1. Set up the General Ledger accounts, Accounts Receivable, and Accounts Payable accounts. Use the following blank forms (make as many copies as necessary). Insert the beginning balances from the Trial Balance and Schedules of Accounts Receivable and Payable. DATE ITEM POST REF. DEBIT CREDIT BALANCE DEBIT CREDIT 2. Journalize the entries shown in the Narrative of Transactions for the month of January in the General Journal. Use the following blank forms (make as many copies as necessary). When using the Work in Process account, be sure to post to the appropriate Job Cost Record. DATE ACCOUNTS POST REF. DEBIT CREDIT Narrative of Transactions January 2Paid Mass Media $4,200.00 for prepaid advertising in local newspapers for the next 12 months. January 2Paid Pierce Properties $2,750.00 for January rent. Of this amount, 25% is for office facilities and 75% is for factory facilities. January 2Paid Owens Insurance $6,000.00 for prepaid insurance for the first quarter of the year. January 3Received a check from Horsfield Happy Ice Cream as partial payment on account in the amount of $5,000.00. January 3Paid Rockaway Metal the balance of $2,873.00 on account. January 4Sold two ice cream systems to Day Dreamers Ice Cream. The estimated direct labor is $8,200.00. The estimated direct material is $3,350.00. The estimated indirect material is $350.00. Day Dreamers is to be billed in the amount of $20,925.00 on account. A check for $5,000.00 will be collected as a deposit against that sale. The start date will be January. The date promised will be January 23. Assign the contract to Job 74. January 5Mountain Swirl Ice Cream purchased and took delivery of one ice cream machine for $7,500.00. Record the sale and the cost of the sale. Markup is 150% of cost. Transfer cost from Finished Goods to COGS. January 6Purchased indirect material on account from Electrical Systems Corp. in the amount of $3,643.00. Set up a new Accounts Payable account, and record the purchase. January 6Purchased factory supplies on account from Grommet Supplies in the amount of $847.21. Set up a new Accounts Payable account, and record the purchase. January 9Assign the manufacture of one ice cream machine to Job 75. A direct material requisition shows $1,450.00 of direct materials, and an indirect materials requisition shows $170.00 of indirect materials. A time card shows $3,650.00 of direct labor for the completed job. Factory overhead is based on 25% of direct labor cost. Transfer the completed job from Direct Material and Indirect Material to the Finished Goods account. When making the journal entry for applying direct labor, debit Finished Goods for the gross pay and credit FWT Payable and FICA Tax Payable for the appropriate amounts with the net pay going to Salaries Payable. January 10Receive a check from Horsfield Happy Ice Cream as partial payment on account in the amount of $5,000.00. January 10Receive a phone bill in the amount of $1,402.22 from Unique Telephone Systems on account. January 15Paid Liberty Bank $2,435.79 for December payroll taxes payable for the amounts of FWT Payable, $1,613.11; FICA Tax Payable, $822.68. January 15Assign Job 76 to Cold Refrigeration for the purchase of a refrigeration system. The start date will be January 16. The completion date will be no later than February 28. The estimated direct material is $9,175.00. The estimated indirect material is $1,860.00. The estimated direct labor is $15,600.00. The contract amount is $45,800.00. A deposit of $10,000.00 was provided by Cold Refrigeration in signing the contract. The deposit is unearned revenue. Half of the contract will be billed upon 50% completion with the deposit applied against that billing with the remaining amount due immediately. A quarter of the contract will be billed upon 75% completion of the contract with the amount due immediately. The remaining amount of the contract is to be billed when the job is 100% complete and is payable within 30 days of the billing. January 16Purchased $4,441.00 of factory supplies from Johnston Equipment paid in cash. January 16Purchased $2,965.00 of direct materials from Smith Synthetics on account. January 16Purchased $427.50 of office supplies from OfficeMax on account. Continued January 19Apply from direct materials requisition $2,800.00 of direct materials. Apply from indirect materials requisition $325.00 of indirect materials. Apply from time cards $7,950.00 of direct labor to Job 74 completing the job. Applied factory overhead is based on 25% of direct labor cost. Transfer the completed job to the COGS account from Direct Material and Indirect Material and Factory Overhead accounts. When making the journal entry for applying direct labor, debit COGS for the gross pay and credit FWT Payable and FICA Tax Payable for the appropriate amounts with the net pay going to Salaries Payable. January 20. Paid the electric bill from Susquehanna Electric in the amount of $2,356.21 for the month of December. Allocate 30% to Factory Overhead. January 20Paid the FUTA Tax Payable for the previous year. January 20Paid the SUTA Tax Payable for the previous year. January 23Ashman Alcove Designs paid the balance on account. January 27Paid O-Ring Enterprises the balance owed on account. January 27Paid post office $300.00 cash for postage added to postage meter. January 28Apply from direct materials requisition $4,600.00 of direct materials. Apply from indirect materials requisition $950.00 of indirect materials. Apply $8,000.00 (from time cards) of direct labor and factory overhead to Job 76, completing 50% of the job. Factory overhead is based on 25% of direct labor cost. Transfer the partially completed job from Direct Material and Indirect Material to WIP. When making the journal entry for applying direct labor, debit WIP for the gross pay and credit FWT Payable and FICA Tax Payable for the appropriate amounts with the net pay going to Salaries Payable. Set up the accounts receivable and bill Cold Refrigeration for 50% of the contract on account, applying the initial $10,000.00 deposit against the billing. January 29Received a check from Cold Refrigeration in the amount of $12,900.00 on account. January 31Received the following data for the monthly payroll: Direct labor (already recorded) $19,600.00 Sales commission 5,132.50 Officers salaries 5,000.00 Office salaries 1,920.00 Record the monthly payroll. Direct labor payroll has already been recorded, as it was incurred in January. Debit other salary expense accounts for the appropriate amounts; credit FWT Payable for 15% of gross pay; credit FICA Tax Payable for 7.65% of gross pay; and credit Salaries Payable for the net pay. Record the payroll taxes imposed on the employer for all personnel for the month of January. (Prepare the Schedule of Employer Payroll Taxes Allocation using the appropriate tax rates.) January 31Received a check from Messina Missions for the balance on account. January 31Received a check from Horsfield Happy Ice Cream for the remaining balance on account. January 31Paid all employee wages earned in January. 3. Post the general journal entries to the General Ledger, the Accounts Receivable Ledger, and the Accounts Payable Ledger. Use the Post Ref. column to ensure that each line item of the journal entries is posted correctly to each general ledger account. Posting from the journal to the ledger is nothing more than rearranging the information; however, focus and concentrate because its easy to make a mistake. 4. Calculate the balances in the general ledger accounts. Use an Excel spreadsheet or a printing calculator to run the numbers several times. Dont use a hand-held calculator, as its far too easy to make a mistake using it. 5. Prepare the Schedules of Accounts Receivable and Accounts Payable. 6. Prepare an Unadjusted Trial Balance using the balances from the general ledger accounts.