1. Harvey Spectre started Pearson & Co. , a company law firm on April 1, 2021. The followinginformation regarding the company is available:On 1 April, Harvey Spectre invested $80,000 cash to start the company.1.i1. On April 2, Harvey Spectre hired a new secretary, who will be paid a salary of $500 per week,payable monthly.111. On April 3, Pearson & Co. purchased insurance policy worth $450 in advance for the comingsix months, paying the amount in cash.iv. On April 6, Pearson & Co. purchased office supplies worth $5,000, on account. On the sameday the company also purchased new equipment worth $7,500, paying $5,000 cash immediatelyand agreed to pay the remaining within 25 days.v. On April 10, Pearson & Co. received $4,000 from one of it's clients for legal services that areexpected to be completed in June 10.vi. On April 12, Pearson & Co. paid the amount due for supplies that was purchased on account onApril 6.vii. On April 15, Pearson & Co. received $8,100 for legal services provided to one of it's regularclients.viii. On April 16, Harvey Spectre sent a bill worth $2,300 to it's client, for services provided to theclient.ix. On April 17, supplies worth $3,000 was purchased.On April 19, Advertising expenses incurred and unpaid $500.xi. On April 20, Pearson & Co. paid rent of $6,000 for it's office, for the month of April.xii. On April 26, Harvey Spectre paid his secretary salary for the month of April.xiii.On April 28, Pearson & Co. received money for the bill that was sent to it's client on April 16.xiv. On April 29, Harvey Spectre withdrew $1,500 from the business for personal use.Required:a. Journalise the above mentored transaction in the books of Pearson & Co.b. Post the journals into appropriate ledger accounts.c. Prepare a trial balance for Pearson & Co., for the month ended 30 April, 2021.d. Assume that you are the accountant of Pearson & Co., the following adjusting entries werediscovered on the last day of the month :i. One month's insurance expired.the supplies purchased during the month, $1,50worth of supplies were still11.unused.111. From the April 10 transaction, Pearson & Co. earmed $2.000.iv. On April 30, Pearson & Co. received electricity bill of $1,200 that will be paid for withinthe next 5 days (by May 5th).v. Pearson & Co. provided legal services worth $1,500 to it's client that had not beenrecorded yet.vi. Pearson & Co. will charge a depreciation of $75 per month , or $900 per year.vii. The employees of Pearson & Co. are paid weekly and are always paid on the last day ofeach week. The company has three employees and each employee is paid a salary of $600for a 5-day work week (Sunday- Thursday). Assume that April 30 is a Wednesday andemployees are paid on Thursdays of each week. All the previous week's salary are alreadypaid for, only April's last week's salary related transaction is yet to be recorded.d. Write the adjusting journal entries for the above mentioned transactions.e. Prepare the adjusted trial balance for Pearson & Co., for the month ended 30 April, 2021.f. Prepare the Income Statement, Owner's Equity Statement and Balance Sheet for Pearson & Co.,for the month ended 30 April, 2021.g. Write the closing journal entries for Pearson & Co. 2. Doichland Company is a retailer that uses perpetual inventory system. The following informationabout the company's April transaction is available:i.The company had inventory worth $8,700 on April 1. Cash on the same day was $88,000.ii. The company made sales of $500,000 for the month of April. The customers did not like thequality of few products sold by Doichland Company, thus inventories worth $5,800 werereturned to Doichland Company.iii. During the month, Doichland Company purchased inventories worth $56,000 (terms: FOBShipping point, 2/10, n/30). The freight cost was $1,000. Inventories worth $2,000 werereturned to the seller.iv. Doichland Company sold some old non current assets for a gain of $3.400.v. The owner of the company withdrew $1,500 for personal use.vi. At the end of the month Doichland Company again purchased new inventories worth $10,000(terms: FOB Destination; 2/10, n/45). At the end of the month the total value of inventory onhand was $32,000.Required :a. Calculate the Gross profit for the month of April, for Doichland Company.3. Charles and Co.completed the following merchandise transaction in the month of January of thecurrent year:January 1Purchased inventory worth $6,500 from TJ Company, with the following terms :FOB Shipping Point, 2/10, n/ 45. The freight cost of $170 was paid on the same day.January 3Sold merchandise worth $2,300 with transportation terms of FOB Shipping Pointand credit terms of 2/7 , n /30. The cost of the merchandise sold was $1,300. Thefreight cost of $150 was paid on the same day.January 4Merchandise worth $700 was returned to TJ Company.January 9Received payment for merchandise sold on January 3.January 12Made payments for the inventories purchased from TJ Company.Required:Journalise the transactions that are to included in the books of Charles and Co. , using the perpetualinventory system.

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and agreed to pay the remaining within 25 days. v. On April 10, Pearson & Co. received $4,000 from one of it's clients for legal services that are expected to be completed in June 10. vi. On April 12, Pearson & Co. paid the amount due for supplies that was purchased on account on April 6. vii. On April 15, Pearson & Co. received $8,100 for legal services provided to one of it's regular clients. viii. On April 16, Harvey Spectre sent a bill worth $2,300 to it's client, for services provided to the client. ix. On April 17, supplies worth $3,000 was purchased. x. On April 19, Advertising expenses incurred and unpaid $500. xi. On April 20, Pearson & Co. paid rent of S6,000 for it's office, for the month of April. xii. On April 26, Harvey Spectre paid his secretary salary for the month of April. xii.On April 28, Pearson & Co. received money for the bill that was sent to it's client on April 16. xiv. On April 29, Harvey Spectre withdrew $1,500 from the business for personal use. Required: a. Joumalise the above mentored transaction in the books of Pearson & Co. b. Post the journals into appropriate ledger accounts. c. Prepare a trial balance for Pearson & Co., for the month ended 30 April, 2021.

and agreed to pay the remaining within 25 days. v. On April 10, Pearson & Co. received $4,000 from one of it's clients for legal services that are expected to be completed in June 10. vi. On April 12, Pearson & Co. paid the amount due for supplies that was purchased on account on April 6. vii. On April 15, Pearson & Co. received $8,100 for legal services provided to one of it's regular clients. viii. On April 16, Harvey Spectre sent a bill worth $2,300 to it's client, for services provided to the client. ix. On April 17, supplies worth $3,000 was purchased. x. On April 19, Advertising expenses incurred and unpaid $500. xi. On April 20, Pearson & Co. paid rent of S6,000 for it's office, for the month of April. xii. On April 26, Harvey Spectre paid his secretary salary for the month of April. xii.On April 28, Pearson & Co. received money for the bill that was sent to it's client on April 16. xiv. On April 29, Harvey Spectre withdrew $1,500 from the business for personal use. Required: a. Joumalise the above mentored transaction in the books of Pearson & Co. b. Post the journals into appropriate ledger accounts. c. Prepare a trial balance for Pearson & Co., for the month ended 30 April, 2021.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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