or this question South Coast Boards Co. is a merchandising business. The account balances for South Coast Boards Co. as of July 1, 2010 (unless otherwise indicated), are as follows: 110
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South Coast Boards Co. is a merchandising business. The account balances for South
Coast Boards Co. as of July 1, 2010 (unless otherwise indicated), are as follows:
110
Cash
$ 63,600
112
153,900
115
Merchandise Inventory
602,400
116
Prepaid Insurance
16,800
117
Store Supplies
11,400
123
Store Equipment
469,500
124
Accumulated
56,700
210
Accounts Payable
96,600
211
Salaries Payable
—
310
Rocky Hansen, Capital, August 1, 2009
555,300
311
Rocky Hansen, Drawing
135,000
312
Income Summary
—
410
Sales
3,221,100
411
Sales Returns and Allowances
92,700
412
Sales Discounts
59,400
510
Cost of Merchandise Sold
1,623,000
520
Sales Salaries Expense
334,800
521
Advertising Expense
81,000
522
Depreciation Expense
—
523
Store Supplies Expense
—
529
Miscellaneous Selling Expense
12,600
530
Office Salaries Expense
182,100
531
Rent Expense
83,700
532
Insurance Expense
—
539
Miscellaneous Administrative Expense
7,800
During July, the last month of the fiscal year, the following transactions were completed: July 1. Paid rent for July, $5,000.
3. Purchased merchandise on account from Belmont Co., terms 2/10, n/30, FOB shipping point,
$40,000.
4. Paid freight on purchase of July 3, $600.
6. Sold merchandise on account to Modesto Co., terms 2/10, n/30, FOB shipping point,
$25,000. The cost of the merchandise sold was $15,000.
7. Received $26,500 cash from Yuba Co. on account, no discount.
10. Sold merchandise for cash, $80,000. The cost of the merchandise sold was $50,000.
13. Paid for merchandise purchased on July 3, less discount.
14. Received merchandise returned on sale of July 6, $6,000. The cost of the merchandise returned was $4,500.
15. Paid advertising expense for last half of July, $7,500.
16. Received cash from sale of July 6, less return of July 14 and discount.
19. Purchased merchandise for cash, $36,000.
19. Paid $18,000 to Bakke Co. on account, no discount.
20. Sold merchandise on account to Reedley Co., terms 1/10, n/30, FOB shipping point, $40,000.
The cost of the merchandise sold was $25,000.
21. For the convenience of the customer, paid freight on sale of July 20, $1,100.
21. Received $17,600 cash from Owen Co. on account, no discount.
21. Purchased merchandise on account from Nye Co., terms 1/10, n/30, FOB destination, $20,000.
24. Returned $2,000 of damaged merchandise purchased on July 21, receiving credit from the seller.
26. Refunded cash on sales made for cash, $3,000. The cost of the merchandise returned was
$1,800.
28. Paid sales salaries of $22,800 and office salaries of $15,200.
29. Purchased store supplies for cash, $2,400.
30. Sold merchandise on account to Whitetail Co., terms 2/10, n/30, FOB shipping point,
$18,750. The cost of the merchandise sold was $11,250.
30. Received cash from sale of July 20, less discount, plus freight paid on July 21.
31. Paid for purchase of July 21, less return of July 24 and discount.
Instructions
1. Enter the balances of each of the accounts in the appropriate balance column of a four-column account. Write Balance in the item section, and place a check mark (✓) in the Posting Reference column. Journalize the transactions for July.
2. Post the journal to the general ledger, extending the month-end balances to the appropriate balance columns after all posting is completed. In this problem, you are not required to update or post to the accounts receivable and accounts payable subsidiary ledgers.
3. Prepare an unadjusted
4. At the end of July, the following adjustment data were assembled. Analyze and use these data to complete (5) and (6).
a. Merchandise inventory on July 31 $589,850 b. Insurance expired during the year 12,500 c. Store supplies on hand on July 314,700 d. Depreciation for the current year 18,800 e. Accrued salaries on July 31:
Sales salaries $4,400
Office salaries 2,700 7,100
5. Enter the unadjusted trial balance on a 10-column end-of-period spreadsheet (work sheet), and complete the spreadsheet.
6. Journalize and post the
7. Prepare an adjusted trial balance.
8. Prepare an income statement, a statement of owner’s equity, and a
9. Prepare and
10. Prepare a post-closing trial balance.
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