Acct301 Week 3 Assignment - Fall B, 2014 (E4-4, P4-4A, E5-3, E5-9, E5-14, E5-16A)

Acct301 Essentials of Accounting
Week 3 Assignment (Fall B, 2014)

Exercise 4-4 Preparing the financial statements
The following is the adjusted trial balance of Wilson Trucking Company.
Account Title Debit Credit
Cash 8,800
Accounts receivable 16,500
Office supplies 2,000
Trucks 198,000
Accumulated depreciation—Trucks 40,788
Land 75,000
Accounts payable 12,800
Interest payable 3,000
Long-term notes payable 52,000
K. Wilson, Capital 201,848
K. Wilson, Withdrawals 19,000
Trucking fees earned 110,500
Depreciation expense—Trucks 26,308
Salaries expense 51,825
Office supplies expense 14,000
Repairs expense—Trucks 9,503
Totals $420,936 $420,936

The K. Wilson, Capital, account balance is $201,848 at December 31, 2012.
1. Prepare the income statement for the year ended December 31, 2013.
2. Prepare the statement of owner’s equity for the year ended December 31, 2013.

Problem 4-4A Preparing trial balances, closing entries, and financial statements [The following information applies to the questions displayed below.]
The adjusted trial balance of Karise Repairs on December 31, 2013, follows.
Adjusted Trial Balance
December 31, 2013
No. Account Title Debit Credit
101 Cash 16,000
124 Office supplies 1,900
128 Prepaid insurance 2,900
167 Equipment 56,000
168 Accumulated depreciation—Equipment 5,600
201 Accounts payable 16,000
210 Wages payable 900
301 C. Karise, Capital 39,000
302 C. Karise, Withdrawals 18,000
401 Repair fees earned 101,800
612 Depreciation expense—Equipment 5,600
623 Wages expense 38,000
637 Insurance expense 1,400
640 Rent expense 16,000
650 Office supplies expense 3,800
690 Utilities expense 3,700
Totals $163,300 $163,300

1. Prepare an income statement and a statement of owner's equity for the year 2013, and a balance sheet at December 31, 2013. There are no owner investments in 2013.
2. Prepare closing journal entries.
3. Prepare a post-closing trial balance.

Exercise 5-3 Analyzing and recording merchandise transactions-both buyer and seller Santa Fe Company purchased merchandise for resale from Mesa Company with an invoice price of $18,600 and credit terms of 2/10, n/60. The merchandise had cost Mesa $12,685. Santa Fe paid within the discount period. Assume that both buyer and seller use a perpetual inventory system.
1a. Prepare entries that the buyer should record for the purchase.
1b. Prepare entries that the buyer should record for the cash payment.
2a. Prepare entries that the seller should record for the sale.
2b. Prepare entries that the seller should record for the cash collection.
3. Assume that the buyer borrowed enough cash to pay the balance on the last day of the discount period at an annual interest rate of 8% and paid it back on the last day of the credit period. Compute how much the buyer saved by following this strategy.(Use 365 days a year. Round your intermediate calculations and final answer to 2 decimal places.)

Exercise 5-9 Preparing adjusting and closing entries for a merchandiser
The following list includes selected permanent accounts and all of the temporary accounts from the December 31, 2013, unadjusted trial balance of Emiko Co., a business owned by Kumi Emiko. Emiko Co. uses a perpetual inventory system.
Debit Credit
Merchandise inventory 34,000
Prepaid selling expenses 5,000
K.Emiko, Withdrawals 2,000
Sales 612,000
Sales returns and allowances 23,256
Sales discounts 6,512
Cost of goods sold 301,104
Sales salaries expense 67,320
Utilities expense 19,584
Selling expenses 52,632
Administrative expenses 135,252

Additional Information
Accrued sales salaries amount to $1,700. Prepaid selling expenses of $2,000 have expired. A physical count of year-end merchandise inventory shows $33,354 of goods still available.
a. Use the above account balances along with the additional information, prepare the adjusting entries.
b. Use the above account balances along with the additional information, prepare the closing entries.
Exercise 5-14 Preparing journal entries-perpetual system
Following are the merchandising transactions for Chilton Systems.
1. On November 1, Chilton Systems purchases merchandise for $1,500 on credit with terms of 2/5, n/30, FOB shipping point; invoice dated November 1.
2. On November 5, Chilton Systems pays cash for the November 1 purchase.
3. On November 7, Chilton Systems discovers and returns $175 of defective merchandise purchased on November 1 for a cash refund.
4. On November 10, Chilton Systems pays $75 cash for transportation costs with the November 1 purchase.
5. On November 13, Chilton Systems sells merchandise for $1,620 on credit. The cost of the merchandise is $810.
6. On November 16, the customer returns merchandise from the November 13 transaction. The returned items sell for $265 and cost $132. The merchandise is returned to inventory.
Journalize the above merchandising transactions for Chilton Systems assuming it uses a perpetual inventory system.

Exercise 5-16A Recording purchases-periodic system
Apr. 2 Purchased merchandise from Lyon Company under the following terms: $4,000 price, invoice dated April 2, credit terms of 2/15, n/60, and FOB shipping point.
3 Paid $224 for shipping charges on the April 2 purchase.
4 Returned to Lyon Company unacceptable merchandise that had an invoice price of $700.
17 Sent a check to Lyon Company for the April 2 purchase, net of the discount and the returned merchandise.
18 Purchased merchandise from Frist Corp. under the following terms: $8,450 price, invoice dated April 18, credit terms of 2/10, n/30, and FOB destination.
21 After negotiations, received from Frist a $2,366 allowance on the April 18 purchase.
28 Sent check to Frist paying for the April 18 purchase, net of the discount and allowance.
Prepare journal entries to record the above transactions for a retail store. Assume a perpetual inventory system.
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