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 JournalS1
Date / Account Debited / Invoice No. / Ref. / Accounts Receivable Dr.Sales Revenue Cr.
Jan. 3
3
11
11
22
22
25
25 / B. Remy
J. Fine
R. Draves
S. Ingles
B. Remy
R. Draves
B. Hachinski
J. Fine / 510
511
512
513
514
515
516
517 /
/ 3100
1800
1900
900
3700
800
3500
6100
21800
Purchases JournalP1
Date / Account Credited / Terms / Ref. / Purchases Dr.Accounts Payable Cr.
Jan. 5
5
16
16
16
27
27
27 / S. Yost
D. Laux
D. Moreno
S. Kosko
S. Yost
D. Moreno
D. Laux
S. Yost /
/ 3000
2700
15000
13900
1500
12500
1200
2800
52600
COMPREHENSIVE PROBLEM (Continued)
Cash Receipts JournalCR1
Date / AccountCredited / Ref. / Cash
Dr. / Accounts
Receivable
Cr. / Sales
Revenue
Cr. / Other
Accounts
Cr.
Jan. 7
7
10
13
13
20
21
31 / S. Ingles
B. Hachinski
Cash Sales
B. Remy
J. Fine
Cash Sales
S. Ingles
Cash Sales /
/ 4000
2000
15500
3100
1500
17500
900
22920
67420 / 4000
2000
3100
1500
900
11500 / 15500
17500
22920
55920
Cash Payments JournalCP1
Date / Account Debited / Ref. / OtherAccounts
Dr. / Accounts
Payable
Dr. / Supplies
Dr. / Cash
Cr.
Jan. 8
9
9
12
15
17
23
23
28
31 / Freight In
S. Kosko
D. Moreno
Rent Expense
Owner’s Drawings
Supplies
D. Moreno
S. Kosko
Office supplies
Salaries and Wages
Expense / 516
729
306
125
125
627 / 180
1000
800
7900
9880 / 9000
11000
15000
13700
48700 / 400
200
600 / 180
9000
11000
1000
800
400
15000
13700
200
7900
59180
COMPREHENSIVE PROBLEM (Continued)
(a) & (e)
General JournalG1
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 / 15000 / 15000
Adjusting Entries
31 / Supplies Expense......
Supplies...... / 728
125 / 900 / 900
31 / Insurance Expense
(1/10 X 2,000)......
Prepaid Insurance...... / 722/
130/ / 200 / 200
31 / Depreciation Expense
(1/12 X 1,500)......
Accumulated Depreciation—
Equipment.... / 711
158 / 125 / 125
31 / Interest Expense......
Interest Payable...... / 718
230 / 30 / 30
COMPREHENSIVE PROBLEM (Continued)
General JournalG1
Date / Account Titles and Explanations / Ref. / Debit / CreditJan.31 / Inventory (Jan. 31)......
Sales Revenue......
Purchase Returns and
Allowances......
Income Summary...... / 120
401
512
350 / 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...... / 350
120
412
510
516
729
627
728
722
711
718 / 20000
300
52600
180
1000
7900
1000
200
125
30 / 67565
31 / Income Summary......
Owner’s Capital...... / 350
301 / 67565
77100
31 / Owner’s Capital......
Owner’s Drawings...... / 301
306 / 800 / 77100
(b) & (e)General Ledger
CashNo. 101
Date / Explanation / Ref. / Debit / Credit / BalanceJan. 1
31
31 / Balance
Cash Dr.
Cash Cr. /
CR1
CP1 / 67420 / 59180 / 33750
101170
41990
COMPREHENSIVE PROBLEM (Continued)
Accounts ReceivableNo. 112
Date / Explanation / Ref. / Debit / Credit / BalanceJan.1
31
31
9 / Balance
Accounts Receive Dr.
Accounts Receive Cr.
Return Credit J. Fine /
S1
CR1
G1 / 21800 / 11500
300 / 13000
34800
23300
23000
23000
Notes ReceivableNo. 115
Date / Explanation / Ref. / Debit / Credit / BalanceJan. 1 / Balance / / 39000
InventoryNo. 120
Date / Explanation / Ref. / Debit / Credit / BalanceJan. 1
31
31 / Balance
Adj. entry
Adj. entry /
G1
G1 / 5000 / 20000
15000
15000
SuppliesNo. 125
Date / Explanation / Ref. / Debit / Credit / BalanceJan. 1
31
31 / Balance
17th & 28th purchase
Adj. entry /
CP1
G1 / 600 / 900 / 1000
1600
700
Prepaid InsuranceNo. 130
Date / Explanation / Ref. / Debit / Credit / BalanceJan. 1
31 / Balance
Adj. entry /
G1 / 200 / 2000
1800
EquipmentNo. 157
Date / Explanation / Ref. / Debit / Credit / BalanceJan. 1 / Balance / / 6450
COMPREHENSIVE PROBLEM (Continued)
Accumulated Depreciation—EquipmentNo. 158
Date / Explanation / Ref. / Debit / Credit / BalanceJan. 1
31 / Balance
Adj. entry /
G1 / 125 / 1500
1625
Notes PayableNo. 200
Date / Explanation / Ref. / Debit / Credit / BalanceJan.21 / G1 / 15000 / 15000
Accounts PayableNo. 201
Date / Explanation / Ref. / Debit / Credit / BalanceJan. 1
31
31
18
21 / Balance
Purchases Journal
Cash Payment Jour.
Returned Merch.
Issued Note Mikush /
P1
CP1
G1
G1 / 52600
15000 / 48900
200 / 35000
56100
7200
7000
22000
Interest PayableNo. 230
Date / Explanation / Ref. / Debit / Credit / BalanceJan.31 / Adj. entry / G1 / 30 / 30
Owner’s CapitalNo. 301
Date / Explanation / Ref. / Debit / Credit / BalanceJan. 1
31
31 / Balance
Owners Drawing
?????????????? /
G1
G1 / 800 / 78700
77900
?
Owner’s DrawingsNo. 306
Date / Explanation / Ref. / Debit / Credit / BalanceJan.15
31 / Owner’s Draw
Close. entry / CP1
G1 / 800 / 800 / 800
0
COMPREHENSIVE PROBLEM (Continued)
Income SummaryNo. 350
Date / Explanation / Ref. / Debit / Credit / BalanceJan.31
31
31 / Inventory
Sales Revenue
Close. Entry / 120
401
G1 / 15000
77720 / 92720 / 15000
92720
0
Sales RevenueNo. 401
Date / Explanation / Ref. / Debit / Credit / BalanceJan.31
31
31 / Sales Journal
Cash Receipts Jour.
Close. Entry / S1
CR1
G1 / 21800
55920 / 77720 / 21800
77720
0
Sales Returns and AllowancesNo. 412
Date / Explanation / Ref. / Debit / Credit / BalanceJan. 9
31 / Issued Credit
Close. entry / G1
G1 / 300 / 300 / 300
0
PurchasesNo. 510
Date / Explanation / Ref. / Debit / Credit / BalanceJan.31
31 / Purchases Journal
Close. entry / P1
G1 / 52600 / 52600 / 52600
0
Purchase Returns and AllowancesNo. 512
Date / Explanation / Ref. / Debit / Credit / BalanceJan.18
31 / Received Credit
Close. entry / G1
G1 / 200 / 200 / 200
0
Freight-InNo. 516
Date / Explanation / Ref. / Debit / Credit / BalanceJan. 8
31 / Pay freight
Close. entry / CP1
G1 / 180 / 180 / 180
0
COMPREHENSIVE PROBLEM (Continued)
Salaries and Wages ExpenseNo. 627
Date / Explanation / Ref. / Debit / Credit / BalanceJan.31
31 / Salaries & Wages
Close. entry / CP1
G1 / 7900 / 7900 / 7900
0
Depreciation ExpenseNo. 711
Date / Explanation / Ref. / Debit / Credit / BalanceJan.31
31 / Adj. entry
Close. entry / G1
G1 / 125 / 125 / 125
0
Interest ExpenseNo. 718
Date / Explanation / Ref. / Debit / Credit / BalanceJan.31
31 / Adj. entry
Close. entry / G1
G1 / 30 / 30 / 30
0
Insurance ExpenseNo. 722
Date / Explanation / Ref. / Debit / Credit / BalanceJan.31
31 / Adj. entry
Close. entry / G1
G1 / 200 / 200 / 200
0
Supplies ExpenseNo. 728
Date / Explanation / Ref. / Debit / Credit / BalanceJan.31
31 / Adj. entry
Close. entry / G1
G1 / 900 / 900 / 900
0
Rent ExpenseNo. 729
Date / Explanation / Ref. / Debit / Credit / BalanceJan.12
31 / Rent
Close. entry / CP1
G1 / 1000 / 1000 / 1000
0
COMPREHENSIVE PROBLEM (Continued)
Accounts Receivable Subsidiary Ledger
R. Draves
Date / Explanation / Ref. / Debit / Credit / BalanceJan. 1
11
22 / Balance
Sold Merchandise to
Sold Merchandise to /
S1
S1 / 1900
800 / 1500
3400
4200
J. Fine
Date / Explanation / Ref. / Debit / Credit / BalanceJan. 3
9
13
25 / Sold Merchandise to
Issued Credit back
Received Payment
Sold Merchandise to / S1
G1
CR1
S1 / 1800
6100 / 300
1500 / 1800
1500
0
6100
B. Hachinski
Date / Explanation / Ref. / Debit / Credit / BalanceJan. 1
7
25 / Balance
Received Payment
Sold Merchandise to /
CR1
S1 / 3500 / 2000 / 7500
5500
9000
S. Ingles
Date / Explanation / Ref. / Debit / Credit / BalanceJan. 1
7
11
21 / Balance
Received Payment
Sold Merchandise to
Received Payment /
CR1
S1
CR1 / 900 / 4000
900 / 4000
0
900
0
B. Remy
Date / Explanation / Ref. / Debit / Credit / BalanceJan. 3
13
22 / Sold Merchandise to
Received Payment
Sold Merchandise to / S1
CR1
S1 / 3100
3700 / 3100 / 3100
0
3700
COMPREHENSIVE PROBLEM (Continued)
Accounts Payable Subsidiary Ledger
D. Laux
Date / Explanation / Ref. / Debit / Credit / BalanceJan. 5
27 / Sold Merchandise to
Sold Merchandise to / P1
P1 / 2700
1200 / 2700
3900
S. Kosko
Date / Explanation / Ref. / Debit / Credit / BalanceJan. 1
9
16
18
23 / Balance
Received Payment
Sold Merchandise to
Received Payment
Received Payment /
CP1
P1
G1
CP1 / 9000
13900 / 9000
200
13700 / 9000
0
13900
13700
0
R. Mikush
Date / Explanation / Ref. / Debit / Credit / BalanceJan. 1
21 / Balance
Received Payment /
G1 / 15000 / 15000 / 15000
0
D. Moreno
Date / Explanation / Ref. / Debit / Credit / BalanceJan. 1
9
16
23
27 / Balance
Received Payment
Sold Merchandise to
Received Payment
Sold Merchandise to /
CP1
P1
CP1
P1 / 11000
15000
12500 / 11000
15000 / 11000
0
15000
0
12500
S. Yost
Date / Explanation / Ref. / Debit / Credit / BalanceJan. 5
16
27 / Sold Merchandise to
Sold Merchandise to
Sold Merchandise to / P1
P1
P1 / 3000
1500
2800 / 3000
4500
7300
PACKARD Company Work Sheet For the Month Ended January 31,2012
Adjusted
Trial Balance / Adjustments / Trial Balance / Income Statement / Balance Sheet
Account Titles / Dr. / Cr. / 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 / 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 / 1,625
Notes Payable / 15,000 / 15,000 / 15,000
Accounts Payable / 25,700 / 25,700 / 25,700
Interest Payable / 30 / 30 / 30
Owner’s Capital / 78,700 / 78,700 / 78,700
Owner’s Drawing / 800 / 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 / 121,055
Net Income / 4,685 / 4,685
Totals / 125,740 / 125,740
COMPREHENSIVE PROBLEM (Continued)
COMPREHENSIVE PROBLEM (Continued)
(d)PACKARD CO.
Income Statement
For the Month Ended January 31, 2012
Sales revenues
Sales revenue...... 72,720
Less: Sales returns and
Allowances...... -300 =72,720
Net sales revenue...... 72,420
Cost of goods sold
Inventory, 1/1/12...... 20,000
Purchases...... +54,600 =74,600
Less: Purchase returns and
Allowances...... -200 =74,400
Net purchases...... 74,400
Freight in...... +180
Cost 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 expenses
Salaries and wages
expense...... 6,900
Rent 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 losses
Interest 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...... 78,700 Add: Net income +4,685
83,385
Less: Drawings...... -800
Owner’s Capital, January 31, 2012...... $82,585
PACKARD CO.
Balance Sheet
January 31, 2012
Assets
Current assets
Cash...... 39,990
Notes receivable...... 39,000
Accounts receivable...... 21,000
Inventory...... 16,000
Supplies...... 700
Prepaid insurance...... +1,800
Total current assets...... $118,490
Property and equipment assets
Equipment...... 6,450
Less: Accumulated depreciation...... -1,625
Total property and equipment assets...... $4,825
Total Assets...... $123,315
Liabilities and Owner’s Equity
Current liabilities
Notes payable...... 15,000
Accounts payable...... 25,700
Interest payable...... -30
Total liabilities...... $40,730
Owner’s equity
Owner’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...... / 39,990
39,000
21,000
16,000
700
1,800
6,450
124,940 / 1,625
15,000
25,700
30
124,940
Accounts Receivable balance...... 21,000
Subsidiary account balances
R. Draves...... 4,200
J. Fine...... 6,100
B. Hachinski...... 9,000
B. Remy...... 1,700 =$21,000
Accounts Payable balance...... 25,700
Subsidiary account balances
D. Laux...... 3,900
D. Moreno...... 14,500
S. Yost...... 7,300=25,700