Comprehensive Accounting Problem
Stumble & Fall, Inc.
BUS 321 - Intermediate Accounting
Spring 2017 - Tad Miller
Instructions
This project is most easily completed in an Excel workbook with several worksheets. You
The first worksheet should be a cover sheet
Skip a line between journal entries
Account titles need to be the same on the chart of accounts, T-Accounts and journal entries
Accounts in Trial Balance and T-accounts should be arranged by account number
There is only one General Journal (one set of T-accounts). All entries need to be recorded in the same General Journal and posted to the same set of T-accounts.
No late assignments.
- Prepare journal entries to record each of the following transactions. You do not needto write explanations below the journal entries.
- Create T-accounts for each account in the chart of accounts and post each of the journal entries to an existing T-account. I will provide an excel template to save you some time.
- Prepare an unadjusted trial balance
- Prepare adjusting journal entries. In addition to the information provided for adjusting journal entries, review the transactions and review your unadjusted trial balance to determine if there are any other adjusting journal entries you may need to prepare.
- Post each of the adjusting journal entries to the same T-accounts you previously created.
- Total the T-accounts prior to preparing the unadjusted trial balance.
- Prepare an adjusted trial balance
- Prepare the following financial statements, in good form
- Multistep income statement you do not need to distinguish between selling expense and general & administrative expenses
- Statement of retained earnings
- Classified balance sheet
Apr 1Issued 10,000 shares of $1 par value common stock for $13 per share.
Apr 1Borrowed $30,000 for Coast National Bank by issuing a $30,000 note due in two years with 10% interest payable annually.
Apr 1Purchased the assets of a distressed competitor for $75,000 in cash. The assets consisted of inventory with an estimated market value of $80,000; supplies worth $6,000 and equipment worth $14,000.
Apr 2Paid rent on building for 12 months in advance, $7,200.
Apr 3Purchased display equipment from Northern Supply for $10,000. Paid $2,000 cash and the balance is to be paid with in 60 days.
Apr 4Purchased merchandise on account from Quick Wholesale. Cost of the merchandise was $44,100, terms were 1/20 n/45. We use the perpetual inventory method.
Apr 4Paid $1,800 for supplies.
Apr 5Made a $25,000 credit sale to Ace Nursery, terms 2/10 n/30. Cost of Goods Sold was $17,500.
Apr 9Purchased merchandise costing $30,000 on account from Plants, Inc, terms were 2/30 n/60. Paid trucking company $250 cash for freight charges.
Apr 11Received $11,760 cash of the amount due from Ace Nursery (in the discount period)
Apr 12Paid salaries totaling $3,000
Apr 20Cash sales of $15,000 before the 2% sales discount. Cost of Goods Sold was $10,500.
Apr 20Received $300 for subleasing an office in the building for $300 per month. The payment covers rent from 4/20/17 until 5/20/17.
Apr 22Received $5,000 from the sale of gift certificates.
Apr 23Paid the amount due to Quick Wholesale (in the discount period)
Apr 24Purchased temporary investments in the stock of Miller Motor Co. at a cost of $3,600.
Apr 25Returned defective merchandise costing $1,200 to Plants, Inc.
Apr 26$24,000 sale to Best-Way, which paid $5,880 cash and the remaining $18,000 was on account, terms 2/10 n/30. Cost of Goods Sold was $16,800.
Apr 29Purchased $6,000 of merchandise on account for Quick Wholesale, terms 1/20 n/45.
Apr 29Cash sales (before any sales discount) of $18,000. Cost of Goods Sold was $12,600.
101 · Cash
111 · Accounts receivable
119 · Allowance for uncollectible accounts
121 · Inventory
122 · Purchases
123 · Purchase discounts
124 · Purchase returns & allow
125 · Transportation in
131 · Investments
141 · Prepaid rent
151 · Supplies
171 · Equipment
179 · accumulated depreciation
201 · Accounts payable
211 · Interest payable
221 · Salaries payable
251 · Unearned revenue: gift certificates
256 · Unearned revenue: rent
261 · Notes payable
301 · Common stock
311 · Additional paid in capital
399 Retained earnings
401 · Sales
409 · Sales discount
501 · Cost of goods sold
511 · Bad debt expense
512 · Depreciation expense
513 · Rent expense
514 · Salary expense
515 · Supplies expense
591 · Rent revenue
599 · Interest expense
Additional information
Our rent expense is $600 per month (not our sublease revenue)
Supplies used during JanApril$1,300
Rent revenue earned during the last 10 days of January April
Gift certificates redeemed - $3,500 with $2,450 Cost of Goods Sold
Interest expense on Bank Note
Salaries earned but not yet paid $2,500
Depreciation $341.67- 5-year life
Uncollectible accounts - $215 (estimate)
Ending inventory - $78,859