financial accounting comprehensive problem instructions 273669

Financial Accounting

Comprehensive Problem

INSTRUCTIONS:

1. Prepare the journal entries for May.

2. Prepare the general ledger to indicate your balances

3. Prepare the Trial Balances.

4. Journalize the adjusting entries and complete Adj. TB

5. Prepare a multi step Income Statement.

6. Prepare a statement of Retained Earnings.

7. Prepare a report form of Balance Sheet.

8. Journalize the closing entries.

9. Prepare a post closing trial balance.

COMPREHENSIVE PROBLEM # 2

Fluorescent Co. is a merchandising business. The account balances for Fluorescent Co. as of May 1, 2010(unless otherwise indicated), are as follows:

110

Cash

$ 19,160

111

Notes Receivable

$ 5,000

112

Accounts Receivable

$ 31,220

115

Merchandise Inventory

$153,900

116

Prepaid Insurance

$ 3,750

117

Store Supplies

$ 2,550

123

Store Equipment

$104,300

124

Accumulated Depreciation—Store Equipment

$ 12,600

210

Accounts Payable

$ 18,450

211

Salaries Payable

310

Common Stock

$113,280

311

Retained Earnings

312

Dividends

$ 10,000

313

Income Summary

410

Sales

$815,750

412

Sales Returns and Allowances

$ 20,600

413

Sales Discounts

$ 13,200

420

Interest Revenue

$ 50

510

Cost of Merchandise Sold

$460,500

520

Sale Salaries Expense

$ 64,400

521

Advertising Expense

$ 18,000

522

Depreciation Expense

523

Store Supplies Expense

529

Miscellaneous Selling Expense

$ 2,800

530

Office Salaries Expense

$ 30,500

531

Rent Expense

$ 18,600

532

Insurance Expense

539

Miscellaneous Administrative Expense

$ 1,650

During May, the last month of the fiscal year, the following transactions were completed.

May 1

Paid Rent for May $2,000.

May 3

Purchased merchandise on account from Tredwell Co., terms 2/10, N/30, FOB shipping point, $10,000.

May 4

Paid Transportation charges on purchase of May 3, $375.

May 6

Sold merchandise on account to Parish CO., Terms 2/10, n/30, FOB shipping point, $8,500. The cost of the merchandise sold was $5,000.

May 7

Received $6,500 cash from Oxford Co. on account, no discount

May 10

Sold Merchandise for cash, $15,300. The cost of the merchandise sold was $9,000.

May 13

Paid for merchandise purchased on May 3, less discount

May 14

Received merchandise returned on sale of May 6, $1,500. The cost of the merchandise returned was $900.

May 15

Paid advertising expense for last half of May, $1,500

May 16

Received cash from sale of May6, less return of May 14, and discount.

May 19

Purchased merchandise for cash, $7,400.

May 19

Paid $5,950 to Lipham Co. on account, no discount.

May 20

Sold merchandise on account to Petroski Co., terms 1/10, n/30, FOB shipping point, $15,000. The cost of the merchandise is $9,000.

May 21

For the convenience of the customer, paid shipping charges on sale of May $600.

May 21

Received $11,750 cash from Grant Co. on account, no discount.

May 21

Purchased merchandise on account from Walden Co., terms 1/10, n/30, FOB shipping point, $15,000.

May 24

Returned $3,500 of damaged merchandise purchased on May 21, receiving credit from the seller.

May 26

Refunded cash on sales made for cash, $600. The cost of the merchandise turned was $360.

May 28

Paid sales salaries of $2,750 and office salaries of $1,220.

May 29

Purchased store supplies for cash $350.

May 30

Sold merchandise on account to Hartel Co., terms 2/10, n/30, FOB shipping point, $23,100. The cost of the merchandise sold was $13,200.

May 30

Received cash from sale of May 20, less discount, plus transportation paid on may 21.

May 31

Paid for purchase of May 21, less return of May 24 and discount.

ADJUSTING ENTRIES:

A.

Merchandise inventory on May 31

$139,750

B.

Insurance expired during the year

$1,250

C.

Store supplies on hand May 31

$1,050

D.

Depreciation for the current year

$7,400

E.

Accrued salaries on May 31:

Sales Salaries

Office Salaries

$350

$180

$530