College Accounting – Comprehensive Review Problem II – paradigm 5th edition
Mills Sporting Goods Store – College Accounting – Comprehensive Review Problem II – paradigm 5th edition
Mills Sporting Goods Store – EXCEL TEMPLATE
You have now completed the accounting cycle for a merchandising business and are ready to try to put it all together in this second comprehensive review problem.
You are keeping the accounting records for Cindi Mills, owner of Mills Sporting Goods Store. You begin with the balances in her accounts and go through the accounting cycle for two months.
Directions:
1. Open accounts in the general ledger with the following balances as of January 1, 20X1
Account Balance
111 Cash $6,560
112 Accounts Receivable 2,955
113 Office Supplies 825
114 Store Supplies 1,915
115 Merchandise Inventory 13,540
116 Prepaid Insurance 750
121 Office Equipment 9,500
121.1 Accumulated Depreciation-Office Equipment 2,600
122 Store Equipment 16,600
122.1 Accumulated Depreciation-Store Equipment 4,000
123 Delivery Equipment 13,000
123.1 Accumulated Depreciation-Delivery Equipment 7,000
211 Accounts Payable 3,880
311 Cindi Mills, Capital 48,165
312 Cindi Mills, Drawing
313 Income Summary
411 Sales
412 Sales Returns and Allowances
413 Sales Discounts
511 Purchases
512 Purchases Returns and Allowances
513 Purchases Discounts
514 Freight in
611 Salaries Expense
612 Rent Expense
613 Utilities Expense
614 Office Supplies Expense
615 Store Supplies Expense
616 Insurance Expense
617 Depreciation Expense-Office Equipment
618 Depreciation Expense-Store Equipment
619 Depreciation Expense-Delivery Equipment
2. Open accounts in the accounts receivable ledger with the following balances as of January 1, 20X1:
Customer Name Balance
Henry Galvin $1,025
Lee Maddox 755
Neagle Co. 1,175
Smitz, Inc -0-
3. Open accounts in the accounts payable ledger with the following balances as of January 1, 20X1:
W. Bedford Co. $1,365
Jones Co. -0-
Lemke Brothers 1,540
Wohlers, Inc. 975
4. Record the January transactions in a general journal (page 12), a one column sales journal (page26), a purchases journal (page 10), a five-column cash receipts journal (page 11), or a four column cash payments journal (page 9). All credit sales carry terms of 2/10, n/30. Freight on all purchases is charged to the freight in account.
20X1
January
2 Paid rent for the month, $1.070, Check No. 234
2 Sold merchandise to Smitz, Inc., $765, Invoice No. 176
4 Collected the balance due from Henry Galvin, less 2% discount
5 Sold merchandise to Henry Galvin, $1,670, Invoice No. 177
6 Collected the balance due from Neagle Co., less 2% discount
7 Issued a credit memorandum to Henry Galvin for the return of defective merchandise sold on January 5, $210
7 Purchased merchandise from Lemke Brothers, $1,045; terms 2/10,n/30; Invoice No. 187
8 Paid W. Bedford Co. the balance due, less 2% discount; Check No. 235
9 Paid Wohlers, Inc., the balance due, less 1% discount; Check No. 236
10 Returned defective merchandise purchased on January 7 from Lemke Brothers, receiving a credit memorandum for $105
10 Collected the balance due from Lee Maddox, Less 2% discount
11 Paid Lemke Brothers the January 1 balance; no discount; Check No 237
12 Received a check from Smitz, Inc., for the amount due from the sale of January 2
14 Purchased merchandise from Jones Co. $2,550; terms, 2/10,n/30; Invoice No. 188
15 Received a check from Henry Galvin for the amount due from the sale of January 5, less the return of January 7
15 Recorded cash sales for the first half of January, $1,665
15 Cindi invested an additional$3,000 cash in the firm
16 Purchased office equipment from Wohlers, Inc., $4,400; terms, 2/30,n/60 Invoice No. 189
17 Sold merchandise to Lee Maddox, $950, Invoice No. 178
17 Paid Lemke Brothers the amount due from the purchase of January 7, less the return of January 10; Check No. 238
18 Purchased office supplies from W. Bedford Co., $860; terms, n/30; Invoice No. 190
19 Returned defective office supplies to W. Bedford Co., receiving a credit memorandum for $110
20 Purchased store supplies from Jones Co.,$555; terms, n/30; Invoice No. 191
22 Cindi invested a used truck valued at $4,700 in the business
23 Sold merchandise to Neagle Co., $820, Invoice No. 179
24 Paid the balance due to Jones Co. from the purchase of January 14; Check No. 239
24 Cindi wrote check No. 240 to pay her home phone bill, $205
25 Sold Merchandise to Smitz, Inc., $1,995, Invoice No. 180
26 Sold store supplies to another firm at cost for cash, $110
27 Issued a credit memorandum to Smitz, Inc., for a shortage from the sale of January 25, $75
27 Purchased merchandise from Jones Co., $750; terms, 2/10,n/30; Invoice No. 192
29 Paid January’s electric bill, $595, Check No. 241
31 Recorded cash sales for the second half of January, $2,445
31 Paid freight on January purchases, $450, Check No. 242
31 Paid salaries for January, $4,450, Check No. 243
5. Total all special journals
6. Post all items that need to be posted
7. Prepare a trial balance on a work sheet as of January 31, 20X1
8. Prepare schedules of accounts receivable and accounts payable
9. Complete the worksheet. Adjustment data for January 31 are as follows:
(a) Office Supplies on hand, $830
(b) Store Supplies on hand, $750
(c) Insurance Expired, $20
(d) Depreciation of office equipment, $90
(e) Depreciation of store equipment, $125
(f) Depreciation of delivery equipment, $250
(g) Merchandise Inventory (beginning), $13,540
(h) Merchandise Inventory (ending), $12,210
10. Record and post adjusting entries as of January 31.
11. Record and post closing entries as of January 31.
12. Prepare a January 31 post-closing trial balance.
13. Prepare an income statement for the month of January. All salaries are sales salaries.
14. Prepare a statement of owner’s equity for the month of January
15. Prepare a January 31 balance sheet
16. Record the following February transactions
20X1
February
1 Paid rent for the month, $1,070, Check No. 244
2 Purchased merchandise from Lemke Brothers, $740; terms, 2/10,n/30; Invoice No. 193
3 Returned merchandise purchased from Lemke Brothers on February 2, receiving a credit memorandum for $75
3 Collected the balance due from Lee Maddox
4 Collected the balance due from Smitz, Inc., for the sale of January 25 less the credit of January 27 and less the 2% discount
5 Cindi took home $40 of office supplies for her personal use
6 Sold merchandise to Henry Galvin, $2,140, Invoice No. 181
6 Paid Jones Co. the balance due on purchases of $555 and $750, less a 2% discount on the $750 purchase; Check No. 245
7 Collected the balance due from Neagle Co.
8 Issued a credit memorandum to Henry Galvin for damaged merchandise sold on February 6, $195
9 Purchased merchandise for cash, $375, Check No. 246
11 Paid Lemke Brothers for the balance due from the purchase of February 2, less the return of February 3; Check No. 247
11 Returned $20 of the merchandise purchased on February 9, receiving a cash refund
12 Sold merchandise to Lee Maddox, $1,185, Invoice No. 182
13 Cindi wrote Check No. 248 for personal expenses, $350
14 Recorded cash sales for the first half of the month, $3,095
15 Paid Wohlers, Inc., the balance due, less 2% discount, Check No. 249
16 Received a check from Henry Galvin for the amount due from the sale of February 6, less the return of February 8
17 Sold office supplies for cash, $85
17 Paid W. Bedford Co. the balance due for the purchase of January 18, less the return of January 19; Check No. 250
19 Purchased store supplies from W. Bedford Co. $340; terms, n/30; Invoice No. 194
20 Returned $30 of the store supplies purchased on February 19, receiving credit
21 Purchased merchandise from Lemke Brothers, $940; terms, 2/10,n/30; Invoice No. 195
22 Sold merchandise to Neagle Co., $1,095; Invoice No. 183
24 Purchased merchandise from Jones Co., $1,045; terms, 2/10,n/30; Invoice No 196
25 Sold merchandise to Smitz, Inc., $1,755, Invoice No. 184
26 Purchased store equipment from Wohlers, Inc., $2700; terms 2/30,n/60; Invoice No. 197
27 Paid the electric bill for February, $550, Check No. 251
28 Recorded cash sales for the second half of the month, $2,985
28 Paid freight on February purchases, $435, Check No. 252
28 Paid salaries for February, $4,450, Check No. 253
17. Total all special journals.
18. Post all items that need to be posted
19. Prepare a trial balance on a work sheet as of February 28, 20X1
20. Prepare schedules of accounts receivable and accounts payable.
21. Complete the work sheet. Adjustment data for February 28 are as follows
(a) Office Supplies on hand, $355
(b) Store Supplies on hand, $275
(c) Insurance Expired, $20
(d) Depreciation of office equipment, $90
(e) Depreciation of store equipment, $125
(f) Depreciation of delivery equipment, $250
(g) Merchandise Inventory (beginning), $12.210
(h) Merchandise Inventory (ending), $12,780
22. Record and post adjusting entries as of February 28.
23. Record and post closing entries as of February 28.
24. Prepare a February 28 post-closing trial balance.
25. Prepare an income statement for the month of February. All salaries are sales salaries.
26. Prepare a statement of owner’s equity for the month of February.
27. Prepare a February 28 balance sheet.
Check figures for January only.
Net Loss: 4,946.75 Total Assets: 57,168.25 Cash Balance: 4,823.25
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