Enoteca Fine Wines is a retail store selling vintage wines. On December 31, 20X1, the firm’s general ledger contained the accounts and balances below. All account balances are normal. Cash $ 29,886 Accounts Receivable 1,500 Prepaid Advertising 480 Supplies 300 Merchandise Inventory 15,000 Store Equipment 27,000 Accumulated Depreciation—Store Equipment 3,000 Office Equipment 6,000 Accumulated Depreciation—Office Equipment 1,500 Notes Payable, due 20X2 20,000 Accounts Payable 4,705 Wages Payable Social Security Tax Payable Medicare Tax Payable Unearned Seminar Fees 8,000 Interest Payable Vincent Carbone, Capital 32,700 Vincent Carbone, Drawing 14,110 Income Summary Sales 154,970 Sales Discounts 200 Seminar Fee Income Purchases 91,000 Purchases Returns and Allowances 1,500 Freight In 225 Rent Expense 13,200 Wages Expense 24,000 Payroll Taxes Expense 3,324 Depreciation Expense—Store Equipment Depreciation Expense—Office Equipment Advertising Expense Supplies Expense Interest Expense 150 INSTRUCTIONS: 1. Prepare the Trial Balance section of a 10-column worksheet. The worksheet covers the year ended December 31, 20X1. 2. Enter the adjustments below in the Adjustments section of the worksheet. Identify each adjustment with the appropriate letter. 3. Complete the worksheet. ADJUSTMENTS: a.–b. Merchandise inventory at December 31, 20X1, was counted and determined to be $14,000. c. The amount recorded as prepaid advertising represents $480 paid on September 1, 20X1, for 12 months of advertising. d. The amount of supplies on hand at December 31 was $130. e. Depreciation on store equipment was $3,800 for 20X1. f. Depreciation on office equipment was $1,250 for 20X1. g. Unearned seminar fees represent $8,000 received on November 1, 20X1, for four seminars. At December 31, three of these seminars had been conducted. h. Wages owed but not paid at December 31 were $500. i. On December 31, 20X1, the firm owed the employer’s social security tax ($31.00) and Medicare tax ($7.25). j. The note payable bears interest at 6 percent per annum. Two months of interest is owed at December 31, 20X1. Analyze: What was the amount of revenue earned by conducting seminars during the year ended December 31, 20X1?
> Jone Nelson and Helen Giddings are equal partners in N&G Appliance Center, which sells appliances and operates an appliance repair service. Nelson and Giddings have decided to incorporate the business. The new corporation will be known as N&G App
> A portion of the Stockholders’ Equity section of CMH Corporation’s balance sheet as of December 31, 20X3, appears below. Dividends have not been paid for the years 20X1 and 20X2. There has been no change in the number of shares of stock issued and outsta
> What two methods are commonly used to record sales involving credit cards issued by credit card companies?
> Red Hot Company issued and has outstanding 100,000 shares of $10 par-value common stock and 5,000 shares of $50 par-value 6 percent preferred stock. The board of directors votes to distribute $10,000 as dividends in 20X1, $20,000 in 20X2, and $100,000 in
> Dexter Thomas and Herman Walker, attorneys, operate a law practice. They would like to expand the expertise of their firm. In anticipation of this, they have agreed to admit Jewell Lorenzo to the partnership on January 1, 20X1. The capital account balanc
> The balance sheet of Adams Pharmacy after the revenue, expense, and partners’ drawing accounts have been closed on December 31, 20X1, follows: On that date, Larry Adams, Hazel Adams, and Isiah Adams agree to admit Vickie Neal to the par
> Lewis Wardell and Lewis Lomas own Lewis’s Antiques. Their partnership agreement provides for annual salary allowances of $200,000 for Wardell and $180,000 for Lomas, and interest of 10 percent on each partner’s invested capital at the beginning of the ye
> Angie Castillo and Reesa Cameron own The Garden and Lawn Shop. The partnership agreement provides that Castillo can withdraw $10,000 a month and Cameron, $9000 a month in anticipation of profits. The withdrawals, which are not considered to be salaries,
> Thomas Richey operates a small shop that sells fishing equipment. His postclosing trial balance on December 31, 20X1, is shown below. Richey plans to enter into a partnership with Kathryn Price, effective January 1, 20X2. Profits and losses will be share
> James Walker operates a store that sells computer software. Walker has agreed to enter into a partnership with Robert Tolliver, effective January 1, 20X1. The new firm will be called International Computing. Walker is to transfer all assets and liabiliti
> Selected accounts of the Johnson Company are listed below. On January 1, 20X1, the only intangible asset in the company’s accounts was Goodwill. This was recorded seven years ago when the company acquired another company and paid $150,000 more than the f
> Hendrix Realty Company owns a number of large office buildings in several cities in the United States. One of the buildings is 16 years old and has had a large number of vacant office suites for several years. The building’s book value is $26.4 million.
> Kingston Mining Company had total depletable capitalized costs of $828,000 for a mine acquired in early 20X1. It was estimated that the mine contained 920,000 tons of recoverable ore when production began. During 20X1, 46,500 tons were mined, and 174,800
> In a particular state, the sales tax rate is 5 percent of sales. The retailer is allowed to record both the selling price and the tax in the same account. Explain how to compute the sales tax due when this method is used.
> James Company purchased four identical machines on January 10, 20X1, paying $5,500 for each. The useful life of each machine is expected to be five years, with a salvage value of $700 each. The company uses the straight-line method of depreciation. Selec
> The transactions listed below occurred at Jenson Company during 20X1: INSTRUCTIONS Note: In following these instructions, assume that straight-line depreciation is used and that depreciation was last recorded on December 31, 20X0. Compute depreciation to
> On January 12, 20X1, Zolle Company purchased a computer (cost, $7,500; expected life, five years; estimated salvage value, $1,500) and a lightweight van for delivery purposes (cost, $36,000; estimated life, seven years; estimated salvage value, $8,000).
> On January 5, 20X1, Sampson Company purchased equipment for $325,000 that had an estimated useful life of five years or 150,000 units of product. The estimated salvage value was $25,000. Actual production data for the first three years were 20X1—26,000 u
> On January 4, 20X1, Wilson Company purchased new equipment for $310,000 that had a useful life of four years and a salvage value of $40,000. INSTRUCTIONS Prepare a schedule showing the annual depreciation and end-of-year accumulated depreciation for the
> On January 6, 20X1, Turner Company purchased a site for a new manufacturing plant for $7,200,000. At a cost of $45,880, it razed an existing facility (fair market value $600,000) and received $32,000 from its salvage. The company also paid $15,200 in att
> Jamison Sailing Company sells boats as a supplement to its boat storage operations. Data for its boat sales for August 20X1 are given below. The beginning inventory on August 1 was composed of the following items: INSTRUCTIONS Sales during the month were
> The August 1 inventory of Thompson Company had a cost of $180,000 and a retail value of $250,000. During August, merchandise was purchased for $202,260 and marked to sell for $304,000. August sales totaled $272,000. INSTRUCTIONS 1. Compute the retail val
> Over the past several years, Buzman Electronics has had an average gross profit of 30 percent. At the end of 20X1, the income statement of the company included the following information: Investigation revealed that employees of the company had not taken
> This data is for selected inventory items at Kimble Supply Company: INSTRUCTIONS Determine the amount to be reported as the inventory valuation at cost or net realizable value, whichever is lower, under each of these methods: 1. Lower of cost or net real
> The sales tax on a credit sale is not collected from the customer immediately. When is this tax usually entered in a firm’s accounting records? What account is used to record this tax?
> The following data pertains to software packages in the inventory of the Investment Software division of Foreign Market Investment Outlets: Inventory, January 1 110 units at $234 Purchases: May 10 80 units at $230 August 18 115 units at $228 October 1
> The following data concerns inventory and purchases at Hinojosa Company: Inventory, January 1 100 units at $113 Purchases: January 6 70 units at $112 January 15 54 units at $113 January 22 44 units at $106 Inventory, January 31 100 units INSTRUCTIO
> On May 16, 20X1, Safeway Company received a 90-day, 8 percent, $10,500 interest-bearing note from Black Company in settlement of Black’s past-due account. On June 30, Safeway discounted this note at Fargo Bank and Trust. The bank charged a discount rate
> The notes receivable held by the Tuttle Company on August 3, 20X1, are summarized below. On August 4, 20X1, Tuttle discounted all of these notes at Community Bank and Trust at a discount rate of 10 percent. Compute the net proceeds received from discount
> The following notes were received by Keller Company during 20X1: Compute the maturity value of each note. Analyze: What is the total interest expense on these notes for the year?
> Give the general journal entry to record each of the following transactions for Wilkinson Company: 1. Issued a 6-month, 9 percent note for $110,000 to purchase two forklifts on May 14, 20X1 (debit Warehouse Equipment). 2. Discounted its own 180-day, noni
> Keller Company issued the following notes during 20X1. Find the interest due on each of the notes, using the interest formula method. Show all calculations. 1. A $30,000 note at 9 percent for 180 days, issued February 15. 2. A $28,000 note at 12 percent
> Pittman Company records uncollectible accounts expense as they occur. Selected transactions for 20X1 and 20X2 are described below. The accounts involved in these transactions are Notes Receivable, Accounts Receivable, and Uncollectible Accounts Expense.
> The balances of selected accounts of the Davidson Company on December 31, 20X1, are given below: Accounts Receivable $ 850,000 Allowance for Doubtful Accounts (credit) 4,000 Total Sales 10,050,000 Sales Returns and Allowances (total) 250,000 INSTRUCTIONS
> The schedule of accounts receivable by age, shown below, was prepared for the Lucero Company at the end of the firm’s fiscal year on December 31, 20X1: INSTRUCTIONS 1. Compute the estimated uncollectible accounts at the end of the year
> What kind of account is Sales Returns and Allowances?
> 1. The new accountant for Asheville Hardware Center, a large retail store, found the following weaknesses in the firm’s cash-handling procedures. How would you explain to management why each of these procedures should be changed? a. No
> Euro Leather Products sells leather clothing at both wholesale and retail. The company has found that there is a higher rate of uncollectible accounts from retail credit sales than from wholesale credit sales. Euro computes its estimated loss from uncoll
> For each of the unrelated situations below, identify the accounting principle or concept violated (if a violation exists) and explain the nature of the violation. If you believe that the treatment is in accordance with GAAP, state the major principle or
> Sadie Hawkins owns The Education Supply Center, a small store that sells educational supplies. Hawkins recently approached the local bank for a loan to finance a planned expansion of her store. Hawkins prepared the balance sheet shown below and submitted
> Samuel Cox, owner of Cox Video Center, sent the income statement shown below to several of his creditors who had asked for financial statements. The business is a sole proprietorship that sells audio and other electronic equipment. One of the creditors l
> The accounting treatment or statement presentation of various items is discussed below. The items pertain to unrelated businesses. INSTRUCTIONS Indicate in each case whether the item has been handled in accordance with generally accepted accounting princ
> Read each of the following statements carefully and indicate whether each is true or false. 1. Accounting principles and standards are based on the assumption that statements will be read by individuals who have little understanding of accounting and rep
> The data below concerns adjustments to be made at Tea Leaf Importers. INSTRUCTIONS 1. Record the adjusting entries in the general journal as of December 31, 20X1. Use 25 as the first journal page number. Include descriptions. 2. Record reversing entries
> Obtain all data that is necessary from the worksheet prepared for Healthy Eating Foods Company. Then follow the instructions to complete this problem. INSTRUCTIONS 1. Record adjusting entries in the general journal as of December 31, 20X1. Use 25 as the
> Obtain all data necessary from the worksheet prepared for Enoteca Fine Wines in Problem 12.6A at the end of Chapter 12. Then follow the instructions to complete this problem. INSTRUCTIONS 1. Prepare a classified income statement for the year ended Decemb
> Good to Go Auto Products distributes automobile parts to service stations and repair shops. The adjusted trial balance data that follows is from the firm’s worksheet for the year ended December 31, 20X1. INSTRUCTIONS 1. Prepare a cla
> How is a multicolumn special journal proved at the end of each month?
> Superior Hardwood Company distributes hardwood products to small furniture manufacturers. The adjusted trial balance data given below is from the firm’s worksheet for the year ended December 31, 20X1. INSTRUCTIONS 1. Prepare a classifie
> Healthy Eating Foods Company is a distributor of nutritious snack foods such as granola bars. On December 31, 20X1, the firm’s general ledger contained the accounts and balances that follow. INSTRUCTIONS 1. Prepare the Trial Balance section of a 10-colum
> The Green Thumb Gardener is a retail store that sells plants, soil, and decorative pots. On December 31, 20X1, the firm’s general ledger contained the accounts and balances that appear below. INSTRUCTIONS 1. Prepare the Trial Balance section of a 10-colu
> On July 31, 20X1, after one month of operation, the general ledger of Michael Mendoza, CPA, contained the accounts and balances given below. INSTRUCTIONS 1. Prepare a partial worksheet with the following sections: Trial Balance, Adjustments, and Adjusted
> On July 1, 20X1, Cherie Wang established Cherie Wang Financial Services. Selected transactions for the first few days of July follow. INSTRUCTIONS 1. Record the transactions on page 1 of the general journal. Omit descriptions. Assume that the firm initia
> Based on the information below, record the adjusting journal entries that must be made for Kisling Distributors on June 30, 20X1. The company has a June 30 fiscal year-end. Use 18 as the page number for the general journal. a.–b. Merchandise Inventory, b
> The following information relates to Ponte Manufacturing Company’s workers’ compensation insurance premiums for 20X1. On January 15, 20X1, the company estimated its premium for workers’ compensation i
> 1. Complete Form 940, the Employer’s Annual Federal Unemployment Tax Return. Assume that all wages have been paid and that all quarterly payments have been submitted to the state as required. The payroll information for 20X1 appears bel
> Certain transactions and procedures relating to federal and state unemployment taxes follow for Robin’s Nest LLC, a retail store owned by Robin Roberts. The firm’s address is 2007 Lovely Lane, Dallas, TX 75268-0967. Th
> Assume you are the accountant for Catalina Industries. John Catalina, the owner of the company, is in a hurry to receive the financial statements for the year ended December 31, 20X1, and asks you how soon they will be ready. You tell him you have just c
> 1. On July 15, the firm issued a check to deposit the federal income tax withheld and the FICA tax (both employee and employer shares for the third month [June]). Based on your computations in Problem 11.2A, record the issuance of the check in general jo
> A payroll summary for Mark Consulting Company, owned by Mark Fronke, for the quarter ending June 30, 20X1, appears below. The firm made the required tax deposits as follows: a. For April taxes, paid on May 15. b. For May taxes, paid on June 17. INSTRUCTI
> The payroll register of Exterior Cleaning Company showed total employee earnings of $5,000 for the payroll period ended July 14. INSTRUCTIONS 1. Compute the employer’s payroll taxes for the period. Use rates of 6.2 percent for the employer’s share of the
> Metro Media Company pays its employees monthly. Payments made by the company on October 31 follow. Cumulative amounts for the year paid to the persons prior to the October 31 payroll are also given. 1. Tori Parker, president, gross monthly salary of $20,
> Alex Wilson operates On-Time Courier Service. The company has four employees who are paid on an hourly basis. During the workweek beginning December 15 and ending December 21, 20X1, employees worked the number of hours shown below. Information about thei
> Country Covers has four employees and pays them on an hourly basis. During the week beginning June 24 and ending June 30, these employees worked the hours shown below. Information about hourly rates, marital status, withholding allowances, and cumulative
> Robin Market works for Cycle Industries. Her pay rate is $14.50 per hour and she receives overtime pay at one and one-half times her regular hourly rate for any hours worked beyond 40 in a week. During the pay period that ended December 31, 20X1, Robin w
> The following transactions took place at Fabulous Fashions Outlet during July 20X1. Fabulous Fashions Outlet uses a perpetual inventory system. The firm operates in a state with no sales tax. Record the transactions in a general journal. Use 8 as the pag
> On August 1, 20X1, the accountant for Western Exports downloaded the company’s July 31, 20X1, bank statement from the bank’s website. The balance shown on the bank statement was $28,810. The July 31, 20X1, balance in the Cash account in the general ledge
> During the bank reconciliation process at Fontes & Barone Consultancy on May 2, 20X1, the following two errors were discovered in the firm’s records. 1. The checkbook and the cash payments journal indicated that Check 2206 dated April 17 was issued for $
> On June 1, 20X1, Jenna Davis opened the Leadership Coaching Agency. She plans to use the chart of accounts given below. INSTRUCTIONS 1. Journalize the transactions. Be sure to number the journal pages and write the year at the top of the Date column. Inc
> On August 31, 20X1, the balance in the checkbook and the Cash account of the Sonoma Creek Bed and Breakfast was $13,031. The balance shown on the bank statement on the same date was $13,997. NOTES a. The firm’s records indicate that a $1,600 deposit date
> On May 2, 20X1, PHF Vacations received its April bank statement from First City Bank and Trust. Enclosed with the bank statement, which appears below, was a debit memorandum for $210 that covered an NSF check issued by Doris Fisher, a credit customer. Th
> The Hike and Bike Outlet is a retail store. Transactions involving purchases and cash payments for the firm during June 20X1 are listed below, as are the general ledger accounts used to record these transactions. INSTRUCTIONS 1. Open the general ledger a
> Awesome Sounds is a wholesale business that sells musical instruments. Transactions involving sales and cash receipts for the firm during April 20X1 follow, along with the general ledger accounts used to record these transactions. INSTRUCTIONS 1. Open th
> The cash payments of The Aristocrats Jewels, a retail business, for June and the general ledger accounts used to record these transactions appear below. INSTRUCTIONS 1. Open the general ledger accounts and enter the balances as of June 1. 2. Record all p
> Car Geek is a retail store that sells car care products over the Internet. The firm’s cash receipts for February and the general ledger accounts used to record these transactions are shown below. INSTRUCTIONS 1. Open the general ledger
> Office Plus is a retail business that sells office equipment, furniture, and supplies. Its credit purchases and purchases returns and allowances for September are shown below. The general ledger accounts and the creditors’ accounts in t
> The Old English Garden Shop is a retail store that sells garden equipment, furniture, and supplies. Its credit purchases and purchases returns and allowances for July are listed below. The general ledger accounts used to record these transactions are als
> This problem is a continuation of Problem 8.1A. INSTRUCTIONS 1. Set up an accounts payable subsidiary ledger for Lens Queen. Open an account for each of the creditors listed below and enter the balances as of June 1, 20X1. Arrange the accounts payable le
> Lens Queen is a retail store that sells cameras and photography supplies. The firm’s credit purchases and purchases returns and allowances transactions for June 20X1 appear below, along with the general ledger accounts used to record th
> French Taylor is a new staff accountant for Fashion House Beauty Supply. He has asked you to review the financial statements prepared for April to find and correct any errors. Review the income statement and balance sheet that follow and identify the err
> Bella Floral Designs is a wholesale shop that sells flowers, plants, and plant supplies. The transactions shown below took place during January. All customers have credit terms of n/30. INSTRUCTIONS 1. Record the transactions in the proper journal. Use 7
> Elegant Dining sells china, glassware, and other gift items that are subject to an 8 percent sales tax. The shop uses a general journal and a sales journal similar to those illustrated in this chapter. All customers have payment terms of n/30. INSTRUCTIO
> Towncenter Furniture specializes in modern living room and dining room furniture. Merchandise sales are subject to an 8 percent sales tax. The firm’s credit sales and sales returns and allowances for February 20X1 are reflected below, a
> Great Lakes Appliances is a retail store that sells household appliances. Merchandise sales are subject to an 8 percent sales tax. The firm’s credit sales for July are listed below, along with the general ledger accounts used to record
> A partially completed worksheet for At Home Pet Care Service, a firm that grooms pets at the owner’s home, follows. INSTRUCTIONS 1. Record balances as of December 31 in the ledger accounts. 2. Prepare the worksheet. 3. Journalize (use 3
> On December 31, after adjustments, Ponthieu Company’s ledger contains the following account balances: INSTRUCTIONS 1. Record the balances in the ledger accounts as of December 31. 2. Journalize the closing entries in the general journal
> A completed worksheet for The Best Group is shown below. INSTRUCTIONS 1. Record balances as of December 31, 20X1, in the ledger accounts. 2. Journalize (use 3 as the page number) and post the adjusting entries. Use account number 131 for Prepaid Advertis
> Research Associates, owned by Alex Raman, is retained by large companies to test consumer reaction to new products. On January 31, 20X1, the firm’s worksheet showed the following adjustments data: (a) supplies used, $2,340; (b) expired
> Shayla Green owns Creative Designs. The trial balance of the firm for January 31, 20X1, the first month of operations, is shown below. INSTRUCTIONS 1. Complete the worksheet for the month. 2. Prepare an income statement, statement of ownerâ€&#
> The completed worksheet for Chavarria Corporation as of December 31, 20X1, after the company had completed the first month of operation, appears below. INSTRUCTIONS 1. Prepare an income statement. 2. Prepare a statement of owner’s equity. The owner made
> Brenda Jo Smith is an architect who operates her own business. The accounts and transactions for the business follow. INSTRUCTIONS (1) Analyze the transactions for January 20X1. Record each in the appropriate T accounts. Identify each entry in the T acco
> The adjusted trial balance of Campus Book Store and Supply Company as of November 30, 20X1, after the firm’s first month of operations, appears below. Appropriate adjustments have been made for the following items: a. Supplies used duri
> The trial balance of Ortiz Company as of January 31, 20X1, after the company completed the first month of operations, is shown in the partial worksheet below. INSTRUCTIONS Complete the worksheet by making the following adjustments: supplies on hand at th
> Four transactions for Airline Maintenance and Repair Shop that took place in November 20X1 appear below, along with the general ledger accounts used by the company. INSTRUCTIONS Record the transactions in the general journal and post them to the appropri
> The following journal entries were prepared by an employee of International Marketing Company who does not have an adequate knowledge of accounting. INSTRUCTIONS Examine the journal entries carefully to locate the errors. Prepare journal entries to corre
> On October 1, 20X1, Helen Kennedy opened an advertising agency. She plans to use the chart of accounts listed below. INSTRUCTIONS 1. Journalize the transactions. Number the journal page 1, write the year at the top of the Date column, and include a descr
> The transactions that follow took place at the Cedar Hill Recreation and Sports Arena during September 20X1. This firm has indoor courts where customers can play tennis for a fee. It also rents equipment and offers tennis lessons. INSTRUCTIONS Record eac
> The following accounts and transactions are for Vincent Sutton, Landscape Consultant. INSTRUCTIONS Analyze the transactions. Record each in the appropriate T accounts. Identify each entry in the T accounts by writing the letter of the transaction next to
> The following occurred during June at Brown Financial Planning. INSTRUCTIONS Analyze each transaction. Use T accounts to record these transactions and be sure to put the name of the account on the top of each account. Record the effects of the transactio
> Since graduating from college five years ago, you have worked for a national chain of men’s clothing stores. You have held several positions within the company and are currently manager of a local branch store. Over the past three years
