Acct202 Practice Set Ver. 5.1 2011-12 (Summer 2012)- AC Speed (JULY 2010 Trx) - WORKING PAPERS

Acct202 Accounting Simulation

Practice Set Ver. 5.1 2011-12 (Summer 2012)-

AC Speed (JULY 2010 Transactions) - WORKING PAPERS ONLY

JULY JOURNAL TRANSACTIONS
1-Jul Issued 6,300 shares of common stock for $12 per share (Refer to Chart of Accounts GL for description of common stock).
1-Jul Sold 2000 DVD players on account to Kia for $100 each, Invoice #0701
1-Jul Purchased 3000 docking stations on credit from Magellan for $ 43 each.
1-Jul Signed a two year 15%, $200,000 note payable with Chase Bank.
2-Jul Rented idle warehouse space to a new tenant and received $12,000 for six months rent. (July - December)
2-Jul Sold 500 docking stations on account to Toyota for $80 each, Invoice #0702
3-Jul Sold 1500 GPS units on account to Nissan for $70 each, Invoice #0703
3-Jul Purchased 3000 DVD players on credit from Motorola for $60 each.
4-Jul 80 defective DVD players were returned from Kia. A credit was issued to the customer.
6-Jul The 80 defective DVD players were returned to Motorola.
6-Jul Paid $500 for equipment repair. Check # 5000
7-Jul Reimbursed employees for traveling expenses totaling $800. Check # 5001
7-Jul Paid June utility bill of $1500. Check # 5002
11-Jul Paid in full for the July 1 purchase from Magellan. Check # 5003
11-Jul Received payment in full from Kia for July 1st sale
12-Jul The Board of Directors declared a cash dividend of $3 per share for shareholders of record on July 15th, payable on July 20th.
12-Jul Purchased 3000 GPS units from Garmin for $35 each on credit.
12-Jul Received payment in full from Toyota for July 2nd sale.
13-Jul Received payment in full from Nissan for July 3nd sale
13-Jul Paid in full for the July 3rd purchase from Motorola, Check # 5004
15-Jul Check # 5005 was issued for payroll: $20,500 for salaries and $3,560 for wages
17-Jul Bought new warehouse equipment from JVC for $20,000. Equipment use begins in August. Check # 5006
19-Jul 1500 GPS units purchased on July 12th from Garmin were found to be the wrong model. All 1500 units were returned.
19-Jul Paid $1500 bill for phone survey performed by marketing consultant, Check # 5007
20-Jul Received $100,000 from Ford for June 5th sales.
20-Jul Paid $15,000 mortgage payment to First Bank ($5000 principal and $10,000 interest), Check # 5008.
20-Jul Purchased office supplies from Office Depot on credit for $800.
20-Jul Paid the dividend that was declared on July 12, Check # 5009
22-Jul Paid in full the purchase from Garmin on July 12th. Check #5010
23-Jul General Motors declared bankruptcy. $10,000 receivable from General Motors was written off .
25-Jul Received $120,000 payment from Toyota for sale on June 11th.
26-Jul Sold 1000 DVD players to Honda for $105 each, Invoice # 0704
26-Jul Purchased 1000 shares of Treasury Stock for $13 per share, Check # 5011 (cost method)
27-Jul Sold 2000 docking stations to Ford for $75 each, Invoice # 0705
27-Jul Paid Navistar $40,000 for June 27 purchase, Check # 5012
28-Jul Issued bonds payable at face value for $ 500,000
29-Jul Paid JVC $162,500 for balance due in June, Check # 5013
29-Jul Check #5014 was issued for payroll: $ 20,500 for salaries and $ 3,560 for wages
30-Jul Received and paid legal service invoice of $5,000, Check # 5015
31-Jul Paid the first month's principal of $20,000 plus interest for notes issued at the beginning of the month. Check # 5016

*All purchases on account terms of 3/10, net 30
**All credit sales have terms of 3/10, net 45

July Month-end Adjustments:
A. AC Speed estimates bad debt expense on a monthly basis rather than waiting until year-end. The company uses the allowance method. Based on recent industry estimates, AC Speed estimates that the estimate of bad debt expense should be 1.5% of total sales.
B. The balance in the Prepaid Insurance account at the beginning of July represents 6 months of coverage. Record the amount of insurance expense for July. (p.102)
C. AC Speed has earned one month of the rent prepaid by their tenant at the beginning of July. (pp. 104-105)
D. The Company took a physical inventory count on July 31 and found the following inventory on hand:
Merchandise Inventory - $329,000 (p.211)
E. The Company took a physical count of Office Supplies on July 31 and found the following to be on hand:
Office Supplies - $2,365 (p.101)
F. Depreciation on the company's fixed assets for the month of July is as follows:
1. The furniture and equipment for the warehouse purchased a few years ago cost $10,000. These assets have a 10-year life, with $1500 salvage value, and are depreciated using the straight-line method. (p.444)
2. The furniture and equipment for the office was purchased last year for $8,500. These assets have a 5 year life, an expected salvage value of $1,500, and are depreciated using double declining method.
3.The new warehouse equipment purchased in July has a 20 year life with a $3,000 salvage value, and is depreciated using the straight line method
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