Heritage Home Solution 2004.qrk 3/16/04 9:15 AM Page 1 SOLUTIONS TO HERITAGE HOME FURNITURE A NARRATIVE PRACTICE SET FOR USE WITH ACCOUNTING PRINCIPLES 7 th Edition JERRY J. WEYGANDT Ph.D., C.P.A. Arthur Anderson Alumni Professor of Accounting University of Wisconsin - Madison Madison, Wisconsin DONALD E. KIESO Ph.D., C.P.A. KPMG Peat Marwick Emeritus Professor of Accountancy Northern Illinois University DeKalb, Illinois PAUL D. KIMMEL Ph.D., C.P.A. Associate Professor of Accounting University of Wisconsin - Milwaukee Milwaukee, Wisconsin Prepared By JOAN E. COOK, C.P.A. Milwaukee Area Technical College JOHN WILEY & SONS, INC. New York Chichester Weinheim Brisbane Singapore Toronto
Heritage Home Solution 2004.qrk 3/16/04 9:15 AM Page 2 COVER PHOTO James Bareham/Stone To order books or for customer service call 1-800-CALL-WILEY (225-5945) Copyright 2004 by John Wiley & Sons, Inc. Excerpts from this work may be reproduced by instructors for distribution on a not-for-profit basis for testing or instructional purposes only to students enrolled in courses for which the text book has been adopted. Any other reproduction or translation of this work beyond that permitted by sections 107 or 108 of the 1976 United States Copyright Act without the permission of the copyright owner is unlawful. Requests for permission or further information should be addressed to the Permissions Department, John Wiley & Sons, Inc., 605 Third Avenue, New York, NY 10158-0012 ISBN 0-471-39154-9 Printed in he United States of America 10 9 8 7 6 5 4 3 2 1 Printed and bound by Odyssey Press, Inc
Heritage Home Solution 2004.qrk 3/16/04 9:15 AM Page 3 TABLE OF CONTENTS Sales Journal............................................................ 1 Purchases Journal........................................................ 1 Cash Receipts Journal..................................................... 2 Cash Payments Journal.................................................... 4 General Journal.......................................................... 6 General Ledgers........................................................ 10 Accounts Receivable Subsidiary Ledger..................................... 20 Accounts Payable Subsidiary Ledger....................................... 23 Accounts Receivable Schedule............................................. 25 Accounts Payable Schedule............................................... 25 Work Sheet............................................................. 26 Bank Reconciliation...................................................... 30 Depreciation Schedule for Delivery Trucks.................................. 31 Income Statement....................................................... 32 Owner s Equity Statement................................................ 33 Sheet........................................................... 34 Post-Closing Trial................................................ 36
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Heritage Home Solution 2004.qrk 3/16/04 9:15 AM Page 1 SALES JOURNAL S5 Cost of Goods Sold Dr. Inv. Accts. Rec. Dr. Merchandise Date Account Debited No. Ref. Sales Cr. Inventory Cr. 1 May 7 Willington Hotels 621 9100 4550 1 2 10 Carthage Community College 622 5500 2750 2 3 13 Salem Hotel 623 12000 6000 3 4 20 Wallton Apartments 624 28350 14175 4 5 20 Tollson Motel 625 11000 5500 5 6 23 Carthage Community College 626 17500 8750 6 7 28 Wallton Apartments 627 9800 4900 7 8 28 Willington Hotels 628 15000 7500 8 9 31 Salem Hotel 629 8800 4400 9 10 117050 5 8525 10 11 (112)(411) (505)(120) 11 12 12 13 13 14 14 15 15 PURCHASES JOURNAL P 12 Merchandise Inventory Dr. Accounts Date Account Credited Terms Ref. Payable Cr. 1 May 7 Lexis Fine Furniture 1/15, n/30 22200 1 2 20 Lexis Fine Furniture 3/15, n/30 19000 2 3 21 Georgia Carpet Mills 2/10,n/60 15800 3 4 24 American Mattress Co. n/30 10800 4 5 28 Cabbot Recliners, Inc. 1/15,n/30 11500 5 6 28 Austin Cabinet Makers 2/30,n/60 7500 6 7 86800 7 8 (120)(201) 8 9 9 10 10 11 11 12 12 13 13 14 14 15 15 16 16 17 17 18 18 19 19 20 20 Copyright 2004 by John Wiley & Sons, Inc. 1
Heritage Home Solution 2004.qrk 3/16/04 9:15 AM Page 2 CR 10 CASH RECEIPTS JOURNAL Date Bank Cash Deposit Dr. 1 May 1 Walton Apartments, Inc. 8820 1 2 3 Cash sales 51200 2 3 3 Bank Deposit 6 0020 3 4 6 Bell and Gateway, CPAs 1470 4 5 6 Tollson Motel 5096 5 6 6 Carthage Community College 2009 6 7 8 Willington Hotels 9016 7 8 9 Bell and Gateway, CPAs 1960 8 9 10 Cash sales 31000 9 10 10 Bank Deposit 5 0551 10 11 13 Wallton Apartments Inc. 4400 11 12 14 Brent Davis Capital 301 1 0000 12 13 16 Willington Hotels 8918 13 14 17 Cash Sales 21750 14 15 17 Bank Deposit 4 5068 15 16 20 Carthage Community College 5390 16 17 23 Salem Hotel 11760 17 18 24 Cash Sales 35200 18 19 24 Bank Deposit 5 2350 19 20 29 Other Receivables (Truck Sale) 119 4500 20 21 30 Dorothy Knight 650 21 22 31 Cash Sales 21800 22 23 31 Bank Deposit 2 6950 23 24 234939 234939 24 25 (x) (101) 25 26 26 27 27 28 28 29 29 30 30 31 31 32 32 33 33 34 34 35 35 36 36 37 37 38 38 39 39 40 40 41 41 42 42 43 43 44 44 45 45 Copyright 2004 by John Wiley & Sons, Inc. 2
Heritage Home Solution 2004.qrk 3/16/04 9:15 AM Page 3 CASH RECEIPTS JOURNAL CR 10 Cost of Goods Sold Dr. Sales Accounts Sales Maxicard Other Merchandise Discounts Receivable Cr. Cr. Sales Cr. Accounts Cr. Inventory Cr. 1 180 9000 1 2 43200 8000 25600 2 3 3 4 30 1500 4 5 104 5200 5 6 41 2050 6 7 184 9200 7 8 40 2000 8 9 27500 3500 15500 9 10 10 11 4400 11 12 1 0000 12 13 182 9100 13 14 14750 7000 10875 14 15 15 16 110 5500 16 17 240 12000 17 18 30000 5200 17600 18 19 19 20 4500 20 21 650 21 22 14600 7200 10900 22 23 23 24 1111 60600 130050 30900 1 4500 80475 24 25 (414) (112) (401) (401) (X) (505/120) 25 26 26 27 27 28 28 29 29 30 30 31 31 32 32 33 33 34 34 35 35 36 36 37 37 38 38 39 39 40 40 41 41 42 42 43 43 44 44 45 45 Copyright 2004 by John Wiley & Sons, Inc. 3
Heritage Home Solution 2004.qrk 3/16/04 9:15 AM Page 4 CP 11 CASH PAYMENTS JOURNAL Check Date No. Payee Account Debited 1 May 3 525 Cabbot Recliners, Inc. Cabbot Recliners, Inc. 1 2 6 526 Zeekle Auto Shop Repairs and Maintenance-Delivery Trucks 2 3 8 527 Wallace Office Superstore Wallace Office Superstore 3 4 9 528 Eastern Freight Merchandise Inventory 4 5 13 529 Lexis Fine Furniture Lexis Fine Furniture 5 6 14 530 Old Hickory Furniture Old Hickory Furniture 6 7 15 531 Brent Davis 7 8 15 532 Ohio State Bank FICA Taxes Payable 8 9 Federal Income Tax WH Withholding Payable 9 10 17 533 American Mattress Co. American Mattress Co. 10 11 20 534 Georgia Carpet Mills Georgia Carpet Mills 11 12 20 535 Daily Advocate 12 13 20 536 Lexis Fine Furniture Lexis Fine Furniture 13 14 20 537 Austin Cabnet Makers Austin Cabnet Makers 14 15 21 538 Reliable Freight Merchandise Inventory 15 16 28 539 Falcon Truck Repairs and Maintenance-Delivery Trucks 16 17 29 540 Daily Advocate 17 18 29 541 Brent Davis Brent Davis, Drawing 18 19 30 542 George Collins Office Supplies 19 20 Store Supplies 20 21 30 543 Ohio State Bank Interest Expense 21 22 Mortgage Payable 22 23 30 544 Oxford Utilities Utilities Expense 23 24 31 545 Brent Davis 24 25 25 26 26 27 27 28 28 29 29 30 30 31 31 32 32 33 33 34 34 35 35 36 36 37 37 38 38 39 39 40 40 41 41 42 42 43 43 44 44 45 45 Copyright 2004 by John Wiley & Sons, Inc. 4
Heritage Home Solution 2004.qrk 3/16/04 9:15 AM Page 5 CASH PAYMENTS JOURNAL CP 11 Other Advertising Salaries Accounts Merchandise Cash Ref. Accounts Dr. Expense Dr. Payable Dr. Payable Dr. Inventory Cr. Cr. 1 4000 4000 1 2 624 5 5 0 550 2 3 500 500 3 4 120 2900 2900 4 5 16700 334 16366 5 6 8350 167 8183 6 7 24309 24309 7 8 214 11900 8 9 216 16100 28000 9 10 6800 6800 10 11 4800 96 4704 11 12 1500 1500 12 13 22200 222 21978 13 14 19100 382 18718 14 15 120 2200 2200 15 16 624 8 2 0 820 16 17 3500 3500 17 18 306 16000 16000 18 19 125 7 5 19 20 127 80 25 180 20 21 905 9 0 0 21 22 275 1100 2000 22 23 732 9 5 0 950 23 24 21188 21188 24 25 53575 5025 45497 82450 1201 185346 25 26 (X) (610) (212) (201) (120) (101) 26 27 27 28 28 29 29 30 30 31 31 32 32 33 33 34 34 35 35 36 36 37 37 38 38 39 39 40 40 41 41 42 42 43 43 44 44 45 45 Copyright 2004 by John Wiley & Sons, Inc. 5
Heritage Home Solution 2004.qrk 3/16/04 9:15 AM Page 6 GENERAL JOURNAL Date Account Titles and Explanation Ref. Debit Credit 1 May 2 Delivery Trucks (new) 163 4 2000 1 2 Accumulated Depreciation-Delivery Trucks 164 9000 2 3 Delivery Trucks (old) 163 3 6000 3 4 Notes Payable, 8%, 3-Month 200 1 5000 4 5 To record exchange of old delivery truck 5 6 for a similar new delivery truck 6 7 7 8 10 Notes Receivable 115 6000 8 9 Accounts Receivable / Jake Lansing 112 6000 9 10 To record acceptance of 30-day, 8% 10 11 note of payment in full of open account 11 12 12 13 15 Store Salaries Expense 626 2 5000 13 14 Office Salaries Expense 727 8100 14 15 FICA Taxes Payable 214 2681 15 16 Federal Income Tax Withholding Payable 216 6110 16 17 Salaries Payable 212 2 4309 17 18 Accrue Salaries 18 19 19 20 15 Payroll Taxes Expense 730 3888 20 21 FICA Taxes Payable 214 2681 21 22 Federal Unemployment Tax Payable 224 1 6 6 22 23 State Unemployment Tax Payable 226 1041 23 24 Accrue Payroll Taxes 24 25 25 26 23 Sales Returns & Allowances 412 1000 26 27 Accounts Receivable/Tollson Motel 112 1000 27 28 CM 129, Inv. 625 28 29 29 30 23 Merchandise Inventory 120 5 0 0 30 31 Cost of Goods Sold 505 5 0 0 31 32 32 33 24 Allowance for Doubtful Accounts 113 6 5 0 33 34 Accounts Receivable/Dorothy Knight 112 650 34 35 Write off - bad account 35 36 36 37 37 38 38 39 39 40 40 J 12 Copyright 2004 by John Wiley & Sons, Inc. 6
Heritage Home Solution 2004.qrk 3/16/04 9:15 AM Page 7 GENERAL JOURNAL Date Account Titles and Explanation Ref. Debit Credit 1 May 29 Depreciation Expense - Delivery Truck 617 3 0 0 1 2 Accumulated Depreciation-Delivery Trucks 164 3 0 0 2 3 Record Depreciation on truck 3 4 4 5 29 Other Receivables 119 4500 5 6 Accumulated Depreciation-Delivery Trucks 164 1 4900 6 7 Delivery Truck 163 1 7500 7 8 Gain on Disposal Trucks 812 1900 8 9 Record Sale of Truck 9 10 10 11 30 Accounts Receivable/Dorothy Knight 112 650 11 12 Allowance for Doubtful Accounts 113 6 5 0 12 13 Reinstate account written off 13 14 14 15 31 Store Salaries Expense 626 1 7750 15 16 Office Salaries Expense 727 1 1400 16 17 FICA Taxes Payable 214 2332 17 18 Federal Income Tax Withholding Payable 216 5630 18 19 Salaries Payable 212 2 1188 19 20 Accrue Salaries 20 21 21 22 31 Payroll Tax Expense 730 3411 22 23 FICA Taxes Payable 214 2332 23 24 Federal Unemployment Tax Payable 224 2 0 4 24 25 State Unemployment Tax Payable 226 8 7 5 25 26 Accrue payroll taxes 26 27 27 28 28 J 13 GENERAL JOURNAL Date Account Titles and Explanation Ref. Debit Credit 1 May Adjusting Entries 1 2 (a) 31 Credit Card Expense 613 1236 2 3 Maxicard Payable 240 1236 3 4 To accrue credit card fees (30,900x4%) 4 5 5 6 (b) 31 Maxicard payable 240 1530 6 7 Miscellaneous Expense 735 1 2 0 7 8 Cash 101 1650 8 9 Bank Reconciliation 9 10 10 J 14 Copyright 2004 by John Wiley & Sons, Inc. 7
Heritage Home Solution 2004.qrk 3/16/04 9:15 AM Page 8 GENERAL JOURNAL Date Account Titles and Explanation Ref. Debit Credit 1 May 1 2 (c) 31 Bad Debt Expense 612 1178 2 3 Allowance For Doubtful Accounts 113 1178 3 4 To accrue bad debt expense ((94,450 x 4%)-2,600) 4 5 5 6 (d) 31 Interest Receivable 118 2 1 6 7 Interest Receivable 820 2 1 7 8 To accrue interest on note (6,000 x 6% x 21/360) 8 9 9 10 (e) 31 Cost of Goods Sold 505 2474 10 11 Merchandise Inventory 120 2474 11 12 Inventory Adjustment (243,399-240,925) 12 13 13 14 (f) 31 Office Supplies Expense 728 2225 14 15 Office Supplies 125 2225 15 16 Office Supplies used (4,275-2,050) 16 17 17 18 Store Supplies Expense 659 1505 18 19 Store Supplies 127 1505 19 20 Store Supplies Used (2,580-1,075) 20 21 21 22 (g) 31 Insurance Expense 722 5 1 0 22 23 Prepaid Insurance 130 5 1 0 23 24 Record expired insurance 24 25 25 26 (h) 31 Depreciation Expense - Buildings 713 1500 26 27 Depreciation Expense - Office Equipment 715 6 0 0 27 28 Depreciation Expense - Delivery Trucks 617 1750 28 29 Accumulated Depreciation - Buildings 146 1500 29 30 Accumulated Depreciation - Office Equipment 152 6 0 0 30 31 Accumulated Depreciation - Delivery Trucks 164 1750 31 32 Record Depreciation 32 33 33 34 (i) 31 Interest Expense 905 1 0 0 34 35 Interest Payable 230 1 0 0 35 36 Accrue interest on note (15,000 x 8% x 1/12) 36 37 37 38 38 39 39 40 40 J 15 Copyright 2004 by John Wiley & Sons, Inc. 8
Heritage Home Solution 2004.qrk 3/16/04 9:15 AM Page 9 GENERAL JOURNAL Date Account Titles and Explanation Ref. Debit Credit 1 May Closing Entries 1 2 31 Sales 401 278000 2 3 Gain on Disposal of Truck 812 1900 3 4 Interest Revenue 820 2 1 4 5 Income Summary 350 27 9921 5 6 To close credit balances 6 7 7 8 May 31 Income Summary 350 23 1903 8 9 Sales Returns & allowances 412 1000 9 10 Sales Discounts 414 1111 10 11 Cost of Goods Sold 505 14 0974 11 12 Advertising Expense 610 5025 12 13 Bad Debt Expense 612 1178 13 14 Credit Card Expense 613 1236 14 15 Depreciation Expense - Delivery Truck 617 2050 15 16 Repairs and Maintenance - Delivery Trucks 624 1370 16 17 Store Salaries Expense 626 4 2750 17 18 Store Supplies Expense 659 1505 18 19 Depreciation Expense - Building 713 1500 19 20 Depreciation Expense - Office Equipment 715 6 0 0 20 21 Insurance Expense 722 5 1 0 21 22 Office Salaries Expense 727 1 9500 22 23 Office Supplies Expense 728 2225 23 24 Payroll Tax Expense 730 7299 24 25 Utilities Expense 732 9 5 0 25 26 Miscellaneous Expense 735 1 2 0 26 27 Interest Expense 905 1000 27 28 To Close Debit s 28 29 29 30 Income Summary 350 4 8018 30 31 Brent David, Capital 301 4 8018 31 32 To Close Income Summary 32 33 33 34 Brent David, Capital 301 1 6000 34 35 Brent David, Drawing 306 1 6000 35 36 To Close Account 36 37 37 38 38 39 39 40 40 J 16 Copyright 2004 by John Wiley & Sons, Inc. 9
Heritage Home Solution 2004.qrk 3/16/04 9:15 AM Page 10 GENERAL LEDGER Cash ACCOUNT NO. 101 May 1 26940 31 CR10 23 4939 261879 31 CP11 18 5346 76533 31 J14 1650 74883 Petty Cash ACCOUNT NO. 105 May 1 200 Accounts Receivable ACCOUNT NO. 112 May 1 45000 10 J12 6000 39000 23 J12 1000 38000 24 J12 650 37350 30 J13 650 38000 31 S9 117050 155050 31 CR10 6 0600 94450 Allowance for Doubtful Accounts ACCOUNT NO. 113 May 1 2600 24 J12 650 1950 30 J13 650 2600 31 J15 1178 3778 Notes Receivable ACCOUNT NO. 115 May 1 15000 10 J12 6000 21000 Copyright 2004 by John Wiley & Sons, Inc. 10
Heritage Home Solution 2004.qrk 3/16/04 9:15 AM Page 11 GENERAL LEDGER Interest Receivable ACCOUNT NO. 118 May 1 100 31 J15 21 121 Other Receivable ACCOUNT NO. 119 May 29 J13 4500 4500 29 CR10 4500 0 Merchandise Inventory ACCOUNT NO. 120 May 1 291200 31 P12 86800 378000 31 S9 58525 319475 31 CR10 8 0475 239000 31 CP11 1201 237799 10 CP11 2900 240699 21 CP11 2200 242899 23 J12 500 243399 31 J15 2474 240925 Office Supplies ACCOUNT NO. 125 May 1 4200 30 CP11 7 5 4275 31 J15 2225 2050 Store Supplies ACCOUNT NO. 127 May 1 2500 30 CP11 8 0 2580 31 J15 1505 1075 Copyright 2004 by John Wiley & Sons, Inc. 11
Heritage Home Solution 2004.qrk 3/16/04 9:15 AM Page 12 GENERAL LEDGER Prepaid Insurance ACCOUNT NO. 130 May 1 5200 31 J15 510 4690 Land ACCOUNT NO. 140 May 1 85900 Buildings ACCOUNT NO. 145 May 1 350000 Accumulated Depreciation - Buildings ACCOUNT NO. 146 Date Item Ref. Debit Credit Credit May 1 200000 31 J15 1500 201500 Office Equipment ACCOUNT NO. 151 May 1 55000 Accumulated Depreciation - Office Equipment ACCOUNT NO. 152 Date Item Ref. Debit Credit Credit May 1 32000 31 J15 600 32600 Copyright 2004 by John Wiley & Sons, Inc. 12
Heritage Home Solution 2004.qrk 3/16/04 9:15 AM Page 13 GENERAL LEDGER Delivery Trucks ACCOUNT NO. 163 May 1 53500 2 J12 42000 95500 2 J12 36000 59500 29 J13 17500 42000 Accumulated Depreciation - Delivery Trucks ACCOUNT NO. 164 Date Item Ref. Debit Credit Credit May 1 23600 2 J12 9000 14600 29 J13 300 14900 29 J13 14900 0 31 J15 1750 1750 Notes Payable ACCOUNT NO. 200 Date Item Ref. Debit Credit Credit May 2 J12 1 5000 15000 Accounts Payable ACCOUNT NO. 201 Date Item Ref. Debit Credit Credit May 1 60250 31 P12 86800 147050 31 CP11 8 2 4 5 0 6 4 6 0 0 Salaries Payable ACCOUNT NO. 212 Date Item Ref. Debit Credit Credit May 15 J12 24309 24309 31 J13 21188 45497 31 CP11 4 5 4 9 7 0 Copyright 2004 by John Wiley & Sons, Inc. 13
Heritage Home Solution 2004.qrk 3/16/04 9:15 AM Page 14 GENERAL LEDGER FICA Taxes Payable ACCOUNT NO. 214 Date Item Ref. Debit Credit Credit May 1 11900 15 J12 2681 14581 15 J12 2681 17262 31 J13 2332 19594 31 J13 2332 21926 15 CP11 1 1900 10026 Federal Income Tax Withholding Payable ACCOUNT NO. 216 Date Item Ref. Debit Credit Credit May 1 16100 15 J12 6110 22210 31 J13 5630 27840 15 CP11 1 6100 11740 Federal Unemployment Tax Payable ACCOUNT NO. 224 Date Item Ref. Debit Credit Credit May 1 620 15 J12 166 785 31 J13 204 990 State Unemployment Tax Payable ACCOUNT NO. 226 Date Item Ref. Debit Credit Credit May 1 1900 15 J12 1041 2941 31 J13 875 3816 Interest Payable ACCOUNT NO. 230 Date Item Ref. Debit Credit Credit May 1 800 31 J15 100 900 Copyright 2004 by John Wiley & Sons, Inc. 14
Heritage Home Solution 2004.qrk 3/16/04 9:15 AM Page 15 GENERAL LEDGER Maxicard Payable ACCOUNT NO. 240 Date Item Ref. Debit Credit Credit May 1 400 31 J14 1236 1636 31 J14 1530 106 Mortgage Payable ACCOUNT NO. 275 Date Item Ref. Debit Credit Credit May 1 200000 30 CP11 1100 198900 Brent Davis, Capital ACCOUNT NO. 301 Date Item Ref. Debit Credit Credit May 1 384570 14 CR10 1 0000 394570 31 J16 48018 442588 31 J16 16000 426588 Brent David, Drawing ACCOUNT NO. 306 May 29 CP11 1 6000 16000 31 J16 16000 0 Income Summary ACCOUNT NO. 350 Date Item Ref. Debit Credit Credit May 31 J16 279921 279921 31 J16 231903 48018 31 J16 48018 0 Copyright 2004 by John Wiley & Sons, Inc. 15
Heritage Home Solution 2004.qrk 3/16/04 9:15 AM Page 16 GENERAL LEDGER Sales ACCOUNT NO. 401 Date Item Ref. Debit Credit Credit May 31 S9 117050 117050 31 CR10 13 0050 247100 31 CR10 3 0900 278000 31 J16 278000 0 Sales Return and Allowances ACCOUNT NO. 412 May 23 J12 1000 1000 31 J16 1000 0 Sales Discounts ACCOUNT NO. 414 May 31 CR10 1111 1111 31 J16 1111 0 Cost of Goods Sold ACCOUNT NO. 505 May 23 J12 500 (500 ) 31 S9 58525 58025 31 CR10 8 0475 138500 31 J15 2474 140974 31 J16 140974 0 Advertising Expense ACCOUNT NO. 610 May 31 CP11 5025 5025 31 J16 5025 0 Bad Debt Expense ACCOUNT NO. 612 May 31 J15 1178 1178 31 J16 1178 0 Copyright 2004 by John Wiley & Sons, Inc. 16
Heritage Home Solution 2004.qrk 3/16/04 9:15 AM Page 17 GENERAL LEDGER Credit Card Expense ACCOUNT NO. 613 May 31 J14 1236 1236 31 J16 1236 0 Depreciation Expense - Delivery Trucks ACCOUNT NO. 617 May 29 J13 300 300 31 J15 1750 2050 31 J16 2050 0 Repairs and Maintenance - Delivery Trucks ACCOUNT NO. 624 May 6 CP11 5 5 0 5 5 0 28 CP11 8 2 0 1370 31 J16 1370 0 Store Salaries Expense ACCOUNT NO. 626 May 15 J12 25000 25000 31 J13 17750 42750 31 J16 42750 0 Store Supplies Expense ACCOUNT NO. 659 May 31 J15 1505 1505 31 J16 1505 0 Depreciation Expense - Buildings ACCOUNT NO. 713 May 31 J15 1500 1500 31 J16 1500 0 Copyright 2004 by John Wiley & Sons, Inc. 17
Heritage Home Solution 2004.qrk 3/16/04 9:15 AM Page 18 GENERAL LEDGER Depreciation Expense - Office Equipment ACCOUNT NO. 715 May 30 J15 600 600 31 J16 6 0 0 0 Insurance Expense ACCOUNT NO. 722 May 31 J15 510 510 31 J16 5 1 0 0 Office Salaries Expense ACCOUNT NO. 728 May 15 J12 8100 8100 31 J13 11400 19500 31 J16 19500 0 Office Supplies Expense ACCOUNT NO. 728 May 31 J15 2225 2225 31 J16 2225 0 Payroll Taxes Expense ACCOUNT NO. 730 May 15 J12 3888 3888 31 J13 3411 7299 31 J16 7299 0 Utilities Expense ACCOUNT NO. 732 May 30 CP11 9 5 0 9 5 0 31 J16 9 5 0 0 Copyright 2004 by John Wiley & Sons, Inc. 18
Heritage Home Solution 2004.qrk 3/16/04 9:15 AM Page 19 GENERAL LEDGER Miscellaneous Expense ACCOUNT NO. 735 May 31 J14 120 120 31 J16 1 2 0 0 Gain on Disposal of Truck ACCOUNT NO. 812 Date Item Ref. Debit Credit Credit May 29 J13 1900 1900 31 J16 1900 0 Interest Revenue ACCOUNT NO. 820 Date Item Ref. Debit Credit Credit May 31 J15 21 21 31 J16 2 1 0 Interest Expense ACCOUNT NO. 905 MAY 30 CP11 9 0 0 9 0 0 31 J15 100 1000 31 J16 1000 0 Copyright 2004 by John Wiley & Sons, Inc. 19
Heritage Home Solution 2004.qrk 3/16/04 9:15 AM Page 20 ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER NAME Bell and Gateway, CPAs ADDRESS 109 Westview Dr. Belmont, OH 45830 Date Item Ref. Debit Credit Apr 26 Invoice 612 S8 1500 1500 30 Invoice 619 S8 2000 3500 May 6 CR10 1500 2000 9 CR10 2000-0- NAME Carthage Community College ADDRESS 1927 Herbert Street, Streetor, OH 45831 Date Item Ref. Debit Credit Apr 26 Invoice 614 S8 2050 2050 May 6 CR10 2050-0- 10 Invoice 622 S9 5500 5500 20 CR10 5500-0- 23 Invoice 626 S9 1 7500 17500 NAME Dorothy Knight ADDRESS 9007 Neely Rd., Fulton, OH 45849 Date Item Ref. Debit Credit Jan 15 Invoice 535 S4 6 5 0 6 5 0 MAY 24 Write off J12 6 5 0-0 - 30 Reinstate J13 6 5 0 6 5 0 30 CR10 6 5 0-0 - Copyright 2004 by John Wiley & Sons, Inc. 20
Heritage Home Solution 2004.qrk 3/16/04 9:15 AM Page 21 ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER NAME Jake Lansing ADDRESS 291 Hightower, Oxford, OH 45861 Date Item Ref. Debit Credit Apr 14 Invoice 601 S8 6000 6000 May 10 J12 6000-0- NAME Salem Hotel ADDRESS 1412 St. Louis Street, Oxford, OH 45861 Date Item Ref. Debit Credit Apr 12 Invoice 599 S8 5000 5000 May 13 Invoice 623 S9 1 2000 17000 23 CR10 1 2000 5000 31 Invoice 629 S9 8800 13800 NAME Tollson Motel ADDRESS 1943 Ester Place, Riding, OH 45863 Date Item Ref. Debit Credit Apr 26 Invoice 613 S8 5200 5200 May 6 CR10 5200-0- 21 Invoice 625 S9 1 1000 11000 23 Credit Memo No. 129 J12 1000 10000 Copyright 2004 by John Wiley & Sons, Inc. 21
Heritage Home Solution 2004.qrk 3/16/04 9:15 AM Page 22 ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER NAME Wallton Apartments, Inc. ADDRESS 304 Colter Ave., Oxford, OH 45861 Date Item Ref. Debit Credit Apr 24 Invoice 611 S8 9000 9000 30 Invoice 620 S8 4400 13400 May 1 CR10 9000 4400 13 CR10 4400-0- 20 S9 28350 28350 28 S9 9800 38150 NAME Willington Hotels ADDRESS 1200 Hovey, Oxford, OH 45861 Date Item Ref. Debit Credit Apr 30 Invoice 617 S8 9200 9200 May 7 Invoice 621 S9 9100 18300 8 CR10 9200 9100 16 CR10 9100-0- 28 Invoice 628 S9 1 5000 15000 Copyright 2004 by John Wiley & Sons, Inc. 22
Heritage Home Solution 2004.qrk 3/16/04 9:15 AM Page 23 ACCOUNTS PAYABLE SUBSIDIARY LEDGER NAME American Mattress Co. ADDRESS 1212 Northgate Street, St.Louis, MO 60662 Date Item Ref. Debit Credit Apr 18 n/30 P11 6800 6800 May 17 CP11 6800-0- 24 n/30 P12 1 0800 10800 NAME Austin Cabinet Makers ADDRESS 231 Deemer Ave., Austin, TX 70808 Date Item Ref. Debit Credit Apr 22 2/30, n/60 P11 1 9100 19100 May 20 CP11 1 9100-0- 28 2/30, n/60 P12 7500 7500 NAME Cabbot Recliners, Inc. ADDRESS 111 Third Street, New York, NY 10016 Date Item Ref. Debit Credit Apr 19 n/30 P11 4000 4000 May 3 CP11 4000-0- 28 1/15, n/30 P12 1 1500 11500 NAME Georgia Carpet Mills ADDRESS 333 State Street, Atlanta, GA 43210 Date Item Ref. Debit Credit Apr 18 2/30, n/60 P11 4800 4800 May 20 CP11 4800-0- 21 2/10, n/60 P12 1 5800 15800 Copyright 2004 by John Wiley & Sons, Inc. 23
Heritage Home Solution 2004.qrk 3/16/04 9:15 AM Page 24 ACCOUNTS PAYABLE SUBSIDIARY LEDGER NAME Lexis Fine Furniture ADDRESS 310 Eastland Drive, Salem, NC 19432 Date Item Ref. Debit Credit Apr 14 2/30, n/60 P11 1 6700 16700 May 7 1/15, n/30 P12 2 2200 38900 15 CP11 1 6700 22200 20 CP11 2 2200-0- 20 3/15, n/30 P12 1 9000 19000 NAME Old Hickory Furniture, Inc. ADDRESS 117 East Ave., Bellmore, MA 38402 Date Item Ref. Debit Credit Apr 30 2/15, n/30 P11 3850 3850 May 14 CP11 8350-0- NAME Wallace Office Superstore ADDRESS Vetmar Ave., Baton Rouge, LA 70212 Date Item Ref. Debit Credit Apr 28 n/15 P11 5 0 0 5 0 0 May 7 CP11 5 0 0-0 - Copyright 2004 by John Wiley & Sons, Inc. 24
Heritage Home Solution 2004.qrk 3/16/04 9:15 AM Page 25 HERITAGE HOME FURNITURE Accounts Receivable Schedule May 31, 1 Carthage Community College 17500 1 2 Salem Hotel 13800 2 3 Tollson Motel 10000 3 4 Wallton Apartments, Inc. 38150 4 5 Willington Hotels 15000 5 6 6 7 Total Accounts Receivable 9 4 4 5 0 7 8 8 9 9 10 10 11 11 12 12 13 13 HERITAGE HOME FURNITURE Accounts Payable Schedule May 31, 1 American Mattress Co. 10800 1 2 Austin Cabinet Makers 7500 2 3 Cabbot Recliners, Inc. 11500 3 4 Georgia Carpet Mills 15800 4 5 Lexis Fine Furniture 19000 5 6 6 7 Total Accounts Payable 64600 7 8 8 9 9 10 10 11 11 12 12 13 13 14 14 15 15 16 16 17 17 18 18 19 19 20 20 Copyright 2004 by John Wiley & Sons, Inc. 25
Heritage Home Solution 2004.qrk 3/16/04 9:15 AM Page 26 HERITAGE HOME FURNITURE Worksheet For the Month Ended May 31, Acct. Trial No. Account Title. Debit Credit 1 101 Cash 76533 1 2 105 Petty Cash 200 2 3 112 Accounts Receivable 9 44 50 3 4 113 Allowance for Doubtful Accounts 2600 4 5 115 Notes Receivable 2 10 00 5 6 118 Interest Receivable 1 00 6 7 119 Other Receivables 7 8 120 Merchandise Inventory 24 33 99 8 9 125 Office Supplies 4275 9 10 127 Store Supplies 2580 10 11 130 Prepaid Insurance 52 00 11 12 140 Land 85900 12 13 145 Buildings 350000 13 14 146 Accumulated Depreciation Building 200000 14 15 151 Office Equipment 5 50 00 15 16 152 Accumulated Depreciation Office Equipment 32000 16 17 163 Delivery Trucks 42000 17 18 164 Accumulated Depreciation Delivery Trucks 18 19 200 Notes Payable 15000 19 20 201 Accounts Payable 64600 20 21 212 Salaries Payable 21 22 214 FICA Taxes Payable 10026 22 23 216 Federal Income Tax Withholding Payable 11740 23 24 224 Federal Unemployment Tax Payable 990 24 25 226 State Unemployment Tax Payable 3816 25 26 230 Interest Payable 800 26 27 240 Maxicard Payable 400 27 28 275 Mortgage Payable 198900 28 29 301 Brent Davis, Capital 394570 29 30 306 Brent Davis, Drawing 1 60 00 30 31 31 32 32 33 33 34 34 35 35 36 36 37 37 38 38 39 39 40 40 Copyright 2004 by John Wiley & Sons, Inc. 26
Heritage Home Solution 2004.qrk 3/16/04 9:15 AM Page 27 Adjustments Adjusted Trial Income Statement Sheet Debit Credit Debit Credit Debit Credit Debit Credit 1 b 1650 74883 74883 1 2 200 200 2 3 94450 94450 3 4 c 1178 3778 3778 4 5 21000 21000 5 6 d 21 121 121 6 7 7 8 e 2474 240925 240925 8 9 f 2225 2050 2050 9 10 f 1505 1075 1075 10 11 g 510 4690 4690 11 12 85900 85900 12 13 350000 350000 13 14 h 1500 201500 201500 14 15 55000 55000 15 16 h 600 32600 32600 16 17 42000 42000 17 18 h 1750 1750 1750 18 19 15000 15000 19 20 64600 64600 20 21 21 22 10026 10026 22 23 11740 11740 23 24 990 990 24 25 3816 3816 25 26 I 100 900 900 26 27 b 1530 a 1236 106 106 27 28 198900 198900 28 29 394570 394570 29 30 16000 16000 30 31 31 32 32 33 33 34 34 35 35 36 36 37 37 38 38 39 39 40 40 Copyright 2004 by John Wiley & Sons, Inc. 27
Heritage Home Solution 2004.qrk 3/16/04 9:15 AM Page 28 HERITAGE HOME FURNITURE Worksheet For the Month Ended May 31, Acct. Trial No. Account Title. Debit Credit 1 401 Sales 278000 1 2 412 Sales Returns and Allowances 10 00 2 3 414 Sales Discounts 11 11 3 4 505 Cost of Goods Sold 13 85 00 4 5 610 Advertising Expense 50 25 5 6 612 Bad Debt Expense 6 7 613 Credit Card Expense 7 8 617 Depreciation Expense - Delivery Trucks 3 00 8 9 624 Repairs and Maintenance - Delivery Trucks 13 70 9 10 626 Store Salaries Expense 4 27 50 10 11 659 Store Supplies Expense 11 12 713 Depreciation Expense - Building 12 13 715 Depreciation Expense - Office Equipment 13 14 722 Insurance Expense 14 15 727 Office Salaries Expense 1 99 50 15 16 728 Office Supplies Expense 16 17 730 Payroll Tax Expense 72 99 17 18 732 Utilities Expense 950 18 19 735 Miscellaneous Expense 19 20 812 Gain of Disposal of Truck 1900 20 21 820 Interest Revenue 21 22 905 Interest Expense 900 22 23 1 215342 1 215342 23 24 Net Income 24 25 25 26 26 27 27 28 28 29 29 30 30 31 31 32 32 33 33 34 34 35 35 36 36 37 37 38 38 39 39 40 40 Copyright 2004 by John Wiley & Sons, Inc. 28
Heritage Home Solution 2004.qrk 3/16/04 9:15 AM Page 29 Adjustments Adjusted Trial Income Statement Sheet Debit Credit Debit Credit Debit Credit Debit Credit 1 278000 278000 1 2 1000 1000 2 3 1111 1111 3 4 e 2474 140 974 140974 4 5 5025 5025 5 6 c 1178 1178 1178 6 7 a 1236 1236 1236 7 8 h 1750 2050 2050 8 9 1370 1370 9 10 42750 42750 10 11 f 1505 1505 1505 11 12 h 1500 1500 1500 12 13 h 600 600 600 13 14 g 510 510 510 14 15 19500 19500 15 16 f 2225 2225 2225 16 17 7299 7299 17 18 950 950 18 19 b 120 120 120 19 20 1900 1900 20 21 d 21 2 1 21 21 22 I 100 1000 1000 22 23 14749 14749 1 220197 1 220197 231903 279921 9882 94 940276 23 24 48018 48018 24 25 279921 279921 988294 988294 25 26 26 27 27 28 28 29 29 30 30 31 31 32 32 33 33 34 34 35 35 36 36 37 37 38 38 39 39 40 40 Copyright 2004 by John Wiley & Sons, Inc. 29
Heritage Home Solution 2004.qrk 3/16/04 9:15 AM Page 30 HERITAGE HOME FURNITURE Bank Reconciliation May 31, 1 per bank statement 83111 1 2 2 3 Add: Deposits in Transit, 5/31 2 6 9 5 0 3 4 4 5 Subtract: Outstanding Checks 5 6 No. 523 1 4 0 0 6 7 No. 526 5 5 0 7 8 No. 533 6 8 0 0 8 9 No. 536 2 1 9 7 8 9 10 No. 540 3 5 0 0 10 11 No. 544 9 5 0 11 12 35178 12 13 Adjusted balance per bank 74883 13 14 14 15 15 16 16 17 per books 76533 17 18 Subtract: 18 19 Check printing fee 7 5 19 20 Monthly service charge 4 5 20 21 Maxicard fee 1530 1650 21 22 Adjusted balance per books 74883 22 23 23 24 24 25 25 26 26 27 27 28 28 29 29 30 30 31 31 32 32 33 33 34 34 35 35 36 36 37 37 38 38 39 39 40 40 Copyright 2004 by John Wiley & Sons, Inc. 30
Heritage Home Solution 2004.qrk 3/16/04 9:15 AM Page 31 HERITAGE HOME FURNITURE Depreciation Schedule for Delivery Trucks Item: Delivery Truck Acquisition Date: May 2, Cost: $42,000 Estimated Salvage: $4,000 Estimated Life: 4 years Depreciation Method: Declining balance, double the straight-line rate Year Beginning Book Value x Depreciation Rate = Annual Depreciation () 1 $ 42,000 50% 21,000 2 21,000 50% 10,500 3 10,500 50% 5,250 4 5,250 50% 1,250 (limit) Depreciation for the month of May: Year 1 Depreciation x 1/12 21,000 x 1/12 = $1,750 Copyright 2004 by John Wiley & Sons, Inc. 31
Heritage Home Solution 2004.qrk 3/16/04 9:15 AM Page 32 HERITAGE HOME FURNITURE Income Statement For the Month Ended May 31, 1 Revenues 1 2 Sales 278000 2 3 Less: Sales Returns and Allowances 1 0 0 0 3 4 Sales Discounts 1 1 1 1 2 1 1 1 4 5 Net Sales 275889 5 6 Cost of Goods Sold 140974 6 7 Gross Profit 134915 7 8 Operating Expenses 8 9 Selling Expenses 9 10 Store Salaries Expense 4 2 7 5 0 10 11 Advertising Expense 5 0 2 5 11 12 Depreciation Expense - Delivery Truck 2 0 5 0 12 13 Store Supplies Expense 1 5 0 5 13 14 Credit Card Expense 1 2 3 6 14 15 Repairs and Maintenance - Delivery Truck 1 3 7 0 15 16 Bad Debt Expense 1 1 7 8 16 17 Total Selling Expenses 55114 17 18 18 19 Administrative Expenses 19 20 Office Salaries Expense 1 9 5 0 0 20 21 Payroll Tax Expense 7 2 9 9 21 22 Office Supplies Expense 2 2 2 5 22 23 Depreciation Expense - Building 1 5 0 0 23 24 Utilities Expense 9 5 0 24 25 Depreciation Expense - Office Supplies 6 0 0 25 26 Insurance Expense 5 1 0 26 27 Miscellaneous Expense 1 2 0 27 28 Total Administrative Expense 3 2 7 0 4 28 29 Total Operating Expense 8 7 8 1 8 29 30 Income from Operations 47097 30 31 31 32 32 33 Other Revenues and Gains 33 34 Gain of disposal of Truck 1 9 0 0 34 35 Interest Revenue 2 1 1 9 2 1 35 36 Other Expenses and Losses 36 37 Interest Expense 1 0 0 0 9 2 1 37 38 38 39 Net Income 48018 39 40 40 Copyright 2004 by John Wiley & Sons, Inc. 32
Heritage Home Solution 2004.qrk 3/16/04 9:15 AM Page 33 HERITAGE HOME FURNITURE Owner s Equity Statement For the Month Ended May 31, 1 Brent Davis Capital, May 1 384570 1 2 Add: Additional investment 10000 2 3 Net income for May 48018 3 4 4 4 2 5 8 8 4 5 5 6 Less: Drawings 16000 6 7 Brent Davis, Capital, May 31 426588 7 8 8 9 9 10 10 11 11 12 12 13 13 14 14 15 15 16 16 17 17 18 18 19 19 20 20 21 21 22 22 23 23 24 24 25 25 26 26 27 27 28 28 29 29 30 30 31 31 32 32 33 33 34 34 35 35 36 36 37 37 38 38 39 39 40 40 Copyright 2004 by John Wiley & Sons, Inc. 33
Heritage Home Solution 2004.qrk 3/16/04 9:15 AM Page 34 HERITAGE HOME FURNITURE Sheet May 31, 1 Assets 1 2 Current Assets 2 3 Cash 74883 3 4 Petty Cash 200 4 5 Accounts receivable 94450 5 6 Allowance for Doubtful Accounts 3 7 7 8 9 0 6 7 2 6 7 Notes Receivable 2 1 0 0 0 7 8 Interest Receivable 1 2 1 8 9 Merchandise Inventory 2 4 0 9 2 5 9 10 Office Supplies 2 0 5 0 10 11 Store supplies 1 0 7 5 11 12 Prepaid Insurance 4 6 9 0 12 13 Total Current Assets 435616 13 14 14 15 15 16 Property, Plant and Equipment Accumulated Net Book 16 17 Cost Depreciation Value 17 18 Land 8 5 9 0 0 8 5 9 0 0 18 19 Buildings 3 5 0 0 0 0 2 01500 1 48500 19 20 Office Equipment 5 5 0 0 0 32600 22400 20 21 Delivery Trucks 4 2 0 0 0 1 7 5 0 4 0 2 5 0 21 22 Total Property, Plant & Equipment 5 3 2 9 0 0 2 35850 297050 22 23 Total Assets 732666 23 24 24 25 25 26 26 27 27 28 28 29 29 30 30 31 31 32 32 33 33 34 34 35 35 36 36 37 37 38 38 39 39 40 40 Copyright 2004 by John Wiley & Sons, Inc. 34
Heritage Home Solution 2004.qrk 3/16/04 9:15 AM Page 35 HERITAGE HOME FURNITURE Sheet (Continued) May 31, 1 Liabilities and Owner s Equity 1 2 Current Liabilities 2 3 Notes payable 1 5 0 0 0 3 4 Accounts payable 6 4 6 0 0 4 5 FICA taxes payable 1 0 0 2 6 5 6 Federal income taxes withholding payable 1 1 7 4 0 6 7 Federal unemployment taxes payable 9 9 0 7 8 State unemployment taxes payable 3 8 1 6 8 9 Interest payable 9 0 0 9 10 Maxicard payable 1 0 6 10 11 Total current liabilities 107178 11 12 12 13 Long-term liabilities 13 14 Mortgage payable 1 9 8 9 0 0 14 15 Total long-term liabilities 1 9 8 9 0 0 15 16 Total liabilities 306078 16 17 17 18 Owner s Equity 18 19 Brent Davis, Capital 426588 19 20 20 21 Total liabilities and owner s equity 7 3 2 6 6 6 21 22 22 23 23 24 24 25 25 26 26 27 27 28 28 29 29 30 30 31 31 32 32 33 33 34 34 35 35 36 36 37 37 38 38 39 39 40 40 Copyright 2004 by John Wiley & Sons, Inc. 35
Heritage Home Solution 2004.qrk 3/16/04 9:15 AM Page 36 HERITAGE HOME FURNITURE Post-Closing Trial May 31, Acct. No. Account Title Debit Credit 1 101. Cash 7488 3 1 2 105 Petty Cash 20 0 2 3 112 Accounts Receivable 9 4 4 5 0 3 4 113 Allowance for Doubtful Accounts 3778 4 5 115 Notes Receivable 2100 0 5 6 118 Interest Receivable 12 1 6 7 120 Merchandise Inventory 24 0 9 2 5 7 8 125 Office Supplies 2050 8 9 127 Store Supplies 1075 9 10 130 Prepaid Insurance 4690 10 11 140 Land 8590 0 11 12 145 Buildings 35 0 0 0 0 12 13 146 Accumulated Depreciation Buildings 20 1 5 0 0 13 14 151 Office Equipment 5500 0 14 15 152 Accumulated Depreciation Office Equipment 3 2 6 0 0 15 16 163 Delivery Trucks 4200 0 16 17 164 Accumulated Depreciation Delivery Trucks 1 7 5 0 17 18 200 Notes Payable, 10%, 3-month 15000 18 19 201 Accounts Payable 64600 19 20 216 Federal Income Tax Withholding Payable 1 0 0 2 6 20 21 224 Federal Unemployment Tax Payable 1 1 7 4 0 21 22 226 State Unemployment Tax Payable 9 9 0 22 23 230 Interest Payable 3816 23 24 240 Maxicard Payable 900 24 25 275 Mortgage Payable 106 25 26 301 Brent Davis, Capital 42 6 5 8 8 26 27 97 2 2 9 4 97 2 2 9 4 27 28 28 29 29 30 30 31 31 32 32 33 33 34 34 35 35 36 36 37 37 38 38 39 39 40 40 41 41 42 42 43 43 44 44 45 45 46 46 47 47 48 48 Copyright 2004 by John Wiley & Sons, Inc. 36