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The Board Shop, owned by Andrew John, sells skateboards in the summer and snowboards in the winte The shop has an August 31 fiscal year end and uses a perpetual inventory system. On August 1, 2014, th company had the following balances in its general ledger: $ 52,80 A. John, drawings Sales Cash $21,385 485,50 Merchandise inventory Supplies Equipment Accumulated depreciation-equipment Accounts payable Unearned revenue 64,125 1,20 11,42 301,01 68,20 3,750 Rent revenue Sales returns and allowances 70,800 Cost of goods sold Salaries expense Rent expense 13,275 12,650 4,680 18.15

The Board Shop, owned by Andrew John, sells skateboards in the summer and snowboards in the winte The shop has an August 31 fiscal year end and uses a perpetual inventory system. On August 1, 2014, th company had the following balances in its general ledger: $ 52,80 A. John, drawings Sales Cash $21,385 485,50 Merchandise inventory Supplies Equipment Accumulated depreciation-equipment Accounts payable Unearned revenue 64,125 1,20 11,42 301,01 68,20 3,750 Rent revenue Sales returns and allowances 70,800 Cost of goods sold Salaries expense Rent expense 13,275 12,650 4,680 18.15

FINANCIAL ACCOUNTING
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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11 Paid Orang y returned $750 of the merchandise it purchased. Board Shop issued Spider a Cumulative Coverage-Chapters 2 to 5 The Board Shop, owned by Andrew John, sells skateboards in the summer and snowboards in the winter. The shop has an August 31 fiscal year end and uses a perpetual inventory system. On August 1, 2014, the company had the following balances in its general ledger: $ 52,800 A. John, drawings Sales Cash Merchandise inventory Supplies Equipment Accumulated depreciation-equipment Accounts payable Unearned revenue $21,385 64,125 3,750 70,800 13,275 485,500 1,200 11.420 301,010 68,200 18,150 4,140 1,925 Rent revenue Sales returns and allowances Cost of goods sold Salaries expense 12,650 Rent expense Insurance expense Interest expense 4,680 Notes payable A. John, capital 42,000 58,400 During August, the last month of the fiscal year, the company had the following transactions: Aug. 1 Paid $1,650 for August's rent. 2 Paid $6,500 on account. 4 Sold merchandise costing $7,900 for $12,260 cash. 5 Purchased merchandise on account from Orange Line Co., FOB shipping point, for $24,500. 5 Paid freight charges of $500 on merchandise purchased from Orange Line Co. 8 Purchased supplies on account for $345. 9 Refunded a customer $425 cash for returned merchandise. The merchandise had cost $265 and was returned to inventory. 10 Sold merchandise on account to Spider Company for $15,750, terms 2/10, n/30, FOB shipping noint. The merchandise had a cost of $9,765. Line Co. for half of the merchandise purchased on August 5. Spider Company credit memo. The merchandise had a cost of $465 and was returned to inventory. 15 Paid salaries, $3,100. 12 19 Spider Company paid the amount owing. 21 Purchased $9,900 of merchandise from Rainbow Option Co. on account, terms 2/10, n/30, FOB destination. 23 Returned S800 of the merchandise to Rainbow Option Co. and received a credit memo. Broadening Your Perspective CHAPTER 5 | 253 Received $525 cash in advance from customers for merchandise to be delivered in September. 30 Paid salaries, $3,100. 30 Paid Rainbow Option Co. the amount owing. 31 Andrew John withdrew $4,800 cash. 24 Adjustment and additional data: 1. A count of supplies on August 31 shows $755 on hand. 2. The equipment has an estimated eight-year useful life. 3. Of the notes payable, $6,000 must be paid on September 1 each year. 4. An analysis of the Unearned Revenue account shows that $3,750 has been earned by August 31. A corresponding $2,325 for Cost of Goods Sold will also need to be recorded for these sales. 5. Interest accrued on the note payable to August 31 was $175. 6. A count of the merchandise inventory on August 31 shows $76,560 of inventory on hand. Instructions (a) Create a general ledger account for each of the above accounts and enter the August I balances. (b) Record and post the August transactions. (c) Prepare a trial balance at August 31, 2014. (d) Record and post the adjustments required at August 31, 2014. (e) Prepare an adjusted trial balance at August 31, 2014. (f) Prepare a multiple-step income statement, statement of owner's equity, and classified balance sheet. (g) Record and post closing entries. (h) Prepare a post-closing trial balance at August 31, 2014.
Transcribed Image Text:11 Paid Orang y returned $750 of the merchandise it purchased. Board Shop issued Spider a Cumulative Coverage-Chapters 2 to 5 The Board Shop, owned by Andrew John, sells skateboards in the summer and snowboards in the winter. The shop has an August 31 fiscal year end and uses a perpetual inventory system. On August 1, 2014, the company had the following balances in its general ledger: $ 52,800 A. John, drawings Sales Cash Merchandise inventory Supplies Equipment Accumulated depreciation-equipment Accounts payable Unearned revenue $21,385 64,125 3,750 70,800 13,275 485,500 1,200 11.420 301,010 68,200 18,150 4,140 1,925 Rent revenue Sales returns and allowances Cost of goods sold Salaries expense 12,650 Rent expense Insurance expense Interest expense 4,680 Notes payable A. John, capital 42,000 58,400 During August, the last month of the fiscal year, the company had the following transactions: Aug. 1 Paid $1,650 for August's rent. 2 Paid $6,500 on account. 4 Sold merchandise costing $7,900 for $12,260 cash. 5 Purchased merchandise on account from Orange Line Co., FOB shipping point, for $24,500. 5 Paid freight charges of $500 on merchandise purchased from Orange Line Co. 8 Purchased supplies on account for $345. 9 Refunded a customer $425 cash for returned merchandise. The merchandise had cost $265 and was returned to inventory. 10 Sold merchandise on account to Spider Company for $15,750, terms 2/10, n/30, FOB shipping noint. The merchandise had a cost of $9,765. Line Co. for half of the merchandise purchased on August 5. Spider Company credit memo. The merchandise had a cost of $465 and was returned to inventory. 15 Paid salaries, $3,100. 12 19 Spider Company paid the amount owing. 21 Purchased $9,900 of merchandise from Rainbow Option Co. on account, terms 2/10, n/30, FOB destination. 23 Returned S800 of the merchandise to Rainbow Option Co. and received a credit memo. Broadening Your Perspective CHAPTER 5 | 253 Received $525 cash in advance from customers for merchandise to be delivered in September. 30 Paid salaries, $3,100. 30 Paid Rainbow Option Co. the amount owing. 31 Andrew John withdrew $4,800 cash. 24 Adjustment and additional data: 1. A count of supplies on August 31 shows $755 on hand. 2. The equipment has an estimated eight-year useful life. 3. Of the notes payable, $6,000 must be paid on September 1 each year. 4. An analysis of the Unearned Revenue account shows that $3,750 has been earned by August 31. A corresponding $2,325 for Cost of Goods Sold will also need to be recorded for these sales. 5. Interest accrued on the note payable to August 31 was $175. 6. A count of the merchandise inventory on August 31 shows $76,560 of inventory on hand. Instructions (a) Create a general ledger account for each of the above accounts and enter the August I balances. (b) Record and post the August transactions. (c) Prepare a trial balance at August 31, 2014. (d) Record and post the adjustments required at August 31, 2014. (e) Prepare an adjusted trial balance at August 31, 2014. (f) Prepare a multiple-step income statement, statement of owner's equity, and classified balance sheet. (g) Record and post closing entries. (h) Prepare a post-closing trial balance at August 31, 2014.
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