Financial Accounting HW – Shocker Electronics

Shocker Electronics Corporations
General Journal Entries
Entry #
General Ledger Account
Shocker Electronics Corporation
General Ledger Accounts
Debit
Credit
Cash
Accounts Receivable
Accounts Payable
Notes Payable
1
Accumulated Depreciation
Cost of Goods Sold
Interest Payable
Rent Expense
Utilities Expense
Depreciation Expense
Income Tax Expense
Interest Payable
Cost of Goods Sold
Shocker Electronics Corporation
Trial Balance
Account
Inventory
Debit
Credit
Debit
Credit
Equipment
Cash
Accounts Receivable
Inventory
Prepaid Rent
Equipment
Accumulated Depreciation
Accounts Payable
Notes Payable
Interest Payable
Common Stock
Common Stock
Prepaid Rent
Sales
Cost of Goods Sold
Rent Expense
Wages Expense
Utilities Expense
Depreciaiton Expense
Interest Expense
Income Tax Expense
Dividends
Totals
Retained Earnings
Wages Expense
Sales
Dividends Payable
Shocker Electronics Corporation
Post-Closing Trial Balance
Account
Cash
Accounts Receivable
Inventory
Prepaid Rent
Equipment
Accumulated Depreciation
Dividends
Interest Expense
Accounts Payable
Notes Payable
Interest Payable
Common Stock
Retained Earnings
Totals
Shocker Electronics Corporation
Income Statement
Shocker Electronics Corporation
Statement of Changes in Retained Earnings
Retained Earnings
Sales
Balance
Cost of Goods Sold
Sale of Stock
Gross Margin
0.00
Sales, General & Administrative Expenses:
Rent Expense
Wages Expense
Utilities Expense
Depreciation Expense
Dividends
Balance
Total S,G & A
0.00
Operating Income
0.00
Other Income & Expense:
Interest Expense
Income before Income Taxes
0.00
Income Tax Expense
Net Income
–
Shocker Electronics Corporation
Balance Sheet
ASSETS
Current Assets:
Cash
Accounts Receivable
Inventory
Prepaid Rent
Total Current Assets
Property, Plant & Equipment:
Net Income
–
$
–
Equipment
Less: Accumulated Depreciation
Net Property, Plant & Equipment
–
Total Assets
–
LIABILITIES & SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts Payable
Interest Payable
Total Current Liabilites
–
Long-Term Liabilities:
Notes Payable
Total Liabilities
–
Shareholders’ Equity:
Common Stock
Retained Earnings
–
Total Shareholders’ Equity
–
Total Liabilities & Shareholders’ Equity
0.00
Financial Accounting
1. Prepare journal entries to record each of the following transactions. You do not
need to write explanations below the journal entries.
2.
Create general ledger accounts for each account and post each of the journal
entries to an existing general ledger account.
3.
Prepare adjusting journal entries as you deem necessary. Besides the information
provided for adjusting journal entries, review the transactions and review your
unadjusted trial balance for any other adjusting journal entries you may need to
prepare.
4.
Post each of the adjusting journal entries to the general ledger accounts.
5.
Prepare closing entries and post the entries to the general ledger accounts.
6.
Prepare trial balances as you deem necessary.
7.
Prepare the following financial statements, in their proper format, for the month
of January
o Income statement
o Statement of retained earnings
o Balance sheet
o Statement of Cash Flow
Shocker Electronics is a new company that distributes computer equipment to retail
outlets. The following information pertains to Shocker Electronics during their first
month of operations:
Suppliers
Xtreme -game systems
HP -office systems
Gateway -home systems
Customers
Cuesta Computer
Mustang Computer
SLO CPU
walk-in customers
sales price
cost
$ 3,000.00
2,000.00
900.00
2,400.00
1,700.00
720.00
terms
1% 15, net 30
1%/20, net/30
2%/10, net/30
terms 2%/10 net 30
terms 2%/10 net 30
terms 2%/10 net 30
cash only – no discount
Jan 1
Issued 10,000 shares of $1 par value common stock for $15 per share.
Jan 1
Made a $50,000 down payment and signed a $600,000 mortgage to
purchase land and building, which will be used as the distribution center.
The land comprised of three (3) lots which appraised at $132,000 each
($396,000 total) and the building appraised for $264,000. The building
occupies one (1) lot, one (1) lot will serve as parking and WCD intends to
sell the third lot.
The loan is a ten (10) year, 8.0% mortgage requiring monthly payments
consisting of principle and interest. The first payment is due Feb. 1st.
Please attach a loan amortization schedule.
Jan 1
Issued 100 bonds with $1,000 face value and 6% coupon rate. The bonds
mature in ten (10) years and pay interest semi-annually on July 1st and
January 1st. The bonds sell at a price to yield an 8% effective interest rate.
The effective interest method will be used to amortize the bond premium
or discount. Please attach a bond amortization schedule.
Jan 1
Borrowed $100,000 from First Bank to purchase shelving for the
warehouse. The shelving cost $100,000 and is expected to last five (5)
years. The note is a three (3) year, 9% note that requires principle and
interest payments on the last day of each month. Please attach a loan
amortization schedule
Jan 1
Purchase inventory
150 systems from Gateway at $720 per system
100 systems from HP at $1,700 per system
40 systems from Xtreme at $2,400 per system
terms 2%/10, net/30
terms 1%/20, net/30
terms 1% 15, net 30
Jan 1
Paid $1,000 for supplies.
Jan 5
Sold Cuesta Computer sixty (60) Gateway systems and forty (40) HP
systems, on account.
Jan 6
Paid Gateway bill in full (in the discount period)
Jan 10
Sold SLO CPU twenty-five (25) Xtreme systems.
Jan 14
Received payment in full from Cuesta Computer (in the discount period).
Jan 14
Sold Mustang Computer fifty (50) Gateway systems and fifty (50) HP
systems.
Jan 14
Paid HP bill in full (in the discount period)
Jan 15
Purchase inventory
75 systems from Gateway at $720 per system
50 systems from HP at $1,700 per system
25 systems from Xtreme at $2,400 per system
terms 2%/10, net/30
terms 1%/20, net/30
terms 1%/15, net 30
Jan 16
Paid salaries totaling $5,000 for the first half of the month. In order to
make this entry you must know that 15% was withheld for federal income
tax, 5% was withheld for state income tax, 7.65% (6.2% social security
and 1.45% Medicare) was withheld for FICA. Don’t forget that the
employer is also responsible for matching the employee’s contribution to
FICA. All taxes, both the employee’s and employer’s, are paid quarterly
throughout the year.
Jan 20
Sold Cuesta Computer forty (40) Gateway systems and forty (40) HP
systems, on account.
Jan 22
Sold SLO CPU twenty-five (25) Xtreme systems.
Jan 23
Received payment in full from Mustang Computers (in discount period).
Jan 24
Paid Gateway bill in full (in the discount period)
Jan 25
Received payment in full from SLO CPU. The first invoice was out of
discount period and the second invoice was in the discount period.
Jan 27
Sold the extra parcel of land, which was held as an investment, for
$125,000.
Jan 28
Paid Xtreme bill in full (first invoice out of the discount period)
Paid Xtreme bill in full (second invoice in the discount period)
Jan 29
Paid HP bill in full (in the discount period)
Jan 29
Received payment in full from Cuesta Computer (in the discount period).
Jan 30
Sold Mustang Computer fifty (50) Gateway systems and ten (10) HP
systems.
Additional information
Accounts Receivable: Accounts receivable are evaluated at the end of each
month. It is estimated that 2% of all accounts receivable will not be
collected.
Inventory: The weighted average cost method is used to value product
purchased from each supplier. By that I mean that the purchase price
does not change by supplier, but you need to factor in any discounts that
are taken. Therefore, you will have to calculate inventory values and cost
of goods sold on a weighted average basis by items purchased from
supplier. A periodic inventory system is utilized.
Depreciation on:
building – 20 years, straight-line, no salvage value.
shelving – 5 years, double declining balance, no
salvage value
Supplies worth $175 are on hand at the end of the month
Accrue salaries for the second half of the month (same amount as Jan.
16th salaries). These salaries will be paid on February 1st.