Chapter 6, Problem 6.1COP

1, 4, 5, and 10

To determine

T Accounts: T- accounts are prepared for all the business transactions. First, journal entries are passed and then transferred to the respective ledger accounts where they are recorded, and summarized in either side of the ‘T’ format. It is divided into two parts by a vertical line, that is, the left side and the right side. The left side of the T-account is known as the debit side, and the right side of the T-account is known as the credit side. The account name appears on the top of the T-account.

To Post: The above journal entries and adjusting entries to T-accounts of Company DD.

2.

To determine

To Prepare: The inventory records for the three inventory items.

3.

To determine

To Record: The transactions in the general journal.

5.

To determine

To Record: The adjusting entries in the journal.

6.

To determine

Trial balance: This is a statement prepared to show all the year-end account balances of a business. The balances are shown in separate columns as debit and credit. Trial balance is made to check whether books of accounts of the business are arithmetically accurate.

Prepare trial balance for D Company as on December 31, 2018.

7.

To determine

To Prepare: A summary for the month, in both units and dollars, of the change in inventory for each item in the following format.

8.

To determine

To Prepare: The income statement, retained earnings statement, and balance sheet of Company D for the year ended December 31, 2018.

9.

To determine

Gross profit percentage is the financial ratio that shows the relationship between the gross profit and net sales. Gross profit is the difference between the total revenues and cost of goods sold. It is calculated by using the following formula:

$\text{Gross profit percentage}=\frac{\text{Gross profit}}{\text{Net sales}}\times 100$

To Calculate: The gross profit percentage of Company D.

10.

To determine

To Post: The closing entries.

11.

To determine

To Prepare: The post-closing trial balance.