Financial Accounting: Comprehensive Problem 8 Victoria Company balance sheet at December

Financial Accounting 
Comprehensive Problem 8 
Victoria Company balance sheet at December 31, 2013, is presented below. 
Victoria Company 
Balance Sheet 
December 31, 2013 
Cash 14,810 Accounts payable 8,620 
Accounts Receivable 20,500 Common stock 19,500 
Allowance for doubtful accounts (850) Retained earnings 15,690 
Inventory 9,350 $43,810 
$43,810 
During January 2014, the following transactions occurred. Victoria uses the perpetual inventory method. 
Jan. 1 Victoria accepted a 4-month, 8% note from Leon Company in payment of Leon’s $1,200 account. 
3 Victoria wrote off as uncollectible the accounts of Barker Corporation ($400) and Elmo Company ($200). 
8 Victoria purchased $19,390 of inventory on account. 
11 Victoria sold for $26,400 on account inventory that cost $17,840. 
15 Victoria sold inventory that cost $690 to Joe Haribo for $1,000. Haribo charged this amount on his Visa First Bank card. The service fee charged Victoria by First Bank is 3%. 
17 Victoria collected $20,900 from customers on account. 
21 Victoria paid $16,570 on accounts payable. 
24 Victoria received payment in full ($200) from Elmo Company on the account written off on January 3. 
27 Victoria purchased advertising supplies for $1,470 cash. 
31 Victoria paid other operating expenses, $3,020. 

Adjustment data: 
1. Interest is recorded for the month on the note from January 1. 
2. Bad debts are expected to be 5% of the January 31, 2014, accounts receivable. 
3. A count of advertising supplies on January 31, 2014, reveals that $430 remains unused. 

Instructions: 
a. Prepare journal entries for the transactions listed above and adjusting entries. (Round answers to 0 decimal places, e.g. 1,250. Credit account titles are automatically indented when amount is entered. Do not indent manually.) 
(Include entries for cost of goods sold using the perpetual system.)  
b. Prepare an adjusted trial balance at January 31, 2014. 
c. Prepare an income statement and a retained earnings statement for the month ending January 31, 2014, and a classified balance sheet as of January 31,2014. 
Powered by