ACC 560 Week 2 Assignment
E3-7 The Sanding Department of Ortiz Furniture Company has the following production and manufacturing cost data for March 2008, the first month of operation.
Production: 12,000 units finished and transferred out; 3,000 units started that are 100% complete as to materials and 20% complete as to conversion costs.
Manufacturing costs: Materials $33,000; labor $27,000; overhead $36,000.
Prepare a production cost report.
Click here for the solution: The Sanding Department of Ortiz Furniture Company has the following production and manufacturing cost data for March 2008, the first month of operation
Showing posts with label operation. Show all posts
Showing posts with label operation. Show all posts
Monday, October 26, 2015
Friday, October 9, 2015
In its first month of operation, Moraine Company purchased 100 units of inventory for $6, then 200 units for $7, and finally 140 units for $8
BE6-5 In its first month of operation, Moraine Company purchased 100 units of inventory for $6, then 200 units for $7, and finally 140 units for $8. At the end of the month, 180 units remained. Compute the amount of phantom profit that would result if the company used FIFO rather than LIFO. Explain why this amount is referred to as phantom profit. The company uses the periodic method.
Click here for the solution: In its first month of operation, Moraine Company purchased 100 units of inventory for $6, then 200 units for $7, and finally 140 units for $8
Click here for the solution: In its first month of operation, Moraine Company purchased 100 units of inventory for $6, then 200 units for $7, and finally 140 units for $8
Sunday, October 4, 2015
Kristen Montana operates a retail clothing operation
Kristen Montana operates a retail clothing operation. She purchases all merchandise inventory on credit and uses a periodic inventory system. The accounts payable account is used for recording inventory purchases only; all other current liabilities are accrued in separate accounts. You are provided with the following selected information for the fiscal years 2005, 2006, 2007, and 2008.
2005 2006 2007 2008
Inventory (ending) $13,000 $11,300 $14,700 $12,200
Accounts payable (ending) 20,000
Sales 225,700 227,600 219,500
Purchase of merchandise
inventory on account 146,000 145,000 129,000
Cash payments to suppliers 135,000 161,000 127,000
Instructions:
a. Calculate cost of goods sold for each of the 2009, 2010, and 2011 fiscal years.
b. Calculate the gross profit for each of the 2009, 2010, and 2011 fiscal years.
c. Calculate the ending balance of accounts payable for each of the 2009, 2010, and 2011 fiscal years.
d. Calculate the gross profit rate for each fiscal year.
e. Sales declined in fiscal 2011. Does that mean that profitability, as measured by the gross profit rate, necessarily also declined? Explain, calculating the gross profit rate for each fiscal year to help support year answer.
Click here for the solution: Kristen Montana operates a retail clothing operation
2005 2006 2007 2008
Inventory (ending) $13,000 $11,300 $14,700 $12,200
Accounts payable (ending) 20,000
Sales 225,700 227,600 219,500
Purchase of merchandise
inventory on account 146,000 145,000 129,000
Cash payments to suppliers 135,000 161,000 127,000
Instructions:
a. Calculate cost of goods sold for each of the 2009, 2010, and 2011 fiscal years.
b. Calculate the gross profit for each of the 2009, 2010, and 2011 fiscal years.
c. Calculate the ending balance of accounts payable for each of the 2009, 2010, and 2011 fiscal years.
d. Calculate the gross profit rate for each fiscal year.
e. Sales declined in fiscal 2011. Does that mean that profitability, as measured by the gross profit rate, necessarily also declined? Explain, calculating the gross profit rate for each fiscal year to help support year answer.
Click here for the solution: Kristen Montana operates a retail clothing operation
Sunday, September 27, 2015
Howit Inc. operates a retail operation that purchases and sells snowmobiles, amongst other outdoor products
P5-6B Howit Inc. operates a retail operation that purchases and sells snowmobiles, amongst other outdoor products. The company purchases all merchandise inventory on credit and uses a periodic inventory system. The accounts payable account is used for recording inventory purchases only; all other current liabilities are accrued in separate accounts. You are provided with the following selected information for the fiscal years 2005 through 2008, inclusive.
2005 2006 2007 2008
Income Statement Data
Sales $96,850 $ (e) $82,220
Cost of goods sold (a) 25,140 25,990
Gross profit 69,640 61,540 (i)
Operating expenses 63,500 (f) 52,060
Net income $ (b) $4,570 $ (j)
Balance Sheet Data
Merchandise inventory $13,000 $ (c) $14,700 $ (k)
Account payable 5,800 6,500 4,600 (l)
Additional Information
Purchases of merchandise
Inventory on account $25,890 $ (g) $24,050
Cash payments to supplies (d) (h) 24,650
Instructions
(a) Calculate the missing accounts.
(b) Sales declined over the 3-year fiscal period, 2006-2008. Does that mean that profitability necessarily also declined? Explain, computing the gross profit rate and the profit margin ratio for each fiscal year to help support your answer. (Round to one decimal place.)
Click here for the solution: Howit Inc. operates a retail operation that purchases and sells snowmobiles, amongst other outdoor products
2005 2006 2007 2008
Income Statement Data
Sales $96,850 $ (e) $82,220
Cost of goods sold (a) 25,140 25,990
Gross profit 69,640 61,540 (i)
Operating expenses 63,500 (f) 52,060
Net income $ (b) $4,570 $ (j)
Balance Sheet Data
Merchandise inventory $13,000 $ (c) $14,700 $ (k)
Account payable 5,800 6,500 4,600 (l)
Additional Information
Purchases of merchandise
Inventory on account $25,890 $ (g) $24,050
Cash payments to supplies (d) (h) 24,650
Instructions
(a) Calculate the missing accounts.
(b) Sales declined over the 3-year fiscal period, 2006-2008. Does that mean that profitability necessarily also declined? Explain, computing the gross profit rate and the profit margin ratio for each fiscal year to help support your answer. (Round to one decimal place.)
Click here for the solution: Howit Inc. operates a retail operation that purchases and sells snowmobiles, amongst other outdoor products
Thursday, September 24, 2015
Midwest Corp completed the following transactions in 2012, the first year of operation
P8-19 Midwest Corp completed the following transactions in 2012, the first year of operation.
1. Issued 20,000 shares of $10 par common stock at par.
2. Issued 2,000 shares of $30 stated value preferred stock at $32 per share.
3. Purchased 500 shares of common stock as treasury stock for $15 per share.
4. Declared a five percent dividend on preferred stock.
5. Sold 300 shares of treasury stock for $18 per share.
6. Paid the cash dividend on preferred stock that was declared in event four.
7. Earned cash service revenue of $75,000 and incurred cash operating expenses of $42,000.
8. Appropriated $6,000 of retained earnings.
Required
a. Organize the transaction in accounts under an accounting equation.
b. Prepare the stockholders equity section of the balance sheet as of December 31, 2012.
Click here for the solution: Midwest Corp completed the following transactions in 2012, the first year of operation
1. Issued 20,000 shares of $10 par common stock at par.
2. Issued 2,000 shares of $30 stated value preferred stock at $32 per share.
3. Purchased 500 shares of common stock as treasury stock for $15 per share.
4. Declared a five percent dividend on preferred stock.
5. Sold 300 shares of treasury stock for $18 per share.
6. Paid the cash dividend on preferred stock that was declared in event four.
7. Earned cash service revenue of $75,000 and incurred cash operating expenses of $42,000.
8. Appropriated $6,000 of retained earnings.
Required
a. Organize the transaction in accounts under an accounting equation.
b. Prepare the stockholders equity section of the balance sheet as of December 31, 2012.
Click here for the solution: Midwest Corp completed the following transactions in 2012, the first year of operation
Tuesday, September 15, 2015
Argentina Partners is concerned about the possible effects of inflation on its operation
Argentina Partners is concerned about the possible effects of inflation
on its operation. Presently, the company sells 60,000 units for $30 per
unit. The variable production costs are $15, and fixed costs amount to
$700,000. Production engineers have advised management that they expect
unit labor cost to rise by 15 percent and unit materials cost to rise by
10 percent in the coming year. Of the $15 variable cost, 50 percent are
from labor and 25 percent are from material. Variable overhead costs
are expected to increase by 20 percent. Sales prices cannot increase
more than 10 percent. It is also expected that fixed cost will rise by 5
percent as a result of increased taxes and other miscellaneous fixed
charges.
The company wishes to maintain the same level of profit in real dollar terms. It is expected that to accomplish this objective, profits must increase by 6 percent during the year.
Required
a. Compute the volume in units and the dollars sales level necessary to maintain the present profit level, assuming that the maximum price increase is implemented.
b. Compute the volume of sales and the dollar sales level necessary to provide the 6 percent increase in profits, assuming that the maximum price increases is implemented.
c. If the volume of dales were to remain at 60,000 units, what price increase would be required to attain the 6 percent increase in profits?
Click here for the solution: Argentina Partners is concerned about the possible effects of inflation on its operation
The company wishes to maintain the same level of profit in real dollar terms. It is expected that to accomplish this objective, profits must increase by 6 percent during the year.
Required
a. Compute the volume in units and the dollars sales level necessary to maintain the present profit level, assuming that the maximum price increase is implemented.
b. Compute the volume of sales and the dollar sales level necessary to provide the 6 percent increase in profits, assuming that the maximum price increases is implemented.
c. If the volume of dales were to remain at 60,000 units, what price increase would be required to attain the 6 percent increase in profits?
Click here for the solution: Argentina Partners is concerned about the possible effects of inflation on its operation
Saturday, August 22, 2015
(Case Study 1-The Complete Accounting Cycle) During its first month of operation, the Parkview Landscaping Corporation
Case Study 1-The Complete Accounting Cycle
During its first month of operation, the Parkview Landscaping Corporation, which specializes in residential landscaping, completed the following transactions:
July 1 Began business by making a deposit in a company bank account of $24,000, in exchange for 4,800 shares of $5 par value common stock.
July 1 Paid the premium on a one-year insurance policy, $2,400.
July 1 Paid the current month's rent, $2,080.
July 3 Purchased landscaping equipment from Brookwood Company, $8,800. Paid $1,200 down and the balance was placed on account. Payments will be $400.00 per month for nineteen months. The first payment is due 8/1. Note: Use Accounts Payable for the Balance Due.
July 8 Purchased landscaping supplies from Lakeside Company on credit, $780.
July 12 Paid utility bill for July, $308.
July 16 Cash landscaping revenue for the first half of July, $2,724.
July 19 Made payment on account to Lakeside Company, $400.
July 31 Cash landscaping revenue for the last half of July, $2,620.
July 31 Declared and paid cash dividend of $1,600.
Requirements Sheet in Workbook
Requirement 1 - Prepare the Journal Entries in the General Journal Journal Entries
Requirement 2 - Post Journal Entries to the General Ledger General Ledger
Requirement 3 - Prepare a Trial Balance Trial Balance
Requirement 4 - Prepare the Adjusting Entries Adjusting Entries
Requirement 5 - Post Adjusting Entries to the General Ledger General Ledger
Requirement 6 - Prepare an Adjusted Trial Balance Adjusted TB
Requirement 7 - Prepare the Financial Statements Financial Statements
Requirement 8 - Prepare the Closing Entries Closing Entries
Requirement 9 - Post Closing Entries to the General Ledger General Ledger
Requirement 10 - Prepare the Post Closing Trial Balance Post Closing TB
Click here for the solution: (Case Study 1-The Complete Accounting Cycle) During its first month of operation, the Parkview Landscaping Corporation
During its first month of operation, the Parkview Landscaping Corporation, which specializes in residential landscaping, completed the following transactions:
July 1 Began business by making a deposit in a company bank account of $24,000, in exchange for 4,800 shares of $5 par value common stock.
July 1 Paid the premium on a one-year insurance policy, $2,400.
July 1 Paid the current month's rent, $2,080.
July 3 Purchased landscaping equipment from Brookwood Company, $8,800. Paid $1,200 down and the balance was placed on account. Payments will be $400.00 per month for nineteen months. The first payment is due 8/1. Note: Use Accounts Payable for the Balance Due.
July 8 Purchased landscaping supplies from Lakeside Company on credit, $780.
July 12 Paid utility bill for July, $308.
July 16 Cash landscaping revenue for the first half of July, $2,724.
July 19 Made payment on account to Lakeside Company, $400.
July 31 Cash landscaping revenue for the last half of July, $2,620.
July 31 Declared and paid cash dividend of $1,600.
Requirements Sheet in Workbook
Requirement 1 - Prepare the Journal Entries in the General Journal Journal Entries
Requirement 2 - Post Journal Entries to the General Ledger General Ledger
Requirement 3 - Prepare a Trial Balance Trial Balance
Requirement 4 - Prepare the Adjusting Entries Adjusting Entries
Requirement 5 - Post Adjusting Entries to the General Ledger General Ledger
Requirement 6 - Prepare an Adjusted Trial Balance Adjusted TB
Requirement 7 - Prepare the Financial Statements Financial Statements
Requirement 8 - Prepare the Closing Entries Closing Entries
Requirement 9 - Post Closing Entries to the General Ledger General Ledger
Requirement 10 - Prepare the Post Closing Trial Balance Post Closing TB
Click here for the solution: (Case Study 1-The Complete Accounting Cycle) During its first month of operation, the Parkview Landscaping Corporation
Tuesday, August 4, 2015
Appendix L : During the first month of operation of Shelby Oaks Dentistry the following transactions occurred
Appendix L
Journalizing, Posting, and Preparing a Trial Balance
Shelby Oaks Dentistry
Use this template to complete the assignment per the instructions below
Shelby Oaks Dentistry Chart of Accounts:
No. 101 Cash
No. 112 Accounts Receivable
No. 126 Supplies
No. 201 Accounts Payable
No. 205 Unearned Revenue
No. 311 Common Stock
No. 400 Service Revenue
No. 726 Rent Expense
No. 729 Salaries Expense
During the first month of operation of Shelby Oaks Dentistry the following transactions occurred:
June 1 Stockholders invested $40,000 cash in exchange for common stock
1 Paid Rent for the month $1,000
7 Purchased supplies on account for $4,000
10 Received $2,100 cash for dental services completed
13 Provided dental services on account for $5,100
25 Received a $500 cash advance for services not yet rendered
30 Paid $1,600 of the amount due on account for supplies
30 Received payment of $1,500 for dental services on account
30 Paid dental assistant for the month $2,400
Instructions
(a) Journalize the transactions on the tab labeled General Journal
(b) Post the transactions to the ledger accounts tab labeled Ledger Accounts
---------Be sure to calculate the balance in the account after each posted transaction
(c) Prepare a trial balance at June 30, 2010 on the tab labeled Trial Balance
Click here for the solution: Appendix L : During the first month of operation of Shelby Oaks Dentistry the following transactions occurred
Journalizing, Posting, and Preparing a Trial Balance
Shelby Oaks Dentistry
Use this template to complete the assignment per the instructions below
Shelby Oaks Dentistry Chart of Accounts:
No. 101 Cash
No. 112 Accounts Receivable
No. 126 Supplies
No. 201 Accounts Payable
No. 205 Unearned Revenue
No. 311 Common Stock
No. 400 Service Revenue
No. 726 Rent Expense
No. 729 Salaries Expense
During the first month of operation of Shelby Oaks Dentistry the following transactions occurred:
June 1 Stockholders invested $40,000 cash in exchange for common stock
1 Paid Rent for the month $1,000
7 Purchased supplies on account for $4,000
10 Received $2,100 cash for dental services completed
13 Provided dental services on account for $5,100
25 Received a $500 cash advance for services not yet rendered
30 Paid $1,600 of the amount due on account for supplies
30 Received payment of $1,500 for dental services on account
30 Paid dental assistant for the month $2,400
Instructions
(a) Journalize the transactions on the tab labeled General Journal
(b) Post the transactions to the ledger accounts tab labeled Ledger Accounts
---------Be sure to calculate the balance in the account after each posted transaction
(c) Prepare a trial balance at June 30, 2010 on the tab labeled Trial Balance
Click here for the solution: Appendix L : During the first month of operation of Shelby Oaks Dentistry the following transactions occurred
Monday, July 6, 2015
A tabular analysis of the transactions made during August 2010 by Witten Company during its first month of operation
E3-4 A tabular analysis of the transactions made during August 2010 by Witten Company during its first month of operation.
Assets = Liabilities + Stockholders' Equity
Office Accounts Common Retained Earnings
Cash + A/R + Supp. + Equip. = Payable + Stock + Rev. - Exp. - Div.
1. +$20,000 +$20,000 Com. Stock
2. -1,000 +$5,000 +$4,000
3. -750 +$750
4. +4,400 +$5,400 +$9,800 Serv. Rev.
5. -1,500 -1,500
6. -2,000 -$2,000 Div.
7. -800 -$ 800 Rent Exp.
8. +450 -450
9. -3,000 -3,000 Sal. Exp.
10. +500 -500 Util. Exp.
Hint: Analyze transaction and compare net income (SO 1)
Instructions
(a) describe each transaction
(b) Determine how much stockholder's equity increased for the month
(c) Compute the net income for the month
Click here for the solution: A tabular analysis of the transactions made during August 2010 by Witten Company during its first month of operation
Assets = Liabilities + Stockholders' Equity
Office Accounts Common Retained Earnings
Cash + A/R + Supp. + Equip. = Payable + Stock + Rev. - Exp. - Div.
1. +$20,000 +$20,000 Com. Stock
2. -1,000 +$5,000 +$4,000
3. -750 +$750
4. +4,400 +$5,400 +$9,800 Serv. Rev.
5. -1,500 -1,500
6. -2,000 -$2,000 Div.
7. -800 -$ 800 Rent Exp.
8. +450 -450
9. -3,000 -3,000 Sal. Exp.
10. +500 -500 Util. Exp.
Hint: Analyze transaction and compare net income (SO 1)
Instructions
(a) describe each transaction
(b) Determine how much stockholder's equity increased for the month
(c) Compute the net income for the month
Click here for the solution: A tabular analysis of the transactions made during August 2010 by Witten Company during its first month of operation
Wednesday, June 17, 2015
The following transactions apply to Puretz Consulting for 2010, the first year of operation
Problem 5-17 Accounting for uncollectible accounts-two cycles using the percent of revenue allowance method
The following transactions apply to Puretz Consulting for 2010, the first year of operation.
1. Recognized $75,000 of service revenue earned on account.
2. Collected $62,000 from accounts receivable.
3. Adjusted accounts to recognize uncollectible accounts expense. Puretz uses the allowance method of accounting for uncollectible accounts and estimates that uncollectible accounts expense will be 2 percent of sales on account.
The following transactions apply to Puretz Consulting for 2011.
1. Recognized $86,500 of service revenue on account.
2. Collected $85,000 from accounts receivable.
3. Determined that $1,120 of the accounts receivable were uncollectible and wrote them off.
4. Collected $500 of an account that had been previously written off.
5. Paid $52,600 cash for operating expenses.
6. Adjusted accounts to recognize uncollectible accounts expense for 2011. Puretz estimates that uncollectible accounts expense will be 1 percent of sales on account.
Required
Complete all the following requirements for 2010 and 2011. Complete all requirements for 2010 prior to beginning the requirements for 2011.
a. Identify the type of each transaction (asset source, asset use, asset exchange, or claims exchange).
b. Show the effect of each transaction on the elements of the financial statements, using a horizontal statements model like the one shown here. Use + for increase, - for decrease, and NA for not affected. Also, in the Cash Flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). The first transaction is entered as an example. (Hint: Closing entries do not affect the statements model.)
c. Organize the transaction data in accounts under an accounting equation.
d. Prepare the income statement, statement of changes in stockholders' equity, balance sheet, and statement of cash flows.
Check:
c. Ending Accounts Receivable, 2010: $13,000
d. Net Income, 2011: $33,035
Click here for the solution: The following transactions apply to Puretz Consulting for 2010, the first year of operation
The following transactions apply to Puretz Consulting for 2010, the first year of operation.
1. Recognized $75,000 of service revenue earned on account.
2. Collected $62,000 from accounts receivable.
3. Adjusted accounts to recognize uncollectible accounts expense. Puretz uses the allowance method of accounting for uncollectible accounts and estimates that uncollectible accounts expense will be 2 percent of sales on account.
The following transactions apply to Puretz Consulting for 2011.
1. Recognized $86,500 of service revenue on account.
2. Collected $85,000 from accounts receivable.
3. Determined that $1,120 of the accounts receivable were uncollectible and wrote them off.
4. Collected $500 of an account that had been previously written off.
5. Paid $52,600 cash for operating expenses.
6. Adjusted accounts to recognize uncollectible accounts expense for 2011. Puretz estimates that uncollectible accounts expense will be 1 percent of sales on account.
Required
Complete all the following requirements for 2010 and 2011. Complete all requirements for 2010 prior to beginning the requirements for 2011.
a. Identify the type of each transaction (asset source, asset use, asset exchange, or claims exchange).
b. Show the effect of each transaction on the elements of the financial statements, using a horizontal statements model like the one shown here. Use + for increase, - for decrease, and NA for not affected. Also, in the Cash Flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). The first transaction is entered as an example. (Hint: Closing entries do not affect the statements model.)
c. Organize the transaction data in accounts under an accounting equation.
d. Prepare the income statement, statement of changes in stockholders' equity, balance sheet, and statement of cash flows.
Check:
c. Ending Accounts Receivable, 2010: $13,000
d. Net Income, 2011: $33,035
Click here for the solution: The following transactions apply to Puretz Consulting for 2010, the first year of operation
Sunday, April 26, 2015
The General's Favorite Fishing Hole - Period 2
The General's Favorite Fishing Hole - Period 2
Comprehensive Problem. Heintz and Parry. College Accounting 19th Edition and 20th Edition.
The General’s Favorite Fishing Hole
Comprehensive Problem. Heintz and Parry. College Accounting 19th Edition and 20th Edition.
The General’s Favorite Fishing Hole
PERIOD 2
The General’s Favorite Fishing Hole
The General’s Favorite Fishing Hole
Bob Night’s fishing camp, “The General’s
Favorite Fishing Hole,” is in the second month of operation. The camp is
open from April through September, which allows for many college
basketball coaches to attend during their off-season. The camp’s
attendees arrive on Sunday afternoon and return home the following
Saturday afternoon. Each attendee pays a registration fee that includes
room and board, the use of fishing boats, and professional instruction
in fishing techniques. Based on suggestions from clients, Night plans to
expand the facilities and provide additional services. The post-closing
trial balance as of April 30, and chart of accounts are provided below.
The General’s Favorite Fishing Hole
The following transactions took place during May 20--
The General’s Favorite Fishing Hole
May
1 In order to provide snacks for guests on a 24 hour basis, Night signed a contract with Snack Attack. Snack Attack will install vending machines with food and drinks and pay a 10% commission on all sales. Estimated payments are made at the beginning of each month. Night received a check for $200, the estimated commission on sales for May.
2 Night purchased a surround sound system and big screen TV with a Digital Satellite System for the guest lounge. The surround sound system cost $3,600 and has an estimated useful life of 5 years, and no salvage value. The TV cost $8,000 and has an estimated useful life of 8 years, and a salvage value of $800. Night paid cash for both items.
2 Paid for May’s programming on the new Digital Satellite System, $125.
3 Night's office manager returned $100 worth of office supplies to Gordon Office Supply. Night received a $100 reduction in our account with Gordon.
3 Deposited registration fees, $52,700
3 Paid rent for lodge and campgrounds for the month of May, $40,000.
3 In preparation for the purchase of a nearby campground, Night invested an additional $600,000.
4 Paid Gordon Office Supply on account, $400.
4 Purchased the assets of a competing business and paid cash for the following: land $100,000, lodge $530,000 and fishing boats $9,000. The lodge has a remaining useful life of 50 years and a $50,000 salvage value. The boats have remaining lives of 5 years and zero salvage value.
5 Paid May's insurance premium for the new camp, $1,000
5 Purchased food supplies from Acme Super Market on account, $22,950.
5 Purchased office supplies from Gordon Office Supplies on account, $1,200.
7 Night paid $40 each for one-year subscriptions to Fishing Illustrated, Fishing Unlimited, and Fish Master.
10 Deposited registration fees, $62,750
13 Paid wages to fishing guides, $30,000.
14 A guest because ill and was unable to stay for the entire week. A refund was issued in the amount of $1,000.
17 Deposited registration fees, $63,000.
19 Purchased food supplies from Acme Super Market on account, $18,400.
21 Deposited registration fees, $63,400
23 Paid $2,500 for advertising spots on National Sports Talk Radio
25 Paid repair fee for damaged boat, $ 850.
27 Paid wages to fishing guides, $30,000.
28 Paid $1,800 for advertising spots on billboards in the mid-west.
29 Purchased food supplies from Acme Super Market on account, $14,325.
30 Paid utilities bill, $3,300
30 Paid telephone bill, $1,800.
30 Paid Acme Super Market on account, $47,350.
31 Bob Night withdrew cash for personal use, $7,500.
Adjustment information at the end of May is provided below.
a. Total vending machine sales were $2,300 for the month of May.
b. Straight-line depreciation is used for the 10 boats purchased on April 2nd for $60,000. The useful life for these assets is 5 years and there is no salvage value. A full month's depreciation was taken in April on these boats.
c. Straight line depreciation is used for the 2 boats purchased in May.
d. Straight line depreciation is used to depreciate the surround sound system.
e. Straight line depreciation is used to depreciate the big screen TV.
f. Straight line depreciation is used for the building purchased in May.
g. On April 2nd Night paid $9,000 for insurance during the six-month camping season. May's portion of this premium was used up during this month.
h. Night received his May issues of Fishing Illustrated, Fishing Unlimited, and Fish Master.
i. Office supplies remaining on hand, $150.
j. Food supplies remaining on hand, $5,925.
k. Wages earned, but not yet paid, at the end of May, $6,000.
The General’s Favorite Fishing Hole
REQUIRED
1. Enter the above transactions in a general journal. Enter transactions from May 1-4 on page 5, May 5-28 on page 6, and the remaining entries on page 7.
2. Post the entries to the general ledger. (If you are not using the working papers that accompany this text, you will need to enter the account titles and account numbers in the general ledger accounts.)
3. Prepare a trial balance on a work sheet.
4. Complete the work sheet.
5. Prepare the income statement.
6. Prepare the statement of owner’s equity
7. Prepare the balance sheet.
8. Journalize the adjusting entries on page 8 of the general journal.
9. Post the adjusting entries to the general ledger.
10. Journalize the closing entries on page 9 of the general journal.
11. Post the closing entries to the general ledger.
12. Prepare a post-closing trial balance.
The General’s Favorite Fishing Hole
The following transactions took place during May 20--
The General’s Favorite Fishing Hole
May
1 In order to provide snacks for guests on a 24 hour basis, Night signed a contract with Snack Attack. Snack Attack will install vending machines with food and drinks and pay a 10% commission on all sales. Estimated payments are made at the beginning of each month. Night received a check for $200, the estimated commission on sales for May.
2 Night purchased a surround sound system and big screen TV with a Digital Satellite System for the guest lounge. The surround sound system cost $3,600 and has an estimated useful life of 5 years, and no salvage value. The TV cost $8,000 and has an estimated useful life of 8 years, and a salvage value of $800. Night paid cash for both items.
2 Paid for May’s programming on the new Digital Satellite System, $125.
3 Night's office manager returned $100 worth of office supplies to Gordon Office Supply. Night received a $100 reduction in our account with Gordon.
3 Deposited registration fees, $52,700
3 Paid rent for lodge and campgrounds for the month of May, $40,000.
3 In preparation for the purchase of a nearby campground, Night invested an additional $600,000.
4 Paid Gordon Office Supply on account, $400.
4 Purchased the assets of a competing business and paid cash for the following: land $100,000, lodge $530,000 and fishing boats $9,000. The lodge has a remaining useful life of 50 years and a $50,000 salvage value. The boats have remaining lives of 5 years and zero salvage value.
5 Paid May's insurance premium for the new camp, $1,000
5 Purchased food supplies from Acme Super Market on account, $22,950.
5 Purchased office supplies from Gordon Office Supplies on account, $1,200.
7 Night paid $40 each for one-year subscriptions to Fishing Illustrated, Fishing Unlimited, and Fish Master.
10 Deposited registration fees, $62,750
13 Paid wages to fishing guides, $30,000.
14 A guest because ill and was unable to stay for the entire week. A refund was issued in the amount of $1,000.
17 Deposited registration fees, $63,000.
19 Purchased food supplies from Acme Super Market on account, $18,400.
21 Deposited registration fees, $63,400
23 Paid $2,500 for advertising spots on National Sports Talk Radio
25 Paid repair fee for damaged boat, $ 850.
27 Paid wages to fishing guides, $30,000.
28 Paid $1,800 for advertising spots on billboards in the mid-west.
29 Purchased food supplies from Acme Super Market on account, $14,325.
30 Paid utilities bill, $3,300
30 Paid telephone bill, $1,800.
30 Paid Acme Super Market on account, $47,350.
31 Bob Night withdrew cash for personal use, $7,500.
Adjustment information at the end of May is provided below.
a. Total vending machine sales were $2,300 for the month of May.
b. Straight-line depreciation is used for the 10 boats purchased on April 2nd for $60,000. The useful life for these assets is 5 years and there is no salvage value. A full month's depreciation was taken in April on these boats.
c. Straight line depreciation is used for the 2 boats purchased in May.
d. Straight line depreciation is used to depreciate the surround sound system.
e. Straight line depreciation is used to depreciate the big screen TV.
f. Straight line depreciation is used for the building purchased in May.
g. On April 2nd Night paid $9,000 for insurance during the six-month camping season. May's portion of this premium was used up during this month.
h. Night received his May issues of Fishing Illustrated, Fishing Unlimited, and Fish Master.
i. Office supplies remaining on hand, $150.
j. Food supplies remaining on hand, $5,925.
k. Wages earned, but not yet paid, at the end of May, $6,000.
The General’s Favorite Fishing Hole
REQUIRED
1. Enter the above transactions in a general journal. Enter transactions from May 1-4 on page 5, May 5-28 on page 6, and the remaining entries on page 7.
2. Post the entries to the general ledger. (If you are not using the working papers that accompany this text, you will need to enter the account titles and account numbers in the general ledger accounts.)
3. Prepare a trial balance on a work sheet.
4. Complete the work sheet.
5. Prepare the income statement.
6. Prepare the statement of owner’s equity
7. Prepare the balance sheet.
8. Journalize the adjusting entries on page 8 of the general journal.
9. Post the adjusting entries to the general ledger.
10. Journalize the closing entries on page 9 of the general journal.
11. Post the closing entries to the general ledger.
12. Prepare a post-closing trial balance.
Click here for the solution: The General's Favorite Fishing Hole - Period 2 Solution
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