 8 00

Credit

Dr. Balance

1 3 0 0 00

NAME

PETRA'S MEAT MARKET

ADDRESS

45 MAIN STREET, FREDERICTON, NB E3B 5H2

Date 2017

Explanation

Post Ref .

1 Balance

SJ5

CRJ2

Sept

Debit

2 3 5 0 00

ADDRESS

137 FOREST RD., CHIPMAN, NB E0E 3H1 Explanation

1 8

Balance

Post Ref .

Debit

4 SJ5

3 5 8 5 00

2 3 5 0 00

VALEMONT VARIETY MEATS

Date 2017

2 8 6 8 00

1 2 3 5 00

NAME

Sept

1 5 4 9 00

7 8 5 00

DISCOUNT MEATS

Explanation

Dr. Balance

7 6 4 00

NAME

Date 2017

Credit

1 2 3 5 00

Dr. Balance

3 8 7 60 8 5 0 00

1 2 3 7 60

Page D6-7 - Chapter 6, D Solutions PROBLEM 6D-2, Cont. WEST MARKET FINEST SAUSAGES LTD. PARTIAL GENERAL LEDGER NAME: CASH Date 2017 Sept

ACCOUNT NO. Explanation

Post Ref

Debit

Credit

DR CR

Balance

8 7 6 2 37 28 6 8 5 77

1 Balance

CRJ

19 9 2 3 40

NAME: ACCOUNTS RECEIVABLE Date 2017 Sept 1 Balance

Explanation

ACCOUNT NO. Post Ref

Debit

GJ7

SJ5

CRJ

2 9 0 00 3 8 0 00 4 1 4 5 00

Explanation

3 9 5 4 60 3 6 6 4 60 3 2 8 4 60 10 2 6 3 60 6 1 1 8 60

Dr Dr

140 Balance

CRJ

9 1 2 5 00 8 0 2 5 00

Credit

1 1 0 0 00

ACCOUNT NO. Post Ref

300

DR CR

Balance

CRJ

50 0 0 0 00 63 5 0 0 00

Debit

Credit

13 5 0 0 00

NAME: SALES Date 2017 Sept 1 Balance

DR CR

Debit

NAME: KAREN BLUM, CAPITAL Date 2017 Sept 1 Balance

Balance

ACCOUNT NO. Post Ref

125

DR CR

6 9 7 9 00

NAME: MEAT COOLING EQUIPMENT Date 2017 Sept 1 Balance

Credit

110

ACCOUNT NO. Post Ref

400

DR CR

Balance

SJ5

CRJ

41 7 4 5 82 48 7 2 4 82 49 9 3 6 82

Explanation

Debit

Credit

6 9 7 9 00 1 2 1 2 00

Chapter 6, D Solutions - Page 6-8

PROBLEM 6D-2, Cont. WEST MARKET FINEST SAUSAGES LTD. PARTIAL GENERAL LEDGER NAME: SALES DISCOUNTS Date 2017 Sept 30

ACCOUNT NO. Post Ref

Explanation

CRJ

Debit

Sept

Explanation

DR CR Dr

3 3 60

NAME: SALES RETURNS AND ALLOWANCES Date 2017

Credit

ACCOUNT NO. Post Ref

GJ7

Debit

2 9 0 00 3 8 0 00

Credit

402 Balance

3 3 60

404

DR CR

Balance

2 9 0 00 6 7 0 00

WEST MARKET FINEST SAUSAGES LTD. SCHEDULE OF ACCOUNTS RECEIVABLE SEPTEMBER 30, 2017 Chapmen's Deli

$2 0 7 8 0 0

Discount Meats

1 5 6 8 00

Petra;s Meat Market

1 2 3 5 00 1 2 3 7 60 $6 1 1 8 6 0

Valemont Variety Meats Total Accounts Receivable

PROBLEM 6D-3

Date 2016

Inv. No.

Terms

Customer's Account

Salesperson

Post Ref.

Accounts Receivable Dr.

Nov

1 2 4 6 10 12 14 16 18 23 25 26 29 30

1001 1002 1003 1004 1005 1006 1007 1008 1009 1010 1011 1012 1013 1014

2/10,n/30 3/12,n/36 3/12,n/36 2/10,n/30 2/10,n/30 2/10,n/30 3/12,n/36 2/10,n/30 2/10,n/30 3/12,n/36 3/12,n/36 3/12,n/36 2/10,n/30 2/10,n/30

FJ CT GM CT FJ GM GM CT CT FJ GM CT FJ CT

Monthly Totals

Cr.

11,893.00 15,980.00 11,915.00 8,145.00 10,588.00 9,492.00 10,690.00 8,009.00 7,549.00 7,781.00 11,482.00 8,186.00 12,203.00 11,670.00

3,254.00 5,629.00 7,310.00

3,360.00 2,712.00 4,605.00 4,515.00 4,709.00 3,632.00 3,325.00 1,860.00

145,583.00 (1500)

November Totals for Salespersons

FJ CT GM Total

Point & Shoot Digital SingleSales Lens Sales

42,465.00 59,539.00 43,579.00 145,583.00

3,254.00 4,715.00 2,309.00 2,715.00 3,525.00 2,720.00 4,618.00 3,950.00 6,508.00 2,315.00

Surveillance Cameras Sales Cr.

6,109.00

3,340.00 2,308.00

Page 1 Video Cameras Sales Cr.

5,279.00 1,530.00 3,630.00 2,625.00 1,145.00 1,716.00 3,434.00 1,716.00 1,590.00

3,471.00 6,864.00 4,236.00 3,435.00 3,720.00

4,910.00

2,260.00 725.00

52,822.00

50,444.00

16,667.00

25,650.00

(4000)

(4100)

(4200)

(4300)

Page D6-9 - Chapter 6, D Solutions

CALGARY CAMERA COMPANY SALES JOURNAL

Chapter 6, D Solutions - Page 6-10 PROBLEM 6D-3., Cont. CALGARY CAMERA COMPANY GENERAL JOURNAL Date

Post Ref.

Account Title and Description

2016

Nov

Page 1

4900

8 Sales Returns and Allowances

Dr.

4 5 0 00

1500

Accounts Receivable, KGC Investigations

Cr.

4 5 0 00

Issued Credit Memorandum No. 101CR

4900

21 Sales Returns and Allowances

1 8 5 00

1500

Accounts Receivable, North Calgary College

1 8 5 00

Issued Credit Memorandum No. 102CR

CHAN'S IMPORTED TECHNOLOGY ACCOUNTS RECEIVABLE LEDGER NAME

KGC INVESTIGATIONS

ADDRESS

2141 - 34 AVE. NE, CALGARY, AB T2E 0M1

Date 2016 Nov

Post Ref .

Debit

SJ1

15 9 8 0 0 0

GJ1

SJ1

7 5 4 9 00

23 0 7 9 0 0

SJ1

8 1 8 6 00

31 2 6 5 0 0

Explanation

LEISURE LIGHT TECHNOLOGIES

ADDRESS

4014 - 13 ST. NE, CALGARY, AB T2E 8A1

Nov

Explanation

Post Ref .

Debit

Dr. Balance

15 9 8 0 0 0 4 5 0 00

NAME

Date 2016

Credit

15 5 3 0 0 0

Dr. Balance

SJ1

8 1 4 5 00

SJ1

8 0 0 9 00

16 1 5 4 0 0

SJ1

11 6 7 0 0 0

27 8 2 4 0 0

Page 6-11 - Chapter 6, D Solutions PROBLEM 6D-3., Cont. CHAN'S IMPORTED TECHNOLOGY ACCOUNTS RECEIVABLE LEDGER NAME

NORTH CALGARY COLLEGE

ADDRESS

811 - 16 AVE. NW, CALGARY, AB T1Y 4C4 Post Ref .

Debit

SJ1

9 4 9 2 00

GJ1

Date 2016 Nov

Explanation

NAME

SKH MANAGEMENT COMPANY

ADDRESS

#2101, 101 - 8 ST. SW, CALGARY, AB T2H 2T1

Date 2016 Nov

Explanation 23

Post Ref .

Debit

SJ1

7 7 8 1 00

NAME

SOUTH CALGARY SCHOOL DISTRICT

ADDRESS

5099 - 10 ST. SE, CALGARY, AB T2H 2T1

9 4 9 2 00 1 8 5 00

9 3 0 7 00

Credit

Dr. Balance

7 7 8 1 00

Debit

SJ1

11 9 1 5 0 0

SJ1

10 6 9 0 0 0

22 6 0 5 0 0

SJ1

11 4 8 2 0 0

34 0 8 7 0 0

Explanation

NAME

WEST CALGARY TRIBAL COUNCIL

ADDRESS

911 - 12 AVE. SW, CALGARY, AB T2T 5S7

Credit

Dr. Balance

Post Ref .

Debit

SJ1

11 8 9 3 0 0

SJ1

10 5 8 8 0 0

22 4 8 1 0 0

SJ1

12 2 0 3 0 0

34 6 8 4 0 0

Date 2016 Nov

Dr. Balance

Post Ref .

Date 2016 Nov

Credit

Explanation

Credit

Dr. Balance

Chapter 6, D Solutions - Page 6-12 PROBLEM 6D-3., Cont. CALGARY CAMERA COMPANY SCHEDULE OF ACCOUNTS RECEIVABLE NOVEMBER 30, 2016 KGC Investigations

31 2 6 5 0 0

Leisure Light Technologies

27 8 2 4 0 0

North Calgary College

9 3 0 7 00

SKH Management Company

7 7 8 1 00

South Calgary School District

34 0 8 7 0 0

West Calgary Tribal Council

34 6 8 4 0 0 144 9 4 8 0 0

CALGARY CAMERA COMPANY PARTIAL GENERAL LEDGER NAME: ACCOUNTS RECEIVABLE Date Explanation 2016 Nov

Post Ref.

GJ1

SJ1

Debit

Explanation

Post Ref.

Debit

SJ1

Explanation

Post Ref. SJ1

DR CR

Balance

Credit

4 5 0 00 6 3 5 00 Dr 144 9 4 8 0 0

145 5 8 3 0 0

ACCOUNT NO.

4000

DR CR

Balance

Credit

52 8 2 2 0 0 Cr

NAME: DIGITAL SINGLE-LENS SALES Date 2016 Nov 30

1500

4 5 0 0 0 Cr 1 8 5 0 0 Cr

NAME: POINT & SHOOT SALES Date 2016 Nov 30

ACCOUNT NO.

Debit

52 8 2 2 0 0

ACCOUNT NO.

4100

DR CR

Balance

Credit

50 4 4 4 0 0 Cr

50 4 4 4 0 0

Page 6-13 - Chapter 6, D Solutions PROBLEM 6D-3., Cont. CHAN'S IMPORTED TECHNOLOGY PARTIAL GENERAL LEDGER NAME: SURVEILLANCE CAMERAS' SALES Date 2016 Nov 30

Explanation

Post Ref.

Debit

Explanation

Post Ref.

Debit

Explanation

Post Ref. GJ1 GJ1

Debit

Explanation

Post Ref.

Balance

Debit

16 6 6 7 0 0

ACCOUNT NO.

4300

DR CR

Balance

Credit

25 6 5 0 0 0

ACCOUNT NO.

4900

DR CR

Balance

4 5 0 00 6 3 5 00

Credit

4 5 0 00 1 8 5 00

NAME: SALES DISCOUNTS Date

DR CR

Credit

25 6 5 0 0 0 Cr

SJ1

NAME: SALES RETURNS AND ALLOWANCES Date 2016 Nov 8

4200

16 6 6 7 0 0 Cr

SJ1

NAME: VIDEO CAMERAS' SALES Date 2016 Nov 30

ACCOUNT NO.

4950

DR CR

Balance

Credit

Chapter 6, D Solutions - Page 6-14 PROBLEM 6D-4. CALGARY CAMERA COMPANY CASH RECEIPTS JOURNAL Date 2016 Nov

Accounts Receivable Cr.

Cash Dr.

3 50 0 0 0 0 0 10 11 6 5 5 1 4 11 15 0 6 4 1 0 16 11 5 5 7 5 5 21 10 3 7 6 2 4 22 9 1 2 0 8 6 25 8 1 4 5 0 0 26 4 0 0 0 0 0

Sales Cr.

Sales Discounts Cr.

2 3 7 86 4 6 5 90 3 5 7 45 2 1 1 76 1 8 6 14

11 8 9 3 0 0 15 5 3 0 0 0 11 9 1 5 0 0 10 5 8 8 0 0 9 3 0 7 00 8 1 4 5 00

Page 1 Sundry Account

Post Ref.

M. Kuerti, Owner 3300 W Calgary Tribal 4 KGC Investigations 4 4 S Calgary SD W Calgary Tribal 4 N Calgary College 4 Leisure Light 4 5001 Advertising

Amount Cr.

50 0 0 0 0 0

4 0 0 0 00

S Calgary SD 4 KGC Invesigations 4

28 10 3 6 9 3 0 10 6 9 0 0 0 30 7 5 4 9 0 0 7 5 4 9 0 0

3 2 0 70

137 8 3 7 1 9 85 6 1 7 0 0

1 7 7 9 81

54 0 0 0 0 0

(4950)

(X)

(1100)

(1500)

CALGARY CAMERA COMPANY ACCOUNTS RECEIVABLE LEDGER NAME

KGC INVESTIGATIONS

ADDRESS

2141 - 34 AVE. NE, CALGARY, AB T2E 0M1

Date 2016 Nov

Post Ref .

Debit

SJ1

15 9 8 0 0 0

GJ1

4 5 0 00

CRJ1

15 5 3 0 0 0

SJ1

7 5 4 9 00

SJ1

8 1 8 6 00

15 7 3 5 0 0

CRJ1

Explanation

LEISURE LIGHT TECHNOLOGIES

ADDRESS

4014 - 13 ST. NE, CALGARY, AB T2E 8A1

Nov

Explanation

Post Ref .

Debit

Dr. Balance

15 9 8 0 0 0

7 5 4 9 00

NAME

Date 2016

Credit

15 5 3 0 0 0

8 1 8 6 00

Dr. Balance

SJ1

8 1 4 5 00

SJ1

8 0 0 9 00

16 1 5 4 0 0

CRJ1

SJ1

8 1 4 5 00 11 6 7 0 0 0

8 0 0 9 00 19 6 7 9 0 0

Page 6-15 - Chapter 6, D Solutions PROBLEM 6D-4., Cont.

CALGARY CAMERA COMPANY ACCOUNTS RECEIVABLE LEDGER

NAME

NORTH CALGARY COLLEGE

ADDRESS

811 - 16 AVE. NW, CALGARY, AB T1Y 4C4 Post Ref .

Debit

SJ1

9 4 9 2 00

GJ1

1 8 5 00

9 3 0 7 00

CRJ1

9 3 0 7 00

Date 2016 Nov

Explanation

NAME

SKH MANAGEMENT COMPANY

ADDRESS

#2101, 101 - 8 ST. SW, CALGARY, AB T2H 2T1

Date 2016 Nov

Explanation 23

Post Ref .

Debit

SJ1

7 7 8 1 00

NAME

SOUTH CALGARY SCHOOL DISTRICT

ADDRESS

5099 - 10 ST. SE, CALGARY, AB T2H 2T1

Date 2016 Nov

Dr. Balance

9 4 9 2 00

Credit

Dr. Balance

7 7 8 1 00

Post Ref .

Debit

SJ1

11 9 1 5 0 0

SJ1

10 6 9 0 0 0

22 6 0 5 0 0

CRJ1

SJ1

CRJ1

Explanation

11 4 8 2 0 0

WEST CALGARY TRIBAL COUNCIL

ADDRESS

911 - 12 AVE. SW, CALGARY, AB T2T 5S7

Date 2016

Credit

11 9 1 5 0 0

NAME

Nov

Credit

Dr. Balance

10 6 9 0 0 0 22 1 7 2 0 0

10 6 9 0 0 0

11 4 8 2 0 0

Credit

Dr. Balance

Post Ref .

Debit

SJ1

11 8 9 3 0 0

SJ1

10 5 8 8 0 0

22 4 8 1 0 0

CRJ1

11 8 9 3 0 0

10 5 8 8 0 0

CRJ1

10 5 8 8 0 0

SJ1

Explanation

12 2 0 3 0 0

Chapter 6, D Solutions - Page 6-16 PROBLEM 6D-4., Cont. CALGARY CAMERA COMPANY SCHEDULE OF ACCOUNTS RECEIVABLE NOVEMBER 30, 2016 KGC Investigations

8 1 8 6 00

Leisure Light Technologies

19 6 7 9 0 0

SKH Management Company

7 7 8 1 00

South Calgary School District

11 4 8 2 0 0

West Calgary Tribal Council

12 2 0 3 0 0 59 3 3 1 0 0

CALGARY CAMERA COMPANY PARTIAL GENERAL LEDGER NAME: CASH Date 2016 Nov

Explanation

Post Ref.

Debit

CRJ1

137 8 3 7 1 9

NAME: ACCOUNTS RECEIVABLE Date 2016 Nov 8

Explanation

Post Ref.

Debit

GJ1

SJ1

CRJ1

Explanation

Post Ref.

145 5 8 3 0 0

Debit

CRJ1

Explanation

Post Ref. SJ1

DR CR

Balance

Credit

DR 137 8 3 7 1 9

ACCOUNT NO.

1500

DR CR

Balance

Credit

4 5 0 00 6 3 5 00 DR 144 9 4 8 0 0 85 6 1 7 0 0 DR 59 3 3 1 0 0 ACCOUNT NO.

3300

DR CR

Balance

Credit

50 0 0 0 0 0 CR

NAME: POINT & SHOOT SALES Date 2016 Nov 30

1100

4 5 0 0 0 CR 1 8 5 0 0 CR

NAME: OWNER'S EQUITY, M. KUERTI Date 2016 Nov 3

ACCOUNT NO.

Debit

50 5 0 0 0 0

ACCOUNT NO.

4000

DR CR

Balance

Credit

52 8 2 2 0 0 CR

52 8 2 2 0 0

Page 6-17 - Chapter 6, D Solutions PROBLEM 6D-4., Cont. CALGARY CAMERA COMPANY PARTIAL GENERAL LEDGER NAME: DIGITAL SINGLE-LENS SALES Date 2016 Nov 30

Explanation

Post Ref.

Debit

Explanation

Post Ref.

Debit

SJ1

Explanation

Post Ref.

Debit

SJ!

Explanation

Post Ref. GJ1 GJ1

Debit

Explanation

Post Ref.

Debit

CRJ1

Date 2016 Nov 26

Explanation

4200

DR CR

Balance

Credit

Post Ref.

Debit

CRJ1

4 0 0 0 00

16 6 6 7 0 0

ACCOUNT NO.

4300

DR CR

Balance

Credit

25 6 5 0 0 0

ACCOUNT NO.

4900

DR CR

Balance

4 5 0 00 6 3 5 00

Credit

ACCOUNT NO.

4950

DR CR

Balance

Credit

1 7 7 9 8 1 CR

NAME: ADVERTISING EXPENSE

50 4 4 4 0 0

ACCOUNT NO.

4 5 0 00 1 8 5 00

NAME: SALES DISCOUNTS Date 2016 Nov 30

Balance

25 6 5 0 0 0 CR

NAME: SALES RETURNS AND ALLOWANCES Date 2016 Nov 8

DR CR

Credit

16 6 6 7 0 0 CR

NAME: VIDEO CAMERAS' SALES Date 2016 Nov 30

4100

50 4 4 4 0 0 CR

SJ1

NAME: SURVEILLANCE CAMERAS' SALES Date 2016 Nov 30

ACCOUNT NO.

1 7 7 9 81

ACCOUNT NO.

5001

DR CR

Balance

4 0 0 0 00

Credit

AMY BURKE GIFTS PURCHASES JOURNAL Date 2016 Mar

Date of Invoice

Inv. No.

Terms

Post Ref.

2 Whalen Co.

03/02

443

2/10,n30

5 Mega Gifts Co.

03/04

6217

9 Kelsey Co.

03/08

8554

17 Whalen Co.

03/16

449

Account Credited

Page 1

Accounts Payable Cr.

Purchases Dr.

1 7 1 9 00

2 1 4 2 00 2/10,n/30

1 0 3 6 00

Sundry Dr. Account

Post Ref.

Amount

Store Equipment

150

2 1 4 2 00

Store Supplies

124

1 4 2 7 00

1 0 3 6 00

1 4 2 7 00 6 3 2 4 00

2 7 5 5 00

3 5 6 9 00

(211)

(500)

(X)

Page 7-1 - Chapter 7, D Solutions

PROBLEM 7D-1.

Chapter 7, D Solutions - Page D7-2 PROBLEM 7D-1., Cont. AMY BURKE GIFTS ACCOUNTS PAYABLE LEDGER NAME

KELSEY CO.

ADDRESS

944 OWEN SOUND, SHELBURNE, ON L0N 1S1

Date 2016 Mar

Explanation

Post Ref .

PJ1

NAME

MEGA GIFTS CO.

ADDRESS

315 MAIN ST., SHELBURNE, ON L0N 1S6

Date 2016 Mar

Debit

Explanation

Post Ref .

Debit

PJ1

NAME

WHALEN CO.

ADDRESS

968 MAIN ST., SHELBURNE, ON L0N 1S9

Date 2016 Mar

Explanation

Post Ref .

Debit

Credit

Cr. Balance

1 0 3 6 00

Credit

Cr. Balance

2 1 4 2 00

Credit

Cr. Balance

PJ1

1 7 1 9 00

PJ1

1 4 2 7 00

3 1 4 6 00

Page 7-3 - Chapter 7, D Solutions PROBLEM 7D-1., Cont. AMY BURKE GIFTS PARTIAL GENERAL LEDGER NAME: STORE SUPPLIES Date 2016 Mar

Explanation 17

ACCOUNT NO. Post Ref.

Debit

PJ1

1 4 2 7 00

NAME: STORE EQUIPMENT Date 2016 Mar

Explanation 5

Mar

Explanation

Post Ref.

Debit

PJ1

2 1 4 2 00

Post Ref.

Debit

Mar

1 4 2 7 00

Credit

Post Ref.

Debit

PJ1

2 7 5 5 00

Credit

150

DR CR

Balance

2 1 4 2 00

DR CR

ACCOUNT NO. Explanation

6 3 2 4 0 0 Cr

NAME: PURCHASES Date 2016

Balance

ACCOUNT NO.

PJ1

DR CR

ACCOUNT NO.

NAME: ACCOUNTS PAYABLE Date 2016

Credit

124

211 Balance

6 3 2 4 00

500

DR CR

Balance

2 7 5 5 00

PROBLEM 7D-2. SUPER SWEETS PURCHASES JOURNAL Date 2017 Aug

Account Credited

Date Post of Inv. Ref. Terms No. Inv.

Accounts Payable Cr.

Purchases Dr.

5 Bakker Co.

08/04 203 2/10,n60

1 7 2 4 69

9 Holmes Co.

08/08 1288 2/10,n60

1 8 1 4 23

08/12 59616

1 4 9 9 85

19 Well-Equip Co. 08/18 41914

1 8 0 0 75

7 6 6 50 7 6 0 6 02 (210)

12 Genesis Co. 25 Genesis Co.

08/13 59700 2/10,n30

Page 15 Store Supplies Dr.

Sundry Account Name

Post Ref.

Amount Dr.

Display Equipment

120

1 8 0 0 75

1 4 9 9 85 7 6 6 50 3 5 3 8 92 2 2 6 6 35 (110) (510)

1 8 0 0 75 (X)

SUPER SWEETS GENERAL JOURNAL Date 2017 Aug

Account Title and Description 16 Accounts Payable (Bakker Co.) Purchase Returns and Allowances

Page 3 Post Ref.

210/

512

Dr.

Cr.

2 5 5 00 2 5 5 00

Debit memo No. 5 re invoice No. 203.

Chapter 7 Solutions - Page 7-4

Page 7-5 - Chapter 6, D Solutions PROBLEM 7D-2., Cont. SUPER SWEETS ACCOUNTS PAYABLE LEDGER NAME:

BAKKER CO.

ADDRESS:

18212 - 84 AVE NW, EDMONTON, AB T5M 2T2

Date 2017

Explanation

Post R e f.

1 Balance

PJ15

GJ3

Aug

Debit

1 7 2 4 69 2 5 5 00

GENESIS CO.

ADDRESS:

10112 - 33 AVE SW, EDMONTON, AB T5T 2V8 Explanation

Post R e f.

Debit

3 2 2 7 24 2 9 7 2 24

Credit

Cr. Balance

1 Balance

PJ15

1 4 9 9 85

3 0 2 6 22

PJ15

7 6 6 50

3 7 9 2 72

Credit

Cr. Balance

Aug

1 5 2 6 37

NAME:

HOLMES CO.

ADDRESS:

3436 - FORT ROAD NW, EDMONTON, AB T5A 1P2

Date 2017

Explanation

Aug

Post R e f.

1 Balance

PJ15

NAME: ADDRESS: Date 2017 Aug

Cr. Balance

1 5 0 2 55

NAME:

Date 2017

Credit

Debit

2 7 1 8 85 1 8 1 4 23

4 5 3 3 08

Credit

Cr. Balance

WELL-EQUIP CO. 4021 - 75 ST NW, EDMONTON, AB T6L 0L7 Explanation

Post R e f.

1 Balance

PJ15

Debit

4 2 3 92 1 8 0 0 75

2 2 2 4 67

Chapter 7, D Solutions - Page D7-6 PROBLEM 7D-2., Cont. SUPER SWEETS PARTIAL GENERAL LEDGER STORE SUPPLIES

NAME: Date 2017

Explanation

Debit

110

DR CR

Balance

2 0 9 2 10 4 3 5 8 45

Credit

1 Balance

PJ15

Aug

NAME:

DISPLAY EQUIPMENT

Date 2017

Explanation

Post Ref.

2 2 6 6 35

Debit

ACCOUNT NO.

120

DR CR

Balance

4 4 1 5 00 6 2 1 5 75

Credit

1 Balance

PJ15

Aug

NAME:

ACCOUNTS PAYABLE

Date 2017

Explanation

Aug

Post Ref.

GJ3

PJ15

Debit

Explanation

Post Ref.

1 Balance

PJ15

Date 2017

210

DR CR

Balance

6 1 7 1 69 5 9 1 6 69 13 5 2 2 71

2 5 5 00 7 6 0 6 02

Debit

Explanation

Post Ref.

Debit

ACCOUNT NO.

510

DR CR

Balance

74 4 6 7 20 78 0 0 6 12

Credit

3 5 3 8 92

PURCHASES RETURNS AND ALLOWANCES

NAME:

ACCOUNT NO. Credit

PURCHASES

Date 2017 Aug

1 8 0 0 75

1 Balance

NAME:

Aug

Post Ref.

ACCOUNT NO.

512

DR CR

Balance

6 9 2 14 9 4 7 14

Credit

1 Balance

GJ3

2 5 5 00

SUPER SWEETS SCHEDULE OF ACCOUNTS PAYABLE AUGUST 31, 2017 Bakker Co.

2 9 7 2 24

Genesis Co.

3 7 9 2 72

Holmes Co.

4 5 3 3 08

Well-Equip Co.

2 2 2 4 67 13 5 2 2 7 1

DEVLIN WATER BOTTLING CASH PAYMENTS JOURNAL Date 2016

Chq. No.

Account Debited

May 4 547 Wolfe Co. 6 548 Northern Motors Co.

Post Ref.

Sundry Dr.

Accounts Payable Dr.

Purchases Dr.

Purchases Discounts Cr.

1 9 70

9 8 5 15

1500 12 9 0 0 0 0

8 549 Prime Filter Co. 9 550 Mansard Co.

Page 14

9 4 17 3 0 4 4 98

3 1 3 9 15

15 551 Excel Plastics Co.

9 6 5 45 12 9 0 0 0 0 3 2 1 7 45

3 2 1 7 45 4

Cash Cr.

1 8 6 3 70

25 552 Higgins Co.

28 553 Industrial Realty

6400

8 5 0 00

29 554 Yellowknife Utilities o.

6800

1 9 3 38

31 555 Frances Co.

2 6 7 7 18

4 3 9 50 13 9 4 3 38 7 2 4 0 98 5 0 1 8 15 (X)

(2100)

(5100)

4 3 9 50 1 1 3 8 7 26 1 5 1 6 4 (5150)

(1100)

Page 7-7 - Chapter 7, D Solutions

PROBLEM 7D-3.

Chapter 7, D Solutions - Page D7-8 PROBLEM 7D-3., Cont. DEVLIN WATER BOTTLING ACCOUNTS PAYABLE LEDGER NAME:

FRANCES CO.

ADDRESS:

150-525 OLD AIRPORT RD., YELLOWKNIFE, NWT X1A 3X9

Date 2016

Post R e f.

Explanation

CPJ14

4 3 9 50

HIGGINS CO.

ADDRESS:

4812 - 49 ST., YELLOWKNIFE, NWT X1A 1N9 Post R e f.

Explanation

May

Debit

CPJ14

Credit

2 6 7 7 18

MANSARD CO.

ADDRESS:

282 RANGE LAKE RD., YELLOWKNIFE, NWT X1A 3B2 Post R e f.

Explanation

CPJ14

ADDRESS: Date 2016

Credit

Cr. Balance

3 1 3 9 15 3 1 3 9 15

WOLFE CO. 2510 - 48 ST., YELLOWKNIFE, NWT X1A 2B1 Post R e f.

Explanation

May

Debit

1 Balance

NAME:

Cr. Balance

2 6 7 7 18

NAME:

May

4 3 9 50

1 Balance

Date 2016

Cr. Balance

8 7 9 00

NAME:

Date 2016

Credit

1 Balance

May

Debit

Credit

Cr. Balance

1 Balance

CPJ14

1 9 7 0 29 9 8 5 15

9 8 5 14

PARTIAL GENERAL LEDGER CASH

NAME: Date 2016 May

Explanation

Post Ref.

Debit

ACCOUNT NO.

1110

DR CR

Balance

20 9 8 3 2 4 5 1 6 8 40

Credit

1 Balance

CPJ5

26 1 5 1 6 4

Page 7-9 - Chapter 7, D Solutions PROBLEM 7D-3., Cont.

PARTIAL GENERAL LEDGER

NAME: DELIVERY TRUCK Date 2016

Explanation

May

NAME:

ACCOUNTS PAYABLE

Date 2016

Explanation

Date 2016 1 Balance 31

Date 2016

Explanation 1 Balance 31

Date 2016

Explanation 1 Balance 28

NAME:

UTILITIES EXPENSE

Date 2016

Explanation

May

28 Balance 29

DR CR

Balance

12 9 0 0 0 0

Credit

2100

DR CR

Balance

CPJ14

8 6 6 5 62 1 4 2 4 64

Debit

Credit

7 2 4 0 98

ACCOUNT NO.

5100

DR CR

Balance

CPJ14

41 0 7 9 2 5 46 0 9 7 4 0

Debit

Credit

5 0 1 8 15

ACCOUNT NO.

5150

DR CR

Balance

CPJ14

6 2 9 17 7 4 3 04

Post Ref.

Debit

Credit

1 1 3 87

RENT EXPENSE

NAME:

1500

ACCOUNT NO.

PURCHASES DISCOUNTS

NAME:

May

12 9 0 0 0 0

Post Ref.

Explanation

May

CPJ14

PURCHASES

NAME:

May

Debit

Post Ref.

1 Balance

May

Post Ref.

ACCOUNT NO.

6400

DR CR

Balance

CPJ14

8 5 0 00 1 7 0 0 00

Post Ref.

Debit

8 5 0 00

Debit

4 CPJ14

Credit

1 9 3 38

ACCOUNT NO.

6800

DR CR

Balance

2 7 5 89 4 6 9 27

Credit

DEVLIN WATER BOTTLING SCHEDULE OF ACCOUNTS PAYABLE MAY 31, 2016 Frances Co.

4 3 9 50

Wolfe Co.

9 8 5 14 1 4 2 4 64

Chapter 7, D Solutions - Page D7-10 PROBLEM 7D-4. FANCY WRITING SUPPLY CO. SALES JOURNAL

Invoice No .

Date 2015

Terms

Customer's Name

Page 1

Post Ref.

Accounts Receivable Dr.

Writing Supplies Sales Cr .

3 F1001

Dr. M. LaPeierre

2/10, n/30

1 0 5 0 00

6 F1002

Hon. N. Marachee

2/10, n/30

2 3 8 5 50

9 F1003

Fern Michaels, LLB

2/10, n/30

1 1 7 5 00

18 F1004

B. Kirk, CA

2/10, n/30

2 6 8 8 75

22 F1005

Dr. M. LaPeierre

2/10, n/30

1 0 7 5 00

23 F1006

B. Kirk, CA

2/10, n/30

6 3 5 25

31 F1007

Moncton Hospital

2/10, n/30

3 4 7 5 00

12 4 8 4 5 0

(1100)

(4000)

May

FANCY WRITING SUPPLY CO. Page 1

GENERAL JOURNAL Date 2015 May

Account Title and Description 1 Cash Printing Press E. Ames, Capital

12 Sales Returns and Allowances Accounts Receivable (Dr. M. LaPeierre)

Post Ref.

Dr.

1000

20 0 0 0 0 0

1800

25 0 0 0 0 0

3000

4020

Cr.

45 0 0 0 0 0 1 5 0 00

1100/

1 5 0 00

Credit memo No. CR101 re invoice No. F1001.

15 Accounts Payable (Markham Inks) Purchases Returns and Allowances Debit memo No. DR25 re invoice No. M1575.

2150/

5100

2 1 4 50 2 1 4 50

FANCY WRITING SUPPLY CO. PURCHASES JOURNAL

Date 2015

Accounts Payable Cr.

Purchases Dr.

4 9 2 3 00

2/10,n30

1 4 0 0 00

3/15,n60

9 6 9 75

20 5 0 0 0 0

2/10,n30

3 5 0 0 00

2/10,n30

3 3 6 5 00 34 6 5 7 7 5

3 3 6 5 00 14 1 5 7 7 5

20 5 0 0 0 0

(2150)

(5000)

(X)

Date of Invoice

Inv. No.

Terms

Post Ref.

May 2 Gant Paper Co.

May 1

28189

2/10,n30

8 Gant Paper Co.

May 7

28205

12 Markham Inks

May 12

M1575

19 Maritime Equip Sales

May 19

39713

26 Findlay and Fortune

May 26

6922

29 Gant Paper Co.

May 26

28415

Account Credited

Page 1 Sundry Dr. Account

Amount

Printing Press

1800

20 5 0 0 0 0

Page 7-11 - Chapter 7, D Solutions

PROBLEM 7D-4., Cont.

PROBLEM 7D-4., Cont. FANCY WRITING SUPPLY CO. CASH RECEIPTS JOURNAL Accounts Receivable Cr.

Writing Supplies Sales Cr.

Sales Discounts Dr.

Page 1

Description of Receipt

Post Ref.

Sundry Cr.

Royal Bank Bank Loan

2400

11 0 0 0 0 0

Date 2015

Cash Dr.

May 13

11 0 0 0 0 0

6 1 5 00

1 6 0 0 00

2 3 3 7 79

2 3 8 5 50

4 7 7 1 Hon. N. Marachee

8 8 2 00

9 0 0 00

1 8 0 0 Dr. M. LaPeierre

1 0 5 3 50 2 6 3 4 98

1 0 7 5 00 2 6 8 8 75

2 1 5 0 Dr. M. LaPeierre 5 3 7 7 B. Kirk, CA

20 1 2 3 2 7

7 0 4 9 25

2 2 1 5 00

(1000)

(1100)

(4000)

(4025)

11 0 0 0 0 0 (X)

Chapter 7 Solutions - Page 7-12

1 4 0 98

Page D7-13 - Chapter 7, D Solutions PROBLEM 7D-4., Cont.

ACCOUNTS RECEIVABLE LEDGER

NAME

B. KIRK, CA

ADDRESS

302 NORWOOD AVE., MONCTON, NB E1C 5M2

Date 2015 May

Explanation

Post Ref .

SJ1

CRJ1

Debit

2 6 8 8 75 6 3 5 25 2 6 8 8 75

NAME

DR. M. LAPEIERRE

ADDRESS

521 DRAYTON ST., MONCTON, NB E1A 9T9 Post Ref .

Debit

SJ1

1 0 5 0 00

GJ1

CRJ1

22 26

SJ1

Date 2015 May

Explanation

HON. N. MARACHEE

ADDRESS

105 CHAMPLAIN ST, MONCTON, NB E1A 3G4

May

Post Ref .

Debit

SJ1

2 3 8 5 50

CRJ1

NAME

FERN MICHAELS, LLB

ADDRESS

401 NORWOOD AVE, MONCTON, NB E1C 6M4

Date 2015 May

Explanation 9

Post Ref .

Debit

SJ1

1 1 7 5 00

NAME

MONCTON HOSPITAL

ADDRESS

105 MACBEATH AVE, MONCTON, NB E1C 6Z8

Date 2015 May

Explanation 31

Post Ref .

Debit

SJ1

3 4 7 5 00

Dr. Balance

2 6 8 8 75 3 3 2 4 00 6 3 5 25

Dr. Balance

1 0 7 5 00

1 0 5 0 00 9 0 0 00 0 1 0 7 5 00 0

Credit

Dr. Balance

2 3 8 5 50

2 3 8 5 50 0

Credit

Dr. Balance

1 0 7 5 00

CRJ1

Explanation

Credit

1 5 0 00 9 0 0 00

NAME

Date 2015

Credit

1 1 7 5 00

Credit

Dr. Balance

3 4 7 5 00

FANCY WRITING SUPPLY CO. SCHEDULE OF ACCOUNTS RECEIVABLE MAY 31, 2015 B. Kirk, CA Fern Michaels, LLB Moncton Hospital

6 3 5 25 1 1 7 5 00 3 4 7 5 00 5 2 8 5 25

PROBLEM 7D-4., Cont.

FANCY WRITING SUPPLY CO. CASH PAYMENTS JOURNAL Date 2015

Accounts Payable Dr.

Page 1 Purchases Discounts Cr.

Post Ref.

Sundry Dr.

1350

2 2 5 0 00

10 3202 Jenkins Cleaning Service

6140

3 1 8 75

11 3203 Gant Paper Co.

3 1 8 75 9 8 46 4 8 2 4 54

15 3204 D. Lee - Casual Salary

6800

23 3205 Markham Inks

24 3206 MDS Supplies

6200

30 3207 Maritime Equipment Sales

Chq. No.

Account Debited

May 1 3201 Riverfront Realty

4 9 2 3 00

Purchases Dr.

9 8 5 00

9 8 5 00 7 5 5 25

1 5 11

3 5 0 25

7 4 0 14 3 5 0 25

(2150)

10 2 5 0 0 0 1 1 3 5 7 19 7 1 8 6 8 (5125)

(1000)

Chapter 7, D Solutions - Page 7-14

10 2 5 0 0 0 3 9 0 4 0 0 15 9 2 8 2 5 (X)

Cash Cr.

Page D7-15 - Chapter 7, D Solutions PROBLEM 7D-4., Cont.

FANCY WRITING SUPPLY CO. ACCOUNTS PAYABLE LEDGER

NAME:

FINDLAY AND FORTUNE

ADDRESS:

499 MCLAUGHLIN DRIVE, MONCTON, NB E1A 4T9

Date 2015 May

Explanation

ADDRESS:

Explanation

Post R e f.

Debit

3 5 0 0 00

Credit

Cr. Balance

PJ1

4 9 2 3 00

PJ1

1 4 0 0 00

6 3 2 3 00

CPJ1

PJ1

4 9 2 3 00

MARITIME EQUIPMENT SALES

ADDRESS:

1204 MAIN ST., MONCTON, NB E1E 8H1

Date 2015

Explanation

Post R e f.

PJ1

CPJ1

Debit

MARKHAM INKS

ADDRESS:

24 UPTON ST., MONCTON, NB E1E 4P2

Date 2015

Explanation

Post R e f.

1 4 0 0 00 3 3 6 5 00

4 7 6 5 00

Credit

Cr. Balance

20 5 0 0 0 0

10 2 5 0 0 0

NAME:

May

Cr. Balance

NAME:

May

Credit

GANT PAPER CO. 291 COMMUNICATION RD., MONCTON, NB E1H 1D4

Date 2015 May

Debit

PJ1

NAME:

Post R e f.

Debit

PJ1

GJ1

2 1 4 50

CPJ1

7 5 5 25

10 2 5 0 0 0

Credit

9 6 9 75

Cr. Balance

9 6 9 75 7 5 5 25 0

FANCY WRITING SUPPLY CO. SCHEDULE OF ACCOUNTS PAYABLE MAY 31, 2015 Findlay and Fortune Gant Paper Co. Maritime Equipment Sales

3 5 0 0 00 4 7 6 5 00 10 2 5 0 0 0 18 5 1 5 0 0

Chapter 7, D Solutions - Page D7-16 PROBLEM 7D-4., Cont. FANCY WRITING SUPPLY CO. - PARTIAL GENERAL LEDGER CASH

NAME: Date 2015

Post Ref.

Debit

GJ1

CRJ1

20 0 0 0 0 0 20 2 6 4 2 5

CPJ1

Explanation

May

Explanation

SJ1

CRJ1

Explanation 1

Date 2015

Post Ref.

Debit

CPJ1

2 2 5 0 00

Debit

GJ1

PJ1

25 0 0 0 0 0 20 5 0 0 0 0

NAME: ACCOUNTS PAYABLE Date 2015 May 15

Explanation

Post Ref.

Debit

GJ1

2 1 4 50

PJ1

CPJ1

20 0 0 0 0 0 40 2 6 4 2 5 20 5 4 5 5 7

ACCOUNT NO.

1100

DR CR

Balance

Credit

7 0 4 9 2 5 Dr

Post Ref.

Explanation

Balance

12 4 8 4 5 0

PRINTING PRESS

NAME:

DR CR

Credit

1 5 0 0 0 Cr

PREPAID RENT

Date 2015 May

Debit

GJ1

NAME:

May

Post Ref.

1000

19 7 1 8 6 8 Dr

NAME: ACCOUNTS RECEIVABLE Date 2015

ACCOUNT NO.

1350

DR CR

Balance

2 2 5 0 00

Credit

ACCOUNT NO.

1800

DR CR

Balance

25 0 0 0 0 0 45 5 0 0 0 0

Credit

ACCOUNT NO.

2150

DR CR

Balance

2 1 4 50 34 4 4 3 2 5 18 5 1 5 0 0

Credit

34 6 5 7 7 5 15 9 2 8 2 5

1 5 0 00 12 3 3 4 5 0 5 2 8 5 25

Cr Cr

Page D7-17 - Chapter 7, D Solutions PROBLEM 7D-4., Cont. FANCY WRITING SUPPLY CO. - PARTIAL GENERAL LEDGER NAME:

BANK LOAN PAYABLE

Date 2015

Explanation

May

Date 2015 31

SJ1

CRJ1

Date 2015 12

Date 2015 31

Date 2015 May

Post Ref.

Debit

GJ1

1 5 0 00

Post Ref.

Debit

CRJ1

1 4 0 98

PURCHASES Explanation

Balance

Post Ref.

Debit

PJ1

14 1 5 7 7 5

11 0 0 0 0 0

ACCOUNT NO.

3000

DR CR

Balance

Credit

45 0 0 0 0 0

ACCOUNT NO.

4000

DR CR

Balance

Credit

12 4 8 4 5 0 Cr 2 2 1 5 0 0 Cr

SALES DISCOUNTS Explanation

NAME:

Debit

SALES RETURNS AND ALLOWANCES Explanation

NAME:

May

Post Ref

DR CR

Credit

45 0 0 0 0 0 Cr

WRITING SUPPLIES SALES Explanation

NAME:

Debit

CRJ1

NAME:

May

Post Ref.

Explanation

2400

11 0 0 0 0 0 Cr

E. AMES, CAPITAL

Date 2015 May

Debit

CRJ1

NAME:

May

Post Ref.

ACCOUNT NO.

12 4 8 4 5 0 14 6 9 9 5 0

ACCOUNT NO.

4020

DR CR

Balance

1 5 0 00

Credit

ACCOUNT NO.

4025

DR CR

Balance

1 4 0 98

Credit

ACCOUNT NO.

5000

DR CR

Balance

14 1 5 7 75

Credit

Chapter 7, D Solutions - Page D7-18 PROBLEM 7D-4., Cont. FANCY WRITING SUPPLY CO. - PARTIAL GENERAL LEDGER NAME: Date 2015 May

Explanation

Date 2015

Explanation

Date 2015

Explanation 10

NAME:

DISPLAY SUPPLIES EXPENSE

Date 2015

Explanation 24

NAME:

PRINTING SUPPLIES EXPENSE

Date

Explanation

NAME:

SALARIES EXPENSE

Date 2015

Explanation

May

Post Ref.

Debit

CPJ1

CLEANING EXPENSE

May

Debit

PURCHASES DISCOUNTS

NAME:

May

Post Ref. GJ1

NAME:

May

PURCHASES RETURNS AND ALLOWANCES

Post Ref.

Debit

CPJ1

3 1 8 75

Post Ref.

Debit

CPJ1

3 5 0 25

Post Ref.

Debit

Post Ref.

Debit

CPJ1

9 8 5 00

ACCOUNT NO.

5100

DR CR

Balance

Credit

2 1 4 5 0 Cr

2 1 4 50

ACCOUNT NO.

5125

DR CR

Balance

Credit

1 1 3 5 7 Cr

1 1 3 57

ACCOUNT NO.

6140

DR CR

Balance

3 1 8 75

Credit

ACCOUNT NO.

6200

DR CR

Balance

3 5 0 25

Credit

ACCOUNT NO.

6500

DR CR

Balance

ACCOUNT NO.

6800

DR CR

Balance

9 8 5 00

Credit

Page D8-1 - Chapter 8, D Solutions

PROBLEM 8D-1 Mar.

31 Chequebook Balance

5 9 2 9 00

Add: Proceeds of a note collected by bank.

6 2 2 00 1 2 00

Less: Collection Fee

6 1 0 00 6 5 3 9 00 Deduct: NSF Cheque

1 5 1 00 4 3 00

Bank Service Charge

1 9 4 00 6 3 4 5 00

Reconciled Balance

31 Balance per Bank Statement

Mar.

6 4 2 2 00

Add:

1 5 2 7 00

Deposits in Transit

7 9 4 9 00 Deduct: Cheque No. K207

2 0 9 00

K209

4 8 3 00 9 1 2 00

K210

1 6 0 4 00 6 3 4 5 00

Reconciled Balance KINGSMAN INC. GENERAL JOURNAL Date 2016 Mar.

Account Title and Description 31 Accounts Receivable, Perry Wolfe

Post Ref.

Dr.

1 5 1 00

Cash 31

1 5 1 00

Service Charge

4 3 00

Cash 31

Cr.

4 3 00

Cash

6 2 2 00

Collection Charge Notes Receivable To reconcile bank.

1 2 00 6 3 4 00

Chapter 8, D Solutions - Page D8-2 PROBLEM 8D-2 BANK OF INDUSTRY AND COMMERCE MAIN BRANCH HALIFAX, NS This form is provided to help you balance your bank statement. If no errors are reported to the bank within 30 days, the account will be considered correct. Please notify us of any change in address.

Cheques outstanding (not charged to account) Cheque No.

Amount

421

$328

432

575

433

434

309

Total

$1,299

Sort the cheques numerically or by date issued. Check off on the stubs of your chequebook each cheque paid by bank. List the numbers and amounts of cheques still outstanding in the space provided at the left. Verify the deposits in your chequebook with deposits credited on this statement. Bank balance shown on this statement $ 3,867 Plus: Deposits not credited on this statement 2,342 Bank error 655 Subtotal 6,864 Less: Cheques outstanding 1,299 Balance $ 5,565 If your chequebook does not agree, enter any necessary adjustment: $ 5,845 NSF Cheque, Leslie Kraulis $235 Entry Error - Chq. #428 27 Service Charge 18 280 Correct chequebook balance $ 5,565

THE FRESH FLOWER SHOP GENERAL JOURNAL Date Account Title and Description 2017 June 28 Accounts Receivable, Leslie Kraulis

Post Ref.

Dr.

Cr.

2 3 5 00

Cash

2 3 5 00 NSF cheque.

28 Utilities Expense

2 7 00

Cash

2 7 00 Error in recording cheque 428.

28 Bank Service Charge Cash

1 8 00 1 8 00

Bank charges.

Page D8-3 - Chapter 8, D Solutions

PROBLEM 8D-3 SAMUEL & CO. GENERAL JOURNAL Page 2 Date 2016 Apr.

Account Title and Description 1 Petty Cash Cash

Post Ref. 105

Dr.

Cr.

2 0 0 00

100

2 0 0 00

To establish petty cash fund, Chq. 280. 30 Office Equipment Cash

170

2 0 2 5 00

100

2 0 2 5 00

Purchased office equipment. from Forrest Office Equipment, Chq 281. 30 Postage Expense

645

Office Supplies Expense

640

Miscellaneous Expense

630

Cash To replenish petty cash fund, Chq. 282.

100

6 1 00 7 4 00 3 3 00 1 6 8 00

PROBLEM 8D-3, Cont. SAMUEL & CO. AUXILIARY PETTY CASH RECORD Category of Payment

Date 2016 Apr.

Voucher No.

Description Establishment

Receipts

Payments

Postage Expense

Office Supplies Expense

630

Coffee Supplies

3 3 00

Postage

4 2 00

Office Supplies

2 9 00

Office Supplies

4 5 00

Postage

2 0 0 00

Balance (New)

1 9 00 1 6 8 00

3 3 00

4 2 00

1 9 00 6 1 00

7 4 00

3 3 00

3 2 00 1 6 8 00 2 0 0 00

2 0 0 00

Chapter 8 Solutions - Page 8-4

2 0 0 00

Replenishment

Amount

3 2 00

Ending Balance

Account

2 0 0 00

Totals

Sundry

Page D8-5 - Chapter 8, D Solutions

PROBLEM 8D-4 CARON CO. GENERAL JOURNAL Date 2015 Sep.

Account Title and Description 1 Petty Cash

Page 22 Post Ref.

Dr.

Cr.

2 2 5 00

Cash

2 2 5 00 To establish petty cash fund, Chq. 501

29 Postage Expense Delivery Expense Miscellaneous Expense Office Supplies Cash Over and Short Cash To replenish petty cash fund, Chq. 534.

1 2 1 00 2 8 00 5 0 00 9 00 4 00 2 1 2 00

PROBLEM 8D-4, Cont. CARON CO. AUXILIARY PETTY CASH RECORD Category of Payment

Date 2015 Sep.

Voucher No.

Description Establishment

Receipts

Payments

Postage

4 3 00

Delivery

1 3 00

Postage

2 6 00

Miscellaneous

5 0 00

Delivery

1 5 00

Office Supplies

Postage

Sundry Account

Amount

4 3 00 1 3 00 2 6 00

5 2 00 4 00

5 2 00

2 1 2 00

1 2 1 00

1 3 00 2 2 5 00

Replenishment

1 3 00 2 1 2 00

Balance (new)

2 2 5 00

5 0 00

Office Supplies

9 00

Cash Short and Over

4 00

2 8 00

6 3 00

Chapter 8 Solutions - Page 8-6

2 2 5 00

Misc.

1 5 00

9 00

Fund Shortage

Balance

Delivery Expense

2 2 5 00

Postage Expense

Page D8-7 - Chapter 8, D Solutions

PROBLEM 8D-5

WAGSTAFF ENERGY CONSULTING BANK RECONCILIATION APRIL 30, 2017

Balance per bank Statement Add: Deposit in transit Less: Outstanding Cheques # 0449 $1,087.00 # 0450 1,350.00 # 0451 1,100.00 Reconciled Balance

$16,750.54 1,131.87 17,882.41

3,537.00 $14,345.41

Balance per G/L - Unadjusted Add: Interest Income

Less: NSF Cheque 0493 NSF Cheque Charge Bank Service Charges Reconciled Balance

550.04 14.00 18.17

$14,863.45 64.17 14,927.62

582.21 $14,345.41

Page D9-1 - Chapter 9, D Solutions

PROBLEM 9D-1

EMPLOYEE

HOURLY RATE

REG. HOURS

OT HOURS

GROSS EARNINGS

$ 10.00 12.00 11.00 14.00 15.00

40 40 40 40 40

4 2 1 6 10

$460.00 516.00 456.50 686.00 825.00

a. Ann Timmons b. Sam White c. Nancy Harris d. Maggie Holden e. Joy Huber A.

(40 x $10.00) +(4 x $15.00)

= $460.00

(40 x $12.00) + (2 x $18.00)

= $516.00

(40 x $11.00) + (1 x $16.50) = $456.50

(40 x $14.00) + (6 x $21.00) = $686.00

(40 x $15.00) + (10 x $22.50) = $825.00

Chapter 9, D Solutions - Page D9-2

PROBLEM 9D-2 WAYLON CORPORATION Payroll - Second Week of May, 2016 Deductions Employee

Claim Code

Total Salary

Memo amounts FIT PIT

Ann Timmons Sam White Nancy Harris Maggie Holden Joy Huber

2 1 3 4 1

460.00 516.00 456.50 686.00 825.00

26.40 37.85 20.30 45.80 81.15

Totals

15.95 20.85 13.50 24.05 40.85

2,943.50

Medical Union Plan Dues

Net Pay

19.41 8.64 22.16 9.69 19.27 8.56 30.58 12.93 37.38 15.51

32.00 48.00 32.00 48.00 32.00

14.00 15.00 14.00 15.00 15.00

343.60 362.45 348.87 509.64 603.11

326.70 128.80 55.33

192.00

73.00

2,167.67

Tax

CPP

42.35 58.70 33.80 69.85 122.00

PROBLEM 9D-3 Payroll - Third Week of May, 2016 Deductions Employee

Claim Code

Total Salary

Ann Timmons Sam White Nancy Harris Maggie Holden Joy Huber

2 1 3 4 1

475.00 498.00 440.00 665.00 750.00

Totals

2,828.00

FIT

Memo amounts PIT Tax

CPP

Medical Union Plan Dues

Net Pay

28.65 35.05 17.50 43.60 69.95

17.65 20.10 11.80 22.90 34.95

20.16 8.94 21.29 9.35 18.42 8.26 29.59 12.55 33.74 14.10

32.00 48.00 32.00 48.00 32.00

14.00 15.00 14.00 15.00 15.00

353.60 349.21 338.02 493.36 550.26

302.15 123.20 53.20

192.00

73.00

2,084.45

46.30 55.15 29.30 66.50 104.90

Page D9-3 - Chapter 9, D Solutions

PROBLEM 9D-4

Date

WAYLON CORPORATION LTD. GENERAL JOURNAL Account Title and Description

Post Ref.

Dr.

Cr.

2016 May

13 Wages Expense

2 9 4 3 50

Income Taxes Payable

3 2 6 70

CPP Payable

1 2 8 80

EI Payable

5 5 33

Medical Plan Payable

1 9 2 00

Union Dues Payable

7 3 00

Wages Payable

2 1 6 7 67

To record wages per Payroll Summary this date.

PROBLEM 9D-5 2016 May

Wages Expense

2 8 2 8 00

Income Taxes Payable

3 0 2 15

CPP Payable

1 2 3 20

EI Payable

5 3 20

Medical Plan Payable

1 9 2 00

Union Dues Payable

7 3 00

Wages Payable To record wages per Payroll Summary this date.

2 0 8 4 45

Chapter 9, D Solutions - Page D9-4

PROBLEM 9D-6

APPLEBY SUPPLIES Payroll - September, 2016 Deductions Memo amounts FIT PIT

Employee

Claim Code

Total Salary

Fred Mora Pat Samuels Emilia Leung Keith Jones David Jarvis

2 1 3 5 1

1,228.50 163.60 79.05 242.65 747.00 69.95 34.60 104.55 546.00 32.60 19.35 51.95 680.00 38.60 21.65 60.25 1,450.00 216.80 105.15 321.95

Totals

4,651.50

Tax

CPP

Medical

30.35 0.00 33.65 14.04 23.65 10.26 30.28 12.81 0.00 0.00

8.00 8.00 8.00 8.00 0.00

40.00 907.50 Sales 40.00 546.76 Sales 22.00 430.14 Admin 22.00 546.66 Admin 40.00 1,088.05 Manage.

781.35 117.93 37.11

32.00

164.00 3,519.11

Wage Details: Fred Mora Pat Samuels Emilia Leung Keith Jones

Rate Reg Hrs Amount $31.50 39 $1,228.50 18.00 40 720.00 10.50 40 420.00 17.00 40 680.00

O/T

Amount

1 8

27 126

Total 1,228.50 747.00 546.00 680.00 3,201.50

Journal Entry to record this payroll: Date Sept 12 Sales Wages Admin Wages Management Salary Income Tax Payable CPP Payable EI Payable Union Dues Collected Medical Fees Collected Net Payroll Payable

Net Pay

Union

Debit Credit 1,975.50 1,226.00 1,450.00 781.35 117.93 37.11 32.00 164.00 3,519.11

Page D9-5 - Chapter 9, D Solutions

PROBLEM 9D-7 J. PARIS JEWELLRY DESIGN Payroll - August 14, 2016

Employee Edgar Montana May Booth Andrew Hilton April Mills Tony Katz Millie Daffem Yourself

Claim Code

Total Salary

Memo amounts FIT PIT

Tax

CPP

Deductions Life EI Ins. Disab. Medical Charity

3 4 1 2 1 4 2

1,556.00 1,200.00 1,290.00 1,360.00 707.00 562.50 875.00

228.80 112.65 146.15 72.85 179.85 85.50 192.65 91.10 64.40 30.55 28.75 18.10 87.50 44.05

341.45 219.00 265.35 283.75 94.95 46.85 131.55

0.00 26.06 60.40 63.86 31.67 24.54 39.86

0.00 22.55 24.24 25.56 13.34 10.56 16.47

Totals

7,550.50

19.00 12.00 10.00 12.00 0.00 0.00 6.00

36.00 36.00 18.00 36.00 18.00 36.00 18.00

25.00 18.00 25.00 25.00 0.00 5.00 5.00

1,102.55 842.39 863.01 888.83 549.04 439.55 640.12

1,382.90 246.39 112.72 59.00 123.00 198.00

103.00

5,325.49

Wage Details:

Tony Katz Millie Daffem

Rate 14.00 12.50

Reg Hrs Amount 40 $560.00 36 $450.00

O/T Hrs 7 3

Amount $147.00 $112.50

Total $707.00 $562.50

32.00 24.00 24.00 25.00 0.00 0.00 18.00

Net Pay

Chapter 9, D Solutions - Page D9-6

PROBLEM 9D-7

Date

JAY PARIS JEWELLRY DESIGN GENERAL JOURNAL Post Ref.

Account Title and Description

Page 21 Dr.

Cr.

2016 Aug. 14

Professional Salaries Expense

5 4 0 6 00

Casual Wages Expense

1 2 6 9 50

Office Wages Expense

8 7 5 00

Income Tax Payable

1 3 8 2 90

CPP Payable

2 4 6 39

EI Payable

1 1 2 72

Life Insurance Liability

5 9 00

Disability Insurance Liability

1 2 3 00

Medical Plan Liability

1 9 8 00

Charitable Deductions Liability

1 0 3 00 5 3 2 5 49

Salaries and Wages Payable To record payroll for week ending August 14, 2016

JAY PARIS JEWELLRY DESIGN CASH DISBURSEMENTS JOURNAL Date 2016

Aug.

Chq. No.

Post Account Payment to Ref.

611

Edgar Montana

612

May Booth

613

614

Page 8 Wages & Salaries Payable Dr.

Cash Cr .

1 1 0 2 55

Andrew Hilton

8 4 2 39 8 6 3 01

April Mills

8 8 8 83

615

Tony Katz

5 4 9 04

616

Millie Daffern

4 3 9 55

617

Yourself

6 4 0 12

Sundry Account Dr .

Accounts Payable Dr .

Alternate choice for recording cheques to employees: All cheques could be recorded in the general journal using the same amounts as shown above.

Page D10-1 - Chapter 10, D Solutions PROBLEM 10D-1

BAWLF HARDWARE LTD. GENERAL JOURNAL

a. Date 2018

Account Title and Description

Page 8 Post Ref.

Dr.

May 31 Payroll benefits expense

Cr.

9 4 4 00

CPP Payable

4 6 8 00

EI Payable

2 8 7 00

LTD Payable

1 8 9 00

To record employer's portion of deductions.

Cheque No. 543 Employees' Deductions

$ 189.00

Employer's share

189.00 $ 378.00

Total Cheque No. 551 Income Tax: $1,009 X 1.0

$ 1,009.00

CPP: $ 468 X 2.0

936.00

EI: $ 205 X 2.4

492.00 $ 2,437.00

Total Cheque No. 567 Deductions $ 160 X 1.0

$ 160.00

No Employer Contribution $ 160.00

Total BAWLF HARDWARE LTD. GENERAL JOURNAL

c. Date 2018

Account Title and Description

Jun. 10 LTD Payable

Page 9 Post Ref.

Dr.

Cr.

3 7 8 00

Cash

3 7 8 00

Remittance from May payroll to ABC Insurance. Jun. 15 Income Tax Payable

1 0 0 9 00

CPP Payable

9 3 6 00

EI Payable

4 9 2 00

Cash

2 4 3 7 00

May deductions remitted to Receiver General. Jun. 15 Union Dues Payable Cash Union dues collected for May.

1 6 0 00 1 6 0 00

Chapter 10, D Solutions - Page D10-2

PROBLEM 10D-2 COUNTERPOINT COUNSELLING GENERAL JOURNAL Date 2017

Account Title and Description

Post Ref.

Mar. 31 Payroll benefits expense

Page 7 Dr.

Cr.

3 0 8 3 60

CPP Payable

1 7 4 2 00

EI Payable

9 7 1 60

Charitable Donations Payable

3 7 0 00

To record payroll benefits expense for March 2017.

Cheque Date

Cheque to be issued to

Cheque

February 15

Receiver General (1)

$ 12,615.60

February 15

Provincial Health Care Organization (2)

$ 430.00

February 20

Provincial Counsellors Society (3)

$ 270.00

February 20

ABCD Insurance Co. (4)

$ 235.00

February 25

Canadian Centre for Counselling Research (5)

$ 740.00

Space below for calculations: 1. Income tax : $ 7,466.00 X 1.0 CPP: $1,742 X 2.0 EI: $ 694 X 2.4 2. Amount Deducted 3. Amount Deducted 4. Amount Deducted 5. Amount Deducted $ 370 X 2

$ 7,466.00 3,484.00 1,665.60

$ 12,615.60 $ 430.00 $ 270.00 $ 235.00 $ 740.00

Page D10-3 - Chapter 10, D Solutions

PROBLEM 10D-3 WAYLON CORPORATION LTD. GENERAL JOURNAL Date 2016

Account Title and Description

Post Ref.

May 13 Payroll benefits expense

Page 8 Dr.

Cr.

2 0 6 26

CPP Payable

1 2 8 80

EI Payable

7 7 46

To record paroll benefits expense for week 2, May.

PROBLEM 10D-4 Date 2016

May

WAYLON CORPORATION LTD. GENERAL JOURNAL Account Title and Description

20 Payroll benefits expense

Post Ref.

Page 9 Dr.

Cr.

1 9 7 68

CPP Payable

1 2 3 20

EI Payable

7 4 48

To record payroll benefits expense for week 3, May.

Chapter 10, D Solutions - Page D10-4

PROBLEM 10D-5 MUNCHKIN BAKERY LTD. GENERAL JOURNAL Date 2016

Account Title and Description

Page 14 Post Ref.

Mar. 12 Payroll benefits expense

Dr.

Cr.

6 7 1 00

CPP Payable

2 9 2 00

EI Payable

1 7 5 00

Health Care Insurance

2 0 4 00

To record payroll benefits expense for Mar 12 payroll. Mar. 26 Payroll benefits expense

6 7 4 40

CPP Payable

2 9 4 00

EI Payable

1 7 6 40

Health Care Payable

2 0 4 00

To record payroll benefits expense for Mar 26 payroll.

Cheque Date

Cheque to be issued to:

Cheque

April 10

Provincial Health Care Organization (1)

$ 816.00

April 15

Receiver General (2)

$ 3,438.40

April 28

Union Treasurer (3)

$ 110.00

Space below for calculations: 1. Amount deducted X 2. ($204 + $204) X 2 = 2. Income tax ($ 826 + $ 838) X 1.0 CPP ($ 292 + $ 294) X 2.0 EI ($ 125 $ 126) X 2.4 3. Amount deducted: ($ 55 + $ 55)

$ 816.00 $ 1,664.00 1,172.00 602.40

$ 3,438.40 $ 110.00

Page D10-5 - Chapter 10, D Solutions

PROBLEM 10D-6 GRIERSON AUTO REPAIR COMPANY - GENERAL JOURNAL Date 2017

May

Account Title and Description

Post Ref.

2 Payroll benefits expense

Dr.

Page 13 Cr.

2 9 9 67

CPP Payable

1 8 9 85

EI Payable

1 0 9 82

To record payroll benefits expense for the May 2 payroll. May

9 Payroll benefits expense

2 9 3 52

CPP Payable

1 8 5 85

EI Payable

1 0 7 67

To record payroll benefits expense for the May 9 payroll. May

16 Payroll benefits expense

2 9 3 52

CPP Payable

1 8 5 85

EI Payable

1 0 7 67

To record payroll benefits expense for the May 16 payroll. May

23 Payroll benefits expense

2 9 1 55

CPP Payable

1 8 4 56

EI Payable

1 0 6 99

To record payroll benefits expense for the May 23 payroll. May

30 Payroll benefits expense

2 9 1 94

CPP Payable

1 8 4 81

UI Payable

1 0 7 13

To record payroll benefits expense for the May 30 payroll.

Chapter 10, D Solutions - Page D10-6

PROBLEM 10D-6, Cont. Cheque Date

Cheque to be issued to:

Cheque Amount

September 15

Receiver General (1)

$ 5,878.57

September 20

Union Treasurer (2)

$ 200.00

September 20

Health Plan Organization (3)

$ 405.75

September 20

Dental Insurance Co. (4)

$ 336.25

Space below for calculations: 1. Income tax: ($ 638.14 + 619.39 + 616.93 + 603.76 + 614.03)

$3,092.25

CPP: ($ 189.85 + 185.85 + 185.85 + 184.56 + 184.81) X 2.0

1,861.84

EI: ($ 78.44 + 76.91 + 76.91 + 76.42 + 76.52) X 2.4

924.48

$ 5,878.57

2. Amounts deducted: ($ 40.00) X 5

$ 200.00

3. Amounts Deducted: ($ 81.15) X 5

$ 405.75

4. Amounts Deducted: ($ 67.25 x 5)

$ 336.25

Page D11-1 - Chapter 11, D Solutions

PROBLEM 11D-1

AEGEAN CORPORATION SALES JOURNAL Date 2017 Sept

Invoice No.

Customer's Name

Post Ref.

Page 5

Accounts Receivable Dr.

502

Ray Fortuna

503

Wilma Jorge

504

Cassie Ho

18 6 9 0 00

505

Wilma Jorge

4 1 4 7 50

Sales Tax Payable Cr.

Equipment Sales Cr.

22 2 6 0 00 1 0 6 0 00 21 2 0 0 00 8 8 3 5 75 4 2 0 75 8 4 1 5 00 8 9 0 00 17 8 0 0 00 1 9 7 50

3 9 5 0 00

53 9 3 3 25 2 5 6 8 25 51 3 6 5 00

(111)

(400)

(212)

AEGEAN CORPORATION GENERAL JOURNAL Date 2017 Sept

Page 3 Post Ref.

Dr.

Sales Returns and Allowances

402

4 2 5 0 00

Sales Tax Payable

212

2 1 2 50

Account Title and Description

Accounts Receivable, Ray Fortuna Issued Credit Memo #8

111

Cr.

4 4 6 2 50

Chapter 11, D Solutions - Page D11-2

PROBLEM 11D-1, Cont. AEGEAN CORPORATION ACCOUNTS RECEIVABLE LEDGER NAME

RAY FORTUNA

ADDRESS

82 FIR STREET, REGINA, SK

Date 2017

Explanation

S4W 3A6 Post Ref .

1 Balance

SJ5

GJ3

Sept

Debit

ADDRESS

34 SUSSEX RD., SASKATOON, SK S7H 8J2

Sept

Post Ref .

Debit

SJ5

19 8 9 7 50

Credit

Dr. Balance

7 3 5 00

WILMA JORGE

ADDRESS

124 PARTRIDGE WAY, PRINCE ALBERT, SK S6V 4H2 Explanation

Post Ref .

19 4 2 5 00

18 6 9 0 00

NAME

Sept

4 4 6 2 50

Balance

Date 2017

24 3 6 0 00

22 2 6 0 00

CASSIE HO

Explanation

Dr. Balance

2 1 0 0 00

NAME

Date 2017

Credit

Debit

Credit

Dr. Balance

1 Balance

SJ5

8 8 3 5 75

10 0 9 5 75

SJ3

4 1 4 7 50

14 2 4 3 25

1 2 6 0 00

Page D11-3 - Chapter 11, D Solutions PROBLEM 11D-1, Cont. AEGEAN CORPORATION PARTIAL GENERAL LEDGER NAME: ACCOUNTS RECEIVABLE Date 2017 Sept 1

ACCOUNT NO. Post Ref

Explanation

Debit

Credit

Balance

GJ3

SJ5

4 4 6 2 50

NAME: SALES TAX PAYABLE Date 2017 Sept

DR CR

Balance

4 0 9 5 00 3 6 7 50 53 5 6 5 75

Cr Dr

53 9 3 3 25

ACCOUNT NO. Post Ref

111

212

DR CR

Balance

GJ3

SJ5

1 7 4 2 50 1 5 3 0 00 4 0 9 8 25

Explanation 1

Balance

Debit

Credit

2 1 2 50 2 5 6 8 25

NAME: EQUIPMENT SALES Date 2017 Sept 30

ACCOUNT NO. Post Ref

Explanation

Debit

SJ5

Explanation

DR CR

Balance

51 3 6 5 00

ACCOUNT NO. Post Ref

Debit

GJ3

4 2 5 0 00

400

Credit

NAME: SALES RETURNS AND ALLOWANCES Date 2017 Sept 30

Credit

402

DR CR

Balance

4 2 5 0 00

AEGEAN CORPORATION SCHEDULE OF ACCOUNTS RECEIVABLE SEPTEMBER 30, 2017 Ray Fortuna

$1 9 8 9 7 5 0

Cassie Ho

19 4 2 5 00 14 2 4 3 25 $5 3 5 6 5 7 5

Wilma Jorge Total Accounts Receivable

PROBLEM 11D-2 MICROCEL COMMUNICATIONS SALES JOURNAL

Date 2016 Aug.

Page 1

PST Payable Cr.

GST Payable Cr.

4 5 8 9 76

2 8 6 86

2 0 4 90

402

3 9 2 0 00

2 4 5 00

1 7 5 00

20 Mountain Explorations Co.

403

7 2 0 7 20

4 5 0 45

3 2 1 75

24 Walkin's Safety Supply Co.

404

7 0 0 0 00

3 1 2 50

405

4 4 7 4 40

4 3 7 50 2 7 9 65

27 1 9 1 36

1 6 9 9 46

1 2 1 3 90

(126)

(210)

Post Ref.

8 Kelly's Real Estate Co.

401

9 Well's Hotshot Service Co.

Customer

29 Well's Hotshot Service Co.

Radio Sales Cr.

4 0 9 8 00 3 5 0 0 00 6 4 3 5 00 6 2 5 0 00

1 9 9 75

(220)

Cellular Sales Cr.

3 9 9 5 00 9 7 5 0 00

14 5 2 8 00

(400)

(404)

Chapter 11 Solutions - Page D11-4

Accounts Receivable Dr.

Sales Invoice

MICROCEL COMMUNICATIONS CASH RECEIPTS JOURNAL Cash Dr.

Date 2016 Aug.

Accounts Receivable Cr.

PST Payable Cr.

GST Payable Cr.

Radio Sales Cr.

Page 1 Cellular Sales Cr.

5 18 5 0 2 40

9 0 7 2 00

1 9 6 0 00

1 1 5 6 40

8 2 6 00

5 6 7 00

4 0 5 00

1 6 5 2 0 0 0 Cash Sales

Cash Sales

8 1 0 0 00

3 7 2 1 76

29 2 0 3 2 8 0 0 30

Sundry Cr.

45 0 0 0 00

Well's Hotshot Serv 4

1 9 6 0 00

21 5 0 0 0 0 0 0 27

Post Ref.

R. Lamoureux, Cap. 300

1 45 0 0 0 00

Description of Receipt

1 2 7 0 50

9 0 7 50

1 9 6 0 00

150 5 4 4 1 6

7 6 4 1 76

2 9 9 3 90

2 1 3 8 50

(105)

(126)

(210)

(220)

Loan Payable

250

Kelly's Real Estate

7 9 0 0 0 0 1 0 2 5 0 0 0 Cash Sales. Well's Hotshot

50 0 0 0 00

95 0 0 0 00

16 0 0 0 00 26 7 7 0 00 (400)

(404)

(X)

Page D11-5 - Chapter 11 Solutions

PROBLEM 11D-2, Cont.

Chapter 11, D Solutions - Page D11-6

PROBLEM 11D-2, Cont. MICROCEL COMMUNICATIONS GENERAL JOURNAL Date 2016 Aug

Post Ref.

Account Title and Description

Page 1 Dr.

Sales Returns and Allowances

406

7 7 5 00

PST Payable

210

5 4 25

GST Payable

220

3 8 75

126

Accounts Receivable, Kelly's Real Estate Co.

Cr.

8 6 8 00

Issued Credit Memo #1

Sales Returns and Allowances

406

1 6 8 0 00

PST Payable

210

1 1 7 60

GST Payable

220

8 4 00

126

Accounts Receivable, Mountain Explorations Co.

1 8 8 1 60

Issued Credit Memo #2

MICROCEL COMMUNICATIONS ACCOUNTS RECEIVABLE LEDGER NAME

KELLY'S REAL ESTATE CO.

ADDRESS

245 CHATTERFORTH RD., WINNIPEG, MB R2T 4R5

Date 2016

Explanation

Post Ref .

Debit

Dr. Balance

SJ1

GJ1

8 6 8 00

3 7 2 1 76

CRJ1

3 7 2 1 76

Aug

4 5 8 9 76

NAME

MOUNTAIN EXPLORATIONS CO.

ADDRESS

66 ROYAL ROAD, STONY MOUNTAIN, MB R0C 3C0

Date 2016 Aug

Credit

Explanation

Post Ref .

SJ1

GJ1

Debit

4 5 8 9 76

Credit

7 2 0 7 20

Dr. Balance

7 2 0 7 20 1 8 8 1 60

5 3 2 5 60

Page D11-7 - Chapter 11, D Solutions

PROBLEM 11D-2, Cont. MICROCEL COMMUNICATIONS ACCOUNTS RECEIVABLE LEDGER NAME

WALKINS SAFETY SUPPLY CO.

ADDRESS

11203 FRASER WAY, WINNIPEG, MB R3C 9G2

Date 2016 Aug

Explanation

Post Ref . SJ1

Debit

WELL'S HOTSHOT SERVICE CO.

ADDRESS

23 PITTS AVE., PORTAGE LA PRAIRIE, MB R1N 7B2 Explanation

Post Ref .

SJ1

CRJ1

SJ1

CRJ1

Aug

Dr. Balance

7 0 0 0 00

NAME

Date 2016

Credit

Debit

7 0 0 0 00

Credit

Dr. Balance

3 9 2 0 00

3 9 2 0 00 1 9 6 0 00

4 4 7 4 40

1 9 6 0 00 6 4 3 4 40

1 9 6 0 00

4 4 7 4 40

ACCOUNT NO.

105

DR CR

Balance

150 5 4 4 1 6

MICROCEL COMMUNICATIONS PARTIAL GENERAL LEDGER NAME: Date 2016 Aug

CASH Explanation

Post Ref

Debit

CRJ1

150 5 4 4 1 6

NAME: ACCOUNTS RECEIVABLE Date 2016 Aug

Explanation

Credit

ACCOUNT NO. Post Ref

GJ1

SJ1

CRJ1

Debit

126

Credit

DR CR

Balance

8 6 8 00 1 8 8 1 60

8 6 8 00 2 7 4 9 60 24 4 4 1 76 16 8 0 0 00

Cr Dr

27 1 9 1 36 7 6 4 1 76

Chapter 11, D Solutions - Page D11-8

PROBLEM 11D-2, Cont. MICROCEL COMMUNICATIONS PARTIAL GENERAL LEDGER NAME: PST PAYABLE Date 2016 Aug

Explanation

ACCOUNT NO. Post Ref

GJ1

SJ1

CRJ1

Debit

5 4 25 1 1 7 60

Aug

Explanation

Post Ref GJ1

GJ1

SJ1

CRJ1

Debit

Aug

NAME:

ROYCE LAMOUREUX, CAPITAL

Date 2016

Explanation

Aug

5 4 25 1 7 1 85 1 5 2 7 61 4 5 2 1 51

Cr Cr

Balance

3 8 75 1 2 2 75 1 0 9 1 15 3 2 2 9 65

Cr Cr

ACCOUNT NO. Post Ref

Debit

Post Ref CRJ1

Debit

220

DR CR

1 2 1 3 90 2 1 3 8 50

CRJ1

Credit

3 8 75 8 4 00

NAME: LOAN PAYABLE Explanation

Balance

ACCOUNT NO.

Date 2016

DR CR

1 6 9 9 46 2 9 9 3 90

NAME: GST PAYABLE Date 2016

Credit

210

250

Credit

DR CR

Balance

50 0 0 0 00

ACCOUNT NO.

300

Credit

DR CR

Balance

45 0 0 0 00

Page D11-9 - Chapter 11, D Solutions

PROBLEM 11D-2, Cont. MICROCEL COMMUNICATIONS PARTIAL GENERAL LEDGER NAME: Date 2016 Aug

Post Ref

SJ1

CRJ1

Date 2016

Credit

DR CR

Balance

9 7 5 0 00 16 0 0 0 00

9 7 5 0 00 25 7 5 0 00

Debit

Post Ref

SJ1

CRJ1

404

Credit

DR CR

Balance

14 5 2 8 00 26 7 7 0 00

14 5 2 8 00 41 2 9 8 00

Debit

SALES RETURNS AND ALLOWANCES, CELLULAR

Date 2016 Aug 15

Explanation

Post Ref GJ1 GJ1

ACCOUNT NO.

CELLULAR SALES Explanation

NAME:

400

ACCOUNT NO.

Explanation

NAME:

Aug

RADIO SALES

Debit

7 7 5 00 1 6 8 0 00

ACCOUNT NO.

406

DR CR

Balance

7 7 5 00 2 4 5 5 00

Credit

MICROCEL COMMUNICATIONS SCHEDULE OF ACCOUNTS RECEIVABLE AUGUST 31, 2016 Mountain Explorations Co.

$5 3 2 5 60

Walkins Safety Supply Co.

7 0 0 0 00 4 4 7 4 40

Well's Hotshot Service Co. Total Accounts Receivable

$1 6 8 0 0 0 0

Chapter 11, D Solutions - Page D11-10

PROBLEM 11D-3

THE ANTIQUES & IMPORTERS WAREHOUSE SALES JOURNAL

Page 13

Accounts Receivable Dr.

HST Payable Cr.

Merchandise Sales Cr.

3 3 3 3 50

3 8 3 50

2 9 5 0 00

Burgess Fancys

3 9 5 5 00

4 5 5 00

3 5 0 0 00

861

Hard - To - Find Co.

2 7 3 00

2 1 0 0 00

862

Georgina's Collections

2 3 7 3 00 4 4 2 3 95

5 0 8 95

3 9 1 5 00

863

Perfect Sales Co.

5 9 3 2 50

6 8 2 50

5 2 5 0 00

Date 2017

Sales Invoice

Customer's Name

Jan. 3

859

Starcraft Reproductions

860

Post Ref.

20 0 1 7 95 (125)

2 3 0 2 95 17 7 1 5 00 (221)

(400)

THE ANTIQUES & IMPORTERS WAREHOUSE CASH RECEIPTS JOURNAL

Date 2017 Jan.

Cash Dr.

Accounts Receivable Cr.

HST Payable Cr.

Merchandise Sales Cr.

Sales Discounts Dr.

Page 17

Description of Receipt

Post Ref.

Sundry Cr.

M. Worth, Capital

300

31 0 0 0 00

3 2 7 4 50

3 3 3 3 50

5 9 0 0 Starcraft Repr.

3 9 5 5 00

Burgess Fancys

4 3 6 1 80

Cash Sales

3 7 9 0 65

5 3 6 7 50 51 7 4 9 45

(111)

5 0 1 80

3 8 6 0 00

6 8 3 0 Georgina's Coll.

3 8 5 8 95 11 1 4 7 45

6 1 7 50 1 1 1 9 30

4 7 5 0 00 8 6 1 0 00

(125)

(221)

(400)

Cash Sales

1 2 7 30

(402)

4 X

31 0 0 0 00

(X)

Page D11-11 - Chapter 11, D Solutions

PROBLEM 11D-3, Cont.

Chapter 11, D Solutions - Page D11-12 PROBLEM 11D-3, Cont. THE ANTIQUES & IMPORTERS WAREHOUSE GENERAL JOURNAL Date 2017

Post Ref

Account Title and Description

24 Sales Returns and Allowances

Jan

HST Payable

401

5 0 0 00

221

6 5 00

125

Accounts Receivable, Georgina's Collections

Dr.

Cr.

5 6 5 00

Issued Credit Memo #10

Sales Returns and Allowances

401

1 8 8 7 00

HST Payable

221

2 4 5 31

125

Accounts Receivable, Perfect Sales Co.

3 1 3 2 31

Issued Credit Memo #11

THE ANTIQUES & IMPORTERS WAREHOUSE ACCOUNTS RECEIVABLE LEDGER NAME

BURGESS FANCYS

ADDRESS

177 PORTMOUTH CRESC., ST. JOHN'S, NF A1C 0S1

Date 2017 Jan

Explanation

Post Ref .

1 Balance

SJ1

CRJ1

Debit

3 9 5 5 00

ADDRESS

188 CASHMERE AVE., ST. JOHN'S, NF A1C 5H1

Jan

Balance

Post Ref .

3 9 5 5 00 3 9 5 5 00

GEORGINA'S COLLECTIONS

Explanation

Dr. Balance

NAME

Date 2017

Credit

Debit

Credit

Dr. Balance

SJ1

GJ1

5 6 5 00

3 8 5 8 95

CRJ1

3 8 5 8 95

4 4 2 3 95

Page D11-13 - Chapter 11, D Solutions THE ANTIQUES & IMPORTERS WAREHOUSE PROBLEM 11D-3, Cont. ACCOUNTS RECEIVABLE LEDGER NAME

HARD-TO-FIND CO.

ADDRESS

47 CLIFF CLOSE, ST. JOHN'S, NF A1C 7E7

Date 2017

Explanation

Jan

Post Ref .

SJ1

2 0 4 7 56

PERFECT SALES CO.

ADDRESS

217 ATLANTIC CRESC., ST. JOHN'S, NF A1C 1T1 Explanation

Post Ref .

Debit

SJ1

GJ1

3 1 3 2 31

ADDRESS

17 HILLHURST CRESC., ST. JOHN'S, NF A1C 0P9 Explanation

1 Balance

SJ1

CRJ1

Explanation 1

Balance

Post Ref

Jan

3 5 9 6 84

Dr. Balance

1 8 0 9 13 5 1 4 2 63

3 3 3 3 50 3 3 3 3 50

1 8 0 9 13

111

DR CR

Balance

CRJ1

2 6 7 5 32 54 4 2 4 77

Debit

Credit

51 7 4 9 45

NAME: ACCOUNTS RECEIVABLE Date 2017

Credit

Debit

THE ANTIQUES & IMPORTERS WAREHOUSE PARTIAL GENERAL LEDGER ACCOUNT NO.

CASH

Date 2017 Jan

Post Ref .

6 7 2 9 15

5 9 3 2 50

STARCRAFT REPRODUCTIONS

NAME:

Dr. Balance

7 9 6 65

NAME

Jan

Credit

Balance

Date 2017

4 4 2 0 56

2 3 7 3 00

NAME

Jan

Dr. Balance

Balance

Date 2017

Credit

Debit

ACCOUNT NO. Post Ref

125

DR CR

Balance

GJ1

SJ1

4 6 5 3 34 4 0 8 8 34 9 5 6 03 20 9 7 3 98

CRJ1

9 8 2 6 53

Explanation 1

Balance

Debit

Credit

5 6 5 00 3 1 3 2 31 20 0 1 7 95 11 1 4 7 45

Chapter 11, D Solutions - Page D11-14

PROBLEM 11D-3, Cont.

THE ANTIQUES & IMPORTERS WAREHOUSE PARTIAL GENERAL LEDGER

NAME: HST PAYABLE Date 2017 Jan 1 Balance

Post Ref

221

DR CR

Balance

GJ1

SJ1

CRJ1

3 1 4 6 90 3 0 8 1 90 2 8 3 6 59 5 1 3 9 54 6 2 5 8 84

Date 2017 Jan

Explanation

Debit

Post Ref

Explanation 1

2 3 0 2 95 1 1 1 9 30

Debit

CRJ1

Post Ref

Explanation

Debit

Cr Cr

ACCOUNT NO.

300

DR CR

Balance

48 0 0 0 00 79 0 0 0 00

Credit

31 0 0 0 00

MERCHANDISE SALES

Date 2017

Balance

NAME:

Credit

6 5 00 2 4 5 31

MARTHA WORTH, CAPITAL

NAME:

ACCOUNT NO.

400

DR CR

Balance

82 1 4 5 62 99 8 6 0 62 108 4 7 0 6 2

Credit

1 Balance

SJ1

CRJ1

Jan

17 7 1 5 00 8 6 1 0 00

Date 2017

Explanation

ACCOUNT NO.

SALES RETURNS AND ALLOWANCES

NAME:

Jan

ACCOUNT NO.

Post Ref

Debit

Credit

DR CR

Balance

1 1 4 3 56 1 6 4 3 56 3 5 3 0 56

1 Balance

GJ1

5 0 0 00 1 8 8 7 00

NAME: SALES DISCOUNTS Date 2017 Jan 30

Explanation

ACCOUNT NO. Post Ref

Debit

CRJ1

1 2 7 30

Credit

401

402

DR CR

Balance

1 2 7 30

Page D11-15 - Chapter 11, D Solutions

PROBLEM 11D-3, Cont.

THE ANTIQUES & IMPORTERS WAREHOUSE SCHEDULE OF ACCOUNTS RECEIVABLE JANUARY 31, 2017 Hard-To-Find Co.

$4 4 2 0 5 6

Perfect Sales Co.

3 5 9 6 84

Starcraft Reproductions

1 8 0 9 13 $9 8 2 6 5 3

Total Accounts Receivable

PROBLEM 10D-4 FONTES TEXTILES LTD. PURCHASES JOURNAL Page 21

Date 2015

Aug

Post Terms Ref.

3 Euro. Fabric Co.

8/2

451

8 Eddyn Co.

8/7

10 Forward Co.

8/8

12 Lavoy Co.

8/12

17 Reliant Co.

8/16

24 Lavoy Co.

8/25

29 Euro. Fabric Co.

8/27

n/15

Accounts Payable Cr.

Purchases Dr.

2 2 0 9 20 2 1 0 4 00 8 7 5 00 9 1 8 75 1214 1/10,n/60 4 1 2 8 6 25 1 2 2 5 00 798 4 6 1 9 50 110 4 2 0 9 8 95 850 2/10,n/3 4 1 6 8 0 00 531 4 n/15 3 5 1 7 50 3 3 5 0 00 12 3 3 0 15 7 5 5 4 00 525 2/10,n/60 4

(220)

(500)

Prepaid GST Dr.

Store Supplies Dr.

Sundry Dr. Account

1 0 5 20 4 3 75 6 1 25 5 9 0 00 2 9 50 Office Equipment 9 9 95 8 0 00 16 0 0 00 1 6 7 50 5 8 7 15 2 1 9 0 00 (142)

(130)

Amount

180

1 9 9 9 00

1 9 9 9 00 (X)

Chapter 11 Solutions - Page D11-16

Account Credited

Date of Inv. Invoice No.

Page D11-17 - Chapter 11, D Solutions

PROBLEM 11D-4, Cont. FONTES TEXTILES LTD. - ACCOUNTS PAYABLE LEDGER NAME:

EDDYN CO.

ADDRESS: Date 2015

164 BRONTE ST., SASKATOON, SK S7T 5C3 Explanation

Post R e f.

1 Balance

PJ21

GJ32

Aug

NAME:

EUROPEAN IMPORT FABRICS CO.

ADDRESS:

58 JASON ST., REGINA, SK

Date 2015

Explanation

Debit

Cr. Balance

8 4 0 00 9 1 8 75 1 4 7 00

1 7 5 8 75 1 6 1 1 75

S4V 2G4 Post R e f.

Debit

Credit

Cr. Balance

1 Balance

PJ21

2 2 0 9 20

5 4 6 4 20

PJ21

3 5 1 7 50

8 9 8 1 70

Credit

Cr. Balance

Aug

NAME:

FORWARD CO.

ADDRESS:

8902 BURKE ROAD, YORKTON, SK

Date 2015

Explanation

Post R e f.

PJ21

NAME:

LAVOY CO.

ADDRESS:

18 PARK DRIVE, SASKATOON, SK

Date 2015

Explanation

3 2 5 5 00

S3N 3J7

1 Balance

Aug

Debit

1 5 7 5 00 1 2 8 6 25

2 8 6 1 25

S7T 5J2

Post R e f.

Debit

Credit

Cr. Balance

1 Balance

PJ21

6 1 9 50

1 1 4 4 50

PJ21

1 6 8 0 00

2 8 2 4 50

Credit

Cr. Balance

Aug

NAME:

RELIANT CO.

ADDRESS:

2415 RED RIVER DRIVE, SASKATOON, SK

Date 2015 Aug

Credit

Explanation 1 Balance

Post R e f.

5 2 5 00

S7T 0P0 Debit

4 PJ21

2 7 3 0 00 2 0 9 8 95

4 8 2 8 95

Chapter 11, D Solutions - Page D11-18 PROBLEM 11D-4, Cont. FONTES TEXTILES LTD. - PARTIAL GENERAL LEDGER STORE SUPPLIES

NAME: Date 2015 Aug

Explanation

Post Ref

Debit

PJ21

2 1 9 0 00

PREPAID GST

NAME: Date 2015

Explanation

Post Ref

Debit

130

DR CR

Balance

2 1 9 0 00

Credit

ACCOUNT NO.

142

DR CR

Balance

2 7 9 5 00 2 7 8 8 00 3 3 7 5 15

Credit

1 Balance

GJ32

PJ21

Aug

NAME:

OFFICE EQUIPMENT

Date 2015

Explanation

Aug

7 00

Date 2015 Aug 1

Explanation

Post Ref

Debit

PJ21

1 9 9 9 00

Post Ref

GJ32

PJ21

Aug

Balance

NAME:

Explanation

DR CR

Balance

1 9 9 9 00

Credit

Balance

8 9 2 5 00 8 7 7 8 00 21 1 0 8 15

1 4 7 00

Balance

220

DR CR

1 2 3 3 0 1 5 Cr

ACCOUNT NO.

500

DR CR

Balance

PJ21

86 3 4 0 00 93 8 9 4 00

Post Ref

Debit

Credit

7 5 5 4 00

PURCHASES RETURNS AND ALLOWANCES

Date 2015 1

Debit

PURCHASES Explanation

180

Balance

Date 2015

ACCOUNT NO.

NAME:

5 8 7 15

NAME: ACCOUNTS PAYABLE

Aug

ACCOUNT NO.

Post Ref

510 DR CR

Balance

GJ32

1 3 7 4 00 1 5 1 4 00

Debit

Credit

1 4 0 00

Page D11-19 - Chapter 11, D Solutions

PROBLEM 11D-4, Cont.

FONTES TEXTILES LTD. GENERAL JOURNAL Date 2015 Aug

Account Title and Description

Page 32 Post Ref. 220

14 Accounts Payable, Eddyn Co.

Dr.

Cr.

1 4 7 00

Purchases Returns and Allowances

510

1 4 0 00

Prepaid GST

142

7 00

Issued Debit Memo #8

FONTES TEXTILES LTD. SCHEDULE OF ACCOUNTS PAYABLE AUGUST 31, 2015 Eddyn Co.

$1 6 1 1 7 5

European Import Fabrics Co.

8 9 8 1 70

Forward Co.

2 8 6 1 25

Lavoy Co.

2 8 2 4 50

Reliant Co.

4 8 2 8 95 $2 1 1 0 8 1 5

Total Accounts Payable

PROBLEM 11D-5 STOKES' WHOLESALE WELDING SUPPLIES CO. Page 45

CASH PAYMENTS JOURNAL Date 2017 May

Chq. No.

Account Debited

Post Ref.

Sundry Dr.

Accounts Payable Dr.

Prepaid GST Dr.

Welding Purchases Dr.

Purchases Discounts Cr.

Cash Cr.

1 721 Dominion Gases Co.

3 722 Delivery Truck

170

5 723 Glover Gauges Co.

6 724 Cash Purchase

14 725 Prism Accessories Co.

18 726 Cash Purchase

24 727 Marker Gloves Co.

28 728 Rent Expense

670

6 7 5 00

3 3 75

7 0 8 75

29 729 Utilities Expense

690

3 1 9 84

1 5 99

30 730 Vertal Rod Co.

3 3 5 83 1 0 0 0 00 2 3 2 63 44 3 8 4 28

1 5 4 2 00

30 8 4 0 00

32 3 8 2 00 8 6 5 23

8 6 5 23 1 2 0 10

2 4 0 2 00

1 8 75

3 7 5 00

1 0 0 0 00 31 8 3 4 84 8 2 7 4 48 1 7 3 0 59

(145)

2 7 7 7 00

(500)

3 6 8 4 92 3 9 3 75

3 4 53

1 8 1 2 95

(200)

2 5 2 2 10 1 8 4 25

3 8 6 9 17

(X)

7 1 3 28

(510)

1 7 7 8 42

(100)

Chapter 11 Solutions - Page D11-20

1 3 85

7 2 7 13

Page D11-21 - Chapter 11, D Solutions

PROBLEM 11D-5, Cont. STOKES' WHOLESALE WELDING SUPPLIES CO. ACCOUNTS PAYABLE LEDGER NAME:

DOMINION GASES CO.

ADDRESS:

143 - 2 ST., FT. LIARD, NT X0G 0A0

Date 2017 May

Explanation 1

Post R e f.

CPJ45

NAME:

GLOVER GAUGES CO. 322 - 4 AVE., FT. LIARD, NT X0G 0A0

Date 2017 May

Explanation 1

7 2 7 13

Post R e f.

Debit

MARKER GLOVES CO.

ADDRESS:

477 APEX ROAD, FT. LIARD, NT X0G 0A0 Explanation

Post R e f.

CPJ45

NAME:

PRISM ACCESSORIES CO. 315 - 4 AVE, FT. LIARD, NT X0G 0A0

Date 2017 May

Explanation 1

Post R e f.

CPJ45

NAME:

VERTAL ROD CO.

ADDRESS:

355 APEX RD, FT. LIARD, NT X0G 0A0

Date 2017 May

Explanation 1

Balance

Debit

Credit

Post R e f.

1 8 1 2 95

Debit

Credit

Cr. Balance

3 8 6 9 17

Debit

4 CPJ45

Cr. Balance

1 8 1 2 95

Balance

Cr. Balance

Balance

ADDRESS:

Credit

8 6 5 23

NAME:

May

7 2 7 13

8 6 5 23

CPJ45

Cr. Balance

1 4 5 4 25

Balance

Date 2017

Credit

Balance

ADDRESS:

Debit

Credit

Cr. Balance

2 4 3 4 06 1 0 0 0 00

1 4 3 4 06

Chapter 11, D Solutions - Page D11-22 PROBLEM 11D-5, Cont. STOKES' WHOLESALE WELDING SUPPLIES CO. PARTIAL GENERAL LEDGER CASH

NAME: Date 2017

ACCOUNT NO. Explanation

1 Balance

May

DR CR

Balance

CPJ45

22 9 4 1 18 21 4 4 3 10

Debit

Date 2017

Explanation 1 Balance

May

ACCOUNT NO. Post Ref

Explanation

Balance

CPJ45

2 4 1 8 12 4 1 4 8 71

Explanation

Post Ref

Debit

CPJ45

30 8 4 0 00

May

Explanation Balance

Debit

Date 2017

Explanation 1

Balance

DR CR

Balance

30 8 4 0 00

Credit

200

DR CR

Balance

10 4 3 5 66 2 1 6 1 19

8 2 7 4 48

ACCOUNT NO.

500

DR CR

Balance

CPJ45

56 4 2 2 29 59 1 9 9 29

Post Ref

Debit

Credit

2 7 7 7 00

WELDING PURCHASES DISCOUNTS

NAME:

May

Post Ref

WELDING PURCHASES

170

ACCOUNT NO.

CPJ45

Date 2017

ACCOUNT NO.

Balance

NAME:

Credit

1 7 3 0 59

NAME: ACCOUNTS PAYABLE Date 2017 May 1

145

DR CR

Debit

DELIVERY TRUCK

NAME: Date 2017

Credit

44 3 8 4 28

PREPAID GST

NAME:

May

Post Ref

100

ACCOUNT NO. Post Ref

510

DR CR

Balance

CPJ45

5 0 6 20 7 3 8 83

Debit

Credit

2 3 2 63

Page D11-23 - Chapter 11, D Solutions

PROBLEM 11D-5, Cont. STOKES' WHOLESALE WELDING SUPPLIES CO. PARTIAL GENERAL LEDGER, Cont. RENT EXPENSE

NAME: Date 2017 May

Explanation 1

CPJ45

NAME:

UTILITIES EXPENSE

Date 2017

Explanation 1

Post Ref

Debit

Credit

Balance

May

ACCOUNT NO.

Balance

DR CR

Balance

3 7 3 0 00 4 4 0 5 00

6 7 5 00

ACCOUNT NO. Post Ref

670

690

DR CR

Balance

CPJ45

1 2 0 4 66 1 5 2 4 50

Debit

Credit

3 1 9 84

STOKES' WHOLESALE WELDING SUPPLIES CO. SCHEDULE OF ACCOUNTS PAYABLE MAY 31, 2017 Dominion Gases Co.

$ 7 2 7 13

Vertal Rod

1 4 3 4 06 $2 1 6 1 1 9

Total Accounts Payable

PROBLEM 11D-6

THIS SOLUTION ASSUMES HST (13%) WESTERN BOOK SUPPLIERS PURCHASES JOURNAL

Date 2016

Oct

Page 17

Accounts Payable Cr.

Book Purchases Dr.

Prepaid HST Dr.

Date of Invoice

Inv. No.

Terms

Post Ref.

1 Milligan Book

10/1

1924

2/10,n/30

5 9 0 3 12

5 2 2 4 00

6 7 9 12

8 Milligan Book

10/7

1980

2/10,n/30

5 5 9 3 50

4 9 5 0 00

6 4 3 50

10 Winnipeg Book

10/8

3112

1/15,n/60

2 7 8 9 97

2 4 6 9 00

3 2 0 97

20 Suburb Auto Sales

10/20

SA09

22 0 3 5 00

26 Smith. Book Co.

10/24

1211

2/10,n/30

28 Milligan Book

10/27

2103

2/10,n/30

Account Credited

5 2 1 0 00 5 8 8 7 30 4 4 3 5 6 00 4 9 2 2 28 47 1 3 1 17 22 2 0 9 00

(210)

(510)

Account

Delivery Truck

Amount

180

19 5 0 0 00

6 7 7 30 5 6 6 28 5 4 2 2 17

19 5 0 0 00

(138)

(X)

Chapter 11 Solutions - Page D11-24

2 5 3 5 00

Sundry Dr.

THIS SOLUTION ASSUMES HST (13%)

WESTERN BOOK SUPPLIERS Page 11

CASH PAYMENTS JOURNAL Date 2016 Oct

Chq. No.

Account Debited

Post Ref.

Sundry Dr.

Accounts Payable Dr.

Prepaid HST Dr.

Book Purchases Dr.

Purchases Discounts Cr.

Cash Cr.

1 001 Prepaid Rent

135

2 7 0 0 00

3 5 1 00

3 0 5 1 00

9 002 Cleaning Expense

615

3 0 0 00

3 9 00

3 3 9 00

11 003 Milligan Book Co.

13 004 Salaries Expense

650

23 005 Winnipeg Book Supply

25 006 Cash Purchase

30 007 Milligan Book Co.

1 0 4 48

5 9 0 3 12 1 4 2 5 00

1 4 2 5 00 2 1 07

2 3 8 0 91 3 6 4 00 4 9 2 2 28 4 4 2 5 0 0 13 2 0 6 3 1

(X)

5 7 9 8 64

(210)

7 5 4 00

(138)

2 3 5 9 84

2 8 0 0 00

3 1 6 4 00

2 8 0 0 00

8 7 12 4 8 3 5 16 2 1 2 67 20 9 7 2 64

(510)

(514)

(110)

Page D11-25 - Chapter 11 Solutions

PROBLEM 11D-6, Cont.

THIS SOLUTION ASSUMES HST (13%)

PROBLEM 11D-6, Cont. WESTERN BOOK SUPPLIERS CASH RECEIPTS JOURNAL

Cash Dr.

Date 2016 Oct.

Accounts Receivable Cr.

Book Sales Cr.

HST Payable Cr.

Page 16 Sales Discounts Dr.

Description of Receipt

Post Ref.

B. Cardinal, Capital 310

32 0 0 0 00

1 1 1 1 92

9 8 4 00

1 2 7 92

Cash Sale

1 4 1 2 50

1 2 5 0 00

1 6 2 50

Cash Sale

2 9 0 8 20

2 9 6 0 60

2 1 3 2 31

1 3 2 7 75

3 1 1 9 10

2 0 0 2 44

5 2 4 0 District College Cash Sale

3 1 7 5 30

5 6 2 0 First City Library

2 0 3 8 52

3 6 0 8 Rural Bookmobile

28 1 2 0 0 0 0 0 31 5 8 0 1 4 2 2

(110)

B. Cardinal, Capital 310

10 3 0 6 73

3 4 0 9 00

(120)

(410)

4 4 3 17

1 4 4 68

(218)

(414)

12 0 0 0 00 44 0 0 0 00 (X)

Chapter 11, D Solutions - Page 11-26

1 5 2 75

32 0 0 0 00

First City Library

1 1 7 5 00

Sundry Cr.

Page D11-27 - Chapter 11, D Solutions

PROBLEM 11D-6, Cont.

THIS SOLUTION ASSUMES HST (13%) WESTERN BOOK SUPPLIERS SALES JOURNAL

Invoice No .

Date 2016

Customer's Name

Page 7

Post Ref.

Accounts Receivable Dr.

HST Payable Cr.

1001

First City Library

2 1 3 2 31

2 4 5 31

1 8 8 7 00

1002

District College

3 2 7 4 74

3 7 6 74

2 8 9 8 00

1003

First City Library

1 7 9 8 96

2 0 6 96

1 5 9 2 00

1004

Rural Bookmobile Co.

2 8 4 6 47

3 2 7 47

2 5 1 9 00

1005

First City Library

3 1 7 5 30

3 6 5 30

2 8 1 0 00

1006

Rural Bookmobile Co.

2 0 3 8 52

2 3 4 52

1 8 0 4 00

1007

Flower & Company

3 8 1 9 40

4 3 9 40

3 3 8 0 00

Oct

19 0 8 5 70

2 1 9 5 70 16 8 9 0 00

(218)

(120)

CARDINAL'S BOOK SHOP GENERAL JOURNAL Date 2016 Oct

Book Sales Cr.

Account Title and Description

10 Sales Returns and Allowances HST Payable Accounts Receivable, District College

(410)

Page 8 Post Ref.

Dr.

412

2 7 8 00

218

3 6 14

120

Cr.

3 1 4 14

Issued Credit Memo #1

Accounts Payable, Winnipeg Book Supply

210

Purchase Returns And Allowances

512

3 6 2 00

Prepaid HST

138

4 7 06

Issued Debit Memo #1

4 0 9 06

Chapter 11, D Solutions - Page D11-28 THIS SOLUTION ASSUMES HST (13%)

PROBLEM 11D-6, Cont.

WESTERN BOOK SUPPLIERS - ACCOUNTS RECEIVABLE LEDGER NAME:

DISTRICT COLLEGE

ADDRESS:

78 SPENSER ROAD, HALIFAX, NS B3T 1A1

Date 2016 Oct

Explanation

Post Ref .

SJ7

GJ8

CRJ1

Debit

3 2 7 4 74 3 1 4 14 2 9 6 0 60

NAME:

FIRST CITY LIBRARY

ADDRESS:

BAYSHORE MALL, HALIFAX, NS B3T 0P5

Date 2016 Oct

Explanation

Post Ref .

SJ7

CRJ1

SJ7

CRJ1

Debit

2 1 3 2 31 3 1 7 5 30 3 1 7 5 30

FLOWER & COMPANY

ADDRESS:

1010 BELL AVENUE, HALIFAX, NS B3T 4B5

Oct

Explanation

Post Ref . SJ7

Debit

RURAL BOOKMOBILE CO.

ADDRESS:

535 KING STREET, HALIFAX, NS B3V 9H2

Oct

Explanation

Post Ref .

SJ7

CRJ1

Credit

3 8 1 9 40

NAME:

Date 2016

Credit

2 1 3 2 31 1 7 9 8 96

NAME:

Date 2016

Credit

Debit

Dr. Balance

3 2 7 4 74 2 9 6 0 60

Dr. Balance

2 1 3 2 31 3 9 3 1 27 1 7 9 8 96 4 9 7 4 26 1 7 9 8 96

Dr. Balance

3 8 1 9 40

Credit

2 8 4 6 47 2 0 3 8 52 2 0 3 8 52

Dr. Balance

2 8 4 6 47 4 8 8 4 99 2 8 4 6 47

WESTERN BOOK SUPPLIERS SCHEDULE OF ACCOUNTS RECEIVABLE OCTOBER 31, 2016 First City Library Flower & Company Rural Bookmobile Total Accounts Receivable

$1 7 9 8 90 3 8 1 9 40 2 8 4 6 47 $8 4 6 4 83

Page D11-29 - Chapter 11, D Solutions THIS SOLUTION ASSUMES HST (13%)

PROBLEM 11D-6, Cont.

WESTERN BOOK SUPPLIERS - ACCOUNTS PAYABLE

NAME:

MILLIGAN BOOK COMPANY

ADDRESS:

425 FARWELL AVENUE, HALIFAX, NS B3V 1V1

Date 2016

Explanation

Post Ref .

PJ17

CPJ11

PJ17

CPJ11

Oct

Debit

5 9 0 3 12 5 5 9 3 50 5 9 0 3 12 4 9 2 2 28 4 9 2 2 28

NAME:

SMITHSONIAN BOOK CO.

ADDRESS:

14 PRINCESS ROAD SE, DARTMOUTH, NS B2X

Date 2016 Oct

Post Ref .

Explanation

Debit

PJ17

NAME:

SUBURBAN AUTO SALES

ADDRESS:

12 ROSEHILL ROAD NW, HALIFAX, NS B3V 1A1

Date 2016 Oct

Explanation

Post Ref .

Debit

PJ17

NAME:

WINNIPEG BOOK SUPPLY

ADDRESS:

12024 - 45 AVENUE, WINNIPEG, MB R2L 4J7

Date 2016 Oct

Explanation

Post Ref .

PJ17

GJ8

CPJ11

Credit

Debit

5 9 0 3 12 11 4 9 6 62 5 5 9 3 50 10 5 1 5 78 5 5 9 3 50

Credit

Cr. Balance

5 8 8 7 30

Credit

Cr. Balance

22 0 3 5 00

Credit

Cr. Balance

2 7 8 9 97 4 0 9 06 2 3 8 0 91

Cr. Balance

2 7 8 9 97 2 3 8 0 91

CARDINAL'S BOOK SHOP SCHEDULE OF ACCOUNTS PAYABLE OCTOBER 31, 2016 Milligan Book Company Smithsonian Book Co. Suburban Auto Sales Total Accounts Payable

$5 5 9 3 50 5 8 8 7 30 22 0 3 5 00 $3 3 5 1 5 8 0

Chapter 11, D Solutions - Page D11-30

THIS SOLUTION ASSUMES HST (13%)

PROBLEM 11D-6, Cont.

WESTERN BOOK SUPPLIERS - PARTIAL GENERAL LEDGER NAME: Date 2016 Oct

CASH

ACCOUNT NO. Post Ref

Debit

CRJ1

58 0 1 4 22

CPJ11

Explanation

20 9 7 2 64

NAME: ACCOUNTS RECEIVABLE Date 2016 Oct

Explanation

Balance

58 0 1 4 22 37 0 4 1 58

ACCOUNT NO. Post Ref

Debit

Credit

DR CR

GJ8

3 1 4 1 4 Cr

SJ7

CRJ1

Date 2016 Oct

Date 2016

Post Ref

Debit

CPJ11

2 7 0 0 00

PREPAID HST Explanation

Post Ref

PJ17

CPJ11

Debit

PJ17

19 5 0 0 00

Explanation

DR CR

Debit

GJ8

4 0 9 06

PJ17

CPJ11

Credit

Balance

4 7 06 5 3 7 5 11 6 1 2 9 11 180 Balance

19 5 0 0 00 210

DR CR

Balance

4 0 9 06 46 7 2 2 11 33 5 1 5 80

4 7 1 3 1 1 7 Cr 13 2 0 6 31

138

DR CR

ACCOUNT NO. Post Ref

135

2 7 0 0 00

Credit

3 1 4 14 18 7 7 1 56 8 4 6 4 83

ACCOUNT NO. Post Ref

Balance

5 4 2 2 17 7 5 4 00

NAME: ACCOUNTS PAYABLE Date 2016 Oct 14

Credit

120

DR CR

4 7 0 6 Cr

DELIVERY TRUCK Explanation

Credit

ACCOUNT NO.

GJ8

Date 2016

1 0 3 0 6 7 3 Dr

ACCOUNT NO.

NAME:

19 0 8 5 70

PREPAID RENT Explanation

NAME:

Oct

DR CR

NAME:

Oct

Credit

110

Page D11-31 - Chapter 11, D Solutions

THIS SOLUTION ASSUMES HST (13%)

PROBLEM 11D-6, Cont.

WESTERN BOOK SUPPLIERS - PARTIAL GENERAL LEDGER, Cont. NAME: Date 2016 Oct

GJ8

SJ7

CRJ1

CRJ16

CRJ1

Date 2016

Post Ref SJ7

CRJ1

NAME: Date 2016 31

NAME: Date 2016

Debit

Post Ref

Debit

GJ8

2 7 8 00

Post Ref

Debit

CRJ1

1 4 4 68

BOOK PURCHASES Post Ref

Debit

PJ17

CPJ1

22 2 0 9 00 2 8 0 0 00

Explanation

3 6 14 2 1 5 9 56

4 4 3 1 7 Cr

2 6 0 2 73

ACCOUNT NO.

310

DR CR

Balance

Credit

DR CR

1 6 8 9 0 0 0 Cr 3 4 0 9 0 0 Cr

SALES DISCOUNTS Explanation

3 2 0 0 0 0 0 Cr 1 2 0 0 0 0 0 Cr

SALES RETURNS AND ALLOWANCES Explanation

ACCOUNT NO.

Date 2016

Balance

2 1 9 5 70

Debit

218

DR CR

Credit

3 6 14

BOOK SALES Explanation

NAME:

Oct

Post Ref

Explanation

NAME:

Debit

B. CARDINAL, CAPITAL

Oct

Post Ref

Date 2016

Oct

ACCOUNT NO.

Explanation

NAME:

Oct

HST PAYABLE

32 0 0 0 00 44 0 0 0 00 410 Balance

16 8 9 0 00 20 2 9 9 00

ACCOUNT NO.

412

DR CR

Balance

2 7 8 00

Credit

ACCOUNT NO.

414

DR CR

Balance

1 4 4 68

Credit

ACCOUNT NO.

510

DR CR

Balance

22 2 0 9 00 25 0 0 9 00

Credit

Chapter 11, D Solutions - Page D11-32

PROBLEM 11D-6, Cont.

THIS SOLUTION ASSUMES HST (13%)

WESTERN BOOK SUPPLIERS - PARTIAL GENERAL LEDGER, Cont.

NAME: Date 2016 Oct

Explanation

Date 2016

Explanation

CLEANING EXPENSE

Date 2016

Explanation 9

NAME:

SALARIES EXPENSE

Date 2016

Explanation

Post Ref

Debit

CPJ11

NAME:

Oct

Debit

PURCHASES DISCOUNTS

Oct

Post Ref

ACCOUNT NO.

GJ8

NAME:

Oct

PURCHASES RETURNS AND ALLOWANCES

Post Ref

Debit

CPJ11

3 0 0 00

Credit

DR CR

Debit

CPJ11

1 4 2 5 00

Balance

3 6 2 0 0 Cr

3 6 2 00

ACCOUNT NO.

514

Credit

DR CR

Balance

2 1 2 6 7 Cr

2 1 2 67

ACCOUNT NO.

615

Credit

DR CR

Balance

3 0 0 00

ACCOUNT NO. Post Ref

512

Credit

650

DR CR

Balance

1 4 2 5 00

THIS SOLUTION ASSUMES GST (5%) WESTERN BOOK SUPPLIERS PURCHASES JOURNAL

Date 2016

Oct

Accounts Payable Cr.

Book Purchases Dr.

5 4 8 5 20

5 2 2 4 00

2 6 1 20

2/10,n/30

5 1 9 7 50

4 9 5 0 00

2 4 7 50

1/15,n/60

2 5 9 2 45

2 4 6 9 00

1 2 3 45

20 4 7 5 00

Date of Invoice

Inv. No.

Terms

Post Ref.

1 Milligan Book

10/1

1924

2/10,n/30

8 Milligan Book

10/7

1980

10 Winnipeg Book

10/8

3112

20 Suburb Auto Sales

10/20

SA09

26 Smith. Book Co.

10/24

1211

2/10,n/30

28 Milligan Book

10/27

2103

2/10,n/30

Account Credited

Page 17

9 7 5 00

5 2 1 0 00 5 4 7 0 50 4 4 3 5 6 00 4 5 7 3 80 43 7 9 4 45 22 2 0 9 00

(210)

Prepaid GST Dr.

(510)

Sundry Dr. Account

Delivery Truck

Amount

180

19 5 0 0 00

2 6 0 50 2 1 7 80 2 0 8 5 45

19 5 0 0 00

(138)

(X)

Page D11-33 - Chapter 11 Solutions

PROBLEM 11D-6

PROBLEM 11D-6, Cont.

THIS SOLUTION ASSUMES GST AT (5%)

WESTERN BOOK SUPPLIERS Page 11

CASH PAYMENTS JOURNAL Date 2016 Oct

Chq. No.

Account Debited

Post Ref.

Sundry Dr.

Accounts Payable Dr.

Prepaid GST Dr.

Book Purchases Dr.

Purchases Discounts Cr.

Cash Cr.

1 001 Prepaid Rent

135

2 7 0 0 00

1 3 5 00

2 8 3 5 00

9 002 Cleaning Expense

615

3 0 0 00

1 5 00

3 1 5 00

11 003 Milligan Book Co.

13 004 Salaries Expense

650

23 005 Winnipeg Book Supply

25 006 Cash Purchase

30 007 Milligan Book Co.

1 0 4 48

1 4 2 5 00

1 4 2 5 00 2 2 1 2 35

2 1 07 1 4 0 00

4 4 2 5 00 12 2 7 1 35

(210)

2 1 9 1 28

2 8 0 0 00

2 9 4 0 00

2 9 0 00

2 8 0 0 00

8 7 12 4 4 8 6 68 2 1 2 67 19 5 7 3 68

(138)

(510)

4 5 7 3 80

(X)

5 3 8 0 72

(514)

(110)

Chapter 11 Solutions - Page D11-34

5 4 8 5 20

WESTERN BOOK SUPPLIERS CASH RECEIPTS JOURNAL

Cash Dr.

Date 2016 Oct.

Accounts Receivable Cr.

Book Sales Cr.

GST Payable Cr.

Page 16 Sales Discounts Dr.

Description of Receipt

Post Ref.

B. Cardinal, Capital 310

32 0 0 0 00

1 0 3 3 20

9 8 4 00

4 9 20

Cash Sale

1 3 1 2 50

1 2 5 0 00

6 2 50

Cash Sale

2 6 9 8 60

2 7 5 1 00

1 9 8 1 35

1 2 3 3 75

2 8 9 4 30

1 8 5 8 12 28 1 2 0 0 0 0 0 31 5 7 0 1 1 8 2

(110)

5 2 4 0 District College

Cash Sale

2 9 5 0 50

5 6 2 0 First City Library

1 8 9 4 20

3 6 0 8 Rural Bookmobile

5 8 75

B. Cardinal, Capital 310

9 5 7 7 05 (120)

3 4 0 9 00 (410)

1 7 0 45

1 4 4 68

(218)

(414)

32 0 0 0 00

First City Library

1 1 7 5 00

Sundry Cr.

12 0 0 0 00 44 0 0 0 00 (X)

Page D11-35 - Chapter 11 Solutions

THIS SOLUTION ASSUMES GST AT (5%)

PROBLEM 11D-6, Cont.

Chapter 11, D Solutions - Page D11-36

PROBLEM 11D-6, Cont.

THIS SOLUTION ASSUMES GST AT (5%) WESTERN BOOK SUPPLIERS SALES JOURNAL

Invoice No .

Date 2016

Customer's Name

Page 7

Post Ref.

Accounts Receivable Dr.

GST Payable Cr.

1001

First City Library

1 9 8 1 35

9 4 35

1 8 8 7 00

1002

District College

3 0 4 2 90

1 4 4 90

2 8 9 8 00

1003

First City Library

1 6 7 1 60

7 9 60

1 5 9 2 00

1004

Rural Bookmobile Co.

2 6 4 4 95

1 2 5 95

2 5 1 9 00

1005

First City Library

2 9 5 0 50

1 4 0 50

2 8 1 0 00

1006

Rural Bookmobile Co.

1 8 9 4 20

9 0 20

1 8 0 4 00

1007

Flower & Company

3 5 4 9 00

1 6 9 00

3 3 8 0 00

Oct

17 7 3 4 50

8 4 4 50 16 8 9 0 00

(218)

(120)

CARDINAL'S BOOK SHOP GENERAL JOURNAL Date 2016 Oct

Book Sales Cr.

Account Title and Description 10 Sales Returns and Allowances GST Payable Accounts Receivable, District College

(410)

Page 8 Post Ref.

Dr.

412

2 7 8 00

218

1 3 90

120

Cr.

2 9 1 90

Issued Credit Memo #1

14 Accounts Payable, Winnipeg Book Supply

210

3 8 0 10

Purchase Returns And Allowances

512

3 6 2 00

Prepaid GST

138

1 8 10

Issued Debit Memo #1

Page D11-37 - Chapter 11, D Solutions PROBLEM 11D-6, Cont.

THIS SOLUTION ASSUMES GST (5%)

WESTERN BOOK SUPPLIERS - ACCOUNTS RECEIVABLE LEDGER NAME:

DISTRICT COLLEGE

ADDRESS:

78 SPENSER ROAD NW, CALGARY, AB T3C 9J1

Date 2016 Oct

Explanation

Post Ref . SJ7

6 10

GJ8

CRJ1

Debit

3 0 4 2 90 2 9 1 90 2 7 5 1 00

NAME:

FIRST CITY LIBRARY

ADDRESS:

3702 - 45 AVENUE SE, CALGARY, AB T2C 0K9

Date 2016 Oct

Explanation

Post Ref .

SJ7

CRJ1

SJ7

CRJ1

Debit

1 9 8 1 35 2 9 5 0 50 2 9 5 0 50

FLOWER & COMPANY

ADDRESS:

1010 - LAWN AVENUE NW, CALGARY, AB T3K 0L7

Oct

Explanation

Post Ref . SJ7

Debit

RURAL BOOKMOBILE CO.

ADDRESS:

535 KING STREET SE, CALGARY, AB T2T 4B9

Oct

Explanation

Post Ref .

SJ7

CRJ1

Credit

3 5 4 9 00

NAME:

Date 2016

Credit

1 9 8 1 35 1 6 7 1 60

NAME:

Date 2016

Credit

Debit

Dr. Balance

3 0 4 2 90 2 7 5 1 00

Dr. Balance

1 9 8 1 35 3 6 5 2 95 1 6 7 1 60 4 6 2 2 10 1 6 7 1 60

Dr. Balance

3 5 4 9 00

Credit

2 6 4 4 95 1 8 9 4 20 1 8 9 4 20

Dr. Balance

2 6 4 4 95 4 5 3 9 15 2 6 4 4 95

WESTERN BOOK SUPPLIERS SCHEDULE OF ACCOUNTS RECEIVABLE OCTOBER 31, 2016 First City Library Flower & Company Rural Bookmobile Total Accounts Receivable

$1 6 7 1 6 0 3 5 4 9 00 2 6 4 4 95 $7 8 6 5 5 5

Chapter 11, D Solutions - Page D11-38 THIS SOLUTION ASSUMES GST (5%)

PROBLEM 11D-6, Cont.

WESTERN BOOK SUPPLIERS - ACCOUNTS PAYABLE

NAME:

MILLIGAN BOOK COMPANY

ADDRESS:

425 FARWELL AVENUE, EDMONTON, AB T6B 1K1

Date 2016

Explanation

Post Ref .

PJ17

CPJ11

PJ17

CPJ11

Oct

Debit

5 4 8 5 20 5 1 9 7 50 5 4 8 5 20 4 5 7 3 80 4 5 7 3 80

NAME:

SMITHSONIAN BOOK CO.

ADDRESS:

14 PRINCESS ROAD SE, CALGARY, AB T2T 2L0

Date 2016 Oct

Post Ref .

Explanation

Debit

PJ17

NAME:

SUBURBAN AUTO SALES

ADDRESS:

12 ROSEHILL ROAD NW, CALGARY, AB T3P 0J4

Date 2016 Oct

Explanation

Post Ref .

Debit

PJ17

NAME:

WINNIPEG BOOK SUPPLY

ADDRESS:

12024 - 45 AVENUE, WINNIPEG, MB R2L 4J7

Date 2016 Oct

Explanation

Post Ref .

PJ17

GJ8

CPJ11

Credit

Debit

Credit

5 4 8 5 20 10 6 8 2 70 5 1 9 7 50 9 7 7 1 30 5 1 9 7 50

Cr. Balance

5 4 7 0 50

Credit

Cr. Balance

20 4 7 5 00

Credit

Cr. Balance

2 5 9 2 45 3 8 0 10 2 2 1 2 35

Cr. Balance

2 5 9 2 45 2 2 1 2 35

WESTERN BOOK SUPPLIERS SCHEDULE OF ACCOUNTS PAYABLE OCTOBER 31, 2016 Milligan Book Company Smithsonian Book Co. Suburban Auto Sales Total Accounts Payable

$5 1 9 7 5 0 5 4 7 0 50 20 4 7 5 00 $3 1 1 4 3 0 0

Page D11-39 - Chapter 11, D Solutions

THIS SOLUTION ASSUMES GST (5%)

PROBLEM 11D-6, Cont.

WESTERN BOOK SUPPLIERS- PARTIAL GENERAL LEDGER NAME: Date 2016 Oct

CASH

ACCOUNT NO. Post Ref

Debit

CRJ1

57 0 1 1 82

CPJ11

Explanation

19 5 7 3 68

NAME: ACCOUNTS RECEIVABLE Date 2016 Oct

Explanation

Balance

57 0 1 1 82 37 4 3 8 14

ACCOUNT NO. Post Ref

Debit

Credit

DR CR

GJ8

2 9 1 9 0 Cr

SJ7

CRJ1

Date 2016 Oct

Date 2016

Post Ref

Debit

CPJ11

2 7 0 0 00

PREPAID GST Explanation

Post Ref

PJ17

CPJ11

Debit

PJ17

19 5 0 0 00

Explanation

DR CR

Debit

GJ8

3 8 0 10

PJ17

CPJ11

Credit

Balance

1 8 10 2 0 6 7 35 2 3 5 7 35 180 Balance

19 5 0 0 00 210

DR CR

Balance

3 8 0 10 43 4 1 4 35 31 1 4 3 00

4 3 7 9 4 4 5 Cr 12 2 7 1 35

138

DR CR

ACCOUNT NO. Post Ref

135

2 7 0 0 00

Credit

2 9 1 90 17 4 4 2 60 7 8 6 5 55

ACCOUNT NO. Post Ref

Balance

2 0 8 5 45 2 9 0 00

NAME: ACCOUNTS PAYABLE Date 2016 Oct 14

Credit

120

DR CR

1 8 1 0 Cr

DELIVERY TRUCK Explanation

Credit

ACCOUNT NO.

GJ8

Date 2016

9 5 7 7 0 5 Dr

ACCOUNT NO.

NAME:

17 7 3 4 50

PREPAID RENT Explanation

NAME:

Oct

DR CR

NAME:

Oct

Credit

110

Chapter 11, D Solutions - Page D11-40

THIS SOLUTION ASSUMES GST (5%)

PROBLEM 11D-6, Cont.

WESTERN BOOK SUPPLIERS - PARTIAL GENERAL LEDGER, Cont. NAME: Date 2016 Oct

Credit

DR CR

Balance

SJ7

8 4 4 5 0 Cr

1 3 90 8 3 0 60

CRJ1

1 7 0 4 5 Cr

1 0 0 1 05

ACCOUNT NO.

310

DR CR

Balance

Post Ref

CRJ16

CRJ1

Date 2016

Post Ref SJ7

CRJ1

NAME: Date 2016

Date 2016

Debit

Explanation

Post Ref

Debit

GJ8

2 7 8 00

Post Ref

Debit

CRJ1

1 4 4 68

BOOK PURCHASES Post Ref

Debit

PJ17

CPJ1

22 2 0 9 00 2 8 0 0 00

Explanation

Credit

DR CR

1 6 8 9 0 0 0 Cr 3 4 0 9 0 0 Cr

SALES DISCOUNTS

NAME:

3 2 0 0 0 0 0 Cr 1 2 0 0 0 0 0 Cr

SALES RETURNS AND ALLOWANCES Explanation

Credit

ACCOUNT NO.

Date 2016

Debit

BOOK SALES Explanation

NAME:

1 3 90

B. CARDINAL, CAPITAL Explanation

NAME:

Oct

Debit

GJ8

Oct

Post Ref

218

Date 2016

Oct

ACCOUNT NO.

Explanation

NAME:

Oct

GST PAYABLE

32 0 0 0 00 44 0 0 0 00 410 Balance

16 8 9 0 00 20 2 9 9 00

ACCOUNT NO.

412

DR CR

Balance

2 7 8 00

Credit

ACCOUNT NO.

414

DR CR

Balance

1 4 4 68

Credit

ACCOUNT NO.

510

DR CR

Balance

22 2 0 9 00 25 0 0 9 00

Credit

Page D11-41 - Chapter 11, D Solutions

PROBLEM 11D-6, Cont.

THIS SOLUTION ASSUMES GST (5%)

WESTERN BOOK SUPPLIERS - PARTIAL GENERAL LEDGER, Cont. NAME: Date 2016 Oct

Explanation

Date 2016

Explanation

CLEANING EXPENSE

Date 2016

Explanation 9

NAME:

SALARIES EXPENSE

Date 2016

Explanation

Post Ref

Debit

CPJ11

NAME:

Oct

Debit

PURCHASES DISCOUNTS

Oct

Post Ref

ACCOUNT NO.

GJ8

NAME:

Oct

PURCHASES RETURNS AND ALLOWANCES

Post Ref

Debit

CPJ11

3 0 0 00

Credit

DR CR

Debit

CPJ11

1 4 2 5 00

Balance

3 6 2 0 0 Cr

3 6 2 00

ACCOUNT NO.

514

Credit

DR CR

Balance

2 1 2 6 7 Cr

2 1 2 67

ACCOUNT NO.

615

Credit

DR CR

Balance

3 0 0 00

ACCOUNT NO. Post Ref

512

Credit

650

DR CR

Balance

1 4 2 5 00

Chapter 12, D Solutions - Page 12-1

PROBLEM 12D-1

a. Net Sales: Sales

- SRA - SD

$21,067 - $1,829 - $444 = $18,794

b. Cost of Goods Sold: Beg. Inv. + Net Purch. + Freight-in - End Inv. $1,921

+ $10,782

$250

- $1,120 = $11,833

c. Gross Profit: Net Sales - COGS $18,794 - $11,833 = $6,961

d. Net Loss: Gross Profit - Operating Expenses $6,961

$13,997

= -$7,036

Page D12-2 - Chapter 12, D Solutions PROBLEM 12D-2 RICE APPAREL WORKSHEET FOR THE YEAR ENDED NOVEMBER 30, 2016 Trial Balance Dr. Cr. Cash Petty Cash Accounts Receivable Merchandise Inventory Supplies Prepaid Insurance HST Prepaid Apparel Repair Equipment Accum. Dep., Equipment Accounts Payable HST Collected Income Tax Payable CPP Payable EI Payable Tasha Rice, Capital Tasha Rice, Withdrawals Income Summary Sales Sales Returns and Allowances Sales Discounts Purchases Purchases Discounts Purchases Returns & Allow. Freight-In Salaries Expense Payroll Taxes Expense Interest Expense

Supplies Expense Insurance Expense Depreciation Expense Salaries Payable Advertising Expense Net Income

3,936.77 200.00 8,454.23 15,291.41 824.00 1,225.00 1,503.35 5,650.00

Adjustments Dr.

Cr.

10,181.39 a) c) d) 42.00

15,291.41 289.25 204.17

e) g)

1,000.00 392.00

15,291.41 b)

10,181.39

1,225.00 20,238.72 2,347.64 3,604.23 1,398.28 429.53 10,004.86 12,400.00 a)

Adjusted Trial Balance Dr. Cr. 3,936.77 200.00 8,454.23 10,181.39 534.75 1,020.83 929.07 5,650.00

12,400.00 15,291.41

3,936.77 200.00 8,454.23 10,181.39 534.75 1,020.83 929.07 5,650.00 2,225.00 18,256.48 5,123.00 3,604.23 426.18 384.23 10,004.86 12,400.00 10,181.39 78,254.75

1,519.82 1,282.25 50,111.62 796.09 599.07

425.70 14,825.00 963.60 285.42 118,898.17

15,291.41

896.00

c) d) e)

289.25 204.17 1,000.00

350.00 28,254.22

10,181.39 78,254.75

1,519.82 1,282.25 50,111.62 796.09 599.07

Balance Sheet Dr. Cr.

2,225.00 18,256.48 5,123.00 3,604.23 426.18 384.23 10,004.86

78,254.75 1,519.82 1,282.25 50,111.62

Income Statement Dr. Cr.

796.09 599.07

425.70 15,721.00 963.60 285.42

289.25 204.17 1,000.00

118,898.17

896.00 28,254.22

896.00 350.00 130,751.28

130,751.28

896.00 350.00 87,444.24

89,831.30

43,307.04

40,919.98

2,387.06 89,831.30

89,831.30

43,307.04

2,387.06 43,307.04

1 of 2

Chapter 12, D Solutions - Page 12-3 PROBLEM 12D-3 BL COMPUTERS WORKSHEET FOR THE YEAR ENDED MARCH 31, 2017 Trial Balance Dr. Cr. Cash Petty Cash Accounts Receivable Merchandise Inventory Computer Repair Supplies Prepaid Insurance Prepaid GST Computer Equipment Acc. Dep., Computer Equip. Accounts Payable GST Collected Income Tax Payable CPP Payable EI Payable Ben Lavens, Capital Ben Lavens, Withdrawals Income Summary Sales Sales Returns and Allowances Sales Discounts Purchases Purchases Discounts Purchases Returns & Allow. Freight-In Salaries Expense Payroll Taxes Expense Advertising Expense Rent Expense Utilities Expense

Supplies Expense Insurance Expense Depreciation Expense Salaries Payable

1,929.37 150.00 10,824.95 9,625.73 750.24 608.00 1,201.44 4,650.00

Dr.

Adjustments Cr.

b) 10,487.29 a) c) d) g) 12.50

9,625.73 323.09 203.34

e) g)

1,550.00 262.50

9,625.73 b)

10,487.29

2,150.00 15,040.25 2,015.23 1,392.51 398.00 343.00 7,809.16 8,150.00 a)

1,929.37 150.00 10,824.95 10,487.29 427.15 404.66 1,213.94 4,650.00

8,150.00 9,625.73

204.50 13,291.00 878.20 771.60 2,400.00 435.89

9,625.73 10,487.29 62,511.50 695.00 482.66 36,924.29 484.22 788.00 204.50 13,291.00 878.20 771.60 2,400.00 435.89

323.09 203.34 1,550.00

484.22 788.00 791.00

250.00

c) d) e)

323.09 203.34 1,550.00

3,700.00 15,302.75 2,015.23 1,392.51 398.00 343.00 7,809.16 8,150.00

10,487.29 62,511.50

695.00 482.66 36,924.29

Balance Sheet Dr. Cr.

3,700.00 15,302.75 2,015.23 1,392.51 398.00 343.00 7,809.16

484.22 788.00 204.50 12,500.00 878.20 521.60 2,400.00 435.89 92,931.87

Income Statement Dr. Cr.

1,929.37 150.00 10,824.95 10,487.29 427.15 404.66 1,213.94 4,650.00

62,511.50 695.00 482.66 36,924.29

92,931.87

f) 23,242.95

Net Income

Adjusted Trial Balance Dr. Cr.

791.00 791.00 23,242.95 106,022.66 106,022.66

67,785.30 74,271.01 6,485.71 74,271.01 74,271.01

38,237.36 38,237.36

791.00 31,751.65 6,485.71 38,237.36

Page D12-4 - Chapter 12, D Solutions PROBLEM 12D-4 NANJI SHOES COMPANY WORKSHEET FOR THE YEAR ENDED JULY 31, 2016 Trial Balance Dr. Cr. Cash Petty Cash Accounts Receivable Merchandise Inventory Supplies on Hand Prepaid Insurance Prepaid HST Shoe Stretching Equipment Acc. Dep., Equipment Accounts Payable HST Collected Income Tax Payable CPP Payable EI Payable M. Nanji, Capital M. Nanji, Withdrawals Income Summary Sales Sales Returns and Allowances Sales Discounts Purchases Purchases Discounts Purchases Returns & Allow. Freight-In Salaries Expense Payroll Taxes Expense Advertising Expense Rent Expense Utilities Expense

Supplies Expense Insurance Expense Salaries Payable Depreciation Expense Net Income

13,520.24 100.00 9,540.24 24,123.24 350.00 1,150.00 2,100.24 750.00

Adjustments Dr. Cr.

b) 28,320.69 a) 24,123.24 c) 122.00 d) 479.17 g) 12.61 250.00 22,288.41 4,570.29 876.25 580.44 273.60 15,642.38

e) g)

Adjusted Trial Balance Dr. Cr. 13,520.24 100.00 9,540.24 28,320.69 228.00 670.83 2,112.85 750.00

120.00 109.61

10,428.00 a) 24,123.24 b) 28,320.69

13,520.24 100.00 9,540.24 28,320.69 228.00 670.83 2,112.85 750.00

10,428.00 24,123.24

2,513.32 3,250.83

370.00 22,398.02 4,570.29 876.25 580.44 273.60 15,642.38 10,428.00

28,320.69 65,289.97

1,599.29 500.00 30,024.11

24,123.24

2,513.32 3,250.83

97.00

650.00 12,600.55 834.83 3,214.50 4,000.00 728.25

c) d)

122.00 479.17

120.00 53,855.71

581.00

28,320.69 65,289.97

1,599.29 500.00 30,024.11 2,513.32 3,250.83

650.00 12,019.55 f) 834.83 3,214.50 4,000.00 631.25 g) 115,535.49 115,535.49

Balance Sheet Dr. Cr.

370.00 22,398.02 4,570.29 876.25 580.44 273.60 15,642.38

65,289.97 1,599.29 500.00 30,024.11

Income Statement Dr. Cr.

581.00

581.00 120.00 53,855.71 144,666.79 144,666.79

581.00 120.00 78,995.94 20,378.87 99,374.81

99,374.81

65,670.85

99,374.81

65,670.85

45,291.98 20,378.87 65,670.85

Chapter 13, D Solutions - Page D13-1 PROBLEM 13D-1

JERSON'S PANAMA HATS & ARTIFACTS INCOME STATEMENT FOR THE YEAR ENDED JULY 31, 2015

Revenue: Gross Sales

$7 5 9 1 3 17

Less: Sales Returns and Allowances

$ 8 0 2 50 1 1 2 5 00

Sales Discounts Net Sales

1 9 2 7 50 7 3 9 8 5 67

Cost of Goods Sold: Merchandise Inventory, 1/08/14

8 1 2 4 52

Purchases Less: Purchase Returns and Allowances Purchase Discounts Net Purchases Add: Freight-in

$3 1 4 0 2 15 $ 3 0 9 49 4 6 7 55

7 7 7 04 3 0 6 2 5 11 7 5 9 45

Net Cost of Purchases

3 1 3 8 4 56

Cost of Goods Available for Sale

3 9 5 0 9 08 1 0 4 5 9 82

Less: Merchandise Inventory, 31/07/15 Cost of Goods Sold

2 9 0 4 9 26

Gross Profit

4 4 9 3 6 41

Operating Expenses: Advertising Expense Depreciation Expense, Equipment Cleaning Expense Insurance Expense Rent Expense Salaries Expense Utilities Expense Total Operating Expenses Net Income from Operations

1 4 1 1 64 5 9 5 00 1 9 7 5 00 4 2 5 00 8 2 0 0 00 2 1 7 7 4 78 2 4 4 3 92 3 6 8 2 5 34 8 1 1 1 07

Other Income: Rental Income Net Income

3 0 0 0 00 $1 1 1 1 1 07

Page D13-2 - Chapter 13, D Solutions

PROBLEM 13D-2 WULFMAN BRICK & TILE COMPANY STATEMENT OF OWNER'S EQUITY FOR THE YEAR ENDED APRIL 30, 2017 D. Wulfman, Capital, 1/5/16

$4 9 8 6 5 9 9

Add: Net Income

$1 7 9 5 1 5 4

Less: Withdrawals

16 2 8 1 00

Increase in Capital D. Wulfman, Capital, 30/4/17

1 6 7 0 54 $5 1 5 3 6 5 3

Chapter 13, D Solutions - Page D13-3 PROBLEM 13D-2, Cont. WULFMAN BRICK & TILE COMPANY BALANCE SHEET APRIL 30, 2017 Assets Current Assets: Cash

$1 7 8 9 5 2 3 1 0 0 00 25 4 2 5 40 35 2 3 9 67 2 5 8 4 05 1 2 5 5 00 3 8 9 4 51

Petty Cash Accounts Receivable Merchandise Inventory Supplies on Hand Prepaid Insurance Prepaid HST Total Current Assets

$8 6 3 9 3 86

Capital Assets: Cutting Equipment Less: Accumulated Depreciation, Cutting Equipment Delivery Van Less: Accumulated Depreciation, Delivery Van

$1 7 8 6 0 0 0 8 4 0 0 00

9 4 6 0 00

31 2 4 5 00 12 5 9 5 00

18 6 5 0 00

Total Assets

2 8 1 1 0 00 $114 5 0 3 86

Liabilities Current Liabilities: Accounts Payable

$2 8 9 2 5 6 5 3 1 2 9 00 5 1 1 1 24 2 4 0 0 00 2 3 0 0 00

Salaries Payable HST Collected Unearned Rent Mortgage Payable Total Current Liabilities

4 1 8 6 5 89

Long-Term Liabilities: Chattel Mortgage Payable, Van Total Liabilities

2 1 1 0 1 44 6 2 9 6 7 33

Owner's Equity D. Wulfman, Capital, April 30, 2017 Total Liabilities and Owner's Equity

5 1 5 3 6 53 $114 5 0 3 86

Page D13-4 - Chapter 13, D Solutions PROBLEM 13D-3 ROCIO'S HERBS & HEALTH FOODS WORKSHEET FOR THE YEAR ENDED JANUARY 31, 2016

854.00 50.00 11,246.99 14,259.95 1,359.21 1,452.23 16,125.00

Adjustments Dr.

Cr.

21,421.57 A) E)

14,259.95 453.07

1,225.00

12,250.00 35,100.00

Adjusted Trial Balance Dr. Cr. 854.00 50.00 11,246.99 21,421.57 906.14 1,452.23 16,125.00

890.00

13,475.00

14,259.95 B)

21,421.57

18,215.00 14,259.95

57,485.44 358.86 19,425.00

35,100.00 25,450.00 6,297.00 8,999.00 600.00 3,215.00 22,622.53

1,800.00

18,215.00

Balance Sheet Dr. Cr. 854.00 50.00 11,246.99 21,421.57 906.14 1,452.23 16,125.00

35,100.00 24,560.00 6,297.00 8,999.00 2,400.00 C) 3,215.00 22,622.53

25,450.00 6,297.00 8,999.00 600.00 3,215.00 22,622.53 18,215.00

21,421.57 57,485.44

358.86 19,425.00 605.25 750.21

350.10 1,245.00 2,400.00 876.20 15,241.00 625.89 139,184.43

Income Statement Dr. Cr.

14,259.95

21,421.57 57,485.44

358.86 19,425.00 605.25 750.21

350.10 1,245.00 2,400.00 876.20 15,241.00 625.89

605.25 750.21 350.10 1,245.00 2,400.00 876.20 15,241.00 625.89

139,184.43 C) D) E)

2,115.00 453.07 40,049.59

1,800.00

40,049.59

1,800.00 2,115.00 453.07 162,721.00

162,721.00

1,800.00 2,115.00 453.07 57,350.07 24,712.40 82,062.47

82,062.47

105,370.93

82,062.47

105,370.93

80,658.53 24,712.40 105,370.93

Chapter 13, D Solutions - Page D13-5

PROBLEM 13D-3, Cont. ROCIO'S HERBS & HEALTH FOODS INCOME STATEMENT FOR THE YEAR ENDED JANUARY 31, 2016 Revenue: Gross Sales

$5 7 4 8 5 44 3 5 8 86

Less: Sales Discounts and Returns Net Sales

5 7 1 2 6 58

Cost of Goods Sold: Merchandise Inventory, 1/2/15

1 4 2 5 9 95

Purchases Less: Purchase Returns and Allowances Purchase Discounts Net Purchases Add: Freight-In Net Cost of Purchases Cost of Goods Available for Sale Less: Merchandise Inventory, 31/1/16

$1 9 4 2 5 00 $ 6 0 5 25 7 5 0 21

1 3 5 5 46 1 8 0 6 9 54 3 5 0 10 1 8 4 1 9 64 3 2 6 7 9 59 2 1 4 2 1 57 1 1 2 5 8 02

Cost of Goods Sold Gross Profit

4 5 8 6 8 56

Operating Expenses: Advertising Expense Cleaning Expense Repair Expense Salaries Expense Utilities Expense Depreciation Expense Insurance Expense Total Operating Expenses Net Income from Operations

1 2 4 5 00 2 4 0 0 00 8 7 6 20 1 5 2 4 1 00 6 2 5 89 2 1 1 5 00 4 5 3 07 2 2 9 5 6 16 $2 2 9 1 2 40

Other Income: Rental Income Earned Net Income

1 8 0 0 00 $2 4 7 1 2 40

Page D13-6 - Chapter 13, D Solutions

PROBLEM 13D-3, Cont. ROCIO'S HERBS & HEALTH FOODS STATEMENT OF OWNER'S EQUITY FOR THE YEAR ENDED JANUARY 31, 2016 R. Teran, Capital, 1/2/15 Add: Net Income Less: Withdrawals Increase in Capital R. Teran, Capital, 31/1/16

$2 2 6 2 2 53 $2 4 7 1 2 40 1 8 2 1 5 00 6 4 9 7 40 $2 9 1 1 9 93

Chapter 13, D Solutions - Page D13-7 PROBLEM 13D-3, Cont.

ROCIO'S HERBS & HEALTH FOODS BALANCE SHEET JANUARY 31, 2016 Assets

Current Assets: Cash

$ 8 5 4 00 5 0 00 1 1 2 4 6 99 2 1 4 2 1 57 9 0 6 14

Petty Cash Accounts Receivable Merchandise Inventory Prepaid Insurance Total Current Assets

$3 4 4 7 8 70

Capital Assets: Equipment Less: Accumulated Depreciation, Equipment Building Less: Accumulated Depreciation, Building

$1 6 1 2 5 00 1 3 4 7 5 00 3 5 1 0 0 00 2 5 4 5 0 00

2 6 5 0 00 9 6 5 0 00 1 2 3 0 0 00 $4 6 7 7 8 70

Total Capital Assets Total Assets Liabilities Current Liabilities: Accounts Payable Unearned Rent GST Payable Mortgage Payable (current portion)

$6 2 9 7 00 6 0 0 00 1 7 6 2 77 2 5 0 0 00 1 1 1 5 9 77

Total Current Liabilities Long Term Liabilities:

6 4 9 9 00

Mortgage Payable Total Liabilities

$1 7 6 5 8 77 Owner's Equity

R. Teran, Capital, Janaury 31, 2016 Total Liabilities and Owner's Equity

2 9 1 1 9 93 $4 6 7 7 8 70

Page D13-8 - Chapter 13, D Solutions

PROBLEM 13D-3, Cont. ROCIO'S HERBS & HEALTH FOODS GENERAL JOURNAL Date 2016

Account Title and Description

Post Ref.

Page 4 Dr.

Cr.

Adjusting Entries Jan. 31 Income Summary

14 2 5 9 95

Merchandise Inventory 31 Merchandise Inventory

14 2 5 9 95 21 4 2 1 57

Income Summary 31 Unearned Rent

21 4 2 1 57 1 8 0 0 00

Rental Income Earned 31 Depreciation Expense, Equipment and Building

1 8 0 0 00 2 1 1 5 00

Accumulated Depreciation, Equipment

1 2 2 5 00

Accumulated Depreciation, Building

8 9 0 00

31 Insurance Expense

4 5 3 07

Prepaid Insurance

4 5 3 07

Closing Entries Jan.

31 Sales Rental Income Earned

57 4 8 5 44 1 8 0 0 00

Purchase Returns and Allowances

6 0 5 25

Purchase Discounts

7 5 0 21

Income Summary

60 6 4 0 90

Chapter 13, D Solutions - Page 13-9

PROBLEM 13D-3, Cont. ROCIO'S HERBS & HEALTH FOODS GENERAL JOURNAL Date 2016

Jan.

Account Title and Description

31 Income Summary

Post Ref.

Page 5 Dr.

Cr.

43 0 9 0 12 3 5 8 86

Sales Discounts and Returns Purchases

19 4 2 5 00

Freight-in

3 5 0 10

Advertising Expense

1 2 4 5 00

Cleaning Expense

2 4 0 0 00

Repair Expense

8 7 6 20

Salaries Expense

15 2 4 1 00

Utilities Expense

6 2 5 89

Depreciation Expense

2 1 1 5 00

Insurance Expense

4 5 3 07

31 Income Summary

2 4 7 1 2 40

R. Teran, Capital 31 R. Teran, Capital R. Teran, Withdrawals

24 7 1 2 40 18 2 1 5 00 18 2 1 5 00

Page D13-10 - Chapter 13, D Solutions PROBLEM 13D-4

WLB TRUCK PARTS LTD.

Trial Balance Dr. Cr. Cash Accounts Receivable Merchandise Inventory Supplies Prepaid Insurance Prepaid GST Equipment Acc. Dep., Equipment Accounts Payable GST Collected W. Brennan, Capital W. Brennan, Withdrawals Income Summary Sales Sales Returns and Allowances Purchases Purchases Discounts Purchases Returns and Allow. Wages Expense Advertising Expense Rent Expense Payroll Benefits Expense Supplies Expense Insurance Expense Depreciation Expense Accrued Wages

WORKSHEET FOR THE YEAR ENDED SEPTEMBER 30, 2015 Adjustments Adjusted Trial Balance Dr. Cr. Dr. Cr.

1768.02 3255.23 18525.00 650.00 952.00 264.08 6600.00

19758.25 a) c) d)

10.60

1825.00 4592.00 655.56 14254.88

e) g)

18525.00

1768.02 3255.23 19758.25 239.13 317.33 274.68 6600.00

950.00 222.60

8525.00 19758.25

8525.00 18525.00

1768.02 3255.23 19758.25 239.13 317.33 274.68 6600.00 2775.00 4814.60 655.56 14254.88 8525.00 19758.25 52444.48

630.00 21126.46 1134.85 505.00

10324.79 690.00 1200.00 901.19 75411.77

18525.00

19758.25 52444.48

630.00 21126.46 1134.85 505.00

Balance Sheet Dr. Cr.

2775.00 4814.60 655.56 14254.88

52444.48 630.00 21126.46

1134.85 505.00

824.12 212.00

11148.91 902.00 1200.00 901.19

410.87 634.67 950.00

75411.77 c) d) e)

41325.51 Net Income

18525.00 410.87 634.67

Income Statement Dr. Cr.

824.12 41325.51

97166.74

824.12 97166.74

56429.10 17413.48 73842.58

73842.58

40737.64

73842.58

40737.64

824.12 23324.16 17413.48 40737.64

Chapter 13, D Solutions - Page 13-11

PROBLEM 13D-4, Cont. WLB TRUCK PARTS LTD. INCOME STATEMENT FOR THE YEAR ENDED SEPTEMBER 30, 2015 Revenue: Gross Sales

$5 2 4 4 4 4 8 6 3 0 00

Less: Sales Returns and Allowances Net Sales

51 8 1 4 48

Cost of Goods Sold: Merchandise Inventory, 1/10/14

$1 8 5 2 5 0 0

Purchases Less: Purchase Discounts Purchase Returns and Allowances

$2 1 1 2 6 4 6 $1 1 3 4 8 5 5 0 5 00

1 6 3 9 85

Net Cost of Purchases

19 4 8 6 61

Cost of Goods Available for Sale

38 0 1 1 61 19 7 5 8 25

Less: Merchandise Inventory, 30/9/15 Cost of Goods Sold

18 2 5 3 36

Gross Profit

33 5 6 1 12

Operating Expenses: Wages Expense Advertising Expense Rent Expense Supplies Expense Insurance Expense Depreciation Expense Payroll Benefits Expense Total Operating Expenses Net Income

11 1 4 8 91 9 0 2 00 1 2 0 0 00 4 1 0 87 6 3 4 67 9 5 0 00 9 0 1 19 16 1 4 7 64 $1 7 4 1 3 4 8

Page D13-12 - Chapter 13, D Solutions

PROBLEM 13D-4, Cont.

WLB TRUCK PARTS LTD. STATEMENT OF OWNER'S EQUITY FOR THE YEAR ENDED SEPTEMBER 30, 2015 W. Brennan, CapitaL, 1/10/14

$1 4 2 5 4 8 8

Add: Net Income

$1 7 4 1 3 4 8

Less: Withdrawals

8 5 2 5 00

Increase in Capital W. Brennan, Capital, 30/09/15

8 8 8 8 48 $2 3 1 4 3 3 6

Chapter 13, D Solutions - Page D13-13 PROBLEM 13D-4, Cont.

WLB TRUCK PARTS LTD. BALANCE SHEET SEPTEMBER 30, 2015 Assets

Current Assets: Cash

$1 7 6 8 0 2 3 2 5 5 23 19 7 5 8 25 2 3 9 13 3 1 7 33 2 7 4 68

Accounts Receivable Merchandise Inventory Supplies Prepaid Insurance Prepaid GST Total Current Assets

$2 5 6 1 2 6 4

Capital Assets: Equipment Less: Accumulated Depreciation, Equipment

$6 6 0 0 0 0 2 7 7 5 00

Total Assets

3 8 2 5 00 $2 9 4 3 7 6 4

Liabilities Accounts Payable

$4 8 1 4 6 0 6 5 5 56 8 2 4 12

GST Collected Accrued Wages Total Liabilities

$6 2 9 4 2 8 Owner's Equity

W. Brennan, Capital, September 30, 2015 Total Liabilities and Owner's Equity

23 1 4 3 36 $2 9 4 3 7 6 4

Page D13-14 - Chapter 13, D Solutions PROBLEM 13D-4, Cont.

Date 2015

WLB TRUCK PARTS LTD. GENERAL JOURNAL

Account Title and Description

Page 5 Post Ref.

Dr.

3320

18 5 2 5 00

Cr.

Adjusting Entries Sept. 30 Income Summary Merchandise Inventory 30 Merchandise Inventory Income Summary

1120

6640

Supplies

1130

30 Insurance Expense

6650

Prepaid Insurance

1140

30 Depreciation Expense

6630

19 7 5 8 25 4 1 0 87 4 1 0 87 6 3 4 67 6 3 4 67 9 5 0 00

1220

6600

30 Wages Expense

19 7 5 8 25

3320

30 Supplies Expense

Accumulated Depreciation, Equipment

18 5 2 5 00

9 5 0 00 8 2 4 12

2210

Accrued Wages 30 Advertising Expense Prepaid GST Accounts Payable

8 2 4 12

6610

2 1 2 00

1150

1 0 60

2200

2 2 2 60

Closing Entries 4400

52 4 4 4 48

Purchases Discounts

5510

1 1 3 4 85

Purchases Returns and Allowances

5520

5 0 5 00

Sept. 30 Sales

Income Summary

3320

54 0 8 4 33

Chapter 13, D Solutions - Page D13-15 PROBLEM 13D-4, Cont.

Date 2015

WLB TRUCK PARTS LTD. GENERAL JOURNAL

Account Title and Description

Sept. 30 Income Summary

Dr.

3320

37 9 0 4 10

Cr.

Purchases

21 1 2 6 46

Sales Returns and Allowances

4410

6 3 0 00

Wages Expense

6600

11 1 4 8 91

Advertising Expense

6610

9 0 2 00

Rent Expense

6620

1 2 0 0 00

Supplies Expense

6640

4 1 0 87

Insurance Expense

6650

6 3 4 67

Depreciation Expense

6630

9 5 0 00

Payroll Benefits Expense

6660

9 0 1 19

W. Brennan, Capital 30 W. Brennan, Capital W. Brennan, Withdrawals

Oct.

Post Ref.

5500

30 Income Summary

2015

Page 6

3320

17 4 1 3 48

3300

17 4 1 3 48 8 5 2 5 00

3310

8 5 2 5 00

Reversing Entry 1 Accrued Wages Wages Expense

2210 6600

8 2 4 12 8 2 4 12

Page D13-16 - Chapter 13, D Solutions

PROBLEM 13D-4, Cont. NAME:

CASH

Date 2015

Explanation

NAME:

Debit

ACCOUNTS RECEIVABLE

Date 2015

Explanation

Sept.

Post Ref

Debit

NAME: MERCHANDISE INVENTORY Date 2015 Sept. 30 Balance

Sept.

Explanation

Post Ref

Debit

30 Adjusting 30 Adjusting

GJ5

Explanation

1 7 6 8 02

ACCOUNT NO.

1110

DR CR

Balance

3 2 5 5 23

Credit

ACCOUNT NO.

1120

DR CR

Balance

18 5 2 5 00

Credit

Post Ref

O Dr

Debit

1130

DR CR

Balance

6 5 0 00 2 3 9 13

Credit

30 Adjusting

GJ5

Explanation

Post Ref

4 1 0 87

30 Balance

30 Adjusting

GJ5

Debit

Date 2015

Explanation

Post Ref

ACCOUNT NO.

1140

DR CR

Balance

9 5 2 00 3 1 7 33

Credit

6 3 4 67

PREPAID GST Debit

ACCOUNT NO.

1150

DR CR

Balance

2 6 4 08 2 7 4 68

Credit

30 Balance

30 Adjusting

GJ5

NAME:

1 0 60

EQUIPMENT

Date 2015

Explanation 30 Balance

Post Ref

Debit

19 7 5 8 25

ACCOUNT NO.

30 Balance

NAME:

Sept.

19 7 5 8 25

SUPPLIES

Date 2015

Sept.

Balance

18 5 2 5 00

NAME: PREPAID INSURANCE

Sept.

DR CR

Credit

4 GJ5

Date 2015

1100

30 Balance

NAME:

ACCOUNT NO.

30 Balance

Sept.

WLB TRUCK PARTS LTD. GENERAL LEDGER

ACCOUNT NO.

1210

DR CR

Balance

6 6 0 0 00

Credit

Chapter 13, D Solutions - Page D13-17 PROBLEM 13D-4, Cont.

WLB TRUCK PARTS LTD. - GENERAL LEDGER

ACCUMULATED DEPRECIATION, EQUIPMENT

NAME: Date 2015

Explanation

Sept. 30 Balance 30 Adjusting

NAME:

ACCOUNTS PAYABLE

Date 2015

Explanation

Sept.

ACCOUNT NO.

1220

DR CR

Balance

GJ5

1 8 2 5 00 2 7 7 5 00

Post Ref

Debit

9 5 0 00

Debit

ACCOUNT NO.

2200

DR CR

Balance

4 5 9 2 00 4 8 1 4 60

Credit

30 Balance

30 Adjusting

GJ5

Date 2015 Sept.

2 2 2 60

ACCRUED WAGES

NAME:

Explanation

Post Ref

Debit

GJ5

30 Adjusting

GST COLLECTED

NAME: Date 2015

Explanation

Post Ref

Debit

NAME: W. BRENNAN, CAPITAL Date 2015 Sept. 30 Balance

Explanation

Post Ref

2210

Credit

DR CR

Balance

8 2 4 12

ACCOUNT NO.

2220

DR CR

Balance

6 5 5 56

Credit

Debit

ACCOUNT NO.

3300

DR CR

Balance

14 2 5 4 88 31 6 6 8 36 23 1 4 3 36

Credit

30 Closing

GJ6

30 Closing

GJ6

NAME:

W. BRENNAN, WITHDRAWALS

Date 2015

Explanation

Post Ref

30 Balance

30 Closing

GJ6

17 4 1 3 48

Debit

ACCOUNT NO.

3310

DR CR

Balance

8 5 2 5 00

Credit

8 5 2 5 00

Post Ref

Debit

Sept. 30 Adjusting

GJ5

18 5 2 5 00

30 Adjusting

GJ5

30 Closing

GJ5

30 Closing

GJ6

30 Closing

GJ6

Explanation

Cr Cr

8 5 2 5 00

NAME: INCOME SUMMARY Date 2015

ACCOUNT NO.

Sept. 30 Balance

Sept.

Credit

ACCOUNT NO.

3320

DR CR

Balance

18 5 2 5 00 1 2 3 3 25 55 3 1 7 58 17 4 1 3 48

Credit

19 7 5 8 25 54 0 8 4 33 37 9 0 4 10 17 4 1 3 48

Cr Cr Cr Cr

Page D13-18 - Chapter 13, D Solutions PROBLEM 13D-4, Cont. NAME:

SALES

Date 2015 Sept.

Explanation

Post Ref

30 Balance

30 Closing

GJ5

NAME:

Explanation

Post Ref

30 Balance

30 Closing

GJ6

NAME:

Explanation

Post Ref

Sept. 30 Balance

30 Closing

GJ6

Sept.

Explanation

30 Closing

GJ5

Debit

Explanation

Post Ref

30 Balance

30 Closing

GJ5

4400

DR CR

Balance

52 4 4 4 48

Credit

ACCOUNT NO.

4410

DR CR

Balance

6 3 0 00

Credit

6 3 0 00

ACCOUNT NO.

5500

DR CR

Balance

21 1 2 6 46

Credit

21 1 2 6 46

Debit

ACCOUNT NO.

5510

DR CR

Balance

1 1 3 4 85

Credit

1 1 3 4 85

PURCHASES RETURNS AND ALLOWANCES

Date 2015 Sept.

Post Ref

30 Balance

NAME:

Debit

PURCHASES DISCOUNTS

Date 2015

ACCOUNT NO.

52 4 4 4 48

PURCHASES

Date 2015

NAME:

Debit

SALES RETURNS AND ALLOWANCES

Date 2015 Sept.

WLB TRUCK PARTS LTD. - GENERAL LEDGER

Debit

ACCOUNT NO.

5520

DR CR

Balance

5 0 5 00

Credit

5 0 5 00

NAME: WAGES EXPENSE

ACCOUNT NO.

6600

DR CR

Balance

30 Adjusting

GJ5

10 3 2 4 79 11 1 4 8 91

30 Closing

GJ6

Date 2015 Sept. 30 Balance

Explanation

Post Ref

Debit

Credit

8 2 4 12 11 1 4 8 91

Chapter 13, D Solutions - Page D13-19

PROBLEM 13D-4, Cont. WLB TRUCK PARTS LTD. - GENERAL LEDGER ADVERTISING EXPENSE

ACCOUNT NO.

6610

DR CR

Balance

30 Adjusting

GJ5

6 9 0 00 9 0 2 00

30 Closing

GJ6

NAME: Date 2015

Explanation

Sept. 30 Balance

NAME:

Explanation

30 Closing

GJ6

30 Adjusting

GJ5

9 5 0 00

30 Closing

GJ6

SUPPLIES EXPENSE

Date 2015

Explanation

Post Ref

Debit

30 Adjusting

GJ5

4 1 0 87

30 Closing

GJ6

NAME:

INSURANCE EXPENSE

Date 2015 Sept.

Post Ref

Debit

30 Adjusting

GJ5

6 3 4 67

30 Closing

GJ6

Explanation

NAME:

PAYROLL BENEFITS EXPENSE

Date 2015

Explanation

Sept.

Post Ref

30 Balance

30 Closing

GJ6

9 0 2 00

ACCOUNT NO.

6620

DR CR

Balance

1 2 0 0 00

Credit

1 2 0 0 00

Debit

NAME:

Sept.

Debit

Post Ref

Explanation

Credit

2 1 2 00

DEPRECIATION EXPENSE, EQUIPMENT

Date 2015 Sept.

Post Ref

30 Balance

NAME:

Debit

RENT EXPENSE

Date 2015 Sept.

Post Ref

Debit

ACCOUNT NO.

6630

DR CR

Balance

9 5 0 00

Credit

9 5 0 00

ACCOUNT NO.

6640

DR CR

Balance

4 1 0 87

Credit

4 1 0 87

ACCOUNT NO.

6650

DR CR

Balance

6 3 4 67

Credit

6 3 4 67

ACCOUNT NO.

6660

DR CR

Balance

9 0 1 19

Credit

9 0 1 19

Page D13-20 - Chapter 13, D Solutions

PROBLEM 13D-4, Cont. WLB TRUCK PARTS LTD. POST-CLOSING TRIAL BALANCE SEPTEMBER 30, 2015 Cash Accounts Receivable Merchandise Inventory Supplies Prepaid Insurance Prepaid GST Equipment Accumulated Depreciation, Equipment Accounts Payable Accrued Wages GST Collected W. Brennan, Capital Totals

1 7 6 8 02 3 2 5 5 23 19 7 5 8 25 2 3 9 13 3 1 7 33 2 7 4 68 6 6 0 0 00 2 7 7 5 00 4 8 1 4 60 8 2 4 12 6 5 5 56 23 1 4 3 36 32 3 1 2 64 32 3 1 2 64

INSTRUCTOR’S MANUAL Brian Zwicker

COLLEGE ACCOUNTING: A PRACTICAL APPROACH Twelfth Canadian Edition

Jeffrey Slater Brian Zwicker

Table of Contents

Teaching this Course Suggestions for Course Management .....................................................1 Preparing for the Course ............................................................................................1 Introducing Students to the Course............................................................................2 Preparing for Each Lecture/Session...........................................................................3 Getting Through Each Chapter ..................................................................................4 Assigning Exercise and Problems .............................................................................6 Reviewing Assignments ............................................................................................8 Testing .......................................................................................................................9 Practice Sets or Simulations ....................................................................................10 Grading ....................................................................................................................10

Course Scheduling ............................................................................................12 Sample Course Syllabi .............................................................................................12 Sample Syllabus for 11-Chapter Course in 12 Weeks.............................................13 Sample Syllabus for 11-Chapter Course in 15-Weeks ............................................14 Sample Syllabus for 13-Chapter Course in 12 Weeks (Using a Merchandising Simulation for Review) ...............................................15 Sample Syllabus for 13-Chapter Course in 16 Weeks (Using a Merchandising Simulation for Review) ...............................................16

Lecture Outlines ..................................................................................................17 Chapter 1: Accounting Concepts and Procedures: An Introduction .....................................17 Chapter 2: Debits and Credits: Analyzing and Recording Business Transactions ...............19 Chapter 3: Beginning the Accounting Cycle: Journalizing, Posting, and the Trial Balance .......................................................................................................21 Chapter 4: The Accounting Cycle Continued: Preparing Worksheets and Financial Reports ................................................................................................23 Chapter 5: The Accounting Cycle Completed: Adjusting, Closing and Post-Closing Trial Balance .................................................................................24 Chapter 6: Special Journals: The Basics, Part 1 ...................................................................25 Chapter 7:

Table of Contents - Page 3 Special Journals: The Basics, Part 2 ...................................................................27 Chapter 8: Banking Procedures and Control of Cash ...........................................................30 Chapter 9: Payroll Procedures: The Employees’ Perspective ..............................................32 Chapter 10: The Employer’s Tax Responsibilities: Principles and Procedures .....................34 Chapter 11: Special Journals with Taxes ...............................................................................36 Chapter 12: Preparing a Worksheet for a Merchandising Company ......................................39 Chapter 13: Completion of the Accounting Cycle for a Merchandising Company ...............40

Chapter Resources Chapter 1 ................................................................................................................42 First Day Mini-Lecture for Students........................................................................42 Class Quiz ................................................................................................................42 Accounting Recall ...................................................................................................44 Solutions to Accounting Recall ...............................................................................45 Points to Stress .........................................................................................................45 Business World Notes..............................................................................................46 Class Activities ........................................................................................................47 Teaching Tips ..........................................................................................................47 Typical Student Misconceptions..............................................................................47 Check Figures for Exercises ....................................................................................48 Check Figures for On-the-Job Training ...................................................................49 Check Figures for Continuing Problem ...................................................................49 Chapter 2 ................................................................................................................50 Class Quiz ................................................................................................................50 Accounting Recall ...................................................................................................51 Solutions to Accounting Recall ...............................................................................51 Points to Stress .........................................................................................................52 Business World Notes..............................................................................................53 Class Activities ........................................................................................................53 Teaching Tips ..........................................................................................................54 Typical Student Misconceptions..............................................................................55 Check Figures for Exercises ....................................................................................55 Check Figures for On-the-Job Training ...................................................................56 Check Figures for Continuing Problem ...................................................................57 Copyright © 2015 Pearson Canada Inc.

Table of Contents - Page 4 Chapter 3 ................................................................................................................58 Class Quiz ................................................................................................................58 Accounting Recall ...................................................................................................59 Solutions to Accounting Recall ...............................................................................59 Points to Stress .........................................................................................................60 Business World Notes..............................................................................................60 Class Activities ........................................................................................................61 Teaching Tips ..........................................................................................................62 Typical Student Misconceptions..............................................................................62 Check Figures for Exercises ....................................................................................63 Check Figures for On-the-Job Training ...................................................................64 Check Figures for Continuing Problem ...................................................................64 Chapter 4 ................................................................................................................65 Class Quiz ................................................................................................................65 Accounting Recall ...................................................................................................66 Solutions to Accounting Recall ...............................................................................66 Points to Stress .........................................................................................................67 Business World Notes..............................................................................................68 Class Activities ........................................................................................................68 Teaching Tips ..........................................................................................................69 Typical Student Misconceptions..............................................................................69 Check Figures for Exercises ....................................................................................70 Check Figures for On-the-Job Training ...................................................................71 Check Figures for Continuing Problem ...................................................................71 Chapter 5 ................................................................................................................72 Class Quiz ................................................................................................................72 Accounting Recall ...................................................................................................72 Solutions to Accounting Recall ...............................................................................73 Points to Stress .........................................................................................................73 Business World Notes..............................................................................................74 Class Activities ........................................................................................................75 Teaching Tips ..........................................................................................................75 Typical Student Misconceptions..............................................................................75 Check Figures for Exercises ....................................................................................76 Check Figures for On-the-Job Training ...................................................................77 Check Figures for Continuing Problem ...................................................................77 Notes on the Mini Practice Set — Sullivan Realty..................................................77 Check Figures for Mini Practice Set ........................................................................78 Chapter 6 ................................................................................................................79 Class Quiz ................................................................................................................79 Accounting Recall ...................................................................................................79 Solutions to Accounting Recall ...............................................................................80 Points to Stress .........................................................................................................80 Copyright © 2015 Pearson Canada Inc.

Table of Contents - Page 5 Business World Notes..............................................................................................81 Class Activities ........................................................................................................82 Teaching Tips ..........................................................................................................82 Typical Student Misconceptions..............................................................................84 Check Figures for Exercises ....................................................................................84 Check Figures for On-the-Job Training ...................................................................85 Check Figures for Continuing Problem ...................................................................85 Chapter 7 ................................................................................................................86 Class Quiz ................................................................................................................86 Accounting Recall ...................................................................................................86 Solutions to Accounting Recall ...............................................................................87 Points to Stress .........................................................................................................87 Business World Notes..............................................................................................88 Class Activities ........................................................................................................89 Teaching Tips ..........................................................................................................89 Typical Student Misconceptions..............................................................................91 Check Figures for Exercises ....................................................................................91 Check Figures for On-the-Job Training ...................................................................92 Check Figures for Continuing Problem ...................................................................92 Chapter 8 ................................................................................................................93 Class Quiz ................................................................................................................93 Accounting Recall ...................................................................................................94 Solutions to Accounting Recall ...............................................................................94 Points to Stress .........................................................................................................95 Business World Notes..............................................................................................95 Class Activities ........................................................................................................96 Teaching Tips ..........................................................................................................97 Typical Student Misconceptions..............................................................................97 Check Figures for Exercises ....................................................................................98 Check Figures for On-the-Job Training ...................................................................99 Check Figures for Continuing Problem ...................................................................99 Chapter 9 ..............................................................................................................100 Class Quiz ..............................................................................................................100 Accounting Recall .................................................................................................100 Solutions to Accounting Recall .............................................................................101 Points to Stress .......................................................................................................101 Business World Notes............................................................................................102 Class Activities ......................................................................................................103 Teaching Tips ........................................................................................................104 Typical Student Misconceptions............................................................................104 Check Figures for Exercises ..................................................................................104 Check Figures for On-the-Job Training .................................................................105 Copyright © 2015 Pearson Canada Inc.

Table of Contents - Page 6 Check Figures for Continuing Problem .................................................................105 Chapter 10 ............................................................................................................106 Class Quiz ..............................................................................................................106 Accounting Recall .................................................................................................106 Solutions to Accounting Recall .............................................................................107 Points to Stress .......................................................................................................107 Business World Notes............................................................................................108 Class Activities ......................................................................................................108 Teaching Tips ........................................................................................................109 Typical Student Misconceptions............................................................................109 Check Figures for Exercises ..................................................................................110 Check Figures for On-the-Job Training .................................................................110 Check Figures for Continuing Problem .................................................................110 Check Figures for Mini Practice Set ......................................................................111 Chapter 11 ............................................................................................................112 Class Quiz ..............................................................................................................112 Accounting Recall .................................................................................................112 Solutions to Accounting Recall .............................................................................113 Points to Stress .......................................................................................................113 Business World Notes............................................................................................114 Class Activities ......................................................................................................116 Teaching Tips ........................................................................................................116 Typical Student Misconceptions............................................................................118 Check Figures for Exercises ..................................................................................118 Check Figures for On-the-Job Training .................................................................119 Check Figures for Continuing Problem .................................................................119 Chapter 12 ............................................................................................................120 Class Quiz ..............................................................................................................120 Accounting Recall .................................................................................................120 Solutions to Accounting Recall .............................................................................121 Points to Stress .......................................................................................................121 Business World Notes............................................................................................122 Class Activities ......................................................................................................122 Teaching Tips ........................................................................................................123 Typical Student Misconceptions............................................................................123 Check Figures for Exercises ..................................................................................124 Check Figures for On-the-Job Training .................................................................125 Check Figures for Continuing Problem .................................................................125 Chapter 13 ............................................................................................................126 Class Quiz ..............................................................................................................126 Copyright © 2015 Pearson Canada Inc.

Table of Contents - Page 7 Accounting Recall .................................................................................................126 Solutions to Accounting Recall .............................................................................127 Points to Stress .......................................................................................................127 Business World Notes............................................................................................128 Class Activities ......................................................................................................128 Teaching Tips ........................................................................................................129 Typical Student Misconceptions............................................................................129 Check Figures for Exercises ..................................................................................130 Check Figures for On-the-Job Training .................................................................131 Check Figures for Continuing Problem .................................................................131 Check Figures for Mini Practice Set ......................................................................131 D Problems ........................................................................................................................ Chapter 1 ............................................................................................................... D-1 Chapter 2 ............................................................................................................... D-3 Chapter 3 ............................................................................................................... D-5 Chapter 4 ............................................................................................................... D-8 Chapter 5 ............................................................................................................. D-11 Chapter 6 ............................................................................................................. D-13 Chapter 7 ............................................................................................................. D-17 Chapter 8 ............................................................................................................. D-21 Chapter 9 ............................................................................................................. D-27 Chapter 10 ........................................................................................................... D-30 Chapter 11 ........................................................................................................... D-35 Chapter 12 ........................................................................................................... D-42 Chapter 13 ........................................................................................................... D-46 D Solutions ......................................................................................................................... Chapter 1 ............................................................................................................. D1-1 Chapter 2 ............................................................................................................. D2-1 Chapter 3 ............................................................................................................. D3-1 Chapter 4 ............................................................................................................. D4-1 Chapter 5 ............................................................................................................. D5-1 Chapter 6 ............................................................................................................. D6-1 Chapter 7 ............................................................................................................. D7-1 Chapter 8 ............................................................................................................. D8-1 Chapter 9 ............................................................................................................. D9-1 Chapter 10 ......................................................................................................... D10-1 Chapter 11 ......................................................................................................... D11-1 Chapter 12 ......................................................................................................... D12-1 Chapter 13 ......................................................................................................... D13-1

Lecture Outlines - Page 1

Teaching this Course Course Management The following suggestions are designed to aid beginning instructors and instructors who are using this textbook for the first time. These recommendations will help you use all of the features of this textbook to their fullest as well as provide you with many classroom-proven techniques for successful course management. Each teaching situation is different and you are encouraged to adapt these guidelines to your specific needs.

Preparing for the Course One of the keys to successful teaching is organization. The first step is to read completely the description given in this manual of this textbook’s features and teaching aids. Become familiar with them so that you are prepared to use each resource at your disposal. Before classes begin you should develop both a class schedule, or syllabus, and a written list of rules that you and your students can refer to throughout the course. Syllabus

Most institutions will require that the instructor prepare a syllabus for each course (sample syllabi are given on pages 13–18). Make enough copies to give one to each student. Having a guide to what work will be covered throughout the course not only ensures you will schedule adequate time to cover all material, but will also provide a guide to students in preparing for each class period. Some instructors also include a detailed list of the exact discussion questions, exercises and problems which are assigned. Rules

Develop a list of the “rules” that you expect your students to follow. A list of this sort can be used both to remind your class of the school’s rules on such subjects as absenteeism and the grading scale, and to provide a written record of the rules of your particular class. Such rules might include:

Course Management - Page 2 •

Grading Incentives — Decide ahead of time how grades will be calculated in the class and be prepared to give each student a copy of this information. Students should be told from the beginning whether attendance and participation will be considered in determining their grade, and what weight will be given to examinations, tests, workshops, simulations and/or quizzes. This will not only avoid misunderstandings and conflicts but can also be a motivating factor for students. Suggestions for “positive grading” are given on page 11.

•

Policy on Make-up Exams

•

Policies for Electronic Courses - perhaps offered using distance learning

•

Policy on Late Assignments, Simulation Reports and the like

•

Office Hours When You Are Available for Individual Consultation - as well as times and appropriate addresses allowing distance learners to reliably contact you for help

Introducing Students to the Course It is common for instructors to consider the first day of class the least important session of the course. In many schools the first day of class does not involve a lecture but rather concentrates on administrative tasks. Instructors who simply go through the motions of taking the initial roll, handing out the textbook or telling students where to buy it, and assigning the first chapter to be read have missed an enormous opportunity. To a large extent, the attitude of the class will be determined that first session. As the instructor, it is important that you walk into the classroom excited about the course. By the time students come to you, they have had years of training in reading the mood of their teachers. They’ll know whether you are enthusiastic about the material or not. Without consciously realizing it, they will “catch” your attitude so you must deliberately choose the attitude you carry into the class with you. The following are some suggestions for activities on the first day of class. As you take attendance make an effort to memorize as many of the student names as possible. It may help you to make brief notes (such as hair colour, age, eye-wear, obvious body jewellery, etc.) beside each student’s name to help you identify them later. One relatively painless option is to use a digital camera (perhaps the one you already have in your phone) to take an image of each student so you can refer to it as a guide to identification. Make a point of using their names as frequently as possible the first few days. Let the students know that you are making a conscious effort to learn their names. They will generally be flattered that you are making the attempt and will gladly help you. Hand out the syllabus and rule list which you have prepared. Go over this material with students explaining each item in a positive way and allowing time for answering any questions. Find out about your students. In order to best relate the material to your students you need to know their background. Some instructors simply ask questions of the class as a group, such as: Copyright © 2015 Pearson Canada Inc.

Course Management - Page 3 “How many of you have had an accounting course before?” “What course are you majoring in?” and “What are your employment goals?” Other teachers ask students to fill out a questionnaire about themselves listing accounting or related courses they have taken as well as any business experience they might have. Both methods have their merits. Obviously, the written questionnaire provides the instructor with much more detailed information about each student. Also, since the material is written it can be kept for future referral. The class discussion method also has its advantages, however. An informal class discussion is an excellent way of making students feel that you intend to present the course in a manner that is responsive to their needs. One of the most powerful teaching aids you have available is students’ willingness to help each other. It may well be that a classmate can explain a concept that has eluded a particular student. Also, the student who explains the material solidifies it in her own mind as she explains it. The first day of class is an excellent time to explain to students why knowledge of accounting will be important to them. Once you know your students’ future plans, you can explain to them how a good understanding of fundamental accounting can help them achieve their career goals, whether they intend a career in accounting, programming, retailing, or any type of business management. I also try and stress that citizens who have some knowledge of accounting and the business world are often better-informed voters as well. Tell students that you expect them to read the assigned chapters before the lecture is given. Let them know that you do not necessarily expect them to understand all of the material, but point out that if they read the chapter first, then they can come to the lecture prepared to ask questions. Without reading the material, they will spend the lecture time concentrating on the basics of the chapter to which they have not yet been exposed. When they later read the chapter for a more detailed understanding, there will be no instructor to help them with the difficult concepts. By explaining this to the students rather than just issuing a “rule” that they must read prior to lecture, you are much more likely to get a good response. Students should be told that because of the nature of accounting it is essential that they complete all assignments on time. Since accounting concepts build upon each other, the students won’t understand Chapter 2 if they don’t understand Chapter 1, and won’t understand Chapter 3 if they don’t understand Chapter 2, and so on. Completion of the assignments is one of the best ways to ensure a thorough understanding of a chapter and to provide a sound basis on which to build.

Preparing for Each Lecture/Session Most instructors find that preparing a lesson plan for each chapter greatly improves their presentation. Lesson plans should be designed to meet an individual instructor’s needs. There is no one correct format for lesson plans, but some items you might include on your lesson plans are: 1.

A brief outline of the topics you wish to cover in your lecture in order of their presentation;

Course Management - Page 4 3.

The materials you need such as handouts, transparencies, computer files (maybe for supplementary questions or exercises), and PowerPoint slides, etc.

A list of the problems to be assigned.

The process of preparing the lesson plan will help ensure that you use every aid available and that you give an organized presentation even the first time you cover a chapter. Once the lesson plan is developed, a quick referral to it can ensure that you will be prepared each time you present the material in the future. Beginning on page 19 you will find brief outlines of each chapter along with a list of points to stress during each session. These can be used as the basis for preparing your own individual plans for each student encounter. This Instructor’s Resource Guide for College Accounting: A Practical Approach provides lecture notes for each chapter. Read these over prior to covering each chapter. These notes emphasize points to stress in the session, supply teaching tips, give business world notes, suggest class activities, and list some common misconceptions which students often have. A review of these notes before each presentation will provide you with many ideas for a comprehensive, clear and interesting session.

Getting Through Each Chapter As you present your lecture (or, plan for each student session - lecturing, while very common, is not the only way to assist students in learning!), you might wish to keep an outline of the chapter (such as in your lesson plan) in front of you so that you can be sure you cover the topics in logical order, omitting none of the material you intend that the students will assimilate. Always begin the lecture/session by reviewing already familiar concepts and tying them to the new material. This provides a helpful review and aids in building a strong foundation for the new concepts being introduced. In this edition of this text we continue to use T-account examples in the margins of many chapters so that students will have a stronger understanding of the debits and credits, especially for those transactions which are recorded in special journals. Please make certain that all of your students fully understand the purpose and use of these "T" accounts in a classroom setting. As you reach points in the lecture where you feel students should be fairly confident of the material, question them. Ask questions of the group in general, and when a particular student wants to answer, call on him or her. This type of questioning has three advantages: 1.

It keeps the students involved in the lecture/session,

It reinforces key points in the lecture/session, and

It gives you feedback on the students’ understanding of the material.

Course Management - Page 5 are familiar. Show students how concepts they are learning are actually used in business. For example, when covering financial statements, get copies of actual financial reports from the library or the Internet to display to the class - or, better yet - have the students obtain their own! When covering payroll, bring blank tax forms such as the T-4, TD1 (both federal and provincial), and monthly remittance forms (or, even better - guide the students to where they can see and download the necessary forms from the appropriate government website). Knowing that the procedures they are learning will be useful when they go to work will motivate many students, and of course, you may also assign some marks to this process as well, and most students will find this difficult to ignore. Encourage questions from students. Students who are encouraged to ask questions are more likely to stay mentally involved in the lecture/session. Without questions from students it is often impossible for an instructor to know which points the students are struggling with. Ask students frequently during the lecture/session if they have any questions. Patiently answer all relevant questions from students. By giving an enthusiastic answer you will encourage future questions. If you do not know the answer to a question, simply explain to the students that you are not sure of the answer. Before the next class be sure to find the answer so that you can tell the students. They will respect this effort much more than an answer they later discover to be incorrect. At the end of each chapter, discussion questions are provided which review all of the major points in the chapter. These questions are most useful when students are required to read them aloud at the end of lecture/session and give answers. These questions have been designed to encourage discussion on all-important concepts, particularly those which tend to confuse students. By covering these questions in class you will be able to clarify statements made to students and correct any misconceptions. The Comprehensive Demonstration Problem with annotated solution can be very useful in the classroom, of course, but could also be "assigned" for students to complete on their own, in groups or under supervised conditions. New to the 11th edition of College Accounting were the Need Help? boxes at the end of most of the Self-Review Quizzes. These detailed explanation sections should prove remarkably helpful in most course situations - whether in a classroom, or by distance delivery. Another useful feature is the "ethical" issues raised in many chapters. These questions are kept relatively simple, but experience suggests that students rapidly become quite involved in each set of facts. One bit of advice would be to not let these issues dominate any session. They are intended as supplements to classroom activities, not as ends in themselves. A most significant feature of the Canadian Edition continues to be the Continuing Problem, at the end of most chapters. Research has indicated clearly that this new approach has many benefits for students. They quickly become “involved” with Tony Freedman and his Precision Computer Centre, and eagerly attempt to complete each assignment. During the extensive review process undertaken before each new edition of the textbook is fully planned, it has been remarkable how many of the instructors contacted continue to see the Continuing Problem as a really useful tool in helping students to understand accounting. Copyright © 2015 Pearson Canada Inc.

Course Management - Page 6 Most institutions will by now include in their programs a component involving using accounting software to ensure that all graduation students are familiar with this essential skill set. However, it has become apparent that in Canada, most institutions do not use the computer workshop materials that were developed for previous editions of the text - some going back to the 8th edition! Therefore, these have been dropped from the 12th edition. The files and workshops still exist of course, and are still relevant for students using the 12th edition, especially where an institution has concluded that it is nowadays a waste of precious resources to devote an entire course to a study of computer accounting. No doubt some programs will continue to see great benefit in having a full course featuring, say, Sage 50 software - others may conclude that a workshop approach may work acceptably well, and require far fewer classroom hours to achieve the desired results. Should any adopting institution think it useful to use the workshops from the 11th edition, the files, workshops descriptions and solutions, as well as the step-by-step guides are readily available - just contact your Pearson representative, or the author. E-mail address brian@bzwicker.ca. In the 12th edition, the two sets of classroom demonstration exercises have been reduced to one, in favour of increasing the Exercises to two slightly different sets. Each exercise set is a close duplicate of the other, so you are encouraged to use the set that works best for your students. Self review quizzes are provided at the end of each learning unit, and in some instances have been extended to cover the chapter topics more thoroughly. Encourage students to complete these quizzes. You may ask students to do them in class immediately following the lecture/session to help reinforce the material. Many instructors also recommend that all students complete the Self-Review questions in each chapter of the Study Guide with Working Papers (answers are provided). Note that there continue to be Need Help? sections following these Quizzes in each of the first five chapters (this was mentioned above as well).

Assigning Exercises and Problems When assigning exercises and problems, be sure that the amount of time you ask students to spend is reasonable and productive. Choose those exercises and problems in the text which you feel most meet your students’ needs (this may well vary from class to class). In the front of the Solutions Manual you will find a grid of all exercises and problems in the text showing their level of difficulty and the approximate time required to complete them. Use this guide when deciding the problems to assign. Make sure that the problems assigned cover each important point in the chapter but do not require so much work that students become overwhelmed. The updated "C" problems in this edition of the text should allow you more flexibility in assigning problems and the corresponding “D” problems included in this guide will provide options for non-standard situations such as extra review material, make-up or late assignment substitution and added exam or quiz material. When you assign problems, take the time to preview them briefly with the class. Make sure that students understand what they are expected to do for each problem. Look over the problems carefully and try to anticipate trouble spots. Warn students about these and give hints for handling them; a student who has difficulty with a portion of a problem may not attempt to complete it. Stress the time-saving benefits of using the Study Guide with Working Papers. Many Copyright © 2015 Pearson Canada Inc.

Course Management - Page 7 instructors feel that most students benefit greatly from the "enforced organization" the Working Papers provide. Note that grading can often be done more efficiently when the students’ answers are presented in a consistent format. For the 12th Edition, look for the Excel Templates that are available for each of the many problems in each chapter. Even when use of a computer/laptop is not mandatory, the templates can often be printed and used to guide students in generating answers that conform to a particular design. Many other solution designs are possible, of course - but there may be an advantage to using the templates, because marking will be faster and more pleasant when the students follow a common format. For those students that do use a computer, the benefits are sure to appeal. Not only is a sound approach presented and mathematical errors minimized, but many times the completed Excel file can be sent electronically to the instructor for grading. This is of special importance in classes offered to distance learners. On longer problems it is recommended that you refer students to the provided check figures for sections of the problem so that they can assure themselves that they are on the right track. These intermediate figures can often be found by referring to the marginalia in the text itself. If their answers do not match the check figures, students will know to look for errors before proceeding. At the end of most chapters you will find two or three practical accounting application problems. These short problems are used to show how concepts from the chapter might affect a student in the workplace. These problems are generally very short and ideal for classroom discussion. Three comprehensive problems are provided in this textbook. They are found after Chapters 5, 10, and 13. Each of these problems pull together all of the concepts taught in the preceding chapters. This gives students a better feel for the whole picture of accounting tasks. These comprehensive problems can be used in addition to or as a substitute for practice sets or simulations, although they are not as detailed as the average practice set. The new payroll simulation following Chapter 10 contains practical payroll practice. The comprehensive problem in chapter 5 is also presented in computer-based format, and may be completed using either Sage 50 or most other accounting software if your design incorporates this aspect of accounting learning. This edition no longer features or includes the rather extensive material for computer accounting activities that was greatly expanded in the 9th edition, and once again for the previous one. Even though all of the Computer Workshops were extensively updated for the 11th edition, and made available through the My Accounting Lab feature, it was disappointing to learn how few institutions used these amazingly-useful learning aids. While no longer officially-available with the 12th edition, they remain quite current and may be extremely useful in some situations. Contact your Pearson representative or the Canadian author for further details. E-mail address: brian@bzwicker.ca. As regards solutions to the previously-available computer workshops, half of the Workshops have a detailed solution available for students to use, while the other half is reserved for instructor use only. That way, one of the Workshops in each workshop-enabled chapter is available for possible use as an examination tool, or whatever other use the instructor may Copyright © 2015 Pearson Canada Inc.

Course Management - Page 8 decide. The solutions to all workshops can be made available to each instructor - again, contact Pearson or the author for information. Especially noteworthy for the previous edition is the PearsonEducation MyAccountingLab website, which features many electronic aids to students wanting to get a firm grip on the subject as quickly as may be. Students will appreciate the many helpful features included in the MAL. All are designed to enhance the learning of accounting, and research has shown that it works! Each textbook has a detailed, colourful section near the front that explains all of the MAL features. Please take full advantage of this remarkable new feature as you design and present your course. Many additions and improvements have been added since this noteworthy addition in the previous edition, and this continues to be one of the most important reasons to choose College Accounting for use in Canadian classrooms. In any event, to make the Slater/Zwicker package even more effective, we need to hear from you. Canadian instructors can either write Jeff Slater or Brian Zwicker c/o PearsonEd Canada. Those who wish to contact Brian Zwicker by e-mail should use this address: brian@bzwicker.ca

Reviewing Assignments Just as important as the lecture is the review of assignments. Reviewing each assignment prepared by students allows them to identify trouble spots and gain more confidence with the material. When reviewing problems, it will be easier for you to keep the class’s interest if you require students to read each problem or transaction in turn and have them supply their answers. You will find it necessary to elaborate on many answers as this procedure pinpoints the areas where students are having difficulty. In most accounting problems, it will be necessary for the students to see the problem written out as well as to hear the answers in order to gain full understanding. For this reason, transparencies of the solutions are an excellent teaching tool. The fonts used in the Solutions Manual have been especially chosen for clarity when copied to an acetate transparency. If you find that students are having difficulty with a particular problem, you should explain it more fully. To ensure that students practice completing the problem the correct way, you may want to assign another similar problem. There are two versions of certain problems in the text: A and B. If you originally assigned the A problem, you can have students prepare the B problem for further practice. Also in this edition are the C series of problems. They are often slightly more challenging than the A or B problems, and are now supplemented by the new D problems in this guide. Note that students do not have access to these D-type problems unless you arrange for that to happen. This can make it quite convenient to choose exam or practice questions from these alternate problems. Solutions are also provided here in exactly the same format as in the Solutions Manual. This facilitates printing to transparencies, or the display of .pdf files on a Copyright © 2015 Pearson Canada Inc.

Course Management - Page 9 laptop or other computer. Please also note that the new D problems are intended to co-ordinate with the blank forms for the C problems included in the Study Guide with Working Papers.

Testing Before giving chapter tests, you may find it beneficial to give students quizzes on the material. Quizzes encourage students to keep current on their reading and homework assignments. Whether they have any effect on the student’s grade or not, quizzes are a valuable pre-test tool to help students assess how well they know the material. By discovering their weaknesses, students will be able to study for the chapter tests more efficiently. Note that pre-testing is now a function of the web site for this textbook. If students have access to the Internet, this process can be quite easy to arrange. Achievement tests are useful in testing students’ mastery of the material. Two versions are suggested for each test. These two versions can be used in many ways. For instance, you may want to give Version A to your morning class and Version B to your afternoon class. Or, if your classroom is crowded, you may want to give different versions of the test to students sitting next to each other. Testing should be presented in as positive a light as possible. Frequently remind the students that the object of the class is to learn accounting, not simply to pass tests. Tests must be given, however, to gauge students’ mastery of the material. Often, when students fail a test, they make no effort to review the material. Since they have already received a poor grade which they cannot change, they have no motivation to restudy. You can provide this incentive, however, by allowing students to retest on the material. As part of your grading procedures you might want to allow students to restudy and retake a test if they fail it. Allow them only a short time to decide to retake the test (such as a week) and then give them the version of the test which they have not already taken. This method gives the student an incentive to restudy the material. This is vital. Since the concepts in accounting build one upon the other, students will be lost if they don’t build a firm foundation before going on. (Thus the one-week limit — it does no good to have the student restudy the material at the end just to bring up a poor grade.) If you use the restudy and retest method, I suggest you always average the two scores to arrive at the student’s grade for that test, even if the second grade is lower than the first. If you do not set and enforce this rule, many students will simply take the second test without studying, feeling that they have nothing to lose. This defeats the purpose of giving the second test. A test bank is available within the MAL with multiple choice, true/false and other types of questions covering Chapters 1–13. Extensively revised, corrected and expanded for the 12th edition, the test bank can be employed within the MAL structure to not only generate a customdesigned quiz on demand, but also to facilitate the marking and reporting function. This allows instant responses from students so as to alert you to what is going right in the course, and also of course to point out troublesome areas that may need review or extra work. You can also design and print a more traditional quiz or test which meets your specific needs quickly by using the Copyright © 2015 Pearson Canada Inc.

Course Management - Page 10 MAL. A copy of this test-bank data is available in popular formats like Word and .pdf files. These files can be supplied to all adopting institutions on request.

Practice Sets or Simulations Practice sets or simulations provide an excellent review of all elements of the accounting process. Many students find that preparing a practice set brings into focus many of the concepts they did not understand during the course. There are many different practice sets, both manual and computerized, from which to choose. For more details, contact your Pearson Education Canada sales representative or faculty service. Practice sets are also available from independent sources, such as Blue Sky Publishing. (780–965–5516 or visit WWW.BLUESKYPUBLISHING.COM). Notice that simulations can be obtained for use in manual bookkeeping or using the computer (especially Sage 50). There are many approaches to grading practice sets. Some instructors have students complete the practice set (perhaps supplying check figures, but not allowing students access to the solution) and then grade the practice set itself. Other instructors allow students to work in groups and even check their work against answer guides, but then test the students on their knowledge of the completed practice set. This method tests that students have not only completed their practice sets but also understood the work they have done. One control procedure often used when computer software is used is to have students include their initials in all invoice numbers. This personalizes each data set thereby making it more difficult to cheat.

Grading As mentioned earlier, students should be told from the beginning of the course how their grade will be calculated. In designing your grading format, the two purposes of grading should be carefully considered. These purposes are: 1.

to motivate the student to learn accounting, and

to provide feedback to both student and instructor (as well as prospective employers!).

Grades can be used as a motivating factor in many ways. To promote student participation and attendance, a portion of each student’s grade can be based on these factors. It is obvious that completion of assignments is important to determine how well a student grasps the material in a chapter. You can encourage students to complete all assignments by giving them a point of value also. In order to compel students to study consistently, you can grade the small quizzes given throughout the course. Students will be less likely to fall behind in their work if they know that there is a quiz coming up which will affect their grade. A sample grading structure is given below. Be sure to vary it according to your own situation.

Course Management - Page 11 Item

Percentage of Final Grade

Attendance and Participation Assignments Quizzes Chapter Tests Simulation Final Examination

10% 10% 10% 30% 20% 20%

In order for grading to be a useful tool for motivation and feedback, it is necessary to grade all work promptly. Inform students of their standing as frequently as possible. (MAL can be a huge help with this!) Above all, be encouraging. A student who has poor grades needs more attention and positive reinforcement than a student with good grades. Students should be supported in their efforts to learn as much as they possibly can from the class.

Lecture Outlines - Page 12

Course Scheduling Sample Course Syllabi Designing a syllabus before your course begins will ensure that you have scheduled enough time to cover all of the material in the course, and will provide you and your students with a guide in preparing for each class. This textbook and its supplements have been designed to be flexible so that you can create a course schedule that fits your needs. By choosing to use or not use Mini Practice Sets, practice sets, computerized exercises, and suggested class activities, you can lengthen or shorten the course to fit into the time allotted. Sample course syllabi are provided on the next several pages for the ten-chapter course and the fifteen-chapter course. (Other possibilities are, of course, possible as well.) Although these syllabi may not fit your course length exactly, you can use them as a guide in developing your own schedule. The task of preparing sample syllabi has been made greatly more complicated because of the new concept of including in the text package several auxiliary chapters, as detailed below: Auxiliary Chapter 17 – Analyzing Financial Statements Auxiliary Chapter 18 – Notes Receivable and Notes Payable Auxiliary Chapter 19 – Accounting for Merchandise Inventory Auxiliary Chapter 20 – Partnerships and Corporations Auxiliary Chapter 21 – Corporations – Bonds Payable Auxiliary Chapter 22 – The Voucher System Auxiliary Chapter 23 – Departmental Accounting Auxiliary Chapter 24 – Manufacturing Accounting As described in the Introduction section of the text itself, these chapters have been chosen from past editions of the text, or from the US Edition, but have been updated where necessary, including a very high degree of Canadianization. These “new” chapters greatly extend the range of topics that instructors may choose from to customize a course so that it meets the needs of their students rather precisely. However, it is rather difficult to construct course syllabi for each possible variation, so the choice was made to provide examples of less sophisticated courses only. It will be necessary for instructors to create their own course syllabi if their ideal course includes one or more of the new auxiliary chapters.

Lecture Outlines - Page 13

Sample Syllabus for 11-Chapter Course in 12 Weeks (Using Comprehensive Problems and Simulation for Review) Week 1

Material Covered

Week

Material Covered

Introduction to Course CHAPTER 1: Accounting Concepts and Procedures: An Introduction CHAPTER 2: Debits and Credits Achievement Test 1

CHAPTER 7: Special Journals Part 2

CHAPTER 3: The Accounting Cycle begun CHAPTER 4: The Accounting Cycle continued CHAPTER 5: The Accounting Cycle completed

CHAPTER 8: Banking Procedures and Control of Cash Achievement Test 3 CHAPTER 9: Payroll Procedures — The Employees’ Perspective CHAPTER 10: Employer’s Tax Responsibilities Mini Practice Set - end of Chapter 10 CHAPTER 11: Special Journals with Taxes

Mini Practice Set Achievement Test 2

CHAPTER 6: Special Journals - Part 1

Finish Mini Practice Set — Chapter 10 Achievement Test 4 Completion of any Simulations. Review Final Comprehensive Exam

(Note: This schedule is designed for a 12-week quarter with 4 hours of class a week. The material to be covered includes all Mini Practice Sets as well as the preparation of a shorter service enterprise simulation

Lecture Outlines - Page 14

Sample Syllabus for 11-Chapter Course in 15 Weeks (Using Comprehensive Problems and Simulation for Review) Week

Material Covered

Week

Material Covered

Introduction to Course CHAPTER 1: Accounting Concepts and Procedures: An Introduction

CHAPTER 8: Banking Procedures and Control of Cash Achievement Test 3

CHAPTER 2: Debits and Credits Achievement Test 1 CHAPTER 3: The Accounting Cycle begun

CHAPTER 9: Payroll Procedures The Employees’ Perspective CHAPTER 10: —Employer’s Tax Responsibilities - Complete Payroll Simulation - end of Ch. 10

CHAPTER 4: The Accounting Cycle continued

CHAPTER 11: Special Journals with Taxes

CHAPTER 5: The Accounting Cycle completed

Mini Practice Set Achievement Test 4

Mini Practice Set Achievement Test 2

Completion of all remaining Simulations

CHAPTER 6: Special Journals The Basics. Part 1

Review for Final Exam

Comprehensive Final Exam 8

CHAPTER 7: Special Journals The Basics. Part 2

(Note: This schedule is designed for a 15-week semester with 3 hours of class a week. The material to be covered includes two Mini Practice Sets as well as the completion of a longer simulation.

Lecture Outlines - Page 15

Sample Syllabus for 13-Chapter Course in 12 Weeks (Using a Merchandise Simulation for Review) Week 1

Material Covered

Week

Material Covered

Introduction to Course 7 CHAPTER 1: Accounting Concepts and Procedures: An Introduction CHAPTER 2: Debits and Credits Achievement Test 1 8 CHAPTER 3: The Accounting Cycle begun CHAPTER 4: The Accounting Cycle continued

Completion of Comprehensive payroll problem - end of chapter 10

CHAPTER 5: The Accounting Cycle completed Achievement Test 2 Mini Practice Set at end of Ch. 5

CHAPTER 12: Worksheet for a Merchandising Company CHAPTER 13: Completing the Accounting Cycle for a Merchandising Company

CHAPTER 6: Special Journals 10 The Basics, Part 1 CHAPTER 7: Special Journals - the Basics, Part 2

Commencement of Merchandising Simulation (could be computerized) – end of Chapter 13

CHAPTER 8: Banking Procedures and Control of Cash Achievement Test 3

CHAPTER 9: Payroll Procedures — The Employees’ Perspective CHAPTER 10: Employer’s Tax Responsibilities

Completion of Merchandising Simulation – end of Chapter 13 (could be computerized) Review for Final Exam Comprehensive Final Exam

CHAPTER 11: Special Journals with Taxes Achievement Tests 4 and 5

(Note: This schedule is designed for a 12-week quarter with 4 hours of class a week. The material to be covered includes a practice set designed to give students a practical review of material covered.)

Lecture Outlines - Page 16

Sample Syllabus for 13-Chapter Course in 16 Weeks (Using a Merchandising Simulation for Review) Week 1

Material Covered

Week

Introduction to Course 9 CHAPTER 1: Accounting Concepts and Procedures: An Introduction CHAPTER 2: Debits and 10 Credits Achievement Test 1 CHAPTER 3: The 11 Accounting Cycle begun CHAPTER 4: The Accounting Cycle continued CHAPTER 5: The 12 Accounting Cycle completed Achievement Test 2 CHAPTER 6: Special Journals - the Basics 13 Part 1

CHAPTER 7: Special Journals - the Basics 14 Part 2

CHAPTER 8: Banking Procedures and Control of Cash

CHAPTER 9: Payroll Procedures – The Employees’ Perspective

Material Covered CHAPTER 10: Employer’s Tax Responsibility Achievement Test 3 Payroll Simulation – Chapter 10 CHAPTER 11: Special Journals with Taxes Achievement Tests 4 & 5 CHAPTER 12: Worksheet for a Merchandising Company CHAPTER 13: Completing the Accounting Cycle for a Merchandising Company Achievement Test 6 Starting Merchandising Practice Set (could be computer based) Completion of Merchandising Practice Set Review for Final Exam Comprehensive Final Exam

(Note: This schedule is designed for a 16-week semester with 3 hours of class a week. The material to be covered includes a simulation designed to give students a practical review of material covered.)

Lecture Outlines - Page 17

Lecture Outlines Chapter 1 Accounting Concepts and Procedures: An Introduction POINTS TO STRESS

OUTLINE

LEARNING UNIT 1-1: 1. Define accounting and bookkeeping

•

The New Designation "CPA" does not become effective and official until passed into law by the various provinces.

•

GAAP in Canada is now defined by the rules adopted by the IASC.

•

The left side of the equation represents assets owned.

•

Liabilities represent what is owed.

•

Equities is divided into the rights of creditors (liabilities) and rights of owners (equity).

2. Briefly mention GAAP and IASC 3. Briefly mention the change from CA, CMA, & CGA to CPA 3. The accounting equation a. Define assets b. Define equities c. Define capital 4. Recording transactions a. Each transaction affects at least two accounts b. Equation must balance after each transaction

• •

A transaction will not always affect both sides of equation. A shift in assets affects only the left side of the equation.

•

Point out the usefulness of the "Need Help?" section at the end of the Self-Review Quizzes

•

Mention that care should be taken in preparing this and all other Financial Statements.

LEARNING UNIT 1-2: 1. Preparing the balance sheet

a. b. c. d.

Restatement of fundamental equation Three-line heading Placement of dollar signs Column rulings

Lecture Outlines - Page 18

LEARNING UNIT 1-3: 1. Define terms

a. b. c. d. e.

Revenue Accounts receivable Expenses Net income Withdrawals

•

Revenue and expenses are subdivisions of owner’s equity.

•

Withdrawals are a subdivision of owner’s equity, but are not a business expense.

•

Revenue is not cash. Sales are entered in the appropriate column when earned. The cash can be received later.

•

Entries in the withdrawals and expense columns are shown as pluses since these accounts are increasing.

•

Only revenue and expenses go on the income statement.

•

Additional investments increase capital.

•

Withdrawals decrease capital.

•

The ending figure for capital on the statement of owner’s equity is used in the equity section of the balance sheet.

•

IS; SoOE; BS - in that order. Accounting software makes this ordering less of an issue.

2. The expanded accounting equation 3. Recording transactions in the expanded equation a. Recording revenue b. Recording expenses c. Recording withdrawals

LEARNING UNIT 1-4: 1. Preparing the income statement

a. b. c. d.

Revenue – Expenses = Net Income Three-line heading Inside column for subtotals Ordering of operating expenses

2. Preparing the statement of owner’s equity a. Formula for ending capital b. Three-line heading c. Computation in instance of net loss 3. Order of preparation of financial statements

Please Remind all Students: •

Point out the usefulness of the "Need Help?" section at the end of the Self-Review Quizzes.

Lecture Outlines - Page 19

Chapter 2 Debits and Credits: Analyzing and Recording Business Transactions OUTLINE

POINTS TO STRESS

LEARNING UNIT 2–1: 1. Ledger accounts

a. b. c. d.

•

T-Accounts are used for classroom illustration purposes only.

•

Point out the usefulness of the "Need Help?" section at the end of the Self-Review Quizzes.

•

Debit means the left side of any account.

•

Credit means the right side of any account.

•

That is all these terms mean - there are no bad or good connotations to the terms "debit" and "credit."

•

Rules for normal balance are the same as for an increase.

•

Each transaction affects at least two accounts and the total debits must equal the total credits.

The standard account form The T-account Three parts of a T-account Footings and balancing

LEARNING UNIT 2–2: 1. Introduction to rules of debit and credit

a. b.

Normal balances Increases and decreases

2. Transaction analysis chart a. For learning purposes only b. Five steps of transaction analysis 1. Which accounts are affected? 2. To which categories do the accounts belong? 3. Are the accounts increasing or decreasing? 4. What is the rule? 5. Place amounts either on the left or right side of the account c. Debits must equal credits d. Compound entries

Lecture Outlines - Page 20

LEARNING UNIT 2–3: 1. The trial balance

a. b. c.

Not a formal report Balances taken directly from Taccounts Debit total must equal credit total

2. Preparing financial reports

•

On a trial balance there is only one number for each account: the ending debit or credit balance.

•

The ending figure for capital on the balance sheet will come from the statement of owner’s equity, not the trial balance.

Lecture Outlines - Page 21

Chapter 3 Beginning the Accounting Cycle: Journalizing, Posting, and the Trial Balance OUTLINE

POINTS TO STRESS

LEARNING UNIT 3–1:

•

Accounting cycle Fiscal year Interim reports

A journal is numbered by pages, a ledger is set up by account numbers.

•

Debits are always recorded first.

2. Steps in the accounting cycle

•

Dollar signs are not used in journals and ledgers.

3. The general journal a. The book of original entry b. The format of the journal

•

The total of the debit amounts for the transaction must equal the total of the credit amounts.

•

Point out the usefulness of the "Need Help?" section at the end of the Self-Review Quizzes

1. Define terms:

a. b. c.

4. Steps for recording transactions in the journal a. Record the date b. The name of the account debited is recorded in the description column c. The amount of the debit is recorded in the Dr. column d. The name of the account credited is recorded in the next line of the description column and indented 1 cm (approx.) e. The amount of the credit is recorded in the Cr. column f. A description is recorded on the next line of the description column and is indented 2 cm (approx.) 5. Compound entries a. All of the debits are recorded first, then all of the credits b. Debits must still equal credits

Lecture Outlines - Page 22

LEARNING UNIT 3–2: 1. Steps in posting to the ledger

a. b. c. d.

Record date and Dr. or Cr. amount in ledger account Record journal page in ledger PR column Record ledger account number in PR column of journal Calculate new account balance

•

The journal and ledger are in separate books.

•

Each debit and credit in the journal will be posted separately to the ledger.

•

Care needs to be taken in posting, otherwise an out-of-balance situation is likely.

•

If the trial balance doesn’t balance then neither will the balance sheet.

•

Using a computer can make the bookkeeping process much simpler and a lot more accurate.

LEARNING UNIT 3–3: 1. Trial balance

a. b. c.

Taken from ledger balances If it doesn’t balance look for transpositions and slides Correcting entries

Lecture Outlines - Page 23

Chapter 4 The Accounting Cycle Continued: Preparing Worksheets and Financial Reports OUTLINE

POINTS TO STRESS •

Use transparencies here to explain the preparation of the worksheet.

•

The worksheet is prepared at the end of the fiscal period to bring accounts up to date.

3. The adjustments section a. The reason for adjusting entries b. Adjustment for office supplies c. Adjustment for prepaid rent d. Adjustment for depreciation of equipment e. Adjustment for accrued salaries

•

The adjustment for depreciation does not affect the Equipment account, only the Accumulated Depreciation and Depreciation Expense accounts.

•

Accumulated Depreciation is a contra-asset account and goes on the balance sheet.

4. The adjusted trial balance section

•

Book value = original cost – accumulated depreciation

•

Withdrawals, Accrued Salaries, and Accumulated Depreciation go on the balance sheet columns.

•

Point out the "Need Help?" section at the end of the Self-Review Quizzes

•

The figure for capital on the balance sheet comes from the statement of owner’s equity, not the worksheet.

•

Using a computer and accounting software can alter the traditional steps described in this chapter. E.G., a worksheet may no longer be essential if a computer is used.

•

Preparation of financial statements is much easier if computer software is used.

LEARNING UNIT 4–1: 1. Purpose of worksheets

2. The trial balance columns

5. The income statement section 6. The balance sheet section

LEARNING UNIT 4–2: 1. Preparing the financial statements from

the worksheet a. Preparing the income statement b. Preparing the statement of owner’s equity c. Preparing the balance sheet

Note: Remind all students of the usefulness of the four-page transparency that shows clearly how a worksheet works and is constructed.

Lecture Outlines - Page 24

Chapter 5 The Accounting Cycle Completed: Adjusting, Closing, and PostClosing Trial Balance OUTLINE

POINTS TO STRESS

LEARNING UNIT 5–1:

•

Preparing the worksheet did not bring the ledger accounts up to date. The adjusting entries must be journalized and posted.

•

Point out the "Need Help?" section at the end of the Self-Review Quizzes.

•

All temporary accounts start each fiscal period with a zero balance.

•

The balances of permanent accounts are carried over from the previous period.

•

The purpose of closing entries is to (1) zero out temporary accounts and (2) update the balance of capital.

•

The balance in Income Summary should equal net income.

•

Computer accounting software makes the closing process painless — and quick! BUT you will usually need to "close" the withdrawals account separately, because most software will not do this step automatically.

•

The only accounts on the post-closing trial balance are assets, liabilities, and capital. The others all have a zero balance and are not listed.

•

Using a computer in the accounting cycle does not really alter things very much

1. Journalizing adjusting entries

2. Posting adjusting entries

LEARNING UNIT 5–2: 1. Introduce closing entries

Temporary accounts are: 1. Revenues 2. Expenses 3. Withdrawals b. Permanent accounts are: 1. Assets 2. Liabilities 3. Capital c. Purpose of closing entries 2. Steps in the closing process a. Clear the revenue balances to Income Summary b. Clear the expense balances to Income Summary c. Clear the balance in Income Summary to Capital d. Clear the balance in Withdrawals to Capital LEARNING UNIT 5–3: 1. Preparing the post-closing trial balance

2. Review the steps in the accounting cycle except the worksheet is no longer needed and the closing process is automatic.

Lecture Outlines - Page 25

Chapter 6 Special Journals, The Basics, Part 1 OUTLINE

POINTS TO STRESS

LEARNING UNIT 6–1:

1. The General Journal is not adequate for use in a modern business 2. Special Journals can include: a. Sales b. Purchases c. Cash Receipts d. Cash Payments e. Payroll 3. Fundamentals of Customer Relations a. Investigate Credit history b. Allow a discount for early payment c. Trade discounts differ from cash discounts, and allow easy management of prices d. Managing the collection function can be critical to business success. LEARNING UNIT 6–2: 1. Introduce the Sales Journal

•

Most businesses find that only using a general journal is impossible.

•

Special journals allow several people to work on business records at the same time.

•

Businesses offer sales discounts to speed up collection of cash.

•

They also use a trade discount strategy to make it easier to customize prices for special customer groups

•

Many special journals are possible, and a business can create and maintain any that they feel are helpful, but the 5 listed at the left are almost always used.

•

It can be crucial to business success to allow the right amount of credit to customers, but the trick is to allow the right amount.

•

The normal balance in the accounts receivable ledger is a debit.

•

Only transactions that are routine sales of merchandise on account are recorded in this journal.

•

The Sales Journal can have as many columns as needed - usually one for each major category of things sold.

•

Totals of the special journals are not posted until the end of the month.

•

The debit to Accounts Receivable must be recorded and posted to both the general ledger (in total) and the accounts receivable ledger (in detail).

•

Multi-column sales journals are very useful and can be custom-designed as needed.

2. Introduce accounts receivable ledger 3. The sales journal a. Format of the journal b. Recording transactions c. Recording the journal to the subsidiary AR ledger d. Posting the sales journal to the general ledger e. Explain the operation of a multicolumn sales journal

Lecture Outlines - Page 26 LEARNING UNIT 6–3: 1. The Credit Memorandum

2. Credit memorandums a. Used to record sales returns and allowances b. Recorded in the general journal c. Recording and posting to both ledgers

•

The credit memorandum must be posted to both the General Ledger, and recorded to the customer account.

•

If the number of Credit Memos is very high, a company could use a special journal to record those transactions.

•

Provided that appropriate controls are in place, it is acceptable to enter credit memos as negative amounts in the sales journal.

•

The CRJ is used to record all cash (and cheques) received during a given period.

•

The CRJ can contain many columns, but always has a column for sundry transactions.

•

Like all special journals, the column totals are posted to the GL at period end.

•

Details are posted individually from the Sundry column.

•

Each entry in the Accounts Receivable column is recorded to the customer's account.

•

At period end (often this is monthly) a list of customers and the balances in their accounts is prepared from the A/R ledger.

•

It is crucial that the total of this list agree exactly with the total in the Accounts Receivable account in the GL.

•

If the two amounts do not agree, then all postings, recordings, and mathematical calculations must be reviewed to find the error(s).

•

It is normal for the schedule to be prepared showing additional information about the length of time the various invoice amounts have been unpaid. This helps to manage the collections process.

LEARNING UNIT 6–4: 1. Introduce the Cash Receipts Journal

2. Create the Schedule of Accounts Receivable

Lecture Outlines - Page 27

Chapter 7 Special Journals, The Basics, Part 2 OUTLINE

POINTS TO STRESS

LEARNING UNIT 7–1:

1. Repeat the facts about why special journals are considered essential: a. More than one bookkeeper can work at the same time b. More efficient - less posting to GL c. Larger companies just cannot use only a general journal

•

All companies today use some form of special journals.

•

Many different journals are used.

•

In this chapter we cover: a. Purchases journal b. Cash Payments journal

•

Some companies use a slightly modified number of steps (eg., the Voucher System).

•

Stress the rules behind "FOB Destination" and "FOB Shipping Point" Explain the different handling of goods in transit under each shipping alternative.

•

State again the profitability of taking all available cash discounts.

•

Cash discounts are taken on the selling price minus returns. Discounts are not generally taken on taxes, freight, etc.

2. 9 Steps in the purchasing process:

1. 2. 3. 4. 5. 6. 7. 8. 9.

Purchase requisition Purchase order Sales invoice prepared Receipt of goods Verification of numbers Recording the invoice Entries for goods returned Make and record payments due Prepare aged listing at period end

Lecture Outlines - Page 28 POINTS TO STRESS LEARNING UNIT 7–2:

1. The purchases journal and the accounts payable ledger a. Format b. Recording transactions c. Recording to the accounts payable ledger d. Posting to the general ledger e. Role of the subsidiary ledger

2. Purchases returns and allowances a. Debit memorandum (purchaser) b. Credit memorandum (seller) c. Recorded in the general journal d. Posting and recording to both ledgers

•

Purchases result in an increase in Accounts Payable, and an increase in the Purchases account.

•

Returned goods or a price adjustment results in the creation of a debit memorandum, thereby reducing the Account Payable, and increasing the Purchase Returns and Allowances account.

•

Note that the PR&A account reduces the Purchases amount because it is deducted in creating the Income Statement.

•

Purchase Discounts reduce the Accounts Payable and increase the Purchase Discounts account - but the latter account is then deducted from Purchases when creating the Income Statement.

•

Some companies allow debit memos to be recorded in the Purchases Journal as a negative amount. This is efficient, but needs to be controlled.

Other points worth emphasizing: •

Column totals are posted at period end; entries for each supplier are recorded individually right away.

•

A purchase requisition stays within the business while a purchase order is sent to the supplier.

•

The debit to Accounts Payable must be recorded and posted to both the accounts payable ledger as well as the general ledger.

•

A sales invoice from a supplier becomes a purchase invoice to the purchasing company.

•

If a firm has lots of DMs to record, it can use a special journal to record them.

•

Normal balance of each account in the accounts payable ledger is credit.

•

The PJ can have as many columns as needed, but always has a Sundry column to record unusual items.

Lecture Outlines - Page 29 LEARNING UNIT 7–3:

•

The CPJ is similar to the CRJ, but it records cash going out, not coming in.

•

Posting includes the period-end totals of most columns, as well as the individual items in the Sundry section.

•

Amounts in the Accounts Payable column are recorded to the supplier's account right away.

•

At period end (often this is monthly) a list of suppliers and the balances in each account is prepared from the A/P ledger.

•

This schedule is often prepared with details of how long the invoices have remained unpaid, thus helping in cash management.

•

It is crucial that the total of this list agree exactly with the total in the Accounts Payable account in the GL.

•

If the two amounts do not agree, then all postings, recordings, and mathematical calculations must be reviewed to find the error(s).

•

Trade discounts are never made part of an invoice. They exist to allow sellers to manage prices for various customer groups.

1. The cash payments journal

a. b. c. d. e.

Format Recording transactions Purchases discounts Recording to the accounts payable ledger Posting to the general ledger

2. Schedule of accounts payable

3. Trade discounts

Lecture Outlines - Page 30

Chapter 8 Banking Procedures and Control of Cash OUTLINE

POINTS TO STRESS

LEARNING UNIT 8–1:

1. Internal control

•

2. Chequing accounts a. Opening a chequing account b. Deposits c. Endorsements d. Cheques e. Parties to a cheque f. Transactions affecting the chequebook

Internal controls are designed to protect the assets of the firm, provide accurate accounting records, and ensure efficient operations.

•

Each time the chequebook balance is changed, a journal entry must be made to update the cash in the ledger account.

•

Bank statements are prepared by the bank while bank reconciliations are prepared by the accountant to compare the company’s records to the bank’s. It is becoming common to use accounting software and the Internet to assist with reconciliations.

•

Realistic simulation of a bank reconciliation is facilitated by the inclusion of substantial new material in this part of Chapter 7. In addition to the extensive example provided (which should be covered in some depth), the assignment material is expanded to include a couple of realistic bank reconciliation problems. There is also a realistic new problem included with the Group D set in this guide.

•

The world is now more electronic, along with "instant" communication, and banking is taking advantage of the power and freedoms this advancing technology allows.

•

No matter how modern banking becomes, be sure that someone still needs to reconcile the company's bank account on a routine basis which can vary from daily (in a very few cases) to monthly. The skills needed to do this task (or, supervise someone who is assigned to the job) are very similar, whether a computer or the Internet are used or not.

3. Bank reconciliations a. Deposits in transit b. Outstanding cheques c. Debit memos d. Credit memos e. Realistic reconciliations 4. New trends in banking a. Electronic Integration b. Cheque truncation c. S.W.I.F.T. codes d. Online banking

Lecture Outlines - Page 31

LEARNING UNIT 8–2: 1. Establishing the petty cash fund

•

When replenishing petty cash, all of the individual expenses that the money was spent on must be debited. You don’t ever debit Petty Cash, except to increase (or credit it to decrease) the fund itself.

•

A debit balance in Cash Short and Over is classified as miscellaneous expense.

•

A credit balance in Cash Short and Over is classified as miscellaneous income.

•

A change fund is usually necessary to facilitate transactions with customers. Much like Petty Cash, this fund will show overages (once in a while), but mostly shortages, as customers will generally complain if they are given too little change.

2. Making payments from the fund a. Petty cash vouchers b. Auxiliary petty cash record 3. Replenishing the fund 4. The change fund 5. Cash short and over a. Shortage or overage in cash register b. Shortage or overage in petty cash fund

Lecture Outlines - Page 32

Chapter 9 Payroll Procedures: The Employees’ Perspective OUTLINE

POINTS TO STRESS

LEARNING UNIT 9–1:

1. Introduction to Payroll a. Minimum wage laws b. Income tax c. Canada (Quebec) Pension Plan d. Employment Insurance e. Workers Compensation f. Union agreements g. Other deductions 2. Calculating gross pay

•

The laws with respect to payroll can be complex and vary from province to province.

•

Income tax deducted is an estimate of the amount an employee will owe at year end.

•

A more complex method to determine income tax deductions for employees in each province is now law in Canada. Tax for each province is added to a federal amount to arrive at a final deduction.

•

CPP rates after rising for more than 15 years, have stabilized at just under 5%. However, politicians have been making noises about looking into this matter, and some alteration may be a possibility in the near term.

•

EI rates have been reduced somewhat in recent years (currently under 2%). What happens to this rate is anybody's guess, but annual changes are a real possibility.

•

Changes to the federal EI Act alter the amounts contributed by workers and employers. EI deductions are now quite similar to CPP deductions, except that the employer pays a higher percentage.

•

There are often dozens of types of deductions for larger employers.

•

Some employers compute the overtime premium as a separate amount to help in controlling costs.

•

Booklets available from Canada Revenue Agency (CRA) determine deductions for each province. These are updated at least annually, and are easy to download from the internet.

•

Care in computing employees’ net pay is necessary.

3. Determining basic deductions a. Income tax (TD1 forms)* b. Canada (Quebec) Pension c. Employment insurance 4. Computing net pay

* There are both provincial and federal TD-1 forms which employees must complete. The federal form is the same throughout Canada, while the provincial ones vary a good deal, and are customized to conform to provincial income tax laws.

Lecture Outlines - Page 33

LEARNING UNIT 9–2: 1. Preparing the payroll register

a. b. c. d. e.

Employee information columns Earnings column Deductions columns Net pay column Other columns

LEARNING UNIT 9–3:

•

Explain that cumulative CPP amounts will increase annually.

•

EI has a maximum amount per year, calculated at a rate set annually, on an earnings maximum amount also set annually. In early 2013 these figures were 1.88% and $47,400, (maximum EI = $891.12) but expect yearly changes. Text based on 2013 numbers.

•

The list of deductions will be unique for each employer, although many similarities are also found.

•

To record the payroll a general journal entry is usually prepared. Some companies treat this payroll register as if it were a journal and post directly from that to the general ledger.

•

Cheques issued are usually recorded in the cash payments journal, which usually has a separate column for wages payable.

•

An individual earnings record is essential for preparing an annual summary for each employee.

•

CPP also has a yearly maximum. For early 2013, this was $2,356.20 but will increase each year. Text is based on 2013 numbers.

1. Entry to record the payroll

2. Entry to record cheques issued to employees 3. The individual earnings record

Lecture Outlines - Page 34

Chapter 10 The Employer’s Tax Responsibilities: Principles and Procedures OUTLINE

POINTS TO STRESS

LEARNING UNIT 10–1: 1. Calculating the employer’s payroll tax

expense a. CPP b. EI c. Other payroll costs 2. Recording payroll tax expense

•

Employers pay exactly the same amount of CPP as was deducted from employees.

•

Employers pay 1.4 times the EI deducted from employees.

•

Employers have no cost with respect to income tax deducted from employees — they just remit what is deducted.

•

Employers may share in other costs as well: a. life insurance b. health care plan c. donations d. long-term disability e. dental plans f. etc, etc.

• The "short cut" for calculating the monthly remittance is: Tax deducted x 1.0 + CPP deducted x 2.0 + EI deducted x 2.4

Lecture Outlines - Page 35

LEARNING UNIT 10–2: 1. Remitting the monthly deductions

a. b. c.

•

Employers must register with the government to make remittances. They obtain a business number to allow their remittances to be tracked.

•

Most employers must remit deductions to CRA monthly. Employers with larger payrolls must remit twice each month.

•

The penalty for late remittances is harsh and should be avoided.

•

Liability accounts include both the amounts deducted from the employees, plus the employer’s share of CPP and EI.

•

Expense accounts include only the amounts paid by the employer.

•

Often employers will record the payroll liability in a single account — Payable to Receiver General (and sent to CRA).

•

T-4 slips must be issued to each employee by February 28 each year for the previous calendar year.

•

By February 28 each year a copy of the T-4 Summary must be balanced to the T-4 slips issued and sent to the government.

•

Balancing the T-4 slips to the accounting records is a daunting task unless care has been taken with the payroll process. Many employers are discovering that one of the main advantages of a computerized payroll package is that it helps tremendously with this task.

•

New laws affecting EI have changed the ROE form in substantial ways. The new form is easier to complete than the old one was.

•

Employers must pay workers’ compensation insurance. Employees do not.

Remittance rules Form PD7A The remittance cheque

2. General ledger accounts a. Liability accounts b. Expense accounts c. Variations

LEARNING UNIT 10–3: 1. The annual T-4 slip

2. The T-4 Summary 3. Workers’ Compensation Insurance

Lecture Outlines - Page 36

Chapter 11 Special Journals with Taxes OUTLINE

POINTS TO STRESS

Introduction to GST and HST

•

Both GST and HST are value-added taxes.

•

Both are accounted for in the same way.

•

It is crucial to record GST/HST paid. If this is not done carefully, profits are reduced!

•

PST is still charged in several provinces, often along with GST (currently at 5%).

•

If a sales discount is given, it is usually based on the sales price before PST or GST.

•

If GST/HST is charged, a current liability account records the amounts billed.

•

Credit memos must also include GST/HST if the original invoice included it.

•

The major difference is that GST/HST is refundable. This means that any GST/HST a company pays is used to offset the amount it needs to submit to the government by way of collections made during a period.

•

If any province charges HST, they will not also charge PST.

•

If one takes the longer view, it can be seen that Canada is emulating European countries in implementing a value-added tax on the national level. It will take some time, but the plan is to have all the provinces and territories "on board" eventually.

LEARNING UNIT 11–1:

1. Define Provincial Sales Tax a. Rate varies from province to province. b. PST is added to credit memos. 2. If PST is charged, the company must keep careful track of the liability - generally in a separate current liability account. 3. Credit Memos must have PST added if the original sale included PST. 4. PST and GST/HST have many similarities, but also some differences. 5. HST is almost identical to GST, and is charged in provinces that have agreed to merge their PST and GST together. 6. There has been an effort on the part of the federal government to encourage provinces with PST to drop that in favor of HST. Most recently, both Ontario and BC have adopted HST, and an incentive is in the latest federal budget to entice Quebec to join as well.

Lecture Outlines - Page 37

LEARNING UNIT 11–2:

• Cash receipts journal and the Schedule of Accounts Receivable with PST, GST or HST

The normal balance in the accounts receivable ledger is a debit balance.

•

When customers take a cash discount, this is recorded as a debit in the appropriate column.

2. Journalizing, recording, and posting in the cash receipts journal

•

The credit to Accounts Receivable must be recorded and posted to both the general ledger and the accounts receivable ledger.

•

All transactions debiting cash are recorded in the cash receipts journal, including cash sales and GST/HST payable.

•

It is an important internal control procedure to be certain that the schedule of accounts receivable at period-end balances with the control account in the GL.

1. GST/HST paid on purchases overview

•

2. Recording purchases with GST/HST a. Format of typical invoice b. Recording in the purchases journal c. Recording a debit memorandum d. Posting to ledger accounts.

GST/HST Paid is often included as a current asset. Increasingly, however, it is treated as part of current liabilities (even if it is a debit amount) because it offsets the amount payable for GST/HST collected on sales.

•

Invoices must be designed to allow for adding the GST/HST. All such invoices must show the seller's GST/HST Registration number.

•

PJ has one new column: GST/HST Prepaid.

•

Recording invoices with GST/HST is very similar to the process in Learning Unit 10–2.

•

GST/HST is added to all debit memos if GST/HST was included on the original price.

•

Posting is modified only slightly: a. amounts are somewhat larger b. GST/HST Prepaid* is credited when a debit memorandum is posted.

•

Amounts posted to GST/HST Prepaid act to reduce the GST/HST collected on sales (due

3. Schedule of Accounts Receivable

LEARNING UNIT 11–3:

3. Cash payments journal

4. Schedule of accounts payable

Lecture Outlines - Page 38 to CRA).

•

The schedule of accounts payable is entirely unaffected by the presence of GST/HST. The amounts are somewhat larger, but this is the only change.

•

Just as with the schedule of AR, the AP Schedule must be agreed with the total amount in the GL control account at periodend.

Lecture Outlines - Page 39

Chapter 12 Preparing a Worksheet for a Merchandising Company OUTLINE

POINTS TO STRESS

LEARNING UNIT 12–1: 1. Adjustments for merchandise inventory

a. b. c. d.

Ending inventory sheet Removing the old inventory figure Entering the new inventory figure Effect on financial statements

•

Before adjustments are made, the balance in the Merchandise Inventory account reflects the beginning of the year inventory.

•

The debit side of the Income Summary account records the beginning inventory. The credit side records the ending inventory.

•

Unearned Rent is a liability. The revenue Rent Income is not recorded until it is earned.

•

Adjusting entries are designed to bring the account balances up to date before financial statements are prepared.

•

The two figures in the Income Summary account will not be combined on the worksheet, since both numbers are needed to prepare the Income Statement.

2. Adjustment for unearned rent

LEARNING UNIT 12–2: 1. Summary of new account titles

2. Review of adjusting entries a. Rental income earned b. Supplies c. Expired insurance d. Depreciation expense e. Salaries accrued 3. The adjustments columns 4. The adjusted trial balance columns 5. The income statement columns 6. The balance sheet columns

Lecture Outlines - Page 40

Chapter 13 Completion of the Accounting Cycle for a Merchandising Company OUTLINE

POINTS TO STRESS

LEARNING UNIT 13–1:

1. Preparing the income statement a. Skeleton outline b. Revenue section c. Cost of goods sold section d. Gross profit e. Operating expenses section f. Other income section g. Other expense section 2. Preparing the statement of owner’s equity 3. Preparing a classified balance sheet a. Current assets b. Plant and equipment c. Current liabilities d. Long-term liabilities

•

The formal income statement uses two separate figures for beginning and ending inventory.

•

Operating expenses can be separated into administrative and selling classifications.

•

The whole point of the accounting process is to provide information about the business. By preparing a classified balance sheet we make this information clearer and easier to read.

Lecture Outlines - Page 41

LEARNING UNIT 13–2: 1. Journalizing adjusting entries

•

Although adjusting entries were shown on the worksheet, the adjustments will not be reflected in the ledger accounts until they are journalized and posted.

•

The Income Summary account balance already reflects the adjustments for Merchandise Inventory.

•

Reversing entries are recorded on the first day of a new accounting period, so that transactions in the new period can be recorded without referring to the previous year’s adjusting entries.

2. Posting adjusting entries 3. Journalizing closing entries a. Close income statement credit column accounts to Income Summary b. Close income statement debit column accounts to Income Summary c. Transfer balance in owner’s withdrawal account to Income Summary 4. Posting closing entries 5. The post-closing trial balance

LEARNING UNIT 13–3: 1. Reversing entries

a. b. c. d. e.

Purpose Accrued salaries without a reversing entry Accrued salaries using a reversing entry Journalizing the reversing entry Types of adjustments that can be reversed

Chapter 1 - Page 42

Chapter Resources Chapter 1 First Day Mini-Lecture for Students 1.

Regular attendance does make a difference.

Accounting is a new language and will take time to learn; do not become overwhelmed.

Do not skim a chapter. Read each learning unit slowly and be sure to complete the selfreview quiz at the end of each unit.

Complete or at least try to complete homework assignments. Even if you get sections of your homework wrong, it will help identify your area of weakness.

Seek assistance from your instructor, lab assistant, or even a friend in class — a small misunderstanding could lead to major trouble later in the course.

Class Quiz 1.

If you supply a pizza shop with $6,000 cash and $3,000 worth of equipment, your equity in the company is _____. Answer: $9,000.

What are the cash and equipment called? Answer: Assets

Chapter 1– Page 43

True or false: a. b. c. d.

The phrase “on account” means put your money down now, receive goods later. (false; it means buy now, pay later) Capital and cash are the same. (false) Buying a desk on account means a shift in assets. (false) True or false: A balance sheet is prepared for a specific period of time. (false; a balance sheet is prepared as at a specific date, not a period of time)

What elements make up the balance sheet? Answer: Assets, liabilities, owner’s equity.

What three questions does the heading of a balance sheet answer? Answer: Who, what, when.

Look at the solution to Self-Review Quiz 1–2 (p. 13). If Accounts Payable were $31,000, what would Capital be? Answer: $8,000.

True or false: a. b. c. d. e.

Revenue is recorded only when the cash is received. (false) As expenses increase, owner’s equity will decrease. (true) An expense can create a liability. (true) Revenue is really cash. (false) Liabilities are a subdivision of owner’s equity. (false)

Have students turn to the solution of Self-Review Quiz 1-3 (p. 19). In Transaction 3, ask them why there is a plus 125 and the number below is minus 1,125. Why isn’t the number underneath $1,875 instead of minus 2,125? This discussion will reinforce the point that expenses have now increased, from $1,000 to $1,125, and that expenses as such decrease owner’s equity.

Chapter 1 - Page 44 10.

Given the following, what is net income? Salon Fees, $5,000 Accounts Payable, $1,000 Salaries Expense, $500 Rent Expense, $600 Answer: $3,900 (Stress that Accounts Payable is a liability and doesn’t go on the income statement.)

11.

True or false: a. b.

Only assets go on the income statement. (false) The ending figure for capital on the statement of owner’s equity is used to update the balance sheet. (true) A net loss will decrease capital. (true) The income statement is prepared after the statement of owner’s equity. (false)

c. d.

Accounting Recall A Cumulative Approach PART 1 Vocabulary Review Match the terms in the left column below with the appropriate definition or phrase in the righthand column. Page Ref. (8) 1. (14) 2. (3) 3. (14) 4. (11) 5. (14) (15) (20) (9) (7)

Capital Accounts receivable Sole proprietorship Expense Balance sheet

6. Revenue 7. Withdrawals 8. Income statement 9. Accounts payable 10. Owner’s equity

A. Prepared as of a particular date B. A liability C. For personal use D. Provides an inward flow of assets E. Company owned and managed by one person F. Amount owed by customers G. Owner’s investment H. A cost of running a business I. Broken into four subdivisions J. Prepared for specific period of time

PART 2 True or False (Accounting Theory) (14) (18)

Chapter 1– Page 45 13. As expenses increase, owner’s equity increases. 14. Accounts receivable goes on the income statement. 15. The statement of owner’s equity calculates a new figure for capital.

(18) (22) (21)

Solutions to Accounting Recall PART 1 1. G

2. F

3. E

4. H

5. A

6. D

7. C

8. J

9. B

10. I

PART 2 11. 12. 13. 14. 15.

False; part of Owner’s Equity True False; Owner’s Equity will decrease False; Balance Sheet True

Points to Stress 1.

We are looking at the accounting needs of Catherine Hall’s law practice and not at her personal finances.

Equities is divided into the rights of the creditors (liabilities) and the rights of the owner (owner’s equity).

The left side of the equation represents assets owned. Liabilities represent what is owed. Owner’s equity represents value of assets minus liabilities.

Note that for Catherine Hall, Capital, $7,800 is shown under owner’s equity. Remember that capital does not mean cash — there is a separate listing of $7,000 for cash under assets.

Stress that we will soon be introducing three other subdivisions of owner’s equity.

A shift in assets causes the makeup or composition of the assets to change, but the total of the assets remains the same.

Note in the solution to the Self-Review Quiz 1–1 (p. 10) that Transaction 2 is a shift in assets and Transaction 3 is an increase in assets.

Revenue is a subdivision of owner’s equity.

Chapter 1 - Page 46 10.

Withdrawals are not business expenses, but they are a subdivision of owner’s equity.

11.

In Transactions G and H (p. 16) expenses are being paid in cash. In Transaction I, the expense is being charged. Stress that in all cases, expenses are increasing, causing a decrease in owner’s equity. (Expenses are one subdivision of owner’s equity.)

12.

Only revenue and expenses go on the income statement.

13.

The inside column of the income statement is used to subtotal all the operating expenses.

1-4.

The income statement lists revenue and expenses.

15.

The statement of owner’s equity uses net income or net loss from the income statement to help calculate the ending figure for capital.

16.

Note that withdrawals are kept separate from expenses.

17.

Additional investments will increase capital.

18.

Point out that the income statement and statement of owner’s equity summarize the transactions for a period of time. This period of time must be specified in the statement heading. The balance sheet shows the assets, liabilities, and equity in the business on a particular date.

19.

After completing this chapter, be sure to have students try the summary practice test found in their Study Guide with Working Papers.

Business World Notes 1.

Even the very smallest business needs accurate accounting records to make informed decisions, acquire financing, and provide required income tax information.

Although students may be tempted to be sloppy about placement of lines and dollar signs in reports, emphasize that these rules are used in all financial reports in the business world and they should learn a proper format from the beginning.

Accounts receivable is an asset because the business owns the legally enforceable right to receive this money.

The Income Statement is sometimes referred to as the Profit and Loss Statement, the P&L Statement, or Statement of Operations.

The owner cannot receive a salary from an unincorporated business. Instead, she withdraws cash or other assets to meet living expenses. The amount withdrawn depends upon her personal needs and the cash or other assets available in the business. It may be more or less than net income in any given year. You may wish to explain some reasons Copyright © 2015 Pearson Canada Inc.

Chapter 1– Page 47 that an owner might make an additional investment in her business in the same year she made withdrawals (e.g., temporary cash shortage, expansion, etc.).

Class Activities Have students read through each title in Self-Review Quiz 1–2 (p. 13) and tell its category before preparing the balance report. Answers: Cash, assets; Office Equipment, asset; Accounts Payable, liabilities; Capital, owner’s equity.

Teaching Tips 1.

Review the Self-Review Quiz 1–1 (p. 10) in class. You might want to check students’ workbooks (forms for completing all self-review quizzes are contained in the Study Guide with Working Papers) to see if they tried to do the quiz. Some students try to skip this very important review of the unit. The quizzes help to identify student weaknesses.

Students often get overwhelmed with the format of reports. I stress simple repetition — the more they do, the better they will become at it, and the more automatic it will be.

Emphasize that items are entered in the revenue column when they are earned. Reinforce the point that owner’s equity is divided into capital, withdrawals, revenue, and expenses.

In Transaction J (p. 17) go over the subdivisions of owner’s equity and their effects on owner’s equity. Stress that withdrawals are not business expenses.

Emphasize to the class that Self-Review Quiz 1–4 (p. 23) puts all the reports together. Students should not attempt end-of-chapter problems until they understand what goes on each report. Stress repetition.

Review the solution to Self-Review Quiz 1–4 (p. 24). It clearly shows how the net income of $1,060 on the income statement is used to help calculate the ending capital figure of $5,960 on the statement of owner’s equity. The $5,960 is then used to update the capital section on the balance sheet of Rusty Realty.

Try this example: If you go out for dinner and use your VISA card to pay, your total expense for the evening has increased, and you have also created a liability.

Typical Student Misconceptions 1.

Students often think that a transaction will always affect both sides of the accounting equation. Emphasize that a shift in assets causes only the left side of the equation to change, and leaves the totals of the left and right sides the same. Copyright © 2015 Pearson Canada Inc.

Chapter 1 - Page 48

Students think that a liability is an expense. It is the expense, when not paid that creates a liability.

Students think that revenue is cash. Revenue is a subdivision of owner’s equity that provides an inward flow of assets when the revenue is earned.

When they get to Transactions I and J (pp. 17) students usually think that expenses and withdrawals should have a minus sign, not a plus sign.

I emphasize how important it is to think of expenses or withdrawals as increasing. As they increase, they ultimately cause owner’s equity to decrease. If students think this way now, it will help them when they get to the rules of debit and credit in the next chapter.

Check Figures for Exercises Set A 1-1A a. b. c. 1-2A. a. b. c.

$15,000 $15,000 $6,000 Cash Owner’s Equity Cash Equipment Equipment Liabilities

$8,000+ $8,000+ $600$600+ $900+ $900+

1-3A. Total Assets: $43,000 1-4A. Total Assets: $105,300 1-5A. a. b. c.

Net Income: $1,540 S. French, Capital June 30, 2016: $9,500 Total Assets: $11,500

Chapter 1– Page 49 Set B 1-1B a. b. c. 1-2B. a. b. c.

$9,000 $19,000 $9,000 Cash Owner’s Equity Cash Equipment Equipment Liabilities

$12,000+ $12,000+ $2,000$2,000+ $3,500+ $3,500+

1-3B. Total Assets: $24,000 1-4B. Total Assets: $80,950 1-5B. a. b. c.

Net Income: $3,390 S. French, Capital June 30, 2016: $11,750 Total Assets: $15,750

Check Figures for On-the-Job Training T-1.

1. 2.

Window Cleaning Revenue = $11,376 + $2,900 = $14,276 Salaries Expense = $5,080 + $1,800 = $6,880 (Stress the difference between cash and accrual accounting.)

T-2.

1. 2.

Total Assets: $252,981 Slowe does not seem to understand the basic accounting equation, the classification of accounts, or the double entry accounting system which would keep all of the accounts in balance (including the Capital account).

Check Figures for Continuing Problem 1., 2. Total Assets

$5,900.00

$1,165.00 $5,565.00 $5,900.00

Net Income O/E Total Assets

Chapter 2 - Page 50

Chapter 2 Class Quiz 1.

List five functions of accounting. Answer: Analyze, record, classify, summarize, report.

Explain the following: Capital doesn’t mean Cash. Answer: Capital could include other assets, such as equipment, as well as cash.

True or false: Revenue is reported on the balance sheet. Answer: False. Revenue is reported on the income statement.

True or false: Withdrawals are expenses on the income statement. Answer: False. Withdrawals are not business expenses; they are reported on the statement of owner’s equity. (Withdrawals are for personal use.)

Complete the statement: As expenses increase, owner’s equity _____. Answer: decreases.

Transaction C (p. 55) is an example of a(n) _____ in assets. Answer: increase.

Transaction F (p. 56) is an example of a(n) _____ in assets. Answer: shift

True or false: To Catherine Hall, legal fees are an asset. Answer: False. Legal fees are revenue, a subdivision of owner’s equity.

Chapter 2 – Page 51

Accounting Recall A Cumulative Approach PART 1 Vocabulary Review Match each term on the left side with the appropriate definition or phrase in the right-hand column. Page Ref. (63) 1. Trial balance (48) 2. Debit (51) 3. Normal balance (14) 4. Revenue (48) 5. Crediting (11) 6. Balance sheet (9) 7. Shift in assets (52) 8. Chart of accounts (47) 9. Ledger (21) 10. Capital, withdrawals, revenue, expenses

A. Total remains the same B. Entering numbers on right side C. Subdivisions of owner’s equity D. Group of accounts E. Numbering system F. Left side of an account G. Prepared as of a particular date H. Not an asset I. Side of account that increases it J. List of the ledger balances

PART 2 True or False (Accounting Theory) (48) (63) (63)

11. A debit always means increase. 12. There are no debit or credit columns on financial reports. 13. The trial balance lists only the ending figure for capital that goes on the balance sheet. 14. An increase in a withdrawal is a credit. 15. The trial balance is not a formal report.

(58) (63)

Solutions to Accounting Recall This Examination Reviews Chapters 1 and 2. PART 1 1. J

2. F

3. I

4. H

5. B

6. G

7. A

8. E

9. D

PART 2 11. 12. 13.

False; depends on the category True False; the beginning balance shows up on the trial balance

10. C

Chapter 2 - Page 52 14. 15.

False; debit True

Points to Stress 1.

Stress at the outset that the words debit and credit only mean a position. Later we will discuss the rules of debit and credit and how they govern which side numbers are placed on.

Rules for normal balance are the same as for an increase.

Note how the rules for revenue and expenses work in the opposite direction.

Note that the names in Column 1 of the transaction analysis charts come from the chart of accounts, as do the account numbers in Column 5.

Go over the solutions to the Self-Review Quiz 2–2 (p. 60) to reinforce the point that arrows can go up or down but the sum of the left must equal the sum of the right.

Using the trial balance in Figure 2–2 (p. 64) have students identify the report on which each item will appear. (Example: Withdrawals go on the statement of owner’s equity.)

The trial balance is an informal report used to prepare formal reports like the balance sheet.

The figure for net income is used to update the statement of owner’s equity.

The ending figure for capital on the statement of owner’s equity is used to update the balance sheet.

10.

The two columns on the trial balance represent debit and credit; however, there are no debits or credits shown on the formal statements even if the statement has two columns.

11.

The trial balance is listed in the same order as the ledger accounts.

12.

On a trial balance, there is only one number for each account — the ending debit or credit balance.

Chapter 2 – Page 53

Business World Notes 1.

A business may have 50 or more accounts (sometimes thousands) to keep track of and therefore it is not practical to use the equation format we used in Chapter 1 to record transactions.

Accountants do not actually write out a transaction analysis chart before they record a transaction, but they go through the exact same steps mentally.

Computers are very useful in maintaining the equality of debits and credits. But, computers are not a complete substitute for clear thinking on the part of accounting clerks and related personnel.

The double-entry system provides built-in protection against errors. If debits do not equal credits, then the accountant knows that there is an error in the records which must be corrected.

A double-entry system is not as necessary for a sole-proprietorship or partnership as it is for a corporation. Point out that if a standard double-entry system is too cumbersome for a small business there are alternative methods of keeping business records. Note, however, that the cash method is not permitted for tax purposes. Books kept on the cash basis must be converted to the accrual basis at year end.

If the accounts are out of balance and a trial balance is not prepared before the financial statement preparation, you would not know there was an error until all three statements were completed and you found the balance sheet wouldn’t balance.

The trial balance does not necessarily need to be written out. Many accountants find it is sufficient to run an adding machine tape to show that debits equal credits. Computer accounting software will print a trial balance at the push of a button.

Class Activities 1.

Draw this T-account on the board: 200 500 300 50 Show students how to balance it and foot it.

Have students turn to Self-Review Quiz 2–2 (p. 60) and explain which transaction in the chapter parallels Transaction D. Have them explain the difference between a withdrawal and a business expense.

Chapter 2 - Page 54

Using the information and accounts in Self-Review Quiz 2–2 (p. 60) have students categorize each account, its normal balance, and the report on which each account will be found. Answers: Cash: Asset, Dr. balance, balance sheet Accounts Receivable: Asset, Dr. balance, balance sheet Equipment: Asset, Dr. balance, balance sheet Accounts Payable: Liability, Cr. balance, balance sheet Bill O’Malley, Capital: Capital, Cr. balance, statement of owner’s equity and balance sheet Bill O’Malley, Withdrawals: Withdrawals, Dr. balance, statement of owner’s equity Professional Fees: Revenue, Cr. balance, income statement Utilities Expense: Expense, Dr. balance, income statement Salaries Expense: Expense, Dr. balance, income statement

Have students go over pp. 53-59 to see how the ledger is built up. Discuss the footings. Show them one title at a time how the trial balance is built on p. 64 from p. 63.

Teaching Tips 1.

Talk about arbitrary rules. For example, in baseball there are nine innings and in football there are four quarters; the rules could be switched between the two sports and still work as long as everybody used the same ones. In accounting, the rules of debit and credit are also arbitrary; they could be switched and still work as long as the sum of the left sides equal the sum of the right sides.

Withdrawals are always increased by a dr (debit).

This is an ideal time to use the transparency or a handout that shows how to complete a transaction analysis chart.

Point out the position of the arrows in the two transaction charts for transactions B and C. Have students explain why arrows go up and down in the chart for transaction B, and the transaction still balances; while on the chart for transaction C, both arrows go up and that transaction also balances.

Chapter 2 – Page 55

Typical Student Misconceptions 1.

“Debit is bad; credit is good.” To get students over this, emphasize instead these meanings: • Debit means the left side of any account. • Credit means the right side of any account.

Use the new section that details how nautical terms are in some ways similar to accounting terms, in that they have both a general meaning, as well as a meaning that is unique to that sector of the economy. You may have another example you could use here Golf, for instance might be an understandable illustration for some students.

Students think that there is only one chart of accounts for all businesses. Emphasize that there are many possible charts of accounts for different businesses — in fact, there are books available that provide sample charts of accounts for all types of businesses and for whole industries (for a hair salon, for the plumbing industry, etc.). Have them turn to Chapter 12 (p. 558) to see a more complex chart of accounts than this one. You could also point out that most accounting software comes with several good and useful charts of accounts.

Students think that all of the arrows in the transactional analysis chart must “balance.” Emphasize that the arrows can go all up or all down or some up and some down as long as the sum of the left side equals the sum of the right side in the accounts.

Students think that legal fees are an asset. Stress that legal fees are revenue, which is a subdivision of owner’s equity. It is true that revenue will provide an inward flow of assets.

Students often think that expenses are liabilities. To clear up this misconception, point to Transaction I, showing that an expense may create a liability if the expense is not paid. An expense is not the same thing as a liability. Expenses are a subdivision of owner’s equity; liabilities are not.

Check Figures for Exercises Set A 2-1A. Cash, 111; Accts. Rec., 112; Office Equip., 121; Accts. Pay., 211; L. Jones, Capital, 311; L. Jones, Withdrawals, 312; Legal Fees, 411; Advertising Exp., 511; Repair Exp., 512; Salary Exp., 513. 2-2A. Computer Equipment Accounts Payable Cash

$19,000+ $16,000+ $ 3,000–

Chapter 2 - Page 56 Salaries Expense: Exp., Dr., Cr., I.S. 2-4A. A. B. C. D. E.

8,1 6,1 9,4 1,7 10 1

F. G. H. I.

3,5 2,7 1,2 3,4

2-5A. Net Income: $185 J. Hall, Capital, 7/31/16: $787 Total Assets: $1,242 Set B 2-1B. Cash, 111; Accts. Rec., 112; Office Equip., 121; Accts. Pay., 211; L. Jones, Capital, 311; L. Jones, Withdrawals, 312; Legal Fees, 411; Cleaning Exp., 511; Office Assistance Exp., 512; Rent Exp., 513. 2-2B. Computer Equipment Accounts Payable Cash

$21,000+ $16,000+ $ 5,000–

2-3B. Legal Fees Earned, Rev., Cr., Dr., I.S. P. Rey, Withdrawals: Owner’s Equity (Withdrawals), Dr., Cr., St. of O.E. Cash, Asset, Dr., Cr., B.S. A/R, Asset, Dr., Cr., B.S. Rent Expense: Exp., Dr., Cr., I.S. 2-4B. A. B. C. D. E.

4,1 6,1 10,4 1,7 7,2

F. G. H. I.

3,4 10,4 1,2 3,5

2-5B. Net Income: $415 J. Hall, Capital, 7/31/16: $870 Total Assets: $1,395

Check Figures for On-the-Job Training T-1.

Cash, $490; Totals, $3,180

T-2.

Situation 3. Trial Balance will balance but be overstated by $400. Capital and Accounts Receivable are overstated by $400.

Chapter 2 – Page 57

Check Figures for Continuing Problem 1., 2., 3.

Cash Dr. $2,865.00

Trial Balance $8,305.00

Net Income O/E Total Assets

$1,160.00 $5,560.00 $5,965.00

Chapter 3 - Page 58

Chapter 3 Class Quiz 1.

Complete these statements: (Review of Chapter 2) a. b. c. d. e. f. g.

True or false: a. b. c. d. e.

Assets are increased by _____. (debits) Liabilities are decreased by _____. (debits) Withdrawals are increased by _____. (debits) Revenue is increased by _____. (credits) The normal balance of an expense is a _____. (debit) Accounts are located in a book called a _____. (ledger) A _____ _____ is a list of the ledger. (trial balance)

A fiscal year is 8 months. (false) A year end report is called an interim report. (false) A ledger “links” debits and credits together on one page. (false) The chart of accounts aids in the journalizing and posting process. (true) An expense can create a liability. (true)

What is the normal balance of each of the following? Cash (Dr.) Accounts Payable (Cr.) Jones, Capital (Cr.) Pizza Revenue (Cr.) Salary Expense (Dr.) Jones, Withdrawals (Dr.)

True or false: a. b. c.

A trial balance is a formal report. (false) A transposition is the result of adding or deleting zeroes in writing numbers. (false) The balance of each account on the trial balance must be its normal balance. (false)

Chapter 3 - Page 59 d. e.

A trial balance is made up from the ending balances of accounts in the ledger. (true) The totals of a trial balance can balance and yet be incorrect. (true)

Accounting Recall A Cumulative Approach This Examination reviews Chapters 1 Through 3. PART 1 Vocabulary Review Match each term on the left side with the related definition or phrase on the right-hand column. Page Ref. (52) 1. Chart of accounts (47,92) 2. Ledger (110) 3. Slide (92) 4. Calendar year (110) 5. Transposition (101) 6. Three-column account (92) 7. Journalizing (95) 8. Compound entry (101) 9. Posting (92) 10. Journal

A. Process of recording transactions in a journal B. Rearrangement of digits C. Book of original entry D. Running balance E. Transferring information F. January 1 to December 31 G. Adding of deleting numbers H. Numbering system I. More than two accounts J. Book of final entry

PART 2 True or False (Accounting Theory) (92) (101) (111) (92) (110)

11. The ledger is located in the same book as the journal. 12. The PR column of a general journal is completed after the posting to the ledger is complete. 13. Correcting errors in journalizing can be done only before posting. 14. A calendar year could be a fiscal year. 15. A trial balance could balance but be incorrect.

Solutions to Accounting Recall Part 1 1. H

2. J

3. G

4. F

5. B

6. D

7. A

8. I

9. E

Part 2 11. 12.

10. C

Chapter 3 - Page 60 13. 14. 15.

False; before or after posting True True

Points to Stress 1.

Note that Withdrawals is part of owner’s equity.

A journal is numbered by pages; a ledger is set up by account numbers.

There is not a set format for the explanations in journal entries. They should be brief, clearly explain the transaction, and refer to any specific documents which pertain (eg. Invoice number).

Point out that the indention of accounts being credited makes it much easier to tell which accounts are being debited or credited, especially in a compound journal entry.

Note in the transaction analysis chart that the arrows can all be pointing up but the total of debits still equals the total of credits.

Have students compare May 10 and May 17 transactions (p. 97). Stress that expenses increase whether paid for in cash or not.

Record revenue when earned. Note that on page 97, May 22 the revenue (Desktop Publishing Fees) is a subdivision of owner’s equity. It provides an inflow of assets into the business in the form of accounts receivable.

Cross-referencing means updating the PR column of the journal, not the ledger.

All numbers for the trial balance in Figure 3–4 (p. 110) come from the ledger shown in the solution to Self-Review Quiz 3–2. Have students turn back to this ledger to verify the numbers.

Business World Notes 1.

Managers use the information on financial statements to make business decisions. Since they need feedback more often than once a year, interim statements are prepared.

The accountant will keep a copy of the chart of accounts as a handy reference of account names and numbers for when he or she records journal entries. The chart is often written on the inside cover of the ledger book.

Explain the advantages of using a numbering system for the chart of accounts. Assets = 1, Liabilities = 2, OE = 3, Revenues = 4, and Expenses = 5. Explain how the numbering system can be used to categorize different accounts of a single type so that the account Copyright © 2015 Pearson Canada Inc.

Chapter 3 - Page 61 numbers are easier to memorize (e.g., current assets begin with 11, plant assets begin with 15, etc.) 4.

Accountants usually write journal entries with an ink pen so that they can be read more easily and so that entries cannot be easily changed without explanation.

A ledger account form that does not have balance columns but determines the balance using footings would get messy after the accounts have been totalled a few times. It would be easy to confuse a footing with a transaction amount.

Transactions should be recorded in the journal when they occur; however, posting can wait for a week’s or month’s posting to be done in a batch. There is no fear of losing the information since it has been recorded in the journal.

Posting is purely mechanical and the accountant does not have to analyze the transaction again to post it. If the accounting records are computerized, once you analyze and journalize the entry the computer can post it automatically.

Before accountants use the figures from the trial balance for the financial statements they should make sure the figures are reasonable. One way to do this is to compare the figures to previous periods.

Explain to students under what circumstances they would be able to correct an error by simply putting a line through the incorrect information (e.g., the wrong account or amount recorded but not posted, an addition error in the ledger, etc.), and when they need to make a correcting entry (e.g., when an incorrect entry has already been posted).

Class Activities 1.

Using the chart of accounts shown on page 94, have students pick out those accounts that have been covered so far, and put check marks next to those that have not yet been discussed.

Ask students what the normal balance is for Capital. Ask them if capital means cash.

Go over the structure of the journal entry. Point out that the PR column, which is blank at this time, will be discussed and filled in later.

Using the transactions shown in Self-Review Quiz 3–1 (p. 101) ask students to cover the solution to the quiz and then construct a transaction analysis chart for each of the seven transactions.

Chapter 3 - Page 62 Cash: Asset, Dr. balance. Brenda Clark, Capital: Capital, Cr. balance 6.

Have students cover the explanations of each transaction in the journal and try to explain in simple language what the debit and credit entries mean.

Have students cover the debit and credit entries of each transaction and reconstruct the debits and credits.

Teaching Tips 1.

Ask students what type of accounting period they are using for their tax return? Answer: calendar year. Point out that this could also be called a fiscal year.

Explain that prepaid rent is an asset because the business now owns the right to those 3 months of office space. If students ask about the expense, tell them we will explain that in Chapter 4 and not to worry about it now.

Write the following on the board: debit + debit = debit credit + credit = credit debit - credit = debit if debit is larger than the credit debit - credit = credit if credit is larger than the debit. Stress that the normal balance of an account is the side that increases by the rules of debit and credit.

This may be a good time to go back to the chapter objectives (p. 92) and review with students where we have been and what will happen in the next chapter. It is important for students to know where they’re headed.

Typical Student Misconceptions 1.

Some students get mixed up about which to list first in the journalizing process — credit or debit. Stress that debits are listed first, followed by credits (indented).

Students often think that dollar signs should be used in journals and ledgers. Stress that dollar signs are used on formal reports but not in journals and ledgers.

Students think that an owner can only withdraw cash from a business. Point out that a withdrawal is not always in the form of cash — sometimes it can be another type of asset. Stress also that withdrawals are part of owner’s equity. One example of an owner withdrawing an asset other than cash might be in the case of a winery - the owner may take away some cases for private consumption. Many other examples are possible. Copyright © 2015 Pearson Canada Inc.

Chapter 3 - Page 63 4.

Students sometimes think that the journal and the ledger are in the same book. Have students turn to Figure 3–3 (p. 104), and show that Clark’s ledger is not located in the same book as the journal.

Check Figures for Exercises Set A 3-1A. Oct.

3-2A. Jan.

Cash Equipment Janet Wills, Capital

70,000 6,000

Supplies Accounts Payable

900

Cash

76,000

900

16,000 Reggie Long, Capital

Accounts Receivable Repair Fees Earned

3-3A. Cash: (Balance) Equipment: (Balance) Accounts Payable: (Balance) A. King, Capital: (Balance)

16,000 900 900

$14,000 dr $8,000 dr $5,000 cr $17,000 cr

3-4A. Total of Trial Balance: $15,800 3-5A. Total of Trial Balance: $15,700 Set B 3-1B. Oct.

3-2B. Jan.

Cash Equipment Janet Wills, Capital

90,000 8,000

Supplies Accounts Payable

800

Cash

98,000

800

16,000 Reggie Long, Capital

Accounts Receivable Repair Fees Earned

16,000 900

900

Chapter 3 - Page 64

3-3B. Cash: (Balance) Equipment: (Balance) Accounts Payable: (Balance) A. King, Capital: (Balance)

$51,000 dr $9,000 dr $5,000 cr $15,000 cr

3-4B. Total of Trial Balance: $15,500 3-5B. Total of Trial Balance: $15,700

Check Figures for On-the-Job Training T-1.

Total of Trial Balance: $23,160

T-2.

1. 5.

Cash is understated. Trial balance will not balance. Accounts Payable is overstated and trial balance will not balance.

Check Figures for Continuing Problem July 30, 2016 Accounts Receivable 2,600.00 Service Revenue 2,600.00 Fees to Dr. Anthony Pitale on account Cash Dr. Trial Balance Net Income July 31, 2016 Balance Sheet Total Assets

$1,645.00 $11,395.00 $3,885.00 $8,495.00

Chapter 4 - Page 65

Chapter 4 Class Quiz 1.

True or false: (Review of Chapter 3) a. b. c. d. e.

A journal is a book of final entry. (false) Posting is done only from the journal to the ledger. (true) A calendar year cannot be a fiscal year. (false) The totals of a trial balance can balance and be incorrect. (true) A transposition is the accidental rearrangement of two adjacent digits of a number. (true)

In Figure 4–1 (p. 142) why is Accumulated Depreciation, Desktop Publishing Equipment not listed on the worksheet immediately below Desktop Publishing Equipment? Answer: This is a new company. Next month Acc. Dep. will be listed below the equipment account.

What is the normal balance of Accumulated Depreciation? Answer: Credit.

True of false: The adjustment for supplies is always the amount left on hand. Answer: False, it’s generally the amount used up.

Using Figure 4–5 (p. 148b) ask your students to cover the columns of the worksheet except for the account titles. Have students state each account classification, its normal balance, and what report it appears on. Example:

Brenda Clark, Withdrawals: Withdrawals, Dr. balance, statement of owner’s equity; listed on balance sheet debit column of the worksheet.

Why aren’t withdrawals listed on the income statement in Figure 4–6? (p. 157) Answer: Withdrawals are not business expenses.

Chapter 4 - Page 66

Accounting Recall A Cumulative Approach This Examination Reviews Chapters 1 through 4. PART 1 Vocabulary Review Match each term on the left side with the appropriate definition or phrase on the right. Page Ref. (131) 1. Prepaid rent (145) (141) (142) (51) (142) (140) (138) (143) (141)

2. Accrued salaries 3. Depreciation expense 4. Accumulated depreciation 5. Normal balance 6. Residual value 7. An asset 8. Worksheet 9. Book value 10. Historical cost

A. Estimated value of an asset after all depreciation has been taken B. Earned but unpaid C. Actual cost at time of purchase D. Columnar device E. Rent paid in advance F. Cost – accumulated depreciation G. Supplies H. Shown on the income statement I. Side of an account that increases J. Contra-asset

PART 2 True or False (Accounting Theory) (139) (140) (142) (142) (152)

11. Adjustments are the result of external transactions. 12. Adjustments affect only the balance sheet. 13. Accumulated depreciation and equipment will both go on the balance sheet. 14. The normal balance of accumulated depreciation is a debit. 15. All financial reports could be prepared from a worksheet.

Solutions to Accounting Recall Part 1 1. E

2. B

3. H

4. J

5. I

6. A

7. G

8. D

9. F

Part 2 11. 12. 13. 14. 15.

10. C

Chapter 4 - Page 67

Points to Stress 1.

Take a moment to go over the headings of the worksheet.

Stress which reports will be prepared from the worksheet.

This is a good time to review which accounts go on each report.

Also stress that the figure for capital on the worksheet is the beginning figure, not the ending. Remind students that if any additional investments occurred during the period, they would have to look back at the capital account in the ledger.

Explain that the adjustments the students are placing on the worksheet have not yet been journalized or posted — this will be done in the next chapter. The worksheet is thus a kind of “rough draft.”

If an adjustment for rent expense is not made, net income on the income statement will be too high. Assets and owner’s equity on the balance sheet will also be too high.

Accumulated Depreciation is a contra asset. It is found on the balance sheet.

An expense can create a liability — show your students the transaction analysis chart for Accrued Wages. Stress that the expense goes on the income statement and the liability goes on the balance sheet.

The following do not go on the income statement: 1. Accumulated Depreciation 2. Equipment 3. Accounts Payable 4. Capital 5. Withdrawals

10.

With respect to Figure 4–5 (p. 148b): a. Only revenue and expenses go on the income statement. b. Net income of $4,900 is the difference between revenue and expenses. c. Every two adjacent columns of the worksheet will balance.

11.

Note in Figure 4–6 (p. 157) that Accumulated Depreciation is not found on the income statement. Stress that the only accounts on the income statement are Revenue and Expenses.

12.

In Figure 4–8 (p. 159) the new figure for capital is calculated by adding beginning capital plus net income minus withdrawals. This calculation is needed because the worksheet only shows the beginning capital for Brenda Clark. Again, no additional investments occurred during the period. Copyright © 2015 Pearson Canada Inc.

Chapter 4 - Page 68

13.

Only assets, contra assets, liabilities, and a new figure for capital are listed on the balance sheet. All revenue on the expenses are recorded on the income statement.

Business World Notes 1.

In a business, there may be other adjustments than the four described in this chapter. Accounts such as Accounts Receivable and Salary Expense might also need to be adjusted to show the correct period end balance.

Many businesses will take a physical count of the office supplies to determine the onhand amount.

There are several different ways of calculating how much of the cost of an asset should be allocated to each year of its life.

Explain that we want to keep the original cost of the asset, as well as its book value, on the balance sheet, because this gives financial statement readers a clearer picture of the asset’s age and usefulness. We only show assets on the books at market value if we are going to sell the asset or the entire business.

Any time the accounting period falls on a different date than the end of the pay period date, an adjustment for unpaid salaries will be necessary.

The adjusting entries are a planned part of the accounting process which occur in most businesses and are rarely the result of errors.

Class Activities 1.

See page 141. Ask students what the balance for Prepaid Rent will be when the adjusted trial balance is complete. Answer: $800

Have students turn to page 147 (Fig. 4–3) to show them where they are headed.

Ask students to give you an example of an expense increasing but not being paid for in cash. Example: Go out for dinner and charge it.

Have students cover over the last column of the worksheet, Figure 4–5 (p. 148b) and by using the trial balance and adjustments columns tell you what the balance will be in each account on the adjusted trial balance. Ask them why it is a debit or a credit balance.

Chapter 4 - Page 69 6.

Go over Figure 4–7 (p. 157), and take students back to the pages indicated there to show them where each number shown in the figure comes from.

Ask them why the figure of $14,275 for Brenda Clark, Capital, is not on the worksheet.

Teaching Tips 1.

Use overlapping transparencies to show students how to prepare a worksheet step-bystep. The one included in the text is a valuable learning device and you should be sure to step the students through it.

Review with the class the transaction analysis chart for every adjustment. Be sure to reinforce the point that one title goes on the income statement and the other title goes on the balance sheet.

Use some colourful examples to talk about depreciation: a. An antique car such as a Rolls-Royce may be fully depreciated and yet have increased in value over the years. b. The elephants in a circus would be depreciated as part of the circus’s equipment.

On the formal income statement (Figure 4–6, p. 157) I ask my students if any number is new (that is, not found on the worksheet). Answer: No!

Typical Student Misconceptions 1.

Students usually think that when depreciation is taken the original cost of the equipment is changed. Emphasize that the original cost remains the same; Depreciation Expense and Accumulated Depreciation accounts increase.

Students may think that book value means market value. Emphasize that the going market value at any one time could be quite different from the value on one’s books.

Students always want to adjust the original cost of equipment. Have your students look at Figure 4–3 (p. 148) and reinforce the point that Desktop Publishing Equipment of $6,000 on the trial balance is still $6,000 on the adjusted trial balance. The original cost is not changed.

Students often want to place Withdrawals and/or Accrued Salaries on the income statement columns of the worksheet. Stress that Withdrawals and Accrued Salaries will go on the balance sheet columns of the worksheet.

Chapter 4 - Page 70 5.

Students think that on page 147, Brenda Clark, Capital is the new figure. Stress that on the worksheet, Capital is the “old” figure, assuming no additional investments took place.

Students think that on page 153, the total of $14,275.00 for Brenda Clark on the balance sheet columns of the worksheet should equal the total of assets and liabilities and owner’s equity on the formal balance sheet. Stress that the formal report rearranges the information from the worksheet. There are no debits or credits on the formal report.

Check Figures for Exercises Set A 4-1A. Office Equip.: A, Dr., B.S. Acc. Dep.: A(C), Cr., B.S. B. Reel, Cap.: OE., Cr., St. of O.E.,; B.S. B. Reel, Withdr.: OE., Dr., St. of O.E. 4-2A. a.

Dep. Exp.: Exp., , Dr. Acc. Dep.: A(C), , Cr.

Rent Exp.: Exp., , Dr. Prep. Rent: A, , Cr.

4-3A. a. b.

Dr. Supp. Exp. Cr. Supplies

$500

Dr. Dep. Exp. Cr. Acc. Dep.

$200

$500 $200

4-4A. Net Income: $4 4-5A. J. Trent, Capital: $15 Total Assets: $24 Set B 4-1B. Office Supplies: A, Dr., B.S. Prepaid Insurance: A, Dr, B.S. Accrued Salaries: L(C), Cr., B.S. B. Reel, Withdr.: OE., Dr., St. of O.E. 4-2B. a. b.

4-3B. a.

Dep. Exp.: Exp.,  Dr. Acc. Dep.: A(C), , Cr. Insurance Exp.: Exp., , Dr. Prep. Insurance: A, , Cr. Dr. Supp. Exp. Cr. Supplies

$800

Chapter 4 - Page 71 b.

Dr. Dep. Exp. Cr. Acc. Dep.

$2,100 $1,`00

4-4B. Net Income: $3 4-5B. J. Trent, Capital: $5 Total Assets: $38

Check Figures for On-the-Job Training T-1.

Insurance Expense Prepaid Insurance

420

Rent Expense Prep. Rent

200

Storage Fees Receivable Storage Fees Earned

500

420

200

T-2. #1.

Part (a) – Advertising expense is $1,600.00

#2.

Part (b) – Interest expense is $1,700.00

Check Figures for Continuing Problem Totals for the Income Columns - $6,685.00 Net Income is $3,006.00 Owner’s Equity end of July on statement is $7,406.00 Cash on Worksheet and Balance Sheet is $1,645.00 Trial Balance total is $11,395.00 Balance Sheet Total Assets is $7,616.00

500

Chapter 5 - Page 72

Chapter 5 Class Quiz 1.

True or false: (Review of Chapter 4) a. b. c. d. e. f. g.

A worksheet is a required formal report in any accounting cycle. (false) All adjustments are caused by external transactions. (false) Supplies do not depreciate. (true) The ending figure for capital is listed on the worksheet. (false) Accumulated Depreciation is a contra-asset account on the balance sheet. (true) The original cost of equipment is not adjusted. (true) Accrued Salaries means salaries already paid out. (false)

Ask students to explain how the $14,275 is arrived at in ledger account no. 311. (see page 194) Remind them that in Chapter 3 the only figure in the Capital account was $10,000.

Ask students to repeat the four steps in the closing process without reading from Figure 5–3 (p.191).

Accounting Recall A Cumulative Approach This Examination Reviews Chapters 1 through 5. PART 1 Vocabulary Review Match each term on the left side with the appropriate definition or phrase in the right-hand column. Page Ref. (187) 1. Closing entries (143) 2. Book value (188) 3. Income summary (142) 4. Contra-asset (139) 5. Supplies (92) 6. Journal (198) 7. Post-closing trial balance (183) 8. Adjusting journal entries (47) 9. Ledger (58) 10. Withdrawals

PART 2 True or False (Accounting Theory)

A. Updates specific ledger accounts B. A temporary account with debit balance C. A permanent account D. Lists only permanent accounts E. Clears all temporary accounts F. Book of original entry G. A temporary account in the ledger H. Cost – accumulated depreciation I. Book of final entry J. Accumulated depreciation

Chapter 5 - Page 73 (188) (188) (188) (139) (183)

11. Income summary has a normal balance of a debit. 12. After closing, all temporary accounts will be cleared to zero balance. 13. Closing entries cannot be made from a worksheet. 14. The worksheet shows the beginning figure for capital. 15. Financial reports are prepared after journalizing and posting adjusting and closing entries.

Solutions to Accounting Recall Part 1 1. E

2. H

3. G

4. J

5. C

6. F

7. D

8. A

9. I

10. B

Part 2 11. 12. 13. 14. 15.

False; not a debit or credit True False; can be done from a worksheet True False; before

Points to Stress 1.

Figure 5–1 (p.187): Note in the PR column that each account in the adjustment process is now updated in the ledger, since the posting process is complete.

Remember that the financial reports of P. Logan have already been prepared. SelfReview Quiz 5–1 (p. 189) shows how we are now updating the ledger balances from the adjustments.

Closing clears all temporary accounts in the ledger to zero.

The Capital account in the ledger is updated to a new balance at closing.

Chapter 5 – Page 74 5.

Income Summary doesn’t have a normal balance of a debit or a credit. In the closing process the total of expenses is on the debit side and the total of revenue is on the credit side.

In Step 3 (p. 190), the three numbers in Income Summary are: $3,100 — Total of all expenses. $8,000 — Total of revenue. $4,900 — A footing representing net income, or the balance in Income Summary that will be transferred to Brenda Clark, Capital.

Point out that on page 193, the Desktop Publishing Equipment account, #121, has not been adjusted or closed and ask students why this is so. Stress that adjustment updates Depreciation Expense and Accumulated Depreciation; the historical cost of equipment does not change.

Emphasize that once the closing entries have been posted, the balances of the permanent accounts will agree with the amounts shown on the balance sheet.

Note how closing clears all temporary accounts, including Income Summary and withdrawals, to a zero balance.

10.

Note that Income Summary will not be listed on the post-closing trial balance.

Business World Notes 1.

If the accounting records are kept on a computer the computer can perform most of the closing process automatically since closing entries do not require any transaction analysis. Most programs require you to close withdrawals using a separate journal entry.

Since it is easy to make an error when entering or posting the long entry to close revenue and expenses, we close them to Income Summary where we can check that the first two entries make the Income Summary balance equal net income or net loss. Some businesses do not use the Income Summary account in the closing process, but close directly to the owner’s Capital account.

All businesses, no matter what type they are, will follow the same steps to complete the accounting cycle. Using a computer only changes this slightly - the role of the various journals is a bit different as to how they are prepared - but their content is mostly the same.

Since the Income Summary account has a zero balance except during the closing process it will never appear on any of the formal financial statements.

Chapter 5 - Page 75

Class Activities 1.

Have students review each adjustment on page 185 by asking what accounts are affected, their categories, increases or decreases, and rules of debit or credit. Example: Adj A: Office Supplies, Asset, decreases, Cr. $500 Office Supplies Expense, Expense, increases, Dr. $500

Have students go back to Figure 5–1 (p. 187) and go over each account on the worksheet, identifying it by category, whether it is temporary or permanent, and which financial report it appears on. Example: Cash: Asset, permanent, balance sheet

Have students turn back to Chapters 3 and 4 and see how Brenda Clark, Capital was built.

Teaching Tips 1.

Be sure to take students through Figure 5–4 (p. 191) to show how each journal entry occurs. Stress the fact that the worksheet provides all the data with no new calculations needed for closing.

Have students return to Chapter 3 to look at the ledger. Ask them to compare it to the ledger in Figure 5–5 (pp. 195-198). Show them that the adjusting and closing process has now caused only permanent accounts to have a balance; the closing process has cleared all temporary accounts to zero.

Have students go back to the Clark worksheet in Chapter 4 (p. 148b). Show them that no new calculation is needed in the closing process.

At first glance the blueprint on page 212 looks busy. Take students through it step by step. It gives them a good overview without worrying about all the specific mechanical steps. Be sure to stress the closing steps.

Typical Student Misconceptions 1.

Figure 5–1 (p. 187): Students think that the adjustments on the worksheet have already been updated in the ledger before the financial reports are prepared. Explain that a worksheet is a rough draft — at this point only the balances on the trial balance are listed in the ledger.

Chapter 5 – Page 76

Students think that Income Summary is a permanent title. They don’t realize that it is a temporary account located in the same ledger as other accounts. Stress that Income Summary has no normal balance like other accounts. It is only a “temporary” storage area for revenue and expenses.

Students ask why we wouldn’t credit just the total of all the expenses in Step 2 (pp. 190193). Stress that we must credit each expense in the journal, because when we post, the goal is to close each expense account in the ledger. If we just totalled all the expenses we would not know which specific ones should be credited.

Students don’t understand why a withdrawal is closed directly to Capital. Stress that a withdrawal is not a business expense and is thus not part of Income Summary.

Students think that all companies journalize and post adjusting and closing entries every month. Remind them that, by using modern accounting software and a computer, this task is made much more simple and quick. It is typical to close the books only once a year, however, no matter how simple the task becomes.

Check Figures for Exercises Set A 5-1A. Dec.

31 31

Rent Expense 900 Prepaid Rent Salaries Expense 200 Accrued Salaries

5-2A. Income Summary Fees Earned Accts Payable

900 200

Temp. closed Temp. closed Perm.

5-3A. Income Summary J. King, Capital

18,900

5-4A. Income Summary M. Foster, Capital

700

18,900

700

5-5A. Totals as of December 31, 2018: (assuming Legal Library is an asset) $114,825 Set B 5-1B. Dec.

31 31

Rent Expense 700 Prepaid Rent Salaries Expense 400 Accrued Salaries

700 400

Chapter 5 - Page 77

5-2B. Income Summary Accrued Salaries Jon Rich, Withdrawals

Temp. closed Perm. Temp. closed

5-3B. Income Summary J. King, Capital

28,800

5-4B. Income Summary M. Foster, Capital

950

28,800

950

5-5B. Totals as of December 31, 2018: (assuming Legal Library is an asset) $39,510

Check Figures for On-the-Job Training T-1.

1. 2. 3. 4.

Need to see current as well as past financial reports. Are salaries too high compared to fees? Ask why there is no Withdrawals account. Would like to see a projected set of figures for future financial report.

T-2.

Ending Capital: $31,340

Check Figures for Continuing Problems July 31, 2016 Income Summary 3,006.00 Freedman, Capital Post Closing Trial Balance, July 31, 2016

3,006.00

7,735.00

Notes on the Mini Practice Set — Sullivan Realty Problems 5A–3, 5B–3, and 5C–3 were Mini Practice Sets with a single accounting cycle. This Mini Practice Set is a real favourite with students because they go through two complete accounting cycles. It gives the students a chance to put all the pieces together. Note that it also exists as one of the Computer Workshops, and some instructors find it to be an excellent idea to have their students do both the manual and computerized versions, in order to stress the similarities (and differences) between the two approaches. There is an alternate computer workshop that students could complete instead of, or in addition to the Sullivan one. Take time to go over all parts of the problem with your students. Forms are in their Study Guide with Working Papers.

Chapter 5 – Page 78

Check Figures for Mini Practice Set Net Income, June: $11,243.00 John Sullivan, Capital, June 30: $34,243.00 Total Assets, June: $35,593.00 Post-Closing Trial Balance, June: $35,893.00 Post-Closing Trial Balance, July: $45,888.00 Net Income, July: $10,745.00 John Sullivan, Capital, July 31: $43,188.00 Total Assets, July: $45,288.00

Chapter 6 - Page 79

Chapter 6 Class Quiz 1.

True or false: (Review for Chapter 5) a. b. c. d. e. f.

Adjusting entries are journalized and posted before closing entries. (true) A post-closing trial balance is made up of assets, contra assets, liabilities, and an ending figure for capital. (true) Closing entries are usually prepared from a worksheet. (true) The Withdrawals account is closed to Income Summary. (false) The normal balance of Income Summary is a debit. (false) After closing, most temporary accounts in the ledger will have zero balances. (false - all will have zero balances)

True or false: a. b. c.

A () means that the general ledger is updated. (false) The subsidiary ledger is arranged in numerical order. (false) The Accounts Receivable controlling account has a normal balance of a debit. (true)

Accounting Recall A Cumulative Approach This Examination Reviews Chapters 1 through 6. PART 1 Vocabulary Review Match each term on the left side with the appropriate definition or phrase in the right-hand column. Page Ref. (251) 1. Accounts receivable subsidiary ledger (259) 2. Sundry (9) 3. Accounts Payable (187) 4. Closing (270) 5. Purchases Journal (355) 6. Sales returns and allowances (251) 7. Controlling account (252) 8. Sales journal (259) 9. Cash receipts journal (249) 10. Sales discounts

A. The results of a cash discount B. Records sales on account C. A contra-revenue account D. Clears temporary accounts E. In alphabetical order F. Miscellaneous G. Records all cash received H. A current liability I. Records purchases on account J. Accounts receivable

Chapter 6 – Page 80

PART 2 True or False (Accounting Theory) (249) (251) (255) (266) (261)

11. Sales Discounts is a liability. 12. The controlling account balance at the end of the month will equal the sum of the subsidiary ledger. 13. Issuing a credit memo results in sales returns and allowances decreasing. 14. All purchases are subject to a discount. 15. A check-mark means the controlling account has been updated.

Solutions to Accounting Recall Part 1 1. E

2. F

3. H

4. D

5. I

6. C

7. J

8. B

9. G

10. A

Part 2 11. 12. 13. 14 15.

False True False; SRA is increasing False False; subsidiary account has been updated

Points to Stress 1.

Special journals are essential for almost every business.

The subsidiary ledgers are organized in alphabetical order. We will use record to describe postings to the AR sub-ledgers. We will use post to update general ledger accounts.

The normal balance in the accounts receivable ledger is a debit balance. Have students go over Figure 6–2 (p. 254), to reinforce this point.

The Sales journal can of course be computerized, and if it is, then a lot of added information can easily be made available to management, such as sales by salesperson or region.

A Sales Journal can have as many columns as are needed to keep track of the main categories of things a company sells. If computer software is used the number of "columns" can be very high indeed.

Chapter 6 - Page 81

Credit memos are shown as being recorded in the General Journal. Note that if the volume of such events is reasonably high, special journals could be used instead, or a credit memo might be entered into the sales journal as a negative (often, bracketed) amount.

Business World Notes 1.

Sellers are willing to offer cash discounts because customers are more likely to pay early and the seller needs the cash to replenish inventory stocks as well as to pay various expenses. This also helps to minimize bad debt losses because funds are collected from customers earlier.

For most businesses, it is important to keep accurate track of sales by various important categories. Products or product lines are the most usual exa,ple, but other catergories may also be crucial in a given business. Sales by salesperson, region, country, age group or product manager are all examples of this. Using computer software makes obtaining this information quite easy, and this chapter now introduces this important topic in an understandable way.

Stationery for the various journals and ledgers can be bought at most office supply stores. (As an aside, I sometimes mention the curious fact that a complete set of journals and ledgers costs a lot more than a simple accounting software package, like Sage 50!). In fact it will soon not be stretching things at all to say that the entire cost of a computer, complete with introductory software might be less - and that includes a printer!

It is necessary to record to the accounts receivable ledger daily since the customers’ accounts need to be up to date, so we can keep close track of their balances, compare them to payments received, and take action on overdue amounts. Proper monitoring of amounts due is closely associated with business success.

Sales Returns are recorded in a separate account instead of being debited directly to the sales account so that businesses can keep track of the dollar amount of returns and investigate the cause if returns represent an unusually high percentage of sales. That said, a few businesses do record returns and allowances as negative amounts in the sales journal. If this is done, proper controls should exist to minimize risk of improper credits being entered and posted.

Chapter 6 – Page 82

Class Activities 1.

Ask the class to debate whether special journals are always needed. Help guide the discussion so that the essential point is made clear - special journals allow more than a single bookkeeper to work on the business accounts at the same time. They are also quite efficient.

Have students turn to the Self-Review Quiz 6–2 (p. 257) and explain what makes statements 3, 5, and 8 false.

Suggest that students crossfoot the multi-column sales journals shown on pages 256 and 257, without reference to the totals that are already there. Also, consider asking them to crossfoot the cash receipts journal on Page 263, also without looking at the totals at the bottom.

Ask students to explain how to post the sundry column in the Solution to Self-Review Quiz 6–4, Page 263.

Ask different class members to support the alternative positions that paper-based accounting records are cheaper than records based on a computer. Ensure that current facts are made known. For example, as this is being written, a major computer manufacturer has just released a laptop computer for less than $200, and a local dealer lists a laser-based printer for less than $100 - so computer hardware is getting very cheap - and this is for new equipment! Used computers might be available for a fraction of these prices. Meanwhile quality paper-based accounting records continue to go up in price, especially if a business wants to have the software do payroll (more on this in chapter 9 of course). It is true that well-known accounting software packages like Sage 50 are no longer really cheap as was once the case. but even there, other, cheaper options do exist.

Teaching Tips 1.

Set the stage for this chapter by describing what a large company would need to do if they had only a general journal to use in recording transactions! It should be easy for students to see it would be impossible for a company to keep up with even a small volume of transactions. Explain how special journals allow different bookkeepers to work on different parts of the record-keeping function at the same time. Also describe how the special journals increase efficiency, by posting totals to the GL accounts, not details.

You may choose to explain the transactions in this chapter using a general journal so that the students can concentrate on the accounts debited and credited, and then introduce the new journals.

It is all the recording and posting rules that scare students. Show them the blueprint at the end of the chapter, where all the rules are summarized in one place. Tell them also that the more they practice, the easier it will get — repetition does work. Copyright © 2015 Pearson Canada Inc.

Chapter 6 - Page 83

It’s a good idea to go over the transaction analysis chart showing that Sales Returns and Allowances is a contra revenue account that is increasing; it has a normal balance of a debit.

Point out the useful fact that when recording sales transactions using Sage 50 (as an example), that program has a feature that shows the journal entry that is to be posted every time a transaction is recorded using the software. Aside from helping students to be in charge of their work, this feature can be most useful in illustrating the fundamentals of bookkeeping - which are of course identical whether a computer is used or not.

Go over Figure 6-9 (p. 264) to stress the steps in recording and posting. From this Figure go to the blueprint at the end of the chapter (pp. 275-277) which summarizes the rules of posting and recording, as well as the relationships involved with the various parts of this chapter.

Stress that the credit memo credits Accounts Receivable — it’s an easy way to remember it.

If time permits, go into a bit of detail regarding the role of journals in manual accounting vs. computer accounting. It might be only of interest to the better students, but in manual accounting, journals are prepared before posting - you in effect post from the journals to the G/L. In most computer accounting however, the journals are generated after the posting are all finished for the period! Sort the reverse of the normal flows, and very interesting how a computer, with its huge ability to store and retrieve details can reverse this "natural" order of bookkeeping! The contents of the various journals are essentially the same regardless of how they are prepared or generated.

Point out that totals of special journals are not posted to G/L accounts until the end of the month in manual bookkeeping. In effect, a computer posts to the G/L accounts, as well as to the subsidiary ledger accounts (accounts receivable or accounts payable) each time a transaction is entered. In the manual bookkeeping world, this would be very difficult - but the computer can do such repetitious work without strain or effort.

10.

Mention that large businesses often use a computer software package that can produce journals with an almost unlimited number of columns. Ask the class to think about the various departments that Canadian Tire or The Bay would keep track of as far as sales are concerned. These companies also keep track of their purchases of each of these classes of goods as well (but be careful not to be sidetracked into talking about inventory subledgers at this point - it is also fascinating, but likely too much for students at this point, and is introduced in the following chapter. If pushed, mention that one of the auxiliary chapters deals with this topic in great detail).

Chapter 6 – Page 84

Typical Student Misconceptions 1.

Most students think that the accounts receivable ledger is located in the general ledger. To correct this, go over Figure 6–2 with them. (see page 253) The TOTALS are in the G/L - not the details.

Students are people too, and often will have a tendency to wait to record to the subledgers until period end. Stress the need to keep the A/R ledger up to date at all times in the business world.

Most students, logically enough, think that cash sales go in a sales journal. They also think that the total of the sundry accounts should be posted at the end of the month. Stress: 1. All cash received goes into the cash receipts journal. 2. Individual items in sundry are posted to the general ledger — the total of sundry is never posted.

Check Figures for Exercises Set A 6-1A. Balance in Accounts Receivable, Dr.: $1,500 6-2A. Total of Sales Journal: $2,400 Balance of Gary Co.: $1,100 Dr. 6-3A. Discount: $84 Payment Required: $2,716 6-4A. HLJ Company paid $2,636.20. 6-5A. A/R Subsidiary Ledger: $74,150 6-6A. Accounts Receivable account: $36,700 Set B 6-1B. Balance in Accounts Receivable, Dr.: $1,500 6-2B. Total of Sales Journal: $1,900 Balance of Gary Co.: $1,200 Dr. 6-3B. Discount: $123 Payment Required: $3,977 6-4B. HLJ Company paid $2,038.40. 6-5B. A/R Subsidiary Ledger: $82.710 Copyright © 2015 Pearson Canada Inc.

Chapter 6 - Page 85 6-6B. Accounts Receivable account: $42,460

Check Figures for On-the-Job Training T-1.

1. 2.

The A/R ledger account will be overstated, and, when bills are sent to customers, the mistake will surface. The Schedule of A/R will not match the controlling account.

Check Figures for Continuing Problem September 30, 2016 Cash Column in CRJ Dr. Schedule of Accounts Receivable

$21,280

$8,140

Chapter 7 - Page 86

Chapter 7 Class Quiz 1.

True or false: (Review for Chapter 6) a. b. c. d. e. f.

Adjusting entries are journalized and posted before closing entries. (true) A post-closing trial balance is made up of assets, contra assets, liabilities, and an ending figure for capital. (true) Closing entries are usually prepared from a worksheet. (true) The Withdrawals account is closed to Income Summary. (false) A multi-column sales journal is limited to 6 columns. (false) After closing, most temporary accounts in the ledger will have zero balances. (false - all will have zero balances)

True or false: a. b. c.

Accounting Recall A Cumulative Approach This Examination Reviews Chapters 1 through 7. PART 1 Vocabulary Review Match each term on the left side with the appropriate definition or phrase in the right-hand column. Page Ref. (251) 1. Accounts receivable subsidiary ledger (259) 2. Sundry (9) 3. Sales by salesperson

A. The results of a cash discount B. Records sales on account C. A contra-revenue account

Chapter 6 - Page 87 (187) (270) (355) (251) (252) (259) (249)

4. Closing 5. Payroll Journal 6. Sales returns and allowances 7. Controlling account 8. Sales journal 9. Cash receipts journal 10. Sales discounts

D. Clears temporary accounts E. In alphabetical order F. Miscellaneous G. Records all cash received H. One way of tracking sales I. Records amounts due to employees J. Accounts receivable

PART 2 True or False (Accounting Theory) (249) (251) (255) (250) (261)

11. Sales Discounts is a liability. 12. The controlling account balance at the end of the month will equal the sum of the subsidiary ledger. 13. Issuing a credit memo results in sales returns and allowances decreasing. 14. All sales are subject to a trade discount. 15. A check-mark means the controlling account has been updated.

Solutions to Accounting Recall Part 1 1. E

2. F

3. H

4. D

5. I

6. C

7. J

8. B

9. G

10. A

Part 2 11. 12. 13. 14 15.

False; it is a contra-revenue account True False; SRA is increasing False; trade discounts are helpful sometimes, but not always used False; subsidiary account has been updated

Points to Stress 1.

This chapter deals with how companies record purchases of goods usually held for resale.

The subsidiary ledgers are organized in alphabetical order. We use recording to describe postings to the AP sub-ledgers. We use posingt to update general ledger accounts.

The normal balance in the accounts payable ledger is a credit balance. Have students go over Figure 7–4 (p. 305), to reinforce this point.

The purchasing function is sometimes thought of as "inferior" to sales. It is true that companies that have low sales do not need to do as much purchasing, but both functions are important. Copyright © 2015 Pearson Canada Inc.

Chapter 7 – Page 88

A purchases journal generally does not need as many columns as a sales journal. If a lot of columns are needed, a company is advised to use a computer, which can easily keep track of individual products purchased. This is generally not possible with manual bookkeeping.

All payments are recorded in a Cash Payments Journal - sometimes called a Cash Disbursements journal.

Both credit memos and debit memos are shown as being recorded in the General Journal. Note that if the volume of such events is reasonably high, special journals could be used instead.

On occasion, and providing suitable controls are in place, it is acceptable to record debit memos as negative amounts in the Purchases Journal. This is pretty the same thing as illustrated in the previous chapter when recording credit memos in the Sales Journal.

Business World Notes 1.

Purchasers should be willing to take all available cash discounts because the rate of interest inherent in most "terms" is quite high, and should not be missed. Even if a company should have to borrow money to take available discounts, it is usually wise to do this, as the rise in interest expense is lower than the savings realized by taking discounts.

For most merchandising companies, merchandise inventory is the largest asset and Cost of Goods Sold is the largest expense. Proper accounting for these accounts is therefore very important.

Because there is a separate account kept for each accounts payable supplier (or vendor), it is very easy to check the balance owed to a particular supplier and to reconcile accounts with the monthly statements generally provided by them. These statements are prepared by the suppliers, and received periodically - often after month-end, and are increasingly available on line at any time if a computer is used.

It is usually necessary to record to the accounts payable ledgers daily since the suppliers' accounts need to be up to date, so we can keep close track of how much is owed, when it is due, and when payments need to be made.

Companies also track purchase discounts so they can easily monitor whether available discounts are being taken. Making payments within the discount period is generally an Copyright © 2015 Pearson Canada Inc.

Chapter 6 - Page 89 excellent idea, because the "interest rate" inherent in a purchase discount is usually quite high - often exceeding 25% per annum. Currently, banks charge less than 6% per annum for loans, so the potential savings are far from trivial. 7.

Tell students that businesses can buy special journal stationery with blank column headings so that the journal can be designed to fit their business’s needs.

Advise students that most computer accounting software available in Canada today is designed to assist businesses with the payment of payables in a prompt and business-like way. The software also can be a big help in planning cash flows and taking all available discounts.

Class Activities 1.

Ask the class to debate which is the most important - accounts receivable, or accounts payable. Guide them to understand that both play an essential role in cash flow management - a critical process for all businesses that want to succeed in a modern business world.

Have students go through the 9 steps explained on pages 300 through 303 in some detail. This will allow the steps to be fully explained, and always results in a number of questions - the answers to which are generally helpful as well.

Have students crossfoot the cash payments journal on Page 310 without looking at the bottom of the page.

Ask students to explain how to post the sundry column in the Solution to Self-Review Quiz 7-3, Page 314.

Ask class members to identify similarities and differences when comparing the sales and purchases journals. They might also compare the CRJ with the CPJ instead - or in addition to.

Teaching Tips 1.

You may choose to explain all of the new merchandising transactions in this chapter using a general journal so that the students can concentrate on the accounts debited and credited, and then introduce the new journals. Copyright © 2015 Pearson Canada Inc.

Chapter 7 – Page 90 3.

It’s a good idea to go over the transaction analysis chart showing that Purchase Returns and Allowances is a contra expense account that is increasing; it has a normal balance of a credit.

Point out the useful fact that when doing the computer workshop using Sage 50, that the program has a feature that shows the journal entry that is to be posted every time a transaction is recorded using the software. Aside from helping students to be in charge of their work, this feature can be most useful in illustrating the fundamentals of bookkeeping - which are of course identical whether a computer is used or not.

Go over Figure 7-6 (pp. 310-311) to stress the steps in recording and posting. From Figure 7-6 (pp. 310-311) go to the blueprint at the end of the chapter (pp. 323-324) which summarizes the rules of posting and recording.

Stress that, as stated in chapter 6, the credit memo credits Accounts Receivable — it’s an easy way to remember it. Likewise, a debit memo debits Accounts Payable.

If time permits, go into a bit of detail regarding the role of journals in manual accounting vs. computer accounting. It might be only of interest to the better students, but in manual accounting, journals are prepared before posting - you in effect post from the journals to the G/L. In most computer accounting however, the journals are generated after the posting are all finished for the period! Sort of interesting how a computer, with its huge ability to store and retrieve details can reverse the "natural" order of bookkeeping! The contents of the various journals are essentially the same, however.

10.

Mention that large businesses often use a computer software package that can produce journals with an almost unlimited number of columns. Ask the class to think about the various departments that Canadian Tire or The Bay would keep track of in order to track purchases of each of these classes of goods. (be careful not to be sidetracked into talking about inventory sub-ledgers at this point - it is also fascinating, but likely too much for students at this point. If pushed, mention that one of the auxiliary chapters deals with this topic in great detail).

Chapter 6 - Page 91

Typical Student Misconceptions 1.

Most students think that the accounts payable ledger is located in the general ledger. To correct this, go over Figure 7–4 with them. (see page 305.) The TOTALS are in the G/L not the details.

Students are people too, and often will have a tendency to wait to record to the subledgers until period end. Stress the need to keep the A/R and A/P ledgers up to date at all times in the business world.

Students think that cash purchases go in a purchases journal. They also think that the total of the sundry accounts should be posted at the end of the month. Stress: 1. All cash paid out goes into the cash payments journal. (and also - all cash received is recorded in the CRJ). 2. Individual items in sundry are posted to the general ledger — the total of sundry is never posted.

Check Figures for Exercises Set A 7-1A. Balance in Accounts Payable, Cr.: $1,200 7-2A. Total of Purchases Journal: $4,100 Balance of Garry Co.: $0.00 Dr. 7-3A. Discount: $56 Payment Required: $2,744 7-4A. Purchases Returns and Allowances: $400 Cr. 7-5A. Cash Payments Journal -- Cash, Cr.: $1,480; G/L – Cash $3,000 Dr. $1,480 Cr. 7-6A. Schedule of Accounts Payable: $1,100 7-7A Mary Rose Co. paid $2,716

Set B 7-1B. Balance in Accounts Payable, Cr.: $1,600 7-2B. Total of Purchases Journal: $5,000 Balance of Regina Co.: $1,500 Cr. 7-3B. Discount: $92 Payment Required: $4,508 Copyright © 2015 Pearson Canada Inc.

Chapter 7 – Page 92 7-4B. Purchases Returns and Allowances: $600 Cr. 7-5B. Cash Payments Journal -- Cash, Cr.: $1,874; G/L – Cash $5,000 Dr. $1,874 Cr. 7-6B. Schedule of Accounts Payable: $1,100 7-7B

Mary Rose Co. paid $4,116

Check Figures for On-the-Job Training T-1.

If a computer system is used, errors are very rare and much efficiency is found in this part of the bookkeeping cycle. G/L Cash: $39,400 DR, $12,060 Cr; Salaries Expense: $2,600 + $2,600 DR

Check Figures for Continuing Problem September 30, 2016 Cash Column in CPJ Dr. Schedule of Accounts Payable

$8,448.88

$625.00

Chapter 8 - Page 93

Chapter 8 Class Quiz 1.

True or false: (Review for Chapter 7) a.

Accounts Receivable are more important than Accounts Payable when it comes to cash management. (false) A post-closing trial balance is made up of assets, contra assets, liabilities, and an ending figure for capital. (true) Closing entries can only be prepared from a worksheet. (false) There are four "usual" special journals. (true - Sales, CRJ, Purchases, CPJ) The normal balance of Accounts Payable is a credit. (true) After closing, some temporary accounts in the ledger will still have balances. (false) The Capital account in the ledger will be updated after the closing entries have been journalized and posted. (true)

b. c. d. e. f. g.

Accounting Recall A Cumulative Approach This Examination Reviews Chapters 1 through 8. PART 1 Vocabulary Review Match each term on the left side to the appropriate definition or phrase on the right. Page Ref. (333) 1. (312) 2. (314) 3. (314) 4. (317) 5.

Cash short and over Trade Discount Payee Drawer Outstanding cheques

(316) (331) (323) (317)

6. 7. 8. 9.

Bank reconciliation Auxiliary petty cash record Safekeeping Deposits in transit

(318)

10. NSF

A. A supplementary record B. Person who writes a cheque C. A process of reconciling D. Recorded on the income statement E. Person or company to whom the cheque is payable F. Lacks sufficient funds G. Cheque truncation H. Add to bank balance I. Cheques written but not processed by bank J. Usually not part of an invoice

Chapter 7 – Page 94 PART 2 True or False (Accounting Theory) (329) (331) (312) (318) (331)

11. Petty cash is a liability. 12. The auxiliary petty cash record is a special journal. 13. Restrictive endorsements limit any further negotiation of a cheque. 14. NSF cheques result in lowering the bank balance in the reconciliation process. 15. In replenishment, the old expenses are shown and a new cheque is written.

Solutions to Accounting Recall Part 1 1. D

2. J

3. E

4. B

5. I

6. C

7. A

8. G

9. H

10. F

Part 2 11. 12. 13. 14. 15.

False; asset False; auxiliary record True False; chequebook balance True

Points to Stress 1.

Go over the three types of endorsements, pointing out the safety features of each.

Go over the four journal entries, showing that the Cash account is affected in each transaction.

Point out the difference between electronic funds transfer and cheque truncation.

Petty Cash is an asset.

The cash payments journal only records the establishment and replenishment of petty cash. During the month, payments from petty cash are updated in the petty cash box and the auxiliary petty cash record.

The auxiliary petty cash record is not a special journal.

Admit that many smaller businesses treat Petty Cash somewhat more casually than this chapter might lead them to believe. Sometimes there are no formal vouchers used, and not every company uses an auxiliary petty cash record. One thing doesn't ever change the total of the money in the fund, plus receipts/vouchers must always equal the petty cash fund amount - if this is not the case, money is missing, and needs investigating. Copyright © 2015 Pearson Canada Inc.

Chapter 8 - Page 95 8. Point out that the only time an entry would be made to the Change Fund account is when it is first established. After that the balance stays the same unless the decision is made to change the amount of cash in the change fund.

Business World Notes 1.

No matter what size the business, internal controls are required to protect the assets, and ensure accurate accounting records. The larger the business, the greater the need for formal written policies. Cash, being the most liquid of all assets needs the most care.

Remind students that increasingly, businesses are thriving with much less emphasis on cash. Electronic forms of currency are increasingly a part of the business reality, and even small companies need to be able to accept payments from their customers in electronic form. Also, it is quite common for smaller businesses to pay their vendors using electronic means.

Explain that the signature card helps protect the business from fraud. If someone forges a company cheque, the bank may catch the forgery by comparing against the signature card. Even if the bank goes ahead and cashes the cheque, the business may receive reimbursement from the bank since the signature is not the same as that on the card.

Businesses use a Daily Cash Report to reconcile the cash register receipts to the amount on hand to be deposited at the end of each day to ensure that cash balances.

Most businesses use a stamp to place a restrictive endorsement on each cheque immediately after it is received. Good internal control requires that the person doing this stamping not be a member of the accounting group.

Some cheque writing machines not only print out the amount of the cheque in permanent ink but also punch tiny holes along the writing so that the amount cannot be changed. Using a colour laser printer is the modern equivalent to using this embossing machine.

All banks have set up systems for their customers to pay bills over the internet. They require that the software used be verified to work with the bank's system, or use of a third-party enabling service. The bank will then, on instruction from the appropriate software, subtract the money from their customer’s account and make payment to the creditor, also by electronic means.

Cash shortages are more common than overages since customers are more likely to complain about receiving too little change.

In a business with more than one cashier, each cashier will be required to reconcile the cash in his or her drawer at the end of the day to cash register receipts. It is crucial for internal control that these reconciliations be inspected each day by a responsible company employee - many times this will be the head cashier, or an assistant accountant. Copyright © 2015 Pearson Canada Inc.

Chapter 9 – Page 96 10.

11.

With increased use of credit cards and debit cards, the need for larger change funds has declined. Petty cash funds also have generally not grown too much, as many employees have the use of company credit cards to purchase things that cash would have been used for in the past. Point out to students that many businesses deal in an international environment, and modern banking is changing to keep up with and facilitate this reality. The use of S.W.I.F.T. codes makes it very easy to send money around the world with proper control and sometimes, just a few keystrokes. The process is not cheap, however - it can cost several dollars to send one payment to an international address.

Class Activities 1.

Take Figure 8-5 (p. 350) as the starting point, then have students look at Figures 8–6 (p. 351) and 8–7 (p. 352) and explain why certain numbers in the cash column in each are checked off.

Have students discuss their recent experiences with using the "cashless economy". Expect the stories to be quite varied, but most should feature the complete absence of cash.

Ask students to explain what is meant by timing considerations and bank statements. Ask them for specific examples.

This is a good time to review all the recording and posting rules, using Figures 8–6 and 8–7 (pp. 351-352). Ask the class which numbers are recorded immediately and which are posted at the end of the month.

Take one of your own cheques and hand it to a student. Ask the students what will happen if, after the cheque is deposited to the student’s account, it bounces. What effect will it have on the student’s chequebook balance?

Using Self-Review Quiz 8–1B (pp. 359-362), have students show examples of each one of the six situations in the body of the text.

For those feeling confident about bank reconciliation, suggest that they try the On-theJob Training T-2, at the end of the chapter (p. 391).

On-the-Job Training T–3 (pp. 391-393), is available for any class where it is important for the students to get as close as possible (in a classroom) to the real world. This is a challenging case, and if you use it, be sure you allow students enough time to do a proper job.

Included with this edition are three rather thorough and challenging bank reconciliation problems. See 8A–5 (pp. 380-382), 8B–5 (pp. 384-386) and 8C–5 (pp. 388-390). While these appear to be extremely time-consuming, they are probably not as long as they first Copyright © 2015 Pearson Canada Inc.

Chapter 8 - Page 97 appear. They are very realistic and will give students a real sense of accomplishment if they work through at least one of these. 10.

Go over Figure 8–11 (p. 364), identifying the parts of a petty cash voucher.

Teaching Tips 1.

Ask students how many have their own chequing account. In a discussion of chequing accounts, you may want to point out that opening an account can help establish credit as well as provide receipts for tax purposes. You may also want to bring in such topics as minimum balances and the convenience of automatic teller machines, as well as the increasing lack of actual cash in business.

In Figure 8–3 (p. 349), show students the bottom right portion of the cheque in magnetic ink — this represents the amount that the cheque was written for. Bank errors in processing the cheque may show up, and can be caught by checking this figure on the bottom of the cheque.

Mention to students that banks no longer return cancelled cheques with bank statements unless special arrangements have been made. Instead, they attach a photocopy list of the paid cheques, reduced in size so about a dozen can be included on a single sheet. Probably even this paper trail will soon disappear to be replaced with the ability to see a copy of the paid cheques over the internet, should there be a need to inspect a copy at all.

Go over Self-Review Quiz 8–2 (p. 368) with the class. Stress why the replenishment entry has 4 debits and 1 credit.

Emphasize the fact that the auxiliary petty cash record is not a special journal, thus the need to use the cash payments journal to establish and replenish petty cash.

Typical Student Misconceptions 1.

In going over Figure 8–3 (p. 349), point out to students that the word “and” is used only in writing out the amount of the cheque to indicate the decimal position. Students often insert “and” as part of the spelling of the dollars as well.

Students often forget to make journal entries for all items that affect the chequebook in the bank reconciliation process.

Stress that each time the chequebook balance is changed, a journal entry must be made to update the cash in the ledger account.

Many students think that they need to post the entries in the Auxiliary Petty Cash Record (Petty Cash Journal) to the Ledger. Emphasize that this record is used only to summarize the vouchers until reimbursement and a single journal entry are made. Copyright © 2015 Pearson Canada Inc.

Chapter 9 – Page 98

I like to clarify the common error of thinking that a chequebook balance is the same as the balance of the cash account. The chequebook balance (or the running balance in the cheque stubs) is an informal record. This running total might be very helpful in managing a firm's cash balance, but reconciliation should always be made to the cash account balance in the general ledger.

Students think that replenishment of the petty cash fund means a debit to Petty Cash. They don’t understand why all the individual expenses must be debited and one new cheque written for the total.

Stress that the debits to the individual expenses will prove what the money was used for. The auxiliary petty cash record (if a company uses this at all) does have the information, but students forget that it is not a special journal, and no posting is done from this summary.

Stress the point that a debit or credit to petty cash will occur only if a higher or lower level of petty cash is desired. Same thing for a change fund - it is left alone except when it is increased or decreased.

Check Figures for Exercises Set A 8-1A. Reconciled Balance: $405 8-2A. July 31, Cash credited for $88 8-3A. July 31, Cash credited for $89 8-4A. July 31, Cash credited for $87 8-5A. Cash Cash Short and Over Sales

$1,156 $74 $1,200

Set B 8-1B. Reconciled Balance: $667 8-2B. July 31, Cash credited for $135 8-3B. July 31, Cash credited for $137 8-4B. July 31, Cash credited for $134 8-5B. Cash Cash Short and Over

Chapter 8 - Page 99 Sales

$1,700

Check Figures for On-the-Job Training T-1.

Cash Replenishment: $85.50 Postage is debited for $15.00

T-2.

Reconciled balance: $4,621.00

T-3.

Reconciled Balance: $17,137.38

Check Figures for Continuing Problem Cash Replenishment Trial Balance – October 31, 2016 Bank Reconciliation, July 31, 2016

$92.00 $59,117.32 $1,645.00

Chapter 9 - Page 100

Chapter 9 Class Quiz 1.

True or false: (Review for Chapter 8) a. b. c. d. e. f.

Point to the general journal entry in the blueprint and ask your students which lines represent A. B. C.

Petty Cash is a liability. (false) Posting must occur from the auxiliary petty cash record. (false) Cash Short and Over is a temporary account. (true) A debit memorandum increases a depositor’s balance. (false) The person who writes a cheque is called the drawer. (true) Replenishment of petty cash does not mean that a new cheque is written. (false)

gross pay net pay deductions

Ask students to identify on which report each T-account listed on the blueprint will be found.

Accounting Recall A Cumulative Approach This Examination Reviews Chapters 1 through 9. PART 1 Vocabulary Review Match each term on the left side with the appropriate definition or related phrase in the righthand column. Page Ref. (366) 1. (329) 2. (378) 3. (374) 4. (92) 5. (367) 6.

TONI Petty cash T4 slip Income tax deductions Calendar year TD1 form

A. Gross pay less deductions B. Tax on Income C. A pension plan for most employees D. An asset E. National insurance plan F. Found in tables customized by province

Chapter 8 - Page 101 (372) (375) (378) (371)

7. EI 8. Net pay 9. Employee earnings record 10. CPP

G. Basis for determining tax deductions H. An annual summary of payroll amounts I. January 1 to December 31 J. Updated each pay period

PART 2 True or False (Accounting Theory) (371) (374) (371) (377) (378)

11. A biweekly pay period results in 24 payrolls each year. 12. A payroll summary is prepared for each payroll. 13. The total earnings column of a payroll register shows earnings that are subject to income tax. 14. Wages and Accrued Salaries records gross pay. 15. The employee earnings record is updated from the payroll register.

Solutions to Accounting Recall Part 1 1. B

2. D

3. H

4. F

5. I

6. G

7. E

8. A

9. J

10. C

Part 2 11. 12. 13. 14. 15.

False; 26 periods True True False; net pay True

Points to Stress 1.

The owners of sole proprietorship businesses do not pay themselves a salary.

Once the maximum amounts are reached in a calendar year, no more CPP is deducted from an employee's paycheque. There is also an annual limit for EI, but since there is no exemption involved, a single table can be used instead of multiple tables (for CPP). However, if an employee changes jobs, they will have additional CPP and EI deducted. True, they get this back when they file their tax returns, but the employer does not receive any refund.

Point out to students that the payroll register is not a journal, and they do not post the column totals. Explain that the register is used to organize and summarize the pay period information in one place. Some businesses, however, do use the payroll register as a journal and post from it directly. Most accounting software posts each employee's cheque Copyright © 2015 Pearson Canada Inc.

Chapter 9 - Page 102 and all details as the cheque is calculated and printed. This sounds inefficient to those comfortable with manual accounting, but the computer handles this with ease. 4.

Mention that, although the method of determining the amount of income tax deducted (TONI) does result in an amount for the country and for a province (or territory), these two amounts are added together and treated the same way for all subsequent steps in the payroll process. There is no need to have a separate liability account for each, for instance.

The total of the Wages and Salaries Payable is posted at the end of the month. Stress that the credits to Wages and Salaries Payable in the ledger come from the payroll journal entry.

Each quarter is 13 weeks.

Business World Notes 1.

In many businesses, the deductions from gross earnings amount to a considerable percentage (33% or more is not uncommon).

Explain to students that employers are required to retain payroll records for seven years, unless permission is obtained to destroy them earlier. In all cases, 4 years of records must be maintained.

Explain that employees must fill out a TD-1 form when they first start working for their employer and only need to fill out a new one after that if their martial status or exemptions change.

Of special interest to students is the fact that a TD-1 form may allow a lower deduction of income tax if they are attending a college or other post-secondary education institution for part of the year.

Explain that employers consider only the wages that the employee has received from them during the year in determining whether the employee’s earnings are over the CPP annual maximum. Wages that the employee received from another employer are not considered. If employees end up paying more than the maximum CPP, they can get it back when they file their income tax return. The employers will not receive a refund for the CPP they paid.

Explain that one advantage of using a separate chequing account to pay payroll is that the cheques for this account can include stubs with a summary of pay period and year-to-date information for the employee’s records. It also makes bank reconciliation easier, although the two chequing accounts may be too expensive for some small businesses to maintain.

Explain that employees’ salaries are divided into categories such as Office Salaries Expense and Market Wages Expense so that managers can see on the income statement Copyright © 2015 Pearson Canada Inc.

Chapter 8 - Page 103 how the salary expenses for an activity compare to the income or benefit from that activity. 8.

Students may be interested to hear that the payroll function is one of the first accounting tasks that businesses choose to computerize. In a computerized payroll system, the computer can perform all of the calculations, record the journal entry, post to both the general ledger and the earnings records, and print the cheques.

Many smaller businesses opt to use a computer accounting package such as Simply Accounting because it does an excellent job of handling payroll computations and recording. Using such software however does not guarantee complete accuracy - a computer can make or allow huge mistakes very quickly if care is not taken.

Class Activities 1.

Have your students call the CRA number for forms and request T-4, T-4A, T-4 Summary and PD7A forms and possibly some interesting Interpretation Bulletins. You’ll encounter some resistance here on the part of your students, but it’s good to push them to do it. A logical extension of this idea is to have the students obtain the forms from CRA using the internet. Detailed URL’s can be found in the text, or can be easily determined from the government website, which is quite well organized for such a large destination.

Another idea is to request a copy of the tax deduction tables for your locality in Canada. The exact figures will differ somewhat from those supplied (which are for Ontario, in 2013). You may wish to have students compare their "textbook" answers to those obtained using local (and up-to-date) figures from these tables. Some instructors may even want students to do all assignments using these figures. In this case, the Solutions Manual could be used as a guide to answering the questions, but the exact numbers will not agree.

When the students get the forms, have them compare them with those in the text and note any changes. (By the time this text is published, there are bound to be some changes!)

Have students prove the federal income tax deductions in Figure 9–2 (p. 409) by turning to the tax tables in the appendix to Chapter 9.

Have students go back to Figure 9–2, the payroll register, and tell you what column each line of the general journal payroll entry comes from.

Go over each T-account and ask what the normal balance is, what the category is, what report it is found on, and if it is a temporary or permanent account.

Ask if any students have ever experienced an error in their pay calculations. There are nearly always a couple (or more) interesting stories to hear.

Chapter 9 - Page 104

Teaching Tips 1.

Take the time to discuss with your students the difference between "bi-weekly" (26 pay periods per year) and "semi-monthly" (24 pay periods per year).

Volunteer to "review" any student’s pay slip with the class. Students are always fascinated with real-life examples.

As an alternative to 2., use your own salary payment slip (with your name crossed out) as a real-world example. Students do pay a lot of attention to these examples.

Many businesses will use a payroll register as a special journal and post the totals directly to the ledger. This fact may be of interest to your students. The end result is the same either way. Be sure to describe to students how Simply and QuickBooks handle payroll tasks and posting - basically, each cheque becomes a separate entry.

Typical Student Misconceptions 1.

Students usually think that deductions are classified as assets. Stress the fact that deductions are liabilities that must be paid promptly. There are strong and costly penalties for not remitting payroll deductions on time!

Many students have not thought about the fact that there is a difference between biweekly and semi-monthly pay periods.

Many students may feel that, since two amounts are determined for income tax (federal and provincial), there should be two ledger accounts for the liability. This is not bad thinking actually and you should compliment any student(s) who think this way. It is just that the various governments have agreed upon a formula for splitting up the amount of tax collected and it is only necessary to keep track of a single amount in the company’s books and records.

Check Figures for Exercises Set A 9-1A. Abe Janzen: $690 9-2A. Ben Smith: $515.58 9-3A. CPP Payable: Liability, Cr., B.S. Marketing Wages Expense: Expense, Dr., I.S. Copyright © 2015 Pearson Canada Inc.

Chapter 8 - Page 105 9-4A. The two debits come from the last two columns of the payroll register. Wages and Salaries Payable comes from the total of the net pay column. 9-5A. For each employee, debit Salaries and Wages Payable and credit Cash. It is OK to have a single debit of $5,522.00, but students should make three credits to the Cash account. Set B 9-1B. Abe Janzen: $688 9-2B. Ben Smith: $563.89 9-3B. EI Payable: Liability, Cr., B.S. Office Salaries Expense: Expense, Dr., I.S. 9-4B. The two debits come from the last two columns of the payroll register. CPP Payable, EI Payable, Income Tax Payable, Union Dues Payable are all separate columns in the payroll register. Wages and Salaries Payable comes from the total of the net pay column. 9-5B. For each employee, debit Salaries and Wages Payable and credit Cash. It is OK to have a single debit of $6,027.00, but students should make three credits to the Cash account.

Check Figures for On-the-Job Training T-1.

Jim: $784 Janice: $952

T-2.

Perhaps unfair, but the law is clear. Each employer must deduct up to the yearly maximum. Employee will get a refund, employers do not.

Check Figures for Continuing Problem Trial Balance $73,055.06 Payroll Register November 29: Aurelle Hall Net Pay

$712.36

Chapter 10 - Page 106

Chapter 10 Class Quiz True or false: (Review for Chapter 9) 1. 2. 3. 4. 5. 6.

FIT Payable is a liability. (true) T-4 forms indicate the amount of FIT to be withheld from people’s paycheques. (false) Payroll journal entries are prepared from the payroll register.(true) A quarter is 12 weeks. (false) FIT exempts wages after a certain base is reached. (false) CPP and EI both have a maximum annual amount. (true)

Accounting Recall A Cumulative Approach This Examination Reviews Chapters 1 through 10. PART 1 Vocabulary Review Match the terms to the appropriate definition or phrase. Page Ref. (422) 1. (415) 2. (372) 3. (92) 4. (422) 5. (316) 6. (378) 7. (377) 8. (413) 9.

PD7A Payroll tax expense Union dues Fiscal year T4 Summary Bank reconciliation Record of employment Medical plan payable RC1(E)

A. A liability account B. Form used to obtain a Business Number C. Makes two differing amounts agree D. Rarely an expense E. Form sent with remittance F. Employer’s share of benefits G. Any 52-week period H. Filled out only when an employee leaves I. Form summarizing calendar year events in the payroll

PART 2 True or False (Accounting Theory) (414) (418) (414) (378)

10. Income tax deductions are part of the payroll tax expense. 11. Remittances are sent to the Receiver General each quarter. 12. Employees often must pay more income tax than has been deducted from their paycheques. 13. Employers are required by law to file a record of employment form for each employee annually. Copyright © 2015 Pearson Canada Inc.

Chapter 10 - Page 107 (333)

14. Each employer must obtain a unique identification number from the federal government to permit employee deductions to be tracked accurately.

Solutions to Accounting Recall Part 1 1. E

2. F

3. D

4. G

5. I

6. C

7. H

8. A

9. B

Part 2 10. False

11. False

12. False

13. False

14. True

Points to Stress 1.

Go over the deposit requirements. Stress that these deposits are for the total CPP plus EI for both the employee and employer as well as Income Tax. Point out the shortcut calculation material earlier.

Careful and accurate work in preparing the payroll will make the annual task of balancing T-4 steps to the T-4 Summary and ledger accounts a much more pleasant experience.

Using a computer to assist in the payroll process is often desirable. Many smaller businesses computerize their payroll process first, using software like Sage 50.

There is an annual limit to CPP and EI contributions.

Many "optional" deductions are made each month (dental, health, charitable, etc.) and must be remitted to the appropriate parties. Stress that these deductions are often important — even from a legal standpoint, and they therefore must be handled with promptness, accuracy and care. Some insurance plans for example have clauses which permit the plan to be cancelled if the premiums are not paid promptly.

Students typically have little knowledge of Workers’ Compensation Insurance. Stress the following points: 1. 2. 3. 4.

The premium is based on the estimated payroll. The actual payroll is compared to the estimated at the end of the year. An adjustment is made in the premium. There are different rates of WCB for different companies. Some are riskier than others. Construction, for example, has more accidents than the travel agency business.

Chapter 10 - Page 108

Business World Notes 1.

At this point students will have realized that finding out what taxes to withhold can be confusing for an employer who is just starting out. Explain that employers can get information about payroll taxes from the local Chamber of Commerce or their accountant. There are also a number of useful booklets provided by CRA which help explain the many aspects of this topic.

Tell students that rather than bothering with all of these complicated rules and taking the chance of being penalized for late deposits, many small business owners simply deposit their payroll taxes from each payroll on the day they pay the payroll.

Explain that employers fill out one original and three copies of the T-4 form. These go to: Original — CRA (along with T-4 Summary) Copy A — The employee for filing with his or her tax return. Copy B — The employee for filing for his or her own records. Copy C — Kept by the employer.

Each province has its own rules about how employers must fund Worker’s Compensation. Generally employers contribute to a provincially-administered plan. There are often rewards in the form of lower rates for businesses with above-average safety records.

Many large employers are permitted to file their T-4 and T-4 Summary information by way of computer-readable media such as a data CD or DVD. Not only is paper saved, the process can be very efficient in terms of time saved.

Class Activities 1.

Have students contact CRA (using the Internet can be a great idea) for samples of various forms. This will give them a chance to compare them to the examples shown in the chapter.

Have students go over the blueprint (p. 466) in class, finding specific examples from the example discussed in the text of the chapter.

Point out to the class that many tax and bookkeeping services will supply their clients with a monthly tax calendar to remind their clients of key dates.

You might want to ask how many of your students would be willing to put aside more than their CPP deductions to help fund future retirement benefits. The common perception is that younger workers have no interest in additional savings for retirement, Copyright © 2015 Pearson Canada Inc.

Chapter 10 - Page 109 which they imagine is way too far in the future to be worth bothering about. Is this really true? Check with your students and find out! 5.

See if you can arrange a visit by a representative of a local bank which provides payroll services. Other independent firms may also be interested in explaining their services to a class of students.

Have the students complete Problem 10C-6 (pp. 481-482) with different assumptions. For example, assume that the company matches the dental plan deduction.

Teaching Tips 1.

Take a moment in class to review the business math fundamentals of changing percents to decimals.

Repeat the formula for determining the monthly remittance to CRA: Income tax deducted x 1 + CPP deducted x 2 + EI deducted x 2.4

Obtain copies of the form PD7A (photocopies will be acceptable) and ask students to fill it in for Problem 10C-6 (pp. 481-482). Tell why businesses should try to avoid the penalties for late remittances. I have often found students need to be reminded that the remittances are in a real sense the property of the employees and the law is correct in treating late remitters with firmness. In fact, the directors of a company have been held personally responsible for payment of these deductions, even if their company goes into bankruptcy!

Typical Student Misconceptions 1.

Most students (like nearly all younger workers in Canada) do not understand the Canada Pension Plan rules. Stress that CPP contributions have increased from 1.8% to just under 5% over a 20-year period. This represents a 278% increase! Currently there is some talk about whether the deduction percentage needs to go higher, and whether a supplementary plan is needed for Canadian workers. The current government has shown no interest in revising the Canada Pension Plan, but has recently introduced a design for a supplementary plan that is designed to allow workers who want to, to put aside funds to help out in their retirement years.

You might want to mention that in the USA, they refer to Social Security, and this plan has many similarities to Canada’s CPP. The rates in the US are currently around 7%, and their legislators are saying that their plan is in trouble.

Many students do not know that the Record of Employment form must be completed only when an employee leaves the business. It is based on weekly figures, so expect some complications if the comparing payroll is monthly or semi-monthly. Copyright © 2015 Pearson Canada Inc.

Chapter 10 - Page 110

Check Figures for Exercises Set A 10-1A. Employee benefits expense: $163.20 10-2A. Employee benefits expense: $571.40 10-3A. Total remitted: $2,171.40 10-4A. Total employee benefits expense: $251.80 10-5A. Total employee benefits expense: $266.40 10-6A. Total to be remitted: $2,076.20 Set B 10-1B. Employee benefits expense: $180.80 10-2B. Employee benefits expense: $610.40 10-3B. Total remitted: $2,380.40 10-4B. Total employee benefits expense: $276.20 10-5B. Total employee benefits expense: $291.80 10-6B. Total to be remitted: $2,332.00

Check Figures for On-the-Job Training T-1.

Approximate payroll tax cost to hire 50 workers directly: 5% CPP + (1.88% x 1.4 for EI) + vacation pay 4% = Approx. 12% cost). $10 x 1.12 = $11.20 which is less than $12.00. The total including the cost of Worker’s Compensation will probably still be less than $12.00. Non-financial considerations must also be considered. These would include the extra effort to supervise employees rather than contract workers; the cost of administering the payroll records for employees; and the possibility of obligation to employees for ongoing work. Additionally, unsuitable workers are more easily replaced and often training costs are borne by the agency.

Check Figures for Continuing Problem Payroll Register, December 24: Aurelle Hall Net Pay

$605.04

Chapter 10 - Page 111 Payroll Earnings Record, Aurelle Hall Net Pay 2016

$4,928.90

Check Figures for Mini Practice Set Payroll Register Net Pay, September 21, 2018

$2,646.43

September 28, 2018 Employee Benefits Expense 160.36 CPP Payable 102.23 EI Payable 58.13 To record employee benefits expense for September 28.

Chapter 10 - Page 112

Chapter 11 Class Quiz 1.

True or false: (Review for Chapter 10) a. b. c. d.

True or false: a. b. c.

CPP (employee) + CPP (employer) + EI + Income tax = Payroll Tax Expense. (false) The Payroll Tax Expense is recorded when the payroll is recorded. (true) Employees complete Form T-4. (false) The total of all cheques to employees each pay period equals the payroll tax liability. (true)

In Self-Review Quiz 11–3 (pp. 515-517) why didn’t Munroe set up a special journal for Sales Returns and Allowances? Answer: Since there are few returns and allowances, the general journal is adequate.

Accounting Recall A Cumulative Approach This Examination Reviews Chapters 1 through 11. PART 1 Vocabulary Review Match each term on the left side with the appropriate definition or phrase in the right-hand column. Page Ref. (317) 1. Cheques outstanding (448) 2. GST/HST (270) 3. Purchases journal

A. A contra-expense account B. Issued by a buyer to the seller C. Special journal that records buying on account

Chapter 11 - Page 113 (252) (266) (255)

4. Sales journal 5. Purchases Discounts 6. Credit memorandum

(422) (270) (275) (264)

7. PD7A 8. Debit memorandum 9. Cash payments journal 10. Purchases

D. Sales on account E. Federal taxes F. Form completed monthly for income tax, CPP, and EI G. Merchandise for resale H. Payment by cheque I. Issued by seller J. Cheques not yet processed by the bank

PART 2 True or False (Accounting Theory) (450) (462) (256) (371) (253)

11. PST is a value-added tax. 12. The controlling account balance at the end of the month will equal the sum of the subsidiary ledger. 13. Issuing a credit memo results in sales returns and allowances decreasing. 14. CPP is always an equal deduction every month. 15. A check-mark means the controlling account has been updated.

Solutions to Accounting Recall Part 1 1. J

2. E

3. C

4. D

5. A

6. I

7. F

8. B

9. H

10. G

Part 2 11. 12. 13. 14 15.

False - GST/HST are value-added taxes, but PST is a "simple" sales tax True False; SRA is increasing False False; subsidiary account has been updated

Points to Stress 1.

It is always useful to help students understand the difference between sales taxes and a value-added tax like GST/HST. Do not get carried away here - the topic is quite complex, actually, but the basic differences are understandable.

The subsidiary ledgers (AR and AP) are organized in alphabetical order. We use record to update these sub-ledgers. We use post to update general ledger accounts.

Chapter 11 – Page 114 3.

The normal balance in the accounts receivable ledger is a debit balance. Have students go over Figure 11–17 (pp. 513-514), to reinforce this point. Stress that the balances in the accounts payable ledger are typically credits. Figure 11-17 shows this clearly.

Sales Tax Payable is a liability found in the general ledger with a credit balance.

GST/HST Payable is likewise a liability account found in the general ledger. (Also a credit balance, of course BUT...) Since GST /HST are value-added taxes, the amount of GST/HST paid on purchases must be separately tracked so these amounts can be deducted from the GST/HST collected each period. GST/HST paid is a debit balance account, and is sometimes listed with current assets. However, other companies list the debit-balance account within the current liabilities section to stress its intimate relationship with GST/HST collected.

All receipts of cash go in a cash receipts journal. Payments of cash are recorded in the cash disbursements journal.

The cash receipts journal can be designed to record GST/HST and PST by adding these two columns. Likewise, the CPJ can have these columns added as well. However - the vast majority of GST/HST transactions happens in the Sales and Purchases journal, since the Canadian requirement is to record GST/HST when it is billed, not when it is received. Note that this also means that any GST/HST that appears on purchase invoices is recorded along with these invoices as they are journalized - not when payment is made.

Stress that the process of requesting, ordering, receiving verifying and paying for things a company usually purchases is quite involved, and needs an organized approach to be both accurate and efficient. The use of a computer can make parts of this process more efficient, but other parts still require "feet on the ground" - verifying quantities received, for example.

Business World Notes 1.

Sellers are willing to offer cash discounts because customers are more likely to pay early and the seller needs the cash to replenish inventory stocks. This also helps to minimize bad debt losses because funds are collected from customers earlier. Vendors have exactly the same concerns, of course, which is why purchase discounts are often made available.

For many students it is mathematically-challenging to do the precise calculation needed to determine the exact annual percentage inherent in a cash discount offered by vendors. You might show them a calculation, or just ask them to believe you that these rates often exceed 25% - an astonishingly high figure, and one that most businesses should take full advantage of. Note that it is not the usual practice to take these discounts on the GST/HST (or freight) portions of a given invoice.

Chapter 11 - Page 115 3.

Because there is a separate account kept for each accounts receivable customer it is very easy to check the balance owed by a particular customer and to prepare end of the month statements. Computers make this even easier, and can at the touch of a few keys, provide enormous quantities of detail, which can make collecting amounts owed easier and more efficient. Computers also allow monthly statements to be easily printed, and some software will even send out copies using e-mail, so both time and money are used efficiently.

The same thing is true with respect to amounts owed. It is important to keep up-to-date and accurate records of amounts owed to vendors. Again, computers can make this process more efficient, and allow for nearly instantaneous reporting on a case-by-case basis if the need arises.

It is necessary to record to the accounts receivable ledger daily since the customers’ accounts need to be up to date, so we can keep close track of outstanding balances, compare them to payments received, and take action on overdue amounts. The very same argument applies to amounts owed to vendors - the accounts payable

The business collects sales taxes but will not keep the tax collected. It must pay this to the provincial taxing authority and submit a sales tax return at the end of the month, quarter, or whatever period the law requires. All amounts collected are a current liability until paid.

Suggest to students that GST/HST is a Federal tax (it is shared with the provinces, of course - but it is a federal tax) and all GST/HST collected must be sent to the CRA (cheque to the Receiver General) at least annually. Many larger businesses must send in the tax more often than that, eg. quarterly or monthly. Also mention that the GST/HST that companies pay on their purchases is deducted from the GST/HST they owe. It is a serious error in accounting to fail to keep proper account of any GST/HST paid - since failure to do this properly can result in significant losses.

Sales returns are recorded in a separate account instead of being debited directly to the sales account so that businesses can keep track of the dollar amount of returns and investigate the cause if returns represent an unusually high percentage of sales. Same reasoning applies to Purchase returns, and that is also tracked separate from the Purchases account.

Point out that where a sales return occurs, the PST and GST/HST must also be reversed if it was charged originally. The transaction should be reversed as far as these two accounts are concerned.

10.

Advise that most computer software available in Canada today is designed to assist businesses with the collection, reporting and remitting of GST/HST (and PST). These programs can save a lot of manual effort when it comes time to fill in and mail a GST/HST or PST report. Less well known is the fact that any auditor from the taxing authority will take a very positive attitude towards a company with careful, accurate and up-to-date records. These records can be either manual, or computer based - the Copyright © 2015 Pearson Canada Inc.

Chapter 11 – Page 116 important thing is that the records themselves convey the reality that the company is keeping careful and accurate track of the taxes they owe - and paying them on time, of course!

Class Activities 1.

Ask the class to investigate the taxes charged in a couple of other countries. Ask various class members to investigate a selected other country. Many will be amazed to learn about taxes in other lands. As one example, most European countries (the best example might be the UK) have VAT (the equivalent of our HST) at about the 17% rate. Many retailers from the UK will deduct this tax from their price if the goods are sent to Canada.

Have students crossfoot the cash receipts journal on Page 461 without looking at the bottom of the page. Same task can be assigned for the cash disbursements journal on page xxx.

Ask students to explain how to post the sundry column in the Solution to Self-Review Quiz 10–2, Page 463.

This might work best for students in B. C. but could be of more general interest. Ask your students why that province gave up collecting HST and went back to collecting both PST and GST.

To really liven up a class session, ask students to say whether they think taxes are "fair". Leave the definition of taxes very flexible - it could mean income taxes, property taxes, sales taxes or value-added taxes like GST/HST. Introduce, for extra "seasoning" the concept of the tax holiday - that day in the year when the average tax-payer in a given province reaches the point when they work for themselves, and not to pay taxes of one sort or another. Do not be surprised if students refuse to believe that this date is generally in late summer for most Canadians!

Teaching Tips 1.

Go over Figure 11–14 (p.509) with students in class. Be sure to explain that the sundry column will record all non-purchases bought on account. It might also be helpful to turn to the sales journal in Figure 11–3) (p. 494) to show a comparison between the accounts payable and accounts receivable ledgers.

Go over Figure 11–6 (p. 497) in class, and have the class also turn to Figure 11-12 (p. 508) and compare. Show the similarities as well as the differences in the two figures.

Chapter 11 - Page 117 4.

You may choose to explain all of the new merchandising transactions in Chapters 6 and 10 using a general journal so that the students can concentrate on the accounts debited and credited. The use of special journals then can be added to this basic understanding.

It is all the recording and posting rules that scare students. Show them the blueprint at the end of the chapter (pp. 527-528), where all the rules are summarized in one place. Tell them also that the more they practice, the easier it will get — repetition does work.

It’s a good idea to go over the transaction analysis chart showing that Sales Returns and Allowances is a contra revenue account that is increasing; it has a normal balance of a debit. The same advice applies to a Purchase Return is a contra-expense account, and has a normal credit balance.

Point out to students that accounting for GST/HST can become very complex. There are many special rules that complicate matters - some are borderline humorous - like buying 5 donuts is a snack (GST/HST applies), but 6 donuts is a food item (no GST/HST)! Other types of events are a lot more complex - what happens to the GST/HST when an account is not collected, for example.

It is sometimes a challenge to explain fully, but students might appreciate knowing that sometimes, a company can receive a refund of GST/HST in a given period. If a company makes a large purchase of equipment for example, there will be GST/HST payable on that, and this can be deducted from GST/HST otherwise payable on goods and services sold. That can result in a refund of GST/HST on occasion.

Go over Figure 11-7 (p. 498) to stress the steps in recording and posting. From Figure 11–7 (p. 498) go to the blueprint at the end of the chapter (pp. 527-528) which summarizes the rules of posting and recording.

10.

Stress that the credit memo credits Accounts Receivable — it’s an easy way to remember it.

11.

If time permits, go into a bit of detail concerning the GST/HST. This is a Value Added Tax similar to the taxes often found throughout Europe. If you have them handy, show your student some samples of GST/HST remittance reports. You may occasionally find newspaper articles dealing with the GST/HST which are of interest to most students.

12.

Point out that totals of special journals are not posted until the end of the month, but the individual postings to AR or AP are made to the individual accounts right away.

13.

Mention that large businesses often use a computer software package that can produce journals with an almost unlimited number of columns. The addition of GST/HST to the journals makes little difference to the detail level needed here. Remind the class to think about the example provided in Chapters 6 and 7 that referred to the many departments that Canadian Tire or The Bay would keep track of as far as sales/purchases are concerned. Copyright © 2015 Pearson Canada Inc.

Chapter 11 – Page 118

Typical Student Misconceptions 1.

Students often think that a purchase order and a purchase requisition are the same thing. Take students through the nine steps in purchasing merchandise from Chapter 7 (pp. 300303), stressing that it is the purchase requisition that in turn creates the purchase order.

Students want to take the discount off the total invoice price (which often includes GST/HST, sometimes PST, and often freight, etc.). Stress that the discount is taken on the selling price only, less any returns of course. Discounts are rarely taken on taxes, freight, etc.

Students have a hard time keeping debit and credit memos straight. Have them compare blueprints at the end of Chapter 11 (pp. 527-528). Stress that a seller issues a credit memo to a buyer, and a buyer issues a debit memo to a seller.

Students think that returns and allowances always gets credited. This is often true, but not always — if equipment is returned, the credit goes to the Equipment account.

Students think that a trade discount is the same as a cash discount.

Check Figures for Exercises Set A 11-1A. Balance in Accounts Receivable, Dr.: $1,575 11-2A. Total of Sales Journal: $3,570 Balance of Bass Co.: $1,890 Dr. 11-3A. Discount: $24 Payment Required: $1,236 11-4A. Boston Co. paid $678. 11-5A. A/P Subsidiary Ledger: $1,890 11-6A. Purchases Returns and Allowances, Cr, $400; Prepaid GST $20 11-7A Cheque to A. James: $1,030 11-8A A/P Subsidiary Ledger: $1,155 11-9A HST to remit: $14,300

Chapter 11 - Page 119 Set B 11-1B. Balance in Accounts Receivable, Dr.: $1,575 11-2B. Total of Sales Journal: $3,885 Balance of Bass Co.: $1,890 Dr. 11-3B. Discount: $30 Payment Required: $1,545 11-4B. Boston Co. paid $1,243. 11-5B. A/P Subsidiary Ledger: $1,890 11-6B. Purchases Returns and Allowances, Cr, $250; Prepaid GST $12.50 11-7B Cheque to A James: $1,133 11-8B A/P Subsidiary Ledger: $1,155 11-9B HST to remit: $12,320

Check Figures for On-the-Job Training T-1.

Because of fierce competition in the business world, all discounts should be taken. This improved the company’s competitive position

T-2.

Sales Journal – Accounts Receivable, Dr. = $3.650; Sales, Cr. = $3,650 Ron should be advised that using a computer with appropriate software (such as Simply Accounting) can help in preventing these sorts of disasters, as long as the software is backed up periodically and a copy kept at an appropriate off-site location.

Check Figures for Continuing Problem January 31, 2017

Cash Column in CRJ Dr.

Schedule of Accounts Receivable

$86,282.24

$4,425

Chapter 12 - Page 120

Chapter 12 Class Quiz 1.

True or false: (Review for Chapter 11) a.

A modified cash system tends to distort financial reports more than a strictly cash basis. (false)

A modified cash system does not have account titles for Accounts Receivable or Accounts Payable in its chart of accounts. (true)

In a cash basis system there are no liability accounts for CPP or EI. (true)

Payroll Tax Expense records federal income tax. (false)

A company using a synoptic journal in accrual accounting will have subsidiary ledgers. (true)

In class, go over Figure 12–4 (p. 559) by asking students to categorize each account title along with the report it is found on and its normal balance. (Do not let them look at Table 12–4 (p.559)!

Have students make up transaction analysis charts for the adjustments in Self-Review Quiz 12–2 (p. 567).

Accounting Recall A Cumulative Approach This Examination Reviews Chapters 1 through 12. PART 1 Vocabulary Review Match each term on the left side with the appropriate definition or phrase in the right-hand column. Page Ref. (547) 1. Interest expense (248) 2. Sales returns and allowances

A. A liability B. Cost of goods sold

Chapter 12 – Page 121 (542) (142) (188) (544) (544) (264) (187) (542)

3. Ending merchandise inventory 4. Accumulated depreciation 5. Income summary 6. Rental income 7. Unearned revenue 8. Purchases 9. Closing 10. Perpetual inventory

C. Continual track D. Contra-asset E. Non-operating expense F. New figure for capital G. Subtracted from cost of goods sold H. Other income I. Contra-revenue account J. Used in adjusting merchandise inventory

PART 2 True or False (Accounting Theory) (544) (542) (542) (414) (188)

11. Unearned rent is an asset. 12. Beginning and ending inventory are combined on the worksheet. 13. Ending inventory is added to cost of goods sold. 14. Due to CRA is a liability that includes only amounts deducted from employees. 15. The normal balance of Income Summary is a debit.

Solutions to Accounting Recall Part 1 1. E

2. I

3. G

4. D

5. J

6. H

7. A

8. B

9. F

10. C

Part 2 11. 12. 13. 14. 15.

False False False False False

Points to Stress 1.

The debit side of the Income Summary account records beginning inventory. The credit side of the Income Summary account records ending inventory.

When the worksheet is prepared, these two figures will not be combined in Income Summary.

Chapter 12 – Page 122

Business World Notes 1.

Students may be interested to note that the trend is for businesses to switch to the perpetual inventory system as computers make the large amount of recordkeeping required by this method more practical.

Taking a physical inventory can be an enormous task. The business may be closed for one or more days and temporary employees or an inventory counting service may be brought in to perform the count.

A physical inventory is necessary not only to supply the correct figures for the financial statements but also to detect shortages due to theft or fraud.

Remind students that many businesses choose a fiscal year so that the year end date will fall when the inventory is naturally low. This means that the job of counting the inventory is easier.

You may want to point out that, if a business does not prepare interim statements, they will only need to make adjustments at the end of the year.

Explain that the payroll taxes do not legally become a liability until the payroll is actually paid. Therefore, there is no need for an adjusting entry for payroll taxes.

Class Activities 1.

Have students go over Figure 12–3 (p. 558) and check off all the new titles introduced since Chapter 5 (the cycle for a service company).

In Figure 12–5 (p. 562), note the following: a. b.

On the Merchandise Inventory line, the $4,000 and $19,000 are not combined. On the Income Summary line, the $19,000 and $4,000 are not combined. Ask students why this is so.

In Figure 12–6 (p. 563), note that the figures for $19,000 and $4,000 are carried over to the Income Statement columns. Ask students why this is so.

Have students look at the worksheet and cover up the last three sections. Go over it step by step with them. For example, on the Income Summary line, adjustments section, we see a debit of $19,000 and a credit of $4,000 — do we then bring over $15,000 to the adjusted trial balance?

Chapter 12 – Page 123 5.

Ask students to look at Figure 12–7 (p. 564) and answer the following questions: a. b. c.

Why is Merchandise Inventory $4,000 and not $15,000? Shouldn’t Unearned Rent be $200? (answer, no, the revenue is $200) Will the total of the column, $45,020, be the same total when the formal report is prepared? (answer, no)

Have students look at the blueprint (p. 570), going over each line. Stress that the worksheet only shows adjustments for inventory here. In reality, there are, of course, more adjustments — the blueprint is emphasizing inventory adjustment.

Teaching Tips 1.

Before trying to explain the adjustment for Merchandise Inventory, have students look at Figure 12–2 (p. 556). Stress the following: a.

Beginning inventory is assumed sold and is a cost on the income statement.

Ending inventory is made up of goods not sold and is not recognized as a cost until the goods are sold.

Review the transaction analysis charts in the margin of p. 557.

Show the students in Figure 12–3 (p. 558) that Unearned Rent, Account #218, is listed under the liabilities for the company.

Take the time to review Table 12–1 (p. 560). Be sure to completely review Merchandise Inventory.

Go over each adjustment shown on the T-accounts and transactional analysis charts (pp 548-549). After talking about an adjustment, have them turn to Figure 12–5 (p. 562) and show them there how it is placed on the worksheet.

Typical Student Misconceptions 1.

Students usually want to combine Beginning and Ending Inventories. Emphasize that these are two separate figures calculated at two different times.

Students think that Unearned Rent is revenue. Emphasize the fact that it is a liability. The revenue (Rental Income) is not recorded until it is earned.

Most students do not realize that an inventory count can take place during a year - it does not have to be done at year-end with all of the upset that entails. Parts of inventory can be counted during the year, and the results compared to what should be on hand. This is Copyright © 2015 Pearson Canada Inc.

Chapter 12 – Page 124 especially possible if a company has a limited number of product categories that can be separated for individual attention. This idea may not work too well if there is just a single category of product sold. If it is attempted, it should be with the approval and guidance of the firm's professional accounting advisor(s).

Check Figures for Exercises Set A 12-1A. a. b. c. d. e. f. g. h.

Cr. Expense (Contra) Dr. Asset (at end of period it is part of COGS) Dr. Expense Dr. Expense Cr. Expense (Contra) Dr. Contra Revenue Cr. Liability Cr. Liability

12-2A. a. b. c. d.

$21,250 $13,340 $7,910 $4,310

12-3A. Unearned Janitorial Services, Liability, Dr., $400 Janitorial Services, Revenue, Cr., $400 12-4A. a. b. c.

$440,000 $390,000 $370,000

12-5A. Net Loss: $1 Set B 12-1B. a. b. c. d. e. f. g. h.

Dr. Contra Revenue Dr. Asset Cr. Revenue Dr. Expense Dr. Expense Cr. Expense (Contra) Cr. Liability Cr. Asset

12-2B. a. b. c. d.

$19,200 $14,050 $5,150 $250

Chapter 12 – Page 125

12-4B. a. b. c.

$434,000 $390,000 $358,000

12-5B. $0 Net Income or Net Loss

Check Figures for On-the-Job Training T-1.

$53,050

T-2.

Sit. 1) $100,000; $60,000; -$20,000 (note – loss) Sit. 2) $240,000; $180,000 Sit. 3) $220,000; $260,000 Sit. 4) $460,000; $300,000; $20,000 Sit. 5) $180,000; $200,000; $100,000 Sit. 6) $180,000; $120,000; $80,000 Sit. 7) $400,000; $240,000; $180,000 Sit. 8) $100,000; $160,000; $120,000

Check Figures for Continuing Problem Trial Balance $264,158.81 Net Income

$ 88,457.36

Chapter 13 – Page 126

Chapter 13 Class Quiz 1.

True or false: (Review for Chapter 12) a.

Merchandise Inventory is found only on the balance sheet. (false)

Unearned Rent is a liability. (true)

On the worksheet, Income Summary contains part of the adjustment for Merchandise Inventory. (true)

Ending Inventory of one period represents goods assumed sold. (false)

Sales Returns and Allowances is a contra-cost of goods sold account. (false)

Accounting Recall A Cumulative Approach This Examination Reviews Chapters 1 through 13. PART 1 Vocabulary Review Match each term on the left with the appropriate definition or phrase in the right-hand column. Page Ref. (579) 1. Current asset (579) 2. Current liabilities (266) 3. Purchases discounts (188) (576) (132) (576) (579)

4. 5. 6. 7. 8.

Income summary Administrative expenses Accumulated depreciation Net sales Capital assets

(579) (587)

9. Long-term liability 10. Reversing entries

A. General expenses B. Contra-asset C. Converted into cash or used within one year D. Contra-expense E. Land F. Mortgage Payable G. Optional bookkeeping H. A temporary account used only at period-end I. Sales–SRA–SD J. Due with on year

Computer Assignments - Page 127

PART 2 True or False (Accounting Theory) (48) (587) (587) (579) (576)

11. There are debit and credit columns on the formal reports. 12. Reversing entries are the same as adjusting entries. 13. All adjustments should be reversed. 14. Equipment is a current asset. 15. Administrative expenses are directly incurred in the selling of goods.

Solutions to Accounting Recall Part 1 1. C

2. J

3. D

4. H

5. A

6. B

7. I

8. E

9. F

10. G

Part 2 11. 12. 13. 14. 15.

False False; opposite False False; Capital Asset False; indirectly

Points to Stress 1.

Show how the formal income statement in Figure 13–1 (p. 589) uses two separate figures for beginning and ending inventories.

Show in the income statement (p. 589) how Rental Income for $200 less Interest Expense of $300 reduced Net Income from Operations from $13,845 to $13,745.

Remember that Payroll Tax Expense of $420 (p. 589) records the employer’s payroll tax responsibilities.

Talk about selling expenses vs. administration expenses.

Compare other income and other expenses to revenue and expenses on the income statement.

Explain the difference between current assets and plant and equipment.

Explain the difference between current liabilities and long-term liabilities.

Computer Assignments – Page 128

In the account for Income Summary on the partial worksheet (p. 589), note that the $19,000 and $4,000 are the result of the adjusting process.

10.

Income Summary does not have a normal balance of a debit or a credit.

11.

The steps for the closing entries are basically the same for a merchandising business as for a service enterprise.

Business World Notes 1.

Because other income and other expenses are shown separately from the rest of the revenues and expenses, managers are able to see the figure Net Income from Operations. This figure gives them an idea of how well the business is performing its main business activity.

By totalling the different classifications of assets and liabilities on a classified balance sheet, managers are better able to judge how much of the liabilities are due soon and how much of their assets are available for paying them and operating the business.

By using the worksheet, accountants can prepare the financial statements quickly and then complete the “clean up” work of journalizing and posting adjusting and closing entries without delaying the statements needed by managers. Of course, using a computer and appropriate software make the preparation of financial statements even more timely.

Most businesses start each year with new ledger forms. The balance for each of the permanent accounts can be taken from the post-closing trial balance once it has been proven to balance.

In larger businesses the individual in charge of payroll may not even know what adjustment was made for salaries and how this should affect the entry made when the payroll is paid. In a small business, the professional accountant may make the adjustment without the accountant seeing it. If a reversing entry is used the payroll accountant can make the normal entry to pay payroll.

Class Activities 1.

Have students take number in the cost of goods sold section and relate it back to Figure 13–1 (p. 589).

Have students turn to the worksheet in Self-Review Quiz 12-2 (p. 592) and go down the worksheet categorizing and classifying each account and indicating which report it can be found on. After doing this, have them turn to the Solution to Self-Review Quiz 13–1 (pp. 593-595) to review the account classifications and which report each account is found on. Copyright © 2015 Pearson Canada Inc.

Computer Assignments - Page 129 3.

Have students draw transaction analysis charts for p. 597.

Teaching Tips 1.

This is a great time to review the payroll titles on the worksheet. You may want to refer students to the payroll chapters (Chapters 9 and 10) to reinforce key points.

Ask students why the $4,000 figure in the adjustments column of Merchandise Inventory (p. 589) was carried over to the adjusted trial balance and balance sheet columns.

Go over Figures 13–5 and 13–6 (pp. 601-602) with the class. Ask students to give you a very simple explanation of reversing entries. This is an area where T-accounts are very helpful. Also ask students the purpose of reversing entries.

Typical Student Misconceptions 1.

Students want to combine beginning and ending inventories for Merchandise Inventory. Stress that the beginning and ending inventories are not combined.

Students get confused about the relationship between Unearned Rent and Rental Income. Stress that Unearned Rent is a liability in the amount of the rental payments we have received and not earned, and Rental Income is the amount of rent we have earned (no matter when we receive the cash).

Students think that inventory is part of the closing process. Take the four steps of the closing and relate them back to the worksheet. Take time to reinforce the point that in the ledger, Income Summary already contains the adjustment for Merchandise Inventory. Note: You might want to mention that there is an alternative method of doing closing in which inventory is part of the closing process.

Computer Assignments – Page 130

Check Figures for Exercises Set A 13-1A. Cost of goods sold: $51,300 13-2A. a. b. c. d. e. f. g.

Accrued Salaries; L.; C.L.; B.S. Accounts Payable; L.; C.L.; B.S. Mortgage Payable; L.; Long-Term; B.S. Unearned Legal Fees; L.; C.L.; B.S. Income Tax Payable; L.; C.L.; B.S. Office Equipment; A.; Capital Asset; B.S. Land; A.; Capital Asset; B.S.

13-3A. Income Summary A. Slow, Capital

805 805

13-4A. Total Assets: $2,104 13-5A. a. b. c.

Dec 31 Salaries Expense Accrued Salaries

300

Jan 1 Accrued Salaries Salaries Expense

300

Feb 3 Salaries Expense Cash

300 300 6,000 6,000

Set B 13-1B. Cost of goods sold: $57,400 13-2B. a. b. c. d. e. f. g.

Mortgage Payable; L.; Long-Term; B.S. Accounts Receivable; A.; Current Asset; B.S. Accrued Rent; L.; C.L.; B.S. Unearned Accounting Fees; L.; C.L.; B.S. CPP Payable; L.; C.L.; B.S. Vehicles; A.; Capital Asset; B.S. Accumulated Depreciation, Vehicles; Contra-Asset.; Capital Asset; B.S.

13-3B. Income Summary A. Slow, Capital

1,439 1,439

13-4B. Total Assets: $3,513 13-5B. a. b.

Dec 31 Salaries Expense Accrued Salaries

700

Jan 1 Accrued Salaries Salaries Expense

700

Computer Assignments - Page 131 c.

Feb 3 Salaries Expense Cash

7,500 7,500

Check Figures for On-the-Job Training T-1.

Net Income from operations: $1,732.00

T-2.

Total Assets: $175,850.00

Check Figures for Continuing Problem Net Income, July 31, 2017

$88,457.36

Total Assets

$85,821.55

Check Figures for Mini Practice Set Total of Sales Journal, Dress Sales, Cr.: Total of Cash Dr. column in CRJ: Sales Discount total in CRJ: Total of Cash Cr. column in CPJ: Net Income:

$3,183.35 $22,570.13 $18.68 $21,903.21 $16,770.18