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For Neel
Below is a Chart of Accounts with a corresponding letter. For each transaction below:
Chart of Accounts:
A.
Accounts Payable
B.
Accounts Receivable
C. Owner’s Capital
D.
Cash
E. Computer
Equipment
F.
Cost of Goods Sold
G. Owner’s Drawing
H.
Merchandise Inventory
(Perpetual)
I. Prepaid Insurance
J.
Sales
K. Service Revenue
L. Telecommunication Expense
M. Sales Discount
1. Following the General Journal entry format, place the letter of the account to be debited in the first line for each transaction and the letter of the account to be credited next.
2. Using the following abbreviations, indicate for each entry which special journal the entry would go in if the company used special journals:
CR – Cash Receipts Journal
CP – Cash Payments Journal
S – Sales Journal
P – Purchases Journal
GJ – General Journal
Jan.1 Owner invested $10,000 of computer equipment to start the business.
Jan. 3 Purchased $5,000 of software for resale to clients on account.
Jan. 5 Sold $1,500 of software to a client on account, terms 2/10, n/30, costing $650.
Jan. 7 Performed $2,000 of consulting services for a client and billed the client.
Jan. 9 Purchased a 12-month insurance policy by paying $9,000 cash.
Jan. 11 Collected payment in full from the customer related to the transaction on Jan. 5th.
Jan. 13 Purchased a new computer costing $1,500 by paying $500 down and the balance due in 30 days.
Jan. 15 Owner withdrew $750.
Jan. 17 Paid the month’s telecommunication bill, which was $550.
Jan. 19 Performed $3,000 of consulting services. Half was paid on this day, and half is to be paid in 15 days.
2- Using the
Adjusted Trial Balance
below, properly and in good form, complete a Multiple Step Income Statement, Statement of Owner’s Equity, and Classified Balance Sheet.
|
ABC Company |
||
| Adjusted Trial Balance | ||
|
12/31/2010 |
||
|
Debit |
Credit |
|
| Cash |
94000 |
|
| Accounts Receivable |
21010 |
|
| Merchandise Inventory |
181900 |
|
|
Office Supplies |
540 |
|
|
Land |
2 5000 |
|
| Equipment |
200000 |
|
|
Accumulated Depreciation, Equipment |
13000 |
|
| Accounts Payable |
18100 |
|
|
Salaries Payable |
2400 |
|
|
Loan Payable |
85000 |
|
|
D. Panther, Capital |
228750 |
|
|
D. Panther, Withdrawals |
43000 |
|
| Sales |
1311000 |
|
|
Sales Returns & Allowances |
2200 |
|
| Cost of Goods Sold |
800000 |
|
|
Sales Salaries Expense |
180000 |
|
|
Advertising Expense |
10000 |
|
|
Office Salaries Expense |
70000 |
|
|
Office Supplies Expense |
1400 |
|
|
Rent Expense – Store |
14000 |
|
|
Utilities Expense – Store |
5000 | |
|
Telecommunication Expense – Admin. |
4500 |
|
|
Interest Expense |
5700 |
|
|
Totals |
1658250 |
3- Partners Audrey, Betty, and Charles have capital account balances of $120,000 each. The income and loss ratio is 5:3:2, respectively. In the process of liquidating the partnership, noncash assets with a book value of $100,000 are sold for $40,000. The balance of Charles’s Capital account after the sale is:
|
$90,000 |
|
|
$102,000 |
|
|
$108,000 |
|
|
None of these is correct |
The partnership agreement of Amos, Baker, and Collins provides for the following income ratio: (a) Amos, the managing partner, receives a salary allowance of $36,000, (b) each partner receives 10% interest on average capital investment, and (c) remaining net income or loss is divided equally. The average capital investments for the year were: Amos $200,000, Baker $400,000, and Collins $600,000. If partnership net income is $240,000, the amount distributed to Baker should be:
|
$68,000 |
|
$84,000 |
|
$88,000 |
