College Accounting, Chapters 1-27
23rd Edition
ISBN: 9781337794756
Author: HEINTZ, James A.
Publisher: Cengage Learning,
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Chapter 6A, Problem 2COP
COMPREHENSIVE PROBLEM 1, PERIOD 2:
The Accounting Cycle
During the month of May 20--, The General’s Favorite Fishing Hole engaged in the following transactions. These transactions required an expansion of the chart of accounts as shown below.
Assets | Revenues | ||
101 | Cash | 401 | Registration Fees |
122 | Accounts Receivable | 404 | Vending Commission Revenue |
142 | Office Supplies | ||
144 | Food Supplies | Expenses | |
145 | Prepaid Insurance | 511 | Wages Expense |
146 | Prepaid Subscriptions | 512 | Advertising Expense |
161 | Land | 521 | Rent Expense |
171 | Buildings | 523 | Office Supplies Expense |
171.1 | Accum. Depr.—Buildings | 524 | Food Supplies Expense |
181 | Fishing Boats | 525 | Phone Expense |
181.1 | Accum. Depr.—Fishing Boats | 533 | Utilities Expense |
182 | Surround Sound System | 535 | Insurance Expense |
182.1 | Accum. Depr.—Surround Sound Sys. | 536 | Postage Expense |
183 | Big Screen TV | 537 | Repair Expense |
183.1 | Accum. Depr.—Big Screen TV | 540 | Depr. Exp.—Buildings |
541 | Depr. Exp.—Surround Sound Sys. | ||
Liabilities | |||
202 | Accounts Payable | 542 | Depr. Exp.—Fishing Boats |
219 | Wages Payable | 543 | Depr. Exp.—Big Screen TV |
546 | Satellite Programming Exp. | ||
Owner’s Equity | 548 | Subscriptions Expense | |
311 | Bob Night, Capital | ||
312 | Bob Night, Drawing | ||
313 | Income Summary |
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 five years and no salvage value. The TV cost $8,000, has an estimated useful life of eight years, and has a salvage value of $800. Night paid cash for both items. | |
2 | Paid for May’s programming on the new digital satellite system, $125. | |
May | 3 | Night’s office manager returned $100 worth of office supplies to Gordon Office Supply. Night received a $100 reduction on the account. |
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 five years and no salvage value. | |
5 | Paid May’s insurance premium for the new camp, $1,000. (See above transaction.) | |
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. The magazines are published monthly. | |
10 | Deposited registration fees, $62,750. | |
13 | Paid wages to fishing guides, $30,000. (Don’t forget wages payable from prior month.) | |
14 | A guest became 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 May’s 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 May’s advertising spots on billboards. | |
29 | Purchased food supplies from Acme Super Market on account, $14,325. | |
30 | Paid utilities bill, $3,300. | |
30 | Paid phone 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. A 10% commission is earned on these sales. | |
(b) | Straight-line |
|
(c) | Straight-line depreciation is used to depreciate the surround sound system. | |
(d) | Straight-line depreciation is used to depreciate the big screen TV. | |
(e) | Straight-line depreciation is used for the building purchased in May. | |
(f) | On April 2, Night paid $9,000 for insurance during the six-month camping season. May’s portion of this premium was used up during this month. | |
(g) | Night received his May issues of Fishing Illustrated, Fishing Unlimited, and Fish Master. | |
(h) | Office supplies remaining on hand, $150. | |
(i) | Food supplies remaining on hand, $5,925. | |
(j) | Wages earned, but not yet paid, at the end of May, $6,000. |
REQUIRED
- 1. Enter the transactions in a general journal. Enter transactions from May 1–4 on page 7, May 5–28 on page 8, and the remaining entries on page 9. To save time and space, don’t enter descriptions for the
journal entries. - 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, account numbers, and balances from April 30 in the general ledger accounts.)
- 3. Prepare a
trial balance on a work sheet. - 4. Complete the work sheet.
- 5. Journalize the
adjusting entries on page 10 of the general journal. - 6. Post the adjusting entries to the general ledger.
- 7. Prepare the income statement.
- 8. Prepare the statement of owner’s equity.
- 9. Prepare the
balance sheet . - 10. Journalize the closing entries on page 11 of the general journal.
- 11. Post the closing entries to the general ledger.
- 12. Prepare a post-closing trial balance.
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Rick Hall owns a card shop: Hall’s Cards. The following cash information is available for the month of August Year 1. As of August 31, the bank statement shows a balance of $13,250. The August 31 unadjusted balance in the Cash account of Hall’s Cards is $9,564. A review of the bank statement revealed the following information:
A deposit of $1,250 on August 31, Year 1, does not appear on the August bank statement.
It was discovered that a check to pay for baseball cards was correctly written and paid by the bank for $1,750 but was recorded on the books as $2,650.
When checks written during the month were compared with those paid by the bank, three checks amounting to $4,095 were found to be outstanding.
A debit memo for $59 was included in the bank statement for the purchase of a new supply of checks.
Tutorial Accounting for Club
The treasurer of Accounting Club has prepared the following receipts and payments account for
the year ended 31 October 2012 from the bank statement.
Receipts:
Balance at bank 1 November
2011
RM
Payments:
RM
7,790 Equipment
1,760
Printing and stationery
Subscriptions:
Ordinary
2,020
2,110 Insurance
1,980
Life
8,800 Telephone and electricity
2,970 Wages (kiosk)
84,480 Purchases (kiosk)
480
Donation
9,240
Takings from kiosk
64,020
Balance at bank 31 October 2012
26,650
106,150
106,150
The following information is available:
1. Cheques issued for kiosk purchases amounting to RM1,190 were unpresented as at 31
October 2012.
2. The takings from the kiosk on 30 October 2012 amounting to RM1,410 were deposited on
the same day but the amount was not credited by the bank until 2 November 2012.
3. Depreciation of 10% on cost is to be provided for the equipment.
4. The captain of the kiosk is entitled to a commission of 5% on the gross profit from the kiosk
before any…
Guardian
Carpets Incorporated provided the following accounts related to beginning balances in its accounts receivable and allowance accounts for the current year:
Accounts Receivable
Beginning Balance
6,000,000
Allowance for Uncollectible
Accounts
2,000,000
Beginning Balance
Question content area top right
Part 1
Requirement
Prepare the journal entries to record the following transactions that occurred during the current year. Prepare a schedule for both accounts receivable and the allowance for uncollectible accounts that shows the beginning balances, the various items that change the beginning balance, and the ending balance.
Question content area bottom
Part 1
Prepare the journal entries to record the following transactions that occurred during the current year. (Record debits first, then credits. Exclude explanations from any journal…
Chapter 6A Solutions
College Accounting, Chapters 1-27
Ch. 6A - Prob. 1RQCh. 6A - Prob. 2RQCh. 6A - SERIES A EXERCISE CLASSIFYING BUSINESS...Ch. 6A - SERIES A EXERCISE CLASSIFYING BUSINESS...Ch. 6A - SERIES B EXERCISE CLASSIFYING BUSINESS...Ch. 6A - SERIES B EXERCISE CLASSIFYING BUSINESS...Ch. 6A - COMPREHENSIVE PROBLEM 1: The Accounting Cycle Bob...Ch. 6A - COMPREHENSIVE PROBLEM 1, PERIOD 2: The Accounting...
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