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| The Marchetti soup Company entered into the following transactions during the month of june: (1) purchased inventory on account for $171,000 (assume Marchetti uses a perpetual inventory system); (2) paid $48,000 in salaries to employees for work performed during the month; (3) sold merchandise that cost $1 |
20,000 |
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Required: |
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Analyze each transaction and show the effect of each on the accounting equation for a corporation. (Select “None” if the category is not affected.) |
Brief Exercise 2-4 Journal entries [LO2]
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The year-end adjusted trial balance of the Timmons Tool and Die Corporation included the following account balances: retained earnings, $226,000; sales revenue, $855,000; cost of goods sold, $565,000; salaries expense, $178,000; rent expense, $37,000; and interest expense, $16,000. |
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Prepare the necessary closing entries. (Omit the “$” sign in your response.) |
Exercise 2-5 The accounting processing cycle [LO2, 3, 4, 5, 6, 7]
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The general ledger of the Karlin Company, a consulting company, at January 1, 2011, contained the following account balances: |
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Account Title |
Debits |
Credits |
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Cash |
30,000 |
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Accounts receivable |
15,000 |
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Allowance for uncollectible accounts |
500 |
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Equipment |
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Accumulated depreciation |
6,000 |
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Salaries payable |
9,000 |
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Common stock |
40,000 |
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Retained earnings |
9,500 |
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Total |
65,000 |
The following is a summary of the transactions for the year:
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Sales of services, $100,000, of which $30,000 was on credit. |
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Collected on accounts receivable, $27,300. |
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Issued shares of common stock in exchange for $10,000 in cash. |
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Paid salaries, $50,000 (of which $9,000 was for salaries payable). |
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Paid miscellaneous expenses, $24,000. |
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Purchased equipment for $15,000 in cash. |
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Paid $2,500 in cash dividends to shareholders. |
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Requirement 1: |
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(Offline – not submitted or graded in this system). Prepare the necessary T-accounts, entering the beginning balances from the trial balance. |
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Requirement 2: |
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Prepare a general journal entry for each of the summary transactions listed above. (Omit the “$” sign in your response.) |
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Requirement 3: |
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Post the journal entries to the offline T-accounts. |
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Requirement 4: |
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Prepare an unadjusted trial balance. (Leave no cells blank – be certain to enter a 0 wherever required.Omit the “$” sign in your response.) |
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Requirement 5: |
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Prepare and post adjusting journal entries. Post to offline T-accounts. Accrued salaries at year-end amounted to $1,000. Depreciation for the year on the equipment is $2,000. The allowance for uncollectible accounts is estimated to be $1,500. (Omit the “$” sign in your response.) |
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Requirement 6: |
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Prepare an adjusted trial balance. (Omit the “$” sign in your response.) |
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Requirement 7: |
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Prepare an income statement for 2011 and a balance sheet as of December 31, 2011. (Amounts in parentheses do not require a minus sign. Input all amounts as positive values. Omit the “$” sign in your response.) |
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Requirement 8: |
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Prepare and post closing entries. (Omit the “$” sign in your response.) |
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Requirement 9: |
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Prepare a post-closing trial balance. (Omit the “$” sign in your response.) |
