Instructions:a. Prepare the cost flow assumption table for Hasellhouf Company's merchandise inventory using FIFO method (2 decimals rounding).b. Journalize the transactions above using perpetual method and make thenecessary adjustments and make the necessary adjustments for depreciation(using the straight-line method), insurance, supplies, and interestsc. Post all the entries to the general ledgers.d. Prepare multiple-step income statement, owner's equity statement, and balance sheet.e. Journalize the closing entries. Chart of Accounts:101 Cash401Sales Revenue102 Accounts Receivable402 Sales Discount103 Supplies403Sales Return & Allowances104 Prepaid Insurance404Interest Revenue105 Merchandise Inventory501 Cost of Goods Sold106 | Interest Receivable502 Freight-Out111 Equipment503Salaries & Wages Expense112 Accumulated Depreciation – Equipment 504 Utilities Expense113 Notes Receivable505 Depreciation Expense201Accounts Payable506 | Insurance Expense202 Interest Payable507 Supplies Expense211Notes Payable508Interest Expense301 | Owner's Capital302 Drawings303 Income Summary Hasellhouf Company is a new retail business that opened up on January 1, 2021. OnApril 1, 2021, a physical count of inventory revealed that there are 23 units left with aunit cost of $38. The company's books also show the ending balance of severalaccounts: Cash was $9,000; Supplies was $100; Accounts Receivable was $1,200;Accounts Payable was $224, and Owner's Capital was $10,950. These were thetransactions that occurred during April 2021 for Hasellhouf Company (AssumeHasellhouf Company uses perpetual method to record its inventories).On April 1, Hasellhouf Company's owner invested $120,000 cash to the businessOn April 1, purchased office equipment for $76,000 that have 4 years ofeconomic-life and $13,600 salvage valueOn April 1, paid insurance policy for 1 year in advance for $12,000On April 2, Hasellhouf Company purchased 80 units of merchandise inventoryfrom Daisy Co. for $40 each, terms 5/12, n/30. FOB Destination, the freight costwas $250On April 3, purchased 60 units of merchandise inventory for $2,700 from YonaCompany, the freight cost was $100. FOB Shipping pointOn April 4, sold 63 units of merchandise inventories for $48 per unit on accountto Tony Company, terms 4/10, n/30, the freight cost was $15. FOB DestinationOn April 5, purchased supplies worth $800 on accountOn7,10 units of damaged merchandise inventory to YonaCompany (the unit cost of merchandise returned does not include the previousfreight cost)On April 8, paid its debt to Daisy Co minus purchase discountOn April 10, issued $15,000 one-year notes payable with 6% annual interest rate,effective on April 11, with interest paid every October 1. (Assume 1 year = 360days)On April 11, sold merchandise inventory to Lily Company for $47 per unit. The totalunits sold was 27 units. FOB Shipping point, the freight cost was $15On April 13, received payment from Tony Company including sales discountOn April 14, company purchased 120 units of Merchandise Inventory for $48each. FOB Destination, the freight cost was $40On April 15, received 5 units of returned merchandise inventory from LilyCompanyOn April 20, purchased merchandise inventory 20 units for $49 each to Kowi Co.FOB Shipping point, the freight cost was $20On April 23, the owner withdrew cash $3,500 for its personal useOn April 25, received $6,000 one-year notes receivable with 9% annual interest rate,effective on April 26, with interest paid every 1 October (Assume 1 year = 360 days)On April 27, sold on account (3/10, n/EOM) 200 units of merchandise inventoryThe unit price for each merchandise is $54. FOB Shipping point, the freight costwas $120On April 30, paid salaries and wages amounting $4,400 and Utilities for $600On April 30, supplies on hand was $200

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Answered: a. Prepare the cost flow assumption…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Instructions: a. Prepare the cost flow assumption table for Hasellhouf Company's merchandise inventory using FIFO method (2 decimals rounding). b. Journalize the transactions above using perpetual method and make the necessary adjustments and make the necessary adjustments for depreciation (using the straight-line method), insurance, supplies, and interests c. Post all the entries to the general ledgers. d. Prepare multiple-step income statement, owner's equity statement, and balance sheet. e. Journalize the closing entries.

Chart of Accounts:
101 Cash
401
Sales Revenue
102 Accounts Receivable
402 Sales Discount
103 Supplies
403
Sales Return & Allowances
104 Prepaid Insurance
404
Interest Revenue
105 Merchandise Inventory
501 Cost of Goods Sold
106 | Interest Receivable
502 Freight-Out
111 Equipment
503
Salaries & Wages Expense
112 Accumulated Depreciation – Equipment 504 Utilities Expense
113 Notes Receivable
505 Depreciation Expense
201
Accounts Payable
506 | Insurance Expense
202 Interest Payable
507 Supplies Expense
211
Notes Payable
508
Interest Expense
301 | Owner's Capital
302 Drawings
303 Income Summary

Hasellhouf Company is a new retail business that opened up on January 1, 2021. On
April 1, 2021, a physical count of inventory revealed that there are 23 units left with a
unit cost of $38. The company's books also show the ending balance of several
accounts: Cash was $9,000; Supplies was $100; Accounts Receivable was $1,200;
Accounts Payable was $224, and Owner's Capital was $10,950. These were the
transactions that occurred during April 2021 for Hasellhouf Company (Assume
Hasellhouf Company uses perpetual method to record its inventories).
On April 1, Hasellhouf Company's owner invested $120,000 cash to the business
On April 1, purchased office equipment for $76,000 that have 4 years of
economic-life and $13,600 salvage value
On April 1, paid insurance policy for 1 year in advance for $12,000
On April 2, Hasellhouf Company purchased 80 units of merchandise inventory
from Daisy Co. for $40 each, terms 5/12, n/30. FOB Destination, the freight cost
was $250
On April 3, purchased 60 units of merchandise inventory for $2,700 from Yona
Company, the freight cost was $100. FOB Shipping point
On April 4, sold 63 units of merchandise inventories for $48 per unit on account
to Tony Company, terms 4/10, n/30, the freight cost was $15. FOB Destination
On April 5, purchased supplies worth $800 on account
On
7,
10 units of damaged merchandise inventory to Yona
Company (the unit cost of merchandise returned does not include the previous
freight cost)
On April 8, paid its debt to Daisy Co minus purchase discount
On April 10, issued $15,000 one-year notes payable with 6% annual interest rate,
effective on April 11, with interest paid every October 1. (Assume 1 year = 360
days)
On April 11, sold merchandise inventory to Lily Company for $47 per unit. The total
units sold was 27 units. FOB Shipping point, the freight cost was $15
On April 13, received payment from Tony Company including sales discount
On April 14, company purchased 120 units of Merchandise Inventory for $48
each. FOB Destination, the freight cost was $40
On April 15, received 5 units of returned merchandise inventory from Lily
Company
On April 20, purchased merchandise inventory 20 units for $49 each to Kowi Co.
FOB Shipping point, the freight cost was $20
On April 23, the owner withdrew cash $3,500 for its personal use
On April 25, received $6,000 one-year notes receivable with 9% annual interest rate,
effective on April 26, with interest paid every 1 October (Assume 1 year = 360 days)
On April 27, sold on account (3/10, n/EOM) 200 units of merchandise inventory
The unit price for each merchandise is $54. FOB Shipping point, the freight cost
was $120
On April 30, paid salaries and wages amounting $4,400 and Utilities for $600
On April 30, supplies on hand was $200

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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