Selected transactions completed by Gampfer Company during its first fiscal year ending December 31 were as follows:

comprehensive_problem_3

 Selected transactions completed by Gampfer Company during its first fiscal year ending December 31 were as follows:Jan. 2. Issued a check to establish a petty cash fund of $3,200.Mar. 14. Replenished the petty cash fund, based on the following summary of petty cash receipts: office supplies, $1,200; miscellaneous selling expense, $410; miscellaneous administrative expense, $620.Apr. 21. Purchased $22,400 of merchandise on account, terms 1/10, n/30. The perpetual inventory system is used to account for inventory.May 20. Paid the invoice of April 21 after the discount period had passed.23. Received cash from daily cash sales for $15,120. The amount indicated by the cash register was $15,152.June 15. Received a 60-day, 10% note for $127,500 on the Cady account.Aug. 14. Received amount owed on June 15 note, plus interest at the maturity date.18. Received $5,440 on the Yoder account and wrote off the remainder owed on a $6,400 accounts receivable balance.Sept. 9. Reinstated the Yoder account written off on August 18 and received $960 cash in full payment.15. Purchased land by issuing a $480,000, 90-day note to Ace Development Co., which discounted it at 8%.Oct. 17. Sold office equipment in exchange for $96,000 cash plus receipt of a $64,000, 90-day, 6% note. The equipment had a cost of $224,000 and accumulated depreciation of $44,800 as of October 17.Nov. 30. Journalized the monthly payroll for November, based on the following data:Salaries DeductionSales salaries $96,640 Income tax withheld $28,090Office salaries $55,200 Social security tax withheld $9,110Total $151,840 Medicare tax withheld $2,278Unemployment tax ratesState unemployment 4.0%Federal unemployment 0.8%Amount subject to unemployment taxes:State unemployment $5,000Federal unemployment 5,00030. Journalized the employer’s payroll taxes on the payroll.Dec. 14. Journalized the payment of the September 15 note at maturity.31. The pension cost for the year was $136,000, of which $99,840 was paid to the pension plan trustee.Instructions1. Journalize the selected transactions.2. Based on the following data, prepare a bank reconciliation for December of the current year:a. Balance according to the bank statement at December 31, $202,240.b. Balance according to the ledger at December 31, $175,440.c. Checks outstanding at December 31, $48,960.d. Deposit in transit, not recorded by bank, $21,120.e. Bank debit memo for service charges, $540.f. A check for $11,520 in payment of an invoice was incorrectly recorded in the accounts as $11,020.3. Based on the bank reconciliation prepared in (2), journalize the entry or entries to be made by Gampfer Company.4. Based on the following selected data, journalize the adjusting entries as of December 31 of the current year:a. Estimated uncollectible accounts at December 31, $11,520, based on an aging of accounts receivable. The balance of Allowance for Doubtful Accounts at December 31 was $1,200 (debit).b. The physical inventory on December 31 indicated an inventory shrinkage of $2,360.c. Prepaid insurance expired during the year, $16,300.d. Office supplies used during the year, $2,800.e. Depreciation is computed as follows:Asset Cost Residual Value Useful life MethodBuilding $650,000 0 50 Double-decliningOffice Equip. 176,000 16,000 5 StraightStore equip 80000 8000 10 Straightf. A patent costing $36,000 when acquired on January 2 has a remaining legal life of eight years and is expected to have value for six years.g. The cost of mineral rights was $390,000. Of the estimated deposit of 650,000 tons of ore, 38,400 tons were mined and sold during the year.h. Vacation pay expense for December, $7,500.i. A product warranty was granted beginning December 1 and covering a one-year period. The estimated cost is 3% of sales, which totaled $1,350,000 in December.j. Interest was accrued on the note receivable received on October 17.5. Based on the following information and the post-closing trial balance shown below, prepare a balance sheet in report form at December 31 of the current year.The merchandise inventory is stated at cost by the LIFO method.The product warranty payable is a current liability.Vacation pay payable:Current liability ………. $5,100Long-term liability …….. 2,400The unfunded pension liability is a long-term liability.Notes payable:Current liability ……. $ 50,000Long-term liability ….450,000

ACC 211 : Assienment #

2

Due:

Time: 3-5 hour

s

Assignment: Complete Comprehensive Problem: Chapters 3 to

10

Points: This assignment is worth 20 points. It is due at the beginning of class on the date shown
on your Course Schedule. If you turn it in one class period late, your assignment grade
will be reduced by 25%. If you tum it in two class periods late, your assignment grade
will be reduced by 50%. Any assignment more than two class periods late will not be
accepted.

Working Papers on pages 1 3 1- 1 36 in your ACC 211 Handouts & Challenges booklet to
complete the assignment. The journal entries for Chapter 11 have been completed for
you.

Use2012 as the year.

An explanation for each journal entry is not required.

A classified balance sheet is on page 153 and example financial statements are also in the
back of your booklet. Use the figures given on the trial balance-you do not need to post
the journal entries or update the accounts (this has already been done for you). Also, pay
attention to the currentllong-term liability information that is presented above the trial
balance.

Hints:

o August 18th – the total account receivable is $6,400. Of this amount, the company
is receiving.$5,440 in cash and the remainder is being written-off as uncollectible.

o October 17th-the company is selling a fixed asset.
o December I4tn – simply pay off the Note Payable balance that was created on

9/15. You do not need to calculate interest.
o 4(e) – notice that they didn’t own the store equipment for the whole year
o 4(i) – you need to accrue interest on the note from Oct. 17 through Dec. 31.

Here are some check figures:

Current Assets: $839,080
Total Assets: $2,550,840 (note: the check figure in the book is wrong!)
Current Liabilities: 8497,&A

Start early! Do r-rot wait until the night before to start this assignment!!

–

532 {hapter X 1 Current Liabilities and payroll

Dec. 26. Journalized rhe entry to record the biweekly payroll. A surnmary of the pay-
roll record follows:

Salary distribution:
Sales

Officers

Office

Deductions:

Social security tax
Medicare tax
Federal income tax withheld
State income tax withheld
Savings bond deductions

Net amount

535,400
17,2

50

6,400 ss9,0s0

S 3,s4

3

88

6

10,5i

1

2,6s

7

1,260 18,857
540,1 93

*/ 5″ T{,tal assets,
$:,sd3,s4fi

ffiF
”’: l{

26. Issued check No. 640 for the net amount of the Lriweekly payrolr.
26. Journalized the entry to record payroll taxes on employees’ earnings of

December 26: social security tax,#3,543; Medicare iax, $gg6; stateirnemploy-
ment tax, $170; federal unemployment tax, fi45.

30. Issued Check No. 651 for 915,169 to Stare Department of Revenue, in pay_
ment of employees, state income tax due on December 31.

30. lssued Check No.652 to Green Bank for 62,520 to purchase U.S. savings
bonds for ernployees.

31. Paid $61,600 to the employee pension plan. The annual pension cost is
$72,800. (Record both the paymenr and the unfunded pension riabirity.)

lnstructions
1. Journalize the transactions.
Z. Jouroalize the following adjusting entries on Decernber 31:

a. Salaries accrued: sales salaries, $10,520; officers salaries, 65,175; office salaries,
#1,92Q. The payroll taxes are immaterial and are not accrued.

b. Vacation pay, 614,84O.

selected transactions completed by Gampfer company during its first fiscal year endingDecember 31 were as follows:

Jan. 2. Issued a check to establish a petty cash fund of $3,200.
Ma. 14. Replenished the petty cash fund, based on the folrowing sulrullary of pe*y

cash receipts: office supplies, $1,200; miscellaneous ,e[Lg expense, g410;
miscellaneous administrative expense, $620.

Apr. 21. Purchased #2Z,4AA of merchandise on account, terms 1/1A, n/3l.The perpet_
ual inventory system is used to accollnt for inventory.

May 20. Paid the invoice of April 2! after the discount period had passed.
23′ Received cash from daily cash sales for $15,120. The arnoult indicated by the

cash register was $15,15

2.

June 15. Received a6}-day,10% note for g127,500 on the Cady account.
Aug’ 14′ Received aniolrnt owed onJune 15 note, plus interest at the mafurity date.

18. Received $5,440 on the yoder account and wrote off the remainder owed
on a $6,400 accounts receivable balance. (The allowance rnethod is used in
accounting for uncollectible receivables.)

sept. 9. Reinstated the yoder account written offon August 1g and received $960 cash
in fulI payment.

15. Purchased land by issuing a $4g0,000, 90_day note to Ace Development Co.,
which discounted it at go/o_

{hapt*r I i Current Liabilities and Payroll

oct. 17. Sold office equipment in exchange for $96,000 cash plus receipt of a $64,000,
90-day,6% note. The equiprnent had a cost of #224,000 and accumulated
depreciation of $44,800 as of October 17,

Nov. 30. Journalized the monthly payroll for November. based on the following data:

Salarier Deductions

Sales salaries

Office salaries

Residual
Asset Cost Value

5 96,640 Income tax withheld
55,200 Social security tax withheld

51 5 1 ,840 Medicare tax withheld

Unemployment tax rates:

State unemployment
Federal unemployment

Amount subject to unemployment taxes:
State unemployment
Federal unemployment

4.0o/o

0.Bolo

5s,000
5,000

5

28,090

9,110

2,27

8

Depreciation
Method

Used

30. Journalized the etnployer’s payroll taxes on the pal’roll.

Dec. 14. Journalized the payment of the September 15 note at maturity.

31. The pension cost fol’the year n’as $136,000, of rl’hich $99,840 was paid to the
pension plan trustee.

[$strH{t;eres
1. Jorrmalize the selected transactions.
2. Basecl on the follo*’ing data, prepare a bank reconciliation fbr December of the

cuffent year:

a. Balance according to the bank statelnent at December 31, fi202,240.
b. Balance according to the ledger at Decenber 3I, $I75,44O.
c. Checks out$tanding at December 31,, fi48,960.
d. Deposit in transit, not recorded by bank, $21,120.
e. Bank debit merno for service charges, $540.
f. A check for $”11,520 in payment of an inr.’oice was incorrectly recorded in the

accounts as $11,O20.

3. Based on the bank reconciliation prepared in (2), journalize the entry or entries to be
rnade by Garnpfer Company.

4. Based on the following selected data, journalize the adiusting enlries as of December
31 of the current year:
a. Estimated uncollectible accounts at December 31, $l!,520, based on an aging of

accounts recei’r’able. The balance of Allowance for Doubtful Accounts at December
31 u’as $r,Z0O (debit).

b. The physical inventory on December 31 indicated an inventory shrinkage of $2,360.
c. Prepaid insurance expired during the year, $16,300.
d. Oflice sr”rpplies used during the year, $2,800,
e. Depreciation is computed as follows:

Acquieition Useful Life
Date inYears

Buildings 5650,000 5 0
Office Equip. 1 76,000 16,000
Store Equip. 80,000 8,000

January 2

January 3

July 1

50

5

10

Double-declining-bala nce
Straight-line
Straight-line

f. A patent costing $36,000 when acquired on January 2 has a remaining legal life of
eight years and is expected to have value for six years.

g. The cost of mineral rights was $390,000. Of the estimated deposit of 650,000 tons
of ore, 38,400 tons were mined and sold during the year.

(Cotttinued)

n
534 {!rapter ‘i T Current Liabilities and Payroll

h. Vacation pay expense for December, $7,500.
i. A product waffanty was granted begiming December 1 and covering a one-year

period. The estimated cost is 3vo af sales, which totaled $1,350,000 in December.
j’ Interest was accnred ou the note receivable received on October 17,

5. Based o11 the follos’ing information and the post-closing tr.ial balance shown below,
prepare a balance sheet in report form at December 31 of the curreflt year.

The merchandise inventory is stated at cost by the LIFO method.
The product warranty payable is a current liability.

Vacation pay payable:

Current liability
Long-term liability

The unfunded pension liability is a long-rerm liability

Notes payable:

Current liability
Long-term liability

Gampfer Company

Post-Closing Trial Balance

December 31,20

12

Debit
Balances

Petty Cash
Cash ..
Notes Receivable……
Accounts Receivable.

$s,1 oo

2,400

s s0,000
450,000

Credit
Balances

Allowance for Doubtful
Merchandise lnventory
I nterest Receivable
Prepaid lnsurance .
Office Supplies….
Land ..
Buildings
Accumulated Depreciation-Buildings.
OfficeEquipment.,..
Accumulated Depreciation-Office Equipmenr. . . .
StoreEquipment…..
Accumulated Depreciation-Store Equipment.
Mineral Rights .
Accumulated Depletion.
Patents

Social Security Tax Payable.
Medicare Tax Payable.
Employees Federal lncome Tax payable

5tate Unemployment Tax payable

Federa{ Unemployment Tax payable

Salaries Payable

Accounts Payable
lnterest Payable
Product Warranty Payable.
Vacation Pay Payable
Unfunded Pension Liability
Notes Payable

Accounts.

3,

200

174,400

64000
336,000

2

30,000

800

32,600

9,600

474,400

650,000

176,000

80,000

390,000

30,000

1 1,520

26,00a

32,000

3,600

23,4

40

1 3,51 3

3,378

28,090
40
200

112,612

224,000

20,207

40,500

7,500

36,i 60

500,000

1,564,640

2,647,00A

J. Gampfer, Capital

2,647,000

Date Gamofer comoanv

Gampfer Company

GeneralJournal
Account Titles

10

11

12

13

1

4

15

16

17

18

19

Name

Comprehensive Problem 3

Gamofer Cornoanv

Continued

Gampfer Company
GeneralJournal
Account Titles

Federallncome Tax P
0

1
2
3
4
5
6
7
8

I
,0

‘.1

Section

Date Gamofer comoanv
2.

GAMPFER COMPANY
Bank Reconciliation

Cash balance per bank statement

Add:

Subtotal

Deduct:

Adjusted cash balance per bank

Gash balance per books (depositor’s records)

Add:

$

Subtotal
Deduct:

iusted cash balance per books $

Comprehensive Problem 3

Gampfer CompanyDate

4.

10
11
12
13

14
15

16
17
18

19

Gampfer Company
General Journal
Account Titles

Journal Entries:

Vacation Pav Pavable

O”r*_ _ Gampfer Company
5.

Balance Sheet

Assets
Cunent assets:

$
s

Property, plant and equipment:

lntangible asset:

Totalassets

Liabilities
Current liabilities:

Long-term liabilities:

Total liabilities

Owner’s Equitv

Total liabilities and owner’s equity