Comprehensive Accounting Problem
Stumble & Fall, Inc.
BUS 321 - Intermediate Accounting
Winter 2016 - Tad Miller
Instructions
Work together and help each other.
Although I want each one of you to complete the project individually, I encourage you to study together and help each other.
I expect each of you to put your fingers on the keyboard and enter the data into the journal entries, T accounts and financial statements. But it is quite all right to help each other. It is OK to tell someone their journal entry is wrong; or explain how to make a calculation. That is fine.
All I require is that each of you put your fingers on the keyboard and enter the data into the journal entries, T accounts and financial statements.
Learning frequently involves doing something incorrectly and then figuring out what we did wrong.
This project is to be completed in an Excel workbook with several worksheets.
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The first worksheet should be a cover sheet with your name
Skip a line between journal entries
Account titles need to be the same on the chart of accounts, T-Accounts and journal entries
Accounts in Trial Balance and T-accounts should be arranged by account number
There is only one General Journal. All entries need to be recorded in the same
General Journal and posted to the same set of T-accounts.
No late assignments.
1.
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3.
Prepare journal entries to record each of the following transactions. You do not
need to write explanations below the journal entries.
Post each journal entry to the appropriate T-account in the excel template.
Prepare an unadjusted trial balance from the T-accounts.
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6.
Prepare adjusting journal entries. In addition to the information provided for adjusting journal entries, review the transactions and review your unadjusted trial balance for any other adjusting journal entries you may need to prepare.
Post each of the adjusting journal entry to the appropriate T-account.
Prepare an adjusted trial balance from the T-accounts.
7.
Prepare the following financial statements, in good form o Multistep income statement you do not need to distinguish between selling expense and general & administrative expenses o Statement of retained earnings o Classified balance sheet
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101 · Cash
111 · Accounts receivable
119 · Allowance for uncollectible accounts
121 · Inventory
122 · Purchases
123 · Purchase discounts
124 · Purchase returns & allow
125 · Transportation in
131 · Investments
141 · Prepaid rent
151 · Supplies
171 · Equipment
179 · accumulated depreciation
201 · Accounts payable
211 · Interest payable
221 · Salaries payable
251 · Deferred revenue: gift certificates
256 · Deferred revenue: rent
261 · Notes payable
301 · Common stock
311 · Additional paid in capital
399 Retained earnings
401 · Sales
409 · Sales discount
501 · Cost of goods sold
511 · Bad debt expense
512 · Depreciation expense
513 · Rent expense
514 · Salary expense
515 · Supplies expense
591 · Rent revenue
599 · Interest expense
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Jan 1 Issued 10,000 shares of $1 par value common stock for $13 per share.
Jan 1 Borrowed $30,000 for Coast National Bank by issuing a $30,000 note due in two years with 10% interest payable annually.
Jan 1 Purchased the assets of a distressed competitor for $75,000 in cash. The assets consisted of inventory, supplies and equipment with an estimated market values of $80,000, $6,000 and $14,000, respectively.
Jan 2 Paid rent on building for 12 months in advance, $7,200.
Jan 3 Purchased display equipment from Northern Supply for $10,000. Paid $2,000 cash with the balance to be paid in 60 days.
Jan 4 Purchased merchandise on account from Quick Wholesale. Cost of the merchandise was $44,100, terms were 1/20 n/45. We use the perpetual inventory method.
Jan 4 Paid $1,800 for supplies.
Jan 5 Made a $25,000 credit sale to Ace Nursery, terms 2/10 n/30. Cost of Goods
Sold was $17,500.
Jan 9 Purchased merchandise costing $30,000 on account from Plants, Inc, terms were 2/30 n/60. Paid trucking company $250 cash for freight charges.
Jan 11 Received $11,760 cash from Ace Nursery (in the discount period) as a partial payment on their account.
Jan 12 Paid salaries totaling $3,000.
Jan 20 Sold goods costing $10,500 with a retail price of $15,000. The retail price does not take the 2% sales discount into consideration.
Jan 20 Received $300 for subleasing an office in the building for $300 per month (from
1/20 until 2/20).
Jan 22 Received $5,000 from the sale of gift certificates.
Jan 23 Paid the amount due to Quick Wholesale (in the discount period)
Jan 24 Purchased temporary investments at a cost of $3,600.
Jan 25 Returned defective merchandise costing $1,200 to Plants, Inc.
Jan 26 $24,000 sale to Best-Way, which paid $5,880 cash and the remaining $18,000 was on account, terms 2/10 n/30. Cost of Goods Sold was $16,800.
Jan 29 Purchased $6,000 of merchandise on account from Quick Wholesale, terms
1/20 n/45.
Jan 29 Cash sales (before any sales discount) of $18,000. Cost of Goods Sold was
$12,600.
Additional information
Our rent expense is $600 per month (not our sublease revenue)
Supplies used during Jan $1,300
Rent revenue earned during the last 10 days of January
Gift certificates redeemed - $3,500
Interest expense on Bank Note with $2,450 Cost of Goods Sold
Salaries earned but not yet paid $2,500
Depreciation $341.67- 5-year life
Uncollectible accounts - $215 (estimate)
Ending inventory - $78,859
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