COMPREHENSIVE PROBLEM: CHAPTERS 3 TO 7
Note: If the working papers that accompany this text are not used in solving this problem, account numbers may differ from those presented in this solution.
(a)
Sales Journal S1
Date Account Debited Invoice No. Ref.Accounts Receivable Dr.
Sales Revenue Cr.Jan. 3
3111122222525
B. RemyJ. FineR. DravesS. InglesB. RemyR. DravesB. HachinskiJ. Fine
510511512513514515516517
3100 1800190090037008003500610021800
Purchases Journal P1
Date Account Credited Terms Ref.Purchases Dr.
Accounts Payable Cr.Jan. 5
5161616272727
S. YostD. LauxD. MorenoS. KoskoS. YostD. MorenoD. LauxS. Yost
3000 270015000139001500125001200280052600
COMPREHENSIVE PROBLEM (Continued)
Cash Receipts Journal CR1
DateAccountCredited Ref.
CashDr.
AccountsReceivable
Cr.
SalesRevenue
Cr.
OtherAccounts
Cr.Jan. 7
7101313202131
S. InglesB. HachinskiCash SalesB. RemyJ. FineCash SalesS. InglesCash Sales
40002000
1550031001500
17500900
2292067420
40002000
31001500
900
11500
15500
17500
2292055920
Cash Payments Journal CP1
Date Account Debited Ref.
OtherAccounts
Dr.
AccountsPayable
Dr.Supplies
Dr.CashCr.
Jan. 8 9 912151723232831
Freight InS. KoskoD. MorenoRent ExpenseOwner’s DrawingsSuppliesD. MorenoS. KoskoOffice suppliesSalaries and Wages Expense
516
729306125
125
627
180
1000800
7900
9880
900011000
1500013700
48700
400
200
600
1809000
110001000800400
1500013700
2007900
59180
COMPREHENSIVE PROBLEM (Continued)
(a) & (e)General Journal G1
Date Account Titles and Explanations Ref. Debit CreditJan. 9 Sales Returns and
Allowances.....................................Accounts Receivable— J. Fine.................................... (Issued credit for merchandise returned)
412
112/
300
300
18 Accounts Payable—S. Kosko..........Purchase Returns and Allowances............................ (Received credit for returned goods)
201/
512
200
200
21 Accounts Payable— R. Mikush........................................
Notes Payable........................... (Issued note for balance due)
201/200
1500015000
Adjusting Entries31 Supplies Expense.............................
Supplies....................................728125
900900
31 Insurance Expense (1/10 X 2,000)..................................
Prepaid Insurance....................722/130/
200200
31 Depreciation Expense (1/12 X 1,500)..................................
Accumulated Depreciation— Equipment.............................
711
158
125
125
31 Interest Expense...............................Interest Payable........................
718230
3030
COMPREHENSIVE PROBLEM (Continued)
General Journal G1Date Account Titles and Explanations Ref. Debit CreditJan. 31 Inventory (Jan. 31).............................
Sales Revenue...................................Purchase Returns and Allowances.....................................
Income Summary.....................
120401
512350
15000
200
77720
67565
31 Income Summary..............................Inventory (Jan. 1)......................Sales Returns and Allowances............................Purchases.................................Freight In...................................Rent Expense............................Salaries and Wages Expense..................................Supplies Expense.....................Insurance Expense...................Depreciation Expense..............Interest Expense.......................
350120
412510516729
627728722711718
20000
30052600
1801000
7900100020012530
67565
31 Income Summary..............................Owner’s Capital........................
350301
6756577100
31 Owner’s Capital.................................Owner’s Drawings....................
301306 800
77100
(b) & (e) General Ledger
Cash No. 101Date Explanation Ref. Debit Credit BalanceJan. 1
3131
BalanceCash Dr.Cash Cr.
CR1CP1
6742059180
33750101170
41990
COMPREHENSIVE PROBLEM (Continued)
Accounts Receivable No. 112Date Explanation Ref. Debit Credit BalanceJan. 1
31319
BalanceAccounts Receive Dr.Accounts Receive Cr.Return Credit J. Fine
S1
CR1G1
2180011500
300
1300034800233002300023000
Notes Receivable No. 115Date Explanation Ref. Debit Credit BalanceJan. 1 Balance 39000
Inventory No. 120Date Explanation Ref. Debit Credit BalanceJan. 1
3131
BalanceAdj. entry Adj. entry
G1G1
5000200001500015000
Supplies No. 125Date Explanation Ref. Debit Credit BalanceJan. 1
3131
Balance17th & 28th purchase Adj. entry
CP1G1
600900
10001600
700
Prepaid Insurance No. 130Date Explanation Ref. Debit Credit BalanceJan. 1
31BalanceAdj. entry
G1 200
20001800
Equipment No. 157Date Explanation Ref. Debit Credit BalanceJan. 1 Balance 6450
COMPREHENSIVE PROBLEM (Continued)
Accumulated Depreciation—Equipment No. 158Date Explanation Ref. Debit Credit BalanceJan. 1
31BalanceAdj. entry
G1 125
15001625
Notes Payable No. 200Date Explanation Ref. Debit Credit BalanceJan. 21 G1 15000 15000
Accounts Payable No. 201Date Explanation Ref. Debit Credit BalanceJan. 1
31311821
BalancePurchases JournalCash Payment Jour.Returned Merch.Issued Note Mikush
P1
CP1G1G1
52600
15000
48900200
3500056100
72007000
22000
Interest Payable No. 230Date Explanation Ref. Debit Credit BalanceJan. 31 Adj. entry G1 30 30
Owner’s Capital No. 301Date Explanation Ref. Debit Credit BalanceJan. 1
3131
BalanceOwners Drawing??????????????
G1G1
8007870077900
?
Owner’s Drawings No. 306Date Explanation Ref. Debit Credit BalanceJan. 15
31Owner’s DrawClose. entry
CP1G1
800800
8000
COMPREHENSIVE PROBLEM (Continued)
Income Summary No. 350Date Explanation Ref. Debit Credit BalanceJan. 31
3131
InventorySales Revenue
Close. Entry
120401G1
1500077720
92720
1500092720
0
Sales Revenue No. 401Date Explanation Ref. Debit Credit BalanceJan. 31
3131
Sales JournalCash Receipts Jour.
Close. Entry
S1CR1G1
2180055920
77720
2180077720
0
Sales Returns and Allowances No. 412Date Explanation Ref. Debit Credit BalanceJan. 9
31Issued Credit
Close. entryG1G1
300300
3000
Purchases No. 510Date Explanation Ref. Debit Credit BalanceJan. 31
31Purchases Journal
Close. entryP1G1
5260052600
526000
Purchase Returns and Allowances No. 512Date Explanation Ref. Debit Credit BalanceJan. 18
31Received Credit
Close. entryG1G1
200200
2000
Freight-In No. 516Date Explanation Ref. Debit Credit BalanceJan. 8
31Pay freight
Close. entryCP1G1
180180
1800
COMPREHENSIVE PROBLEM (Continued)
Salaries and Wages Expense No. 627Date Explanation Ref. Debit Credit BalanceJan. 31
31Salaries & Wages
Close. entryCP1G1
79007900
79000
Depreciation Expense No. 711Date Explanation Ref. Debit Credit BalanceJan. 31
31Adj. entryClose. entry
G1G1
125125
1250
Interest Expense No. 718Date Explanation Ref. Debit Credit BalanceJan. 31
31Adj. entryClose. entry
G1G1
3030
300
Insurance Expense No. 722Date Explanation Ref. Debit Credit BalanceJan. 31
31Adj. entryClose. entry
G1G1
200200
2000
Supplies Expense No. 728Date Explanation Ref. Debit Credit BalanceJan. 31
31Adj. entryClose. entry
G1G1
900900
9000
Rent Expense No. 729Date Explanation Ref. Debit Credit BalanceJan. 12
31Rent
Close. entryCP1G1
10001000
10000
COMPREHENSIVE PROBLEM (Continued)
Accounts Receivable Subsidiary Ledger
R. DravesDate Explanation Ref. Debit Credit BalanceJan. 1
1122
BalanceSold Merchandise toSold Merchandise to
S1S1
1900800
150034004200
J. FineDate Explanation Ref. Debit Credit BalanceJan. 3
91325
Sold Merchandise toIssued Credit backReceived PaymentSold Merchandise to
S1G1
CR1S1
1800
6100
3001500
18001500
06100
B. HachinskiDate Explanation Ref. Debit Credit BalanceJan. 1
725
BalanceReceived PaymentSold Merchandise to
CR1S1 3500
2000750055009000
S. InglesDate Explanation Ref. Debit Credit BalanceJan. 1
71121
BalanceReceived PaymentSold Merchandise toReceived Payment
CR1S1
CR1900
4000
900
40000
9000
B. RemyDate Explanation Ref. Debit Credit BalanceJan. 3
1322
Sold Merchandise toReceived PaymentSold Merchandise to
S1CR1S1
3100
37003100
31000
3700
COMPREHENSIVE PROBLEM (Continued)
Accounts Payable Subsidiary Ledger
D. LauxDate Explanation Ref. Debit Credit BalanceJan. 5
27Sold Merchandise toSold Merchandise to
P1P1
27001200
27003900
S. KoskoDate Explanation Ref. Debit Credit BalanceJan. 1
9161823
BalanceReceived PaymentSold Merchandise toReceived PaymentReceived Payment
CP1P1G1
CP1
9000
139009000
20013700
90000
1390013700
0
R. MikushDate Explanation Ref. Debit Credit BalanceJan. 1
21BalanceReceived Payment
G1
1500015000
150000
D. MorenoDate Explanation Ref. Debit Credit BalanceJan. 1
9162327
BalanceReceived PaymentSold Merchandise toReceived PaymentSold Merchandise to
CP1P1
CP1P1
11000
15000
12500
11000
15000
110000
150000
12500
S. YostDate Explanation Ref. Debit Credit BalanceJan. 5
1627
Sold Merchandise toSold Merchandise toSold Merchandise to
P1P1P1
300015002800
300045007300
COMPREHENSIVE PROBLEM (Continued)
PACKARD Company Work Sheet For the Month Ended January 31,2012
Adjusted Trial Balance Adjustments Trial Balance Income Statement
Account Titles Dr. Cr. Dr. Cr. Dr. Cr Dr. Cr
Cash 39,990 39,990 39,990
Accounts Receivable 21,000 21,000 21,000
Notes Receivable 39,000 39,000 39,000
Merchandise Inventory 20,000 20,000 20,000 16,000 16,000
Office Supplies 1,600 900 700
Prepaid Insurance 2,000 200 1,800 1,800
Equipment 6,450 6,450 6,450
Accumulated Depreciation - Equipment 1,500 125 1,625
Notes Payable 15,000 15,000
Accounts Payable 25,700 25,700
Interest Payable 30 30
Owner’s Capital 78,700 78,700
Owner’s Drawing 800 800
Sales 72,720 72,720 72,720
Sales Returns and Allowances 300 300 300
Purchases 54,600 54,600 54,600
Purchase Returns and Allowances 200 200 200
Freight-in 180 180 180
Sales Salaries Expense 4,300 4,300 4,300
Office Salaries Expense 2,600 2,600 2,600
Rent Expense 1,000 1,000 1,000
Totals 193,820 193,820
Office Supplies Expense 900 900 900 Insurance Expense 200 200 200 Depreciation Expense 125 125 125 Interest Expense 30 30 30 Totals 1,255 1,255 193,975 193,975 84,235 88,920 125,740 Net Income 4,685
Totals 125,740
COMPREHENSIVE PROBLEM (Continued)
(d) PACKARD CO.Income Statement
For the Month Ended January 31, 2012 Sales revenues
Sales revenue.................................. 72,720Less: Sales returns and
Allowances........................... -300 =72,720Net sales revenue........................... 72,420
Cost of goods soldInventory, 1/1/12.............................. 20,000Purchases........................................ +54,600 =74,600Less: Purchase returns and
Allowances.......................... -200 =74,400Net purchases................................. 74,400
Freight in ........................................ +180Cost of goods available for sale.... =74,580 Less: Inventory, 1/31/12................ -16,000 =58,580
Cost of goods sold................... -58,580
Gross profit..................................... $13,840
Operating expensesSalaries and wages expense....................... 6,900Rent expense............................ 1,000 =7,900 Supplies expense..................... 900 =8,800 Insurance expense................... 200 =9,000 Depreciation expense............... 125 =9,125
Total Operating Expenses -9,125 Income from operations....................... $4,715
Other expenses and lossesInterest expense.............................. -30 =4,685
Net income............................................. $4,685
COMPREHENSIVE PROBLEM (Continued)
PACKARD CO.Owner’s Equity Statement
For the Month Ended January 31, 2012 Owner’s Capital, January 1, 2012...................... 78,700Add: Net income............................................... +4,685
83,385 Less: Drawings.................................................. -800Owner’s Capital, January 31, 2012.................... $82,585
PACKARD CO.Balance Sheet
January 31, 2012
AssetsCurrent assets
Cash............................................................. 39,990Notes receivable.......................................... 39,000 Accounts receivable................................... 21,000 Inventory...................................................... 16,000Supplies....................................................... 700 Prepaid insurance....................................... +1,800
Total current assets............................ $118,490
Property and equipment assetsEquipment.................................................... 6,450Less: Accumulated depreciation.............. -1,625
Total property and equipment assets............... $4,825
Total Assets ............................................................... $123,315
Liabilities and Owner’s EquityCurrent liabilities
Notes payable.............................................. 15,000
Accounts payable........................................ 25,700
Interest payable........................................... -30 Total liabilities...................................... $40,730
Owner’s equityOwner’s capital............................................ +80,585
Total liabilities and owner’s equity.... $123,315
COMPREHENSIVE PROBLEM (Continued)
(f) PACKARD CO.Post-Closing Trial Balance
January 31, 2012
Debit CreditCash..................................................................Notes Receivable.............................................Accounts Receivable......................................Inventory..........................................................Supplies...........................................................Prepaid Insurance...........................................Equipment........................................................Accumulated Depreciation—Equipment.......Notes Payable..................................................Accounts Payable...........................................Interest Payable...............................................Owner’s Capital...............................................
39,99039,00021,00016,000
7001,8006,450
124,940
1,62515,00025,700
30124,940
Accounts Receivable balance............................... 21,000
Subsidiary account balancesR. Draves......................................................... 4,200J. Fine.............................................................. 6,100 B. Hachinski.................................................... 9,000 B. Remy........................................................... 1,700 =$21,000
Accounts Payable balance.................................... 25,700
Subsidiary account balancesD. Laux............................................................ 3,900D. Moreno........................................................ 14,500 S. Yost............................................................. 7,300 =25,700