College Accounting CP2: TJ's Specialty, Part 1 (SPECIAL JOURNALS 2nd half Dec20-1)

(REQUIRED—SPECIAL JOURNALS ONLY, Part 1, 2nd half of December 20-1)

College Accounting
Comprehensive Problem 2: Accounting Cycle with Subsidiary Ledgers, Part 1
During the second half of December 20-1, TJ’s Specialty Shop engaged in the following transactions:
Dec. 16 Received payment from Lucy Greene on account, $1,960.
16 Sold merchandise on account to Kim Fields, $160, plus sales tax of $8.SaleNo. 640.
17 Returned merchandise to Evans Essentials for credit, $150.
18 Issued Check No. 813 to Evans Essentials in payment of December 1 balance of $1,250, less the credit received on December 17.
19 Sold merchandise on account to Lucy Greene, $620, plus tax of $31.SaleNo. 641.
22 Received payment from John Dempsey on account, $1,560.
23 Issued Check No. 814 for the purchase of supplies, $120. (Debit Supplies)
24 Purchased merchandise on account from West Wholesalers, $1,200. Invoice No. 465, dated December 24, terms n/30.
26 Purchased merchandise on account from Nathen Co., $800. Invoice No. 817, dated December 26, terms 2/10, n/30.
27 Issued Check No. 815 in payment of utilities expense for the month of December, $630.
27 Sold merchandise on account to John Dempsey, $2,020, plus tax of $101.SaleNo. 642.
29 Received payment from Martha Boyle on account, $2,473.
29 Issued Check No. 816 in payment of wages (Wages Expense) for the two-week period ending December 28, $1,100.
30 Issued Check No. 817 to Meyers Trophy Shop for a cash purchase of merchandise, $200.
As of December 16, TJ’s account balances were as follows: Account Account No. Debit Credit Cash 101 9,705 Accounts Receivable 122 10,256 Merchandise Inventory 131 21,800 Supplies 141 1,035 Prepaid Insurance 145 1,380 Land 161 8,700 Building 171 52,000 Accum Depr - Building 171.1 9,200 Store Equipment 181 28,750 Accum Depr - Store Equipment 181.1 9,300 Accounts Payable 202 3,600 Wages Payable 219 Sales Tax Payable 231 1,378 Mortgage Payable 251 12,525 Tom Jones, Capital 311 90,000 Tom Jones, Drawing 312 8,500 Income Summary 313 Sales 401 124,900 Sales Returns and Allowances 401.1 1,430 Purchases 501 64,400 Purchases Returns and Allowances 501.1 460 Purchases Discounts 501.2 698 Freight-In 502 175 Wages Expense 511 26,100 Advertising Expense 512 4,700 Supplies Expense 524 Telephone Expense 525 2,180 Utilities Expense 533 6,900 Insurance Expense 535 Depr Expense - Building 540 Depr Expense - Store Equipment 541 Miscellaneous Expense 549 2,700 InterestExpense 551 1,350 $252,061 $252,061 TJ’s also had the following subsidiary ledger balances as of December 16: Accounts Receivable Ledger Accounts Payable Ledger Customer Balance Vendor Balance Martha Boyle Evans Essentials 12 Jude Lane 34 Harry Ave. Hartford,CT06117 3,796 East Hartford,CT05234 3,600 Anne Clark Nathen Co. 52 Juniper Road 1009 Drake Rd. Hartford,CT06118 2,100 Farmington,CT06082 - John Dempsey Owen Enterprises 700 Hobbes Dr. 43 Lucky Lane Avon,CT06108 1,560 Bristol,CT06007 - Kim Fields West Wholesalers 5200 Hamilton Ave. 888 Anders Street Hartford, CT 06117 - Newington, CT 06789 - Lucy Greene 236 Bally Lane Simsbury,CT06123 2,800

At the end of the year, the following adjustments (a)–(g) need to be made:
(a, b) Merchandise inventory as of December 31, $19,700.
(c) Unused supplies on hand, $525.
(d) Unexpired insurance on December 31, $1,000.
(e) Depreciation expense on the building for the year, $800.
(f) Depreciation expense on the store equipment for the year, $450.
(g) Wages earned but not paid as of December 31, $330.

For those not using working papers:
1. If you are not using the working papers: a. Open a general ledger, an accounts receivable ledger, and an accounts payable ledger as of December 16. Enter the following December 16 balances in the general ledger accounts and place a check mark in the Posting Reference column. Cash 11,500 Accounts Receivable 7,823 Accounts Payable 6,850 Sales Tax Payable 933 Sales 116,000 Purchases 60,500 Purchases Discounts 575
b. Enter the December 16 balances in the rest of the general ledger accounts, as indicated in the trial balance, and place a check mark in the Posting Reference column. c. Enter the December 16 balances in the accounts receivable and accounts payable ledgers, as indicated in the subsidiary ledger account listings, and place a check mark in the Posting Reference column. d. Insert Dec. 1–15, Cumulative Amount, and the following amounts in the special journal columns. Sales Journal:Accounts Receivable Dr., 4,263; Sales Cr., 4,060; Sales Tax Payable Cr., 203 Cash Receipts Journal: Accounts Receivable Cr., 1,830; Sales Cr., 4,840; Sales Tax Pay Cr., 242; Cash Dr., 6,912 Purchases Journal:Purchases Dr./Accts. Pay. Cr., 3,900 Cash Payments Journal: General Dr., 1,680;Accounts Payable Dr., 7,150; Purchases Discounts Cr., 123; Cash Cr., 8,707.

For working paper users and nonusers:
2. Enter transactions for the second half of December in the proper journals. If you are using the working papers, the cumulative amount of entries in the special journals for December 1–15 has been entered in these journals for you. Post immediately to the accounts receivable and accounts payable ledgers.
3. Post from the journals to the general ledger. Post the journals in the following order: general, sales, purchases, cash receipts, and cash payments.
4. Prepare schedules of accounts receivable and accounts payable.
5. Prepare a year-end work sheet, an income statement, a statement of owner’s equity, and a balance sheet. The mortgage payable includes $600 that is due within one year. 6. Journalize and post adjusting entries.
7. Journalize and post closing entries 8. Prepare a post-closing trial balance.
9. Journalize and post reversing entries for the adjustments where appropriate, as of January 1,20-2.
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