DE ANZA COLLEGE ACCOUNTING 1A EXTRA CREDIT ASSIGNMENT. (Manual Case, and Working Papers) Scott Osborne, CPA

Transcription

1 DE ANZA COLLEGE ACCOUNTING 1A EXTRA CREDIT ASSIGNMENT (Manual Case, and Working Papers) by Scott Osborne, CPA 1

2 EXPLANATION OF EXTRA CREDIT ASSIGNMENT The extra credit assignment consists of a manual accounting exercise (the Garcia case). You will enter the transactions in the respective special journals and post to the general ledger and subsidiary ledgers. You will prepare a worksheet, enter adjusting entries on the worksheet, prepare financial statements, and close the books. You will make sure that your adjusting and closing entries are entered in the journals and posted. Finally, you will prepare a post-closing trial balance and reconcile the subsidiary ledgers to the general ledger. Please note that the Garcia Company uses the periodic inventory system. You will need to consult Appendix C starting at the end of the text. Blank working papers are included for the above steps. Please submit the assignment in the following order: 1 SALES JOURNAL USE MANUAL WORKPAPERS & PENCIL 2 PURCHASES JOURNAL USE MANUAL WORKPAPERS & PENCIL 3 CASH DISB. JOURNAL USE MANUAL WORKPAPERS & PENCIL 4 CASH RECEIPTS JOURNAL USE MANUAL WORKPAPERS & PENCIL 5 GENERAL JOURNAL (2 PAGES) USE MANUAL WORKPAPERS & PENCIL 6 GENERAL LEDGER USE MANUAL WORKPAPERS & PENCIL 7 AR & AP SUB LEDGERS USE MANUAL WORKPAPERS & PENCIL 8 WORKSHEET USE MANUAL WORKPAPERS & PENCIL 9 INCOME STATEMENT USE MANUAL WORKPAPERS & PENCIL 10 STMT OF OE. USE MANUAL WORKPAPERS & PENCIL 11 BALANCE SHEET USE MANUAL WORKPAPERS & PENCIL 12 POST CLOSE T/B USE MANUAL WORKPAPERS & PENCIL 13 SCHEDULE OF AR & AP USE MANUAL WORKPAPERS & PENCIL 2

3 DE ANZA COLLEGE Accounting 1A Extra Credit Assignment G.R. Garcia CO. G.R. Garcia CO. closes its books and prepares financial statements at the end of each month. The company uses the PERIODIC inventory method. The company completed the following transactions during May: MAY 1 Issued check for office rent for the current month. (Debit rent expense) CHECK #: 1062 AMOUNT: $4,700 2 Issued check to pay salaries. Part of this amount had been accrued last month. The company does not use reversing entries. CHECK #: 1063 AMOUNT: $1,550 AMOUNT ACCRUED AS SALARY PAYABLE LAST MONTH: $475 2 Issued invoice for sale on account. INVOICE #: 225 AMOUNT: $6,500 CUSTOMER: HUANG CO. 3 Purchased inventory on credit; terms 1/15, n/60. VENDOR: HOWELL INC. AMOUNT: $2,300 4 Received net amount of cash on account from customer within discount period. CUSTOMER: SCHILLING CO. AMOUNT: $5,292 4 Sold inventory for cash. AMOUNT: $7,200 5 Issued credit memo for merchandise returned by customer to G.R. Garcia CO. Cr Memo #: 173 AMOUNT: $250 CUSTOMER: LEUNG, INC. 5 Issued check to purchase supplies for cash. CHECK #: 1064 AMOUNT: $1,375 6 Collected interest revenue. AMOUNT: $880 7 Issued invoice for sale on account. INVOICE #: 226 AMOUNT: $8,700 CUSTOMER: MCGUIRE, CORP. 8 Issued check to pay vendor part of the amount owed last month. Payment occured after the end of the discount period. CHECK #: 1065 AMOUNT: $7,200 VENDOR: ALCALA, LTD. 11 Issued check to pay vendor the net amount owed from the 3rd of the month. CHECK #: 1066 VENDOR: HOWELL INC. 12 Received net amount of cash on account from customer in full settlement of the account receivable from the 2nd of the month. CUSTOMER: HUANG CO. page 1 3

4 MAY 16 Issued check to pay salaries. CHECK #: 1067 AMOUNT: $1, Purchased inventory for cash. CHECK #: 1068 AMOUNT: $1, Purchased furniture on credit; terms 3/15, n/60. VENDOR: CHUANG CO. AMOUNT: $1, Issued invoice for sale on account. INVOICE #: 227 AMOUNT: $16,200 CUSTOMER: SCHILLING CO. 24 Received half of the amount due on account from customer, regarding the prior month accounts receivable, after the discount period. CUSTOMER: MCGUIRE, CORP. 25 Issued check to pay utilities. CHECK #: 1069 AMOUNT: $1, Purchased supplies on credit; terms 2/10, n/30. VENDOR: ALCALA, LTD. AMOUNT: $ Returned damaged inventory from cash purchase on the 19th of the month, receiving cash. AMOUNT: $1, Issued credit memo for allowance granted to customer by G.R. Garcia CO. Cr Memo #: 174 AMOUNT: $150 CUSTOMER: MCGUIRE, CORP. 31 Purchased inventory on credit; terms 1/10, n/30. VENDOR: KENNEY CO. AMOUNT: $9, Issued check to pay owner for personal withdrawal. CHECK #: 1070 AMOUNT: $4,700 THE BALANCES IN THE SUBSIDIARY LEDGERS LAST MONTH WERE: ACCOUNTS RECEVABLE ACCOUNTS PAYABLE HUANG CO. $0 HOWELL INC. $0 SCHILLING CO. 5,400 ALCALA, LTD. 18,500 LEUNG, INC. 13,720 CHUANG CO. 0 MCGUIRE, CORP. 8,250 KENNEY CO. 0 $27,370 $18,500 page 2 4

5 THE POST CLOSING TRIAL BALANCE FROM LAST MONTH WAS: ACCT # ACCOUNT NAME DR CR 1001 CASH $12, ACCOUNTS RECEIVABLE 27, INTEREST RECEIVABLE INVENTORY 53, SUPPLIES 1, PREPAID INSURANCE 4, FURNITURE 63, ACCUMULATED DEPRECIATION $21, NOTES RECEIVABLE, LONG TERM 16, ACCOUNTS PAYABLE 18, SALARY PAYABLE INTEREST PAYABLE 1, UNEARNED SALES REVENUE NOTE PAYABLE, LONG TERM 38, OWNER'S WITHDRAWAL OWNER'S CAPITAL 99,255 TOTAL $179,420 $179,420 THE CHART OF ACCOUNTS ALSO INCLUDES THE FOLLOWING ACCOUNTS: ACCT # ACCOUNT NAME 3995 INCOME SUMMARY 4010 SALES REVENUE 4020 SALES DISCOUNTS 4030 SALES RTNS. & ALLOWANCES 5000 COST OF GOODS SOLD (CLOSING ONLY) 5010 PURCHASES 5020 PURCHASES DISCOUNTS 5030 PURCHASES RTNS. & ALLOWANCES 6010 SALARY EXPENSE 6020 RENT EXPENSE 6030 SUPPLIES EXPENSE 6040 INSURANCE EXPENSE 6050 UTILITIES EXPENSE 6060 DEPRECIATION EXPENSE 8010 INTEREST REVENUE 8510 INTEREST EXPENSE page 3 5

6 REQUIREMENTS 1. Open the accounts using the balances from the prior month in the various ledgers. 2. Journalize the current transactions in the proper journal. Use page numbers for each journal as follows: SALES JOURNAL PAGE 4 CASH RECEIPTS PAGE 11 PURCHASES JOURNAL PAGE 8 CASH DISBURSEMENTS PAGE 5 GENERAL JOURNAL PAGE 9 All credit sales by the company are made on terms of 2/10, n/ Post daily to the accounts receivable and payable subsidiary ledgers. At the end of the month, post to the general ledger. 4. Prepare a trial balance in the Unadjusted Trial columns of a worksheet. Then use the following information to enter the adjusting entries on the worksheet. Finally complete the worksheet. a. Accrued interest revenue: $720 e. Accrued salary expense: $1,250 b. Supplies on hand: $1,300 f. Accrued interest expense: $1,400 c. Prepaid insurance expired: $1,100 g. Unearned sales revenue:* $370 d. Depreciation expense: $2,280 h. Ending inventory: $59,000 *Sales revenue was credited when collected in advance. At the end of the month the above amount needs to be taken out of revenue and credited to the liability account "Unearned Sales Revenue". 5. Prepare a multiple-step income statement and statement of owner's equity for the month. Prepare a classified balance sheet as of the end of the month. 6. Journalize and post the adjusting and closing entries. 7. Prepare a post closing trial balance as of the end of the month. Also, prepare a schedule reconciling the balances in the A/R and A/P subsidiary ledgers to the balances for the control accounts in the general ledger. PLEASE SUBMIT YOUR ASSIGNMENT IN THE FOLLOWING ORDER. 1 SALES JOURNAL 8 WORKSHEET 2 PURCHASES JOURNAL 9 INCOME STATEMENT 3 CASH DISB. JOURNAL 10 STMT OF OE. 4 CASH RECEIPTS JOURNAL 11 BALANCE SHEET 5 GENERAL JOURNAL (2 PAGES) 12 POST CLOSE T/B 6 GENERAL LEDGER 13 SCHEDULE OF AR & AP 7 AR & AP SUB LEDGERS page 4 6

7 MANUAL CASE WORKPAPERS 7

8 DATE SALES JOURNAL PAGE 4 AR debit INVOICE post NUMBER ACCOUNT DEBITED ref. SALES credit 8

9 DATE PURCHASES JOURNAL PAGE 8 Credits Debits post ACCOUNTS ACCOUNT post ACCOUNT CREDITED TERMS ref. PAYABLE PURCHASES SUPPLIES TITLE ref. AMOUNT 9

10 DATE CASH DISBURSEMENTS JOURNAL PAGE 5 DEBITS CREDITS CK post OTHER ACCOUNTS PURCHASE # ACCOUNT DEBITED ref. ACCOUNTS PAYABLE DISCOUNTS CASH 10

11 DATE CASH RECEIPTS JOURNAL PAGE 11 DEBITS CREDITS SALES ACCOUNTS SALES OTHER ACCOUNTS CASH DISCOUNTS RECEIVABLE REVENUE ACCOUNT TITLE PR AMOUNT 11

12 GENERAL JOURNAL PAGE 9 Post DATE ACCOUNT TITLES Ref. DEBIT CREDIT 12

13 GENERAL JOURNAL PAGE 10 Post DATE ACCOUNT TITLES Ref. DEBIT CREDIT 13

14 GENERAL LEDGER ACCOUNT CASH ACCOUNT NUMBER 1001 ACCOUNT ACCOUNTS RECEIVABLE ACCOUNT NUMBER 1010 ACCOUNT INTEREST RECEIVABLE ACCOUNT NUMBER 1020 ACCOUNT INVENTORY ACCOUNT NUMBER 1030 General Ledger Page 1 14

15 ACCOUNT SUPPLIES ACCOUNT NUMBER 1040 ACCOUNT PREPAID INSURANCE ACCOUNT NUMBER 1050 ACCOUNT FURNITURE ACCOUNT NUMBER 1510 ACCOUNT ACCUMULATED DEPRECIATION ACCOUNT NUMBER 1520 ACCOUNT NOTES RECEIVABLE, LONG TERM ACCOUNT NUMBER 1810 General Ledger Page 2 15

16 ACCOUNT ACCOUNTS PAYABLE ACCOUNT NUMBER 2010 ACCOUNT SALARY PAYABLE ACCOUNT NUMBER 2020 ACCOUNT INTEREST PAYABLE ACCOUNT NUMBER 2030 ACCOUNT UNEARNED SALES REVENUE ACCOUNT NUMBER 2040 ACCOUNT NOTE PAYABLE, LONG TERM ACCOUNT NUMBER 2610 General Ledger Page 3 16

17 ACCOUNT OWNER'S WITHDRAWAL ACCOUNT NUMBER 3980 ACCOUNT OWNER'S CAPITAL ACCOUNT NUMBER 3990 ACCOUNT INCOME SUMMARY ACCOUNT NUMBER 3995 ACCOUNT SALES REVENUE ACCOUNT NUMBER 4010 ACCOUNT SALES DISCOUNTS ACCOUNT NUMBER 4020 General Ledger Page 4 17

18 ACCOUNT SALES RTNS. & ALLOW. ACCOUNT NUMBER 4030 ACCOUNT COST OF GOODS SOLD-CLOSING ACCOUNT NUMBER 5000 ACCOUNT PURCHASES ACCOUNT NUMBER 5010 ACCOUNT PURCHASES DISCOUNTS ACCOUNT NUMBER 5020 ACCOUNT PURCHASES RTN. & ALLOW. ACCOUNT NUMBER 5030 General Ledger Page 5 18

19 ACCOUNT SALARY EXPENSE ACCOUNT NUMBER 6010 ACCOUNT RENT EXPENSE ACCOUNT NUMBER 6020 ACCOUNT SUPPLIES EXPENSE ACCOUNT NUMBER 6030 ACCOUNT INSURANCE EXPENSE ACCOUNT NUMBER 6040 ACCOUNT UTILITIES EXPENSE ACCOUNT NUMBER 6050 General Ledger Page 6 19

20 ACCOUNT DEPRECIATION EXPENSE ACCOUNT NUMBER 6060 ACCOUNT INTEREST REVENUE ACCOUNT NUMBER 8010 ACCOUNT INTEREST EXPENSE ACCOUNT NUMBER 8510 General Ledger Page 7 20

21 ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER ACCOUNT ACCOUNT ACCOUNT ACCOUNT Sub-Ledgers Page 1 21

22 ACCOUNTS PAYABLE SUBSIDIARY LEDGER ACCOUNT ACCOUNT ACCOUNT ACCOUNT Sub-Ledgers Page 2 22

23 G.R. Garcia CO. WORKSHEET MAY 31,200X Unadj. Trial Bal. Adjustments Adjusted Trial Bal. Income Statement Sheet AC # ACCOUNT NAME DR CR DR CR DR CR DR CR DR CR 1001 Cash 1010 Accounts Receivable 1020 Interest Receivable 1030 Inventory 1040 Supplies 1050 Prepaid Insurance 1510 Furniture 1520 Accumulated Depreciation 1810 Notes Receivable, Long Term 2010 Accounts Payable 2020 Salary Payable 2030 Interest Payable 2040 Unearned Sales Revenue 2610 Note Payable, Long Term 3980 Owner'S Withdrawal 3990 Owner'S Capital 3995 Income Summary 4010 Sales Revenue 4020 Sales Discounts 4030 Sales Rtns. & Allowances 5010 Purchases 5020 Purchases Discounts 5030 Purchases Rtns. & Allowances 6010 Salary Expense 6020 Rent Expense 6030 Supplies Expense 6040 Insurance Expense 6050 Utilities Expense 6060 Depreciation Expense 8010 Interest Revenue 8510 Interest Expense 23

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