Comprehensive Problem, Colo Company (150 Minutes)

Comprehensive Problem, Colo Company (150 minutes)

Part 1

SALES JOURNAL / Page 2
Date /
Account Debited / Invoice
Number /
PR / Accounts Receivable Dr.
Sales Cr. / Cost of Goods Sold Dr. Inventory Cr.
May 2 / Hensel Company...... / 8785 /  / 6,100 / 4,100
16 / Hensel Company...... / 8786 /  / 3,990 / 1,890
22 / Lee Services...... / 8787 /  / 6,850 / 4,990
26 / Crane Corp...... / 8788 /  / 14,210 / 8,230
31 / Totals...... / 31,150 / 19,210
(106/413) / (502/119)

PURCHASES JOURNAL

/ Page 2
Date /
Account /
Date of
Invoice /
Terms /
PR / Accounts
Payable
Cr. /
Inventory
Dr. / Office
Supplies
Dr. / Other
Accounts
Dr.
May 4 / Store Supp./Gear Supp...... / 5/04 / n/10, EOM / 125/ / 37,729 / 37,072 / 83 / 574
10 / Office Equip./Gear Supp...... / 5/10 / n/10, EOM / 163/ / 4,074 / 4,074
11 / Garcia, Inc...... / 5/10 / 2/10, n/30 /  / 8,800 / 8,800
17 / Fink Corp...... / 5/14 / 2/10, n/60 /  / 13,650 / 13,650
24 / Store Supp./Gear Supp...... / 5/24 / n/10, EOM / 125/ / 9,030 / 8,120 / 280 / 630
25 / Peyton Products...... / 5/23 / 2/10, n/30 /  / 3,080 / 3,080 / ___ / ____
31 / Totals...... / 76,363 / 70,722 / 363 / 5,278
(201) / (119) / (124) / ()
CASH RECEIPTS JOURNAL / Page 2
Date /
Account Credited /
Explanation /
PR /
Cash
Dr. / Sales
Discount
Dr. / Accounts
Receivable
Cr. /
Sales
Cr. / Other
Accts.
Cr. / Cost of Goods Sold Dr. Inventory Cr.
May 5 / Knox, Inc...... /

Sale of Apr. 28......

/  / 4,459 / 91 / 4,550
9 / Store Supplies...... / Sold store supplies...... / 125 / 350 / 350
11 / Hensel Company...... / Sale of May 2...... /  / 5,978 / 122 / 6,100
15 / Sales...... / Cash sales May 1-15...... /  / 59,220 / 59,220 / 38,200
30 /

Lee Services......

/

Sale of May 22......

/  / 6,713 / 137 / 6,850
31 / Sales...... / Cash sales, May 16-31...... /  / 66,052 / ___ / _____ / 66,052 / ___ / 42,500
31 / Totals...... / 142,772 / 350 / 17,500 / 125,272 / 350 / 80,700
(101) / (415) / (106) / (413) / () / (502/119)
CASH DISBURSEMENTS JOURNAL / Page 2
Date /
Ck.
No. /
Payee /
Account Debited /
PR /
Cash
Cr. /
Inventory
Cr. / Other
Accounts
Dr. / Accounts
Payable
Dr.
May 1 / 3410 / S&P Mgmt. Co...... / Rent Exp.–Selling Space...... / 642 / 2,968
Rent Exp.–Office Space...... / 641 / 3,710 / 742
8 / 3411 / Peyton Products...... / Peyton Products...... /  / 6,174 / 126 / 6,300
15 / 3412 / Payroll...... / Sales Salaries Expense...... / 621 / 5,320
Office Salaries Expense...... / 620 / 8,470 / 3,150
19 / 3413 / Garcia, Inc...... / Garcia, Inc...... /  / 8,624 / 176 / 8,800
23 / 3414 / Fink Corp...... / Fink Corp...... /  / 13,377 / 273 / 13,650
26 / 3415 / Perennial Power...... / Utilities Expense...... / 690 / 1,283 / 1,283
29 / 3416 / Jenny Colo...... / J. Colo, Withdrawals...... / 302 / 7,000 / 7,000
30 / 3417 / Payroll...... / Sales Salaries Expense...... / 621 / 5,320
Office Salaries Expense...... / 620 / 8,470 / ___ / 3,150 / _____
31 / Totals...... / 57,108 / 575 / 28,933 / 28,750
(101) / (119) / () / (201)
GENERAL JOURNAL Page 3
May 2 / Sales Returns and Allow...... / 414 / 175
Accounts Receivable—Knox, Inc...... / 106/ / 175
Issued a credit memo for returns.
3 / Accounts Payable—Peyton Products...... / 201/ / 798
Inventory...... / 119 / 798
Received a credit memo for returns.
12 / Accts. Payable—Gear Supply Co...... / 201/ / 854
Office Equipment...... / 163 / 854
Received a credit memo for returns.

COLO COMPANY

Work Sheet for Month Ended May 31, 2005

Unadjusted Trial Balance /
Adjustments /
Adjusted Trial Balance / Income
Statement / Balance Sheet or Statement of Owner’s Equity
Account / Debit / Credit / Debit / Credit / Debit / Credit / Debit / Credit / Debit / Credit
Cash...... / 135,911 / 135,911 / 135,911
Accounts receivable...... / 18,200 / 18,200 / 18,200
Merchandise inventory...... / 189,519 / 189,519 / 189,519
Office supplies...... / 793 / (c) 289 / 504 / 504
Store supplies...... / 3,301 / (b) 669 / 2,632 / 2,632
Prepaid insurance...... / 3,318 / (a) 553 / 2,765 / 2,765
Office equipment...... / 25,690 / 25,690 / 25,690
Accum. depr. –Office equipment. / 9,898 / (e) 329 / 10,227 / 10,227
Store equipment...... / 38,920 / 38,920 / 38,920
Accumulated depr. –Store equip / 17,556 / (d) 567 / 18,123 / 18,123
Accounts payable...... / 53,059 / 53,059 / 53,059
Jenny Colo, Capital...... / 308,085 / 308,085 / 308,085
Jenny Colo, Withdrawals..... / 7,000 / 7,000 / 7,000
Sales...... / 156,422 / 156,422 / 156,422
Sales discounts...... / 350 / 350 / 350
Sales returns and allowances... / 175 / 175 / 175
Cost of goods sold...... / 99,910 / 99,910 / 99,910
Depr. Expense–Office equipment / (e) 329 / 329 / 329
Depr. Expense–Store equipment / (d) 567 / 567 / 567
Office salaries expense...... / 6,300 / 6,300 / 6,300
Sales salaries expense...... / 10,640 / 10,640 / 10,640
Insurance expense...... / (a) 553 / 553 / 553
Rent expense, office space..... / 742 / 742 / 742
Rent expense, selling space.... / 2,968 / 2,968 / 2,968
Office supplies expense...... / (c) 289 / 289 / 289
Store supplies expense...... / (b) 669 / 669 / 669
Utilities expense...... / 1,283 / ______ / _____ / _____ / 1,283 / ______ / 1,283 / ______ / ______ / ______
Totals...... / 545,020 / 545,020 / 2,407 / 2,407 / 545,916 / 545,916 / 124,775 / 156,422 / 421,141 / 389,494
Net income...... / 31,647 / ______ / ______ / 31,647
Totals...... / 156,422 / 156,422 / 421,141 / 421,141

Adjusting entries (Part 2)

May 31 / Insurance Expense...... / 637 / 553
Prepaid Insurance...... / 128 / 553
To adjust for expired insurance.
31 / Store Supplies Expense...... / 651 / 669
Store Supplies...... / 125 / 669
To adjust for store supplies used.
31 / Office Supplies Expense...... / 650 / 289
Office Supplies...... / 124 / 289
To adjust for office supplies used.
31 / Depreciation Expense–Store Equip...... / 613 / 567
Accumulated Depr.–Store Equip...... / 166 / 567
To record depreciation of store eq.
31 / Depreciation Expense–Office Equip...... / 612 / 329
Accumulated Depr.–Office Equip...... / 164 / 329
To record depreciation of office eq.

Closing entries (Part 2)

May 31 / Income Summary...... / 901 / 124,775
Sales Discounts...... / 415 / 350
Sales Returns and Allowances...... / 414 / 175
Cost of goods sold...... / 502 / 99,910
Depr. Expense, Office Equipment...... / 612 / 329
Depr. Expense, Store Equipment...... / 613 / 567
Office Salaries Expense...... / 620 / 6,300
Sales Salaries Expense...... / 621 / 10,640
Insurance Expense...... / 637 / 553
Rent Expense, Office Space...... / 641 / 742
Rent Expense, Selling Space...... / 642 / 2,968
Office Supplies Expense...... / 650 / 289
Store Supplies Expense...... / 651 / 669
Utilities Expense...... / 690 / 1,283
To close temporary accounts with
debit balances.
May 31 / Sales...... / 413 / 156,422
Income Summary...... / 901 / 156,422
To close temporary accounts with
credit balances.
May 31 / Income Summary...... / 901 / 31,647
J. Colo, Capital...... / 301 / 31,647
To close income summary to
owner’s capital.
May 31 / J. Colo, Capital...... / 301 / 7,000
J. Colo, Withdrawals...... / 302 / 7,000
To close withdrawals to owner’s capital.

Parts 1 and 2

GENERAL LEDGER
Cash / Acct. No. 101
Date / Explanation / PR / Debit / Credit / Balance
Apr. 30 / Balance / 50,247
May 31 / R2 / 142,772 / 193,019
31 / D2 / 57,108 / 135,911
Accounts Receivable / Acct. No. 106
Date / Explanation / PR / Debit / Credit / Balance
Apr. 30 / Balance / 4,725
May 2 / G3 / 175 / 4,550
31 / S2 / 31,150 / 35,700
31 / R2 / 17,500 / 18,200
Merchandise Inventory / Acct. No. 119
Date / Explanation / PR / Debit / Credit / Balance
Apr. 30 / Balance / 220,080
May 3 / G3 / 798 / 219,282
31 / D2 / 575 / 218,707
31 / P2 / 70,722 / 289,429
31 / R2 / 80,700 / 208,729
31 / S2 / 19,210 / 189,519
Office Supplies / Acct. No. 124
Date / Explanation / PR / Debit / Credit / Balance
Apr. 30 / Balance / 430
May 31 / P2 / 363 / 793
31 / G3 / 289 / 504
Store Supplies / Acct. No. 125
Date / Explanation / PR / Debit / Credit / Balance
Apr. 30 / Balance / 2,447
May 4 / P2 / 574 / 3,021
9 / R2 / 350 / 2,671
24 / P2 / 630 / 3,301
31 / G3 / 669 / 2,632
Prepaid Insurance / Acct. No. 128
Date / Explanation / PR / Debit / Credit / Balance
Apr. 30 / Balance / 3,318
May 31 / G3 / 553 / 2,765
Office Equipment / Acct. No. 163
Date / Explanation / PR / Debit / Credit / Balance
Apr. 30 / Balance / 22,470
May 10 / P2 / 4,074 / 26,544
12 / G3 / 854 / 25,690
Accumulated Depreciation–Office Equipment / Acct. No. 164
Date / Explanation / PR / Debit / Credit / Balance
Apr. 30 / Balance / 9,898
May 31 / G3 / 329 / 10,227
Store Equipment / Acct. No. 165
Date / Explanation / PR / Debit / Credit / Balance
Apr. 30 / Balance / 38,920
Accumulated Depreciation–Store Equipment / Acct. No. 166
Date / Explanation / PR / Debit / Credit / Balance
Apr. 30 / Balance / 17,556
May 31 / G3 / 567 / 18,123
Accounts Payable / Acct. No. 201
Date / Explanation / PR / Debit / Credit / Balance
Apr. 30 / Balance / 7,098
May 3 / G3 / 798 / 6,300
12 / G3 / 854 / 5,446
31 / P2 / 76,363 / 81,809
31 / D2 / 28,750 / 53,059
Jenny Colo, Capital / Acct. No. 301
Date / Explanation / PR / Debit / Credit / Balance
Apr. 30 / Balance / 308,085
May 31 / G3 / 31,647 / 339,732
31 / G3 / 7,000 / 332,732
Jenny Colo, Withdrawals / Acct. No. 302
Date / Explanation / PR / Debit / Credit / Balance
May 29 / D2 / 7,000 / 7,000
31 / G3 / 7,000 / 0
Sales / Acct. No. 413
Date / Explanation / PR / Debit / Credit / Balance
May 31 / S2 / 31,150 / 31,150
31 / R2 / 125,272 / 156,422
31 / G3 / 156,422 / 0
Sales Returns and Allowances / Acct. No. 414
Date / Explanation / PR / Debit / Credit / Balance
May 2 / G3 / 175 / 175
31 / G3 / 175 / 0
Sales Discounts / Acct. No. 415
Date / Explanation / PR / Debit / Credit / Balance
May 31 / R2 / 350 / 350
31 / G3 / 350 / 0
Cost of Goods Sold / Acct. No. 502
Date / Explanation / PR / Debit / Credit / Balance
May 31 / S2 / 19,210 / 19,210
31 / R2 / 80,700 / 99,910
31 / G3 / 99,910 / 0
Depreciation Expense—Office Equipment / Acct. No. 612
Date / Explanation / PR / Debit / Credit / Balance
May 31 / G3 / 329 / 329
31 / G3 / 329 / 0
Depreciation Expense—Store Equipment / Acct. No. 613
Date / Explanation / PR / Debit / Credit / Balance
May 31 / G3 / 567 / 567
31 / G3 / 567 / 0
Office Salaries Expense / Acct. No. 620
Date / Explanation / PR / Debit / Credit / Balance
May 15 / D2 / 3,150 / 3,150
30 / D2 / 3,150 / 6,300
31 / G3 / 6,300 / 0
Sales Salaries Expense / Acct. No. 621
Date / Explanation / PR / Debit / Credit / Balance
May 15 / D2 / 5,320 / 5,320
30 / D2 / 5,320 / 10,640
31 / G3 / 10,640 / 0
Insurance Expense / Acct. No. 637
Date / Explanation / PR / Debit / Credit / Balance
May 31 / G3 / 553 / 553
31 / G3 / 553 / 0
Rent Expense—Office Space / Acct. No. 641
Date / Explanation / PR / Debit / Credit / Balance
May 1 / D2 / 742 / 742
31 / G3 / 742 / 0
Rent Expense—Selling Space / Acct. No. 642
Date / Explanation / PR / Debit / Credit / Balance
May 1 / D2 / 2,968 / 2,968
31 / G3 / 2,968 / 0
Office Supplies Expense / Acct. No. 650
Date / Explanation / PR / Debit / Credit / Balance
May 31 / G3 / 289 / 289
31 / G3 / 289 / 0
Store Supplies Expense / Acct. No. 651
Date / Explanation / PR / Debit / Credit / Balance
May 31 / G3 / 669 / 669
31 / G3 / 669 / 0
Utilities Expense / Acct. No. 690
Date / Explanation / PR / Debit / Credit / Balance
May 26 / D2 / 1,283 / 1,283
31 / G3 / 1,283 / 0
Income Summary / Acct. No. 901
Date / Explanation / PR / Debit / Credit / Balance
May 31 / G3 / 124,775 / 124,775
31 / G3 / 156,422 / 31,647
31 / G3 / 31,647 / 0
ACCOUNTS RECEIVABLE LEDGER
Crane Corp.
Date / Explanation / PR / Debit / Credit / Balance
May 26 / S2 / 14,210 / 14,210
Hensel Company
Date / Explanation / PR / Debit / Credit / Balance
May 2 / S2 / 6,100 / 6,100
11 / R2 / 6,100 / 0
16 / S2 / 3,990 / 3,990
Knox, Inc.
Date / Explanation / PR / Debit / Credit / Balance
Apr. 28 / S2 / 4,725 / 4,725
May 2 / G3 / 175 / 4,550
5 / R2 / 4,550 / 0
Lee Services
Date / Explanation / PR / Debit / Credit / Balance
May 22 / S2 / 6,850 / 6,850
30 / R2 / 6,850 / 0
ACCOUNTS PAYABLE LEDGER
Fink Corp.
Date / Explanation / PR / Debit / Credit / Balance
May 17 / P2 / 13,650 / 13,650
23 / D2 / 13,650 / 0
Garcia, Inc.
Date / Explanation / PR / Debit / Credit / Balance
May 11 / P2 / 8,800 / 8,800
19 / D2 / 8,800 / 0
Peyton Products
Date / Explanation / PR / Debit / Credit / Balance
Apr. 29 / P2 / 7,098 / 7,098
May 3 / G3 / 798 / 6,300
8 / D2 / 6,300 / 0
25 / P2 / 3,080 / 3,080
Gear Supply Co.
Date / Explanation / PR / Debit / Credit / Balance
May 4 / P2 / 37,729 / 37,729
10 / P2 / 4,074 / 41,803
12 / G3 / 854 / 40,949
24 / P2 / 9,030 / 49,979

Part 3

COLO COMPANY

Income Statement

For Month Ended May 31, 2005

Revenue

Sales......

/ $156,422
Less: Sales discounts...... / $ 350
Sales returns and allowances...... / 175 / 525
Net sales...... / 155,897
Cost of goods sold...... / 99,910
Gross profit...... / 55,987
Operating expenses
Selling expenses
Depreciation expense—Store equipment...... / 567
Sales salaries expense...... / 10,640
Rent expense—Selling space...... / 2,968
Store supplies expense...... / 669
Total selling expenses...... / 14,844
General and administrative expenses
Depreciation expense—Office equipment...... / 329
Office salaries expense...... / 6,300
Insurance expense...... / 553
Rent expense—Office space...... / 742
Office supplies expense...... / 289
Utilities expense...... / 1,283
Total general and administrative expenses...... / 9,496
Total operating expenses...... / 24,340
Net income...... / $ 31,647

COLO COMPANY

Statement of Owner’s Equity

For Month Ended May 31, 2005

Jenny Colo, Capital, April 30, 2005......

/ $308,085
Plus: Net income...... / 31,647
339,732
Less: Withdrawals by owner...... / (7,000)
Jenny Colo, Capital, May 31, 2005...... / $332,732

COLO COMPANY

Balance Sheet

May 31, 2005

Assets
Current assets
Cash...... / $135,911
Accounts receivable...... / 18,200
Merchandise inventory...... / 189,519
Office supplies...... / 504
Store supplies...... / 2,632
Prepaid insurance...... / 2,765
Total current assets...... / $349,531
Plant assets
Office equipment...... / 25,690
Less accumulated depreciation...... / 10,227 / 15,463
Store equipment...... / 38,920
Less accumulated depreciation...... / 18,123 / 20,797
Total plant assets...... / 36,260
Total assets...... / $385,791
Liabilities
Current liabilities
Accounts payable...... / $ 53,059
Equity
Jenny Colo, Capital...... / 332,732
Total liabilities and equity...... / $385,791

Part 4

COLO COMPANY

Post-Closing Trial Balance

May 31, 2005

Cash...... / $135,911
Accounts receivable...... / 18,200
Merchandise inventory...... / 189,519
Office supplies...... / 504
Store supplies...... / 2,632
Prepaid insurance...... / 2,765
Office equipment...... / 25,690
Accumulated depreciation—Office equip...... / $ 10,227
Store equipment...... / 38,920
Accumulated depreciation—Store equip...... / 18,123
Accounts payable...... / 53,059
Jenny Colo, Capital...... / ______ / 332,732
Totals...... / $414,141 / $414,141

COLO COMPANY

Schedule of Accounts Receivable

May 31, 2005

Crane Corp...... / $14,210
Hensel Company ...... / 3,990
Total accounts receivable...... / $18,200

COLO COMPANY

Schedule of Accounts Payable

May 31, 2005

Peyton Products...... / $ 3,080
Gear Supply Co...... / 49,979
Total accounts payable...... / $53,059